Press release
Major automakers in the red when it comes to using green steel
Berlin, 18 September – A new report by the International Council on Clean Transportation (ICCT) reveals that only four of the 17 major automakers selling vehicles in Europe and North America have committed to start using any fossil-free steel by 2030. The commitments total an estimated 2% of the global steel used by all these major automakers. When including commitments to use lower-emissions steel, this figure rises to only 4%.
“The auto industry can play a pivotal role in cleaning one of the world’s dirtiest industries by committing to procure fossil-free steel. Their demand can send a powerful signal to the steel industry, but current commitments are far from sufficient,” said Dr. Marta Negri, ICCT Associate Researcher and lead author of the study. “With just 2% of future steel demand committed to fossil-free sources, automakers have an opportunity to increase their commitments and lead in this transition.”
The ICCT report analyzes the global supply chain networks and greenhouse gas (GHG) emissions intensity of steel supplied to the 17 major automakers in Europe and North America. The report also compares their commitments to procuring fossil-free steel in the future.
The steel industry is responsible for 7% of global GHG emissions, and automakers, as one of the largest steel consumers, can drive transformation to reduce this high-polluting impact. The shift from traditional coal-based steel production to fossil-free technologies, such as green hydrogen and renewable energy, can drastically cut up to 95% of GHG emissions from producing the steel for passenger vehicles, while adding less than 1% to vehicle costs. Currently, automakers rely heavily on coal-dependent steel producers, where GHG emissions remain high. In Europe, using conventional methods to produce steel for a typical vehicle results in 1.4 tonnes of carbon dioxide equivalent (CO2e) emissions; in the United States, it’s 1.9 tonnes. A full transition to fossil-free steel could cut these emissions to below 0.1 tonnes.
“Switching to fossil-free steel would have a minimal impact on vehicle pricing. For 100–200 euros per vehicle, automakers can significantly cut carbon emissions in the supply chain —much less than the cost of a custom paint job,“ ICCT researcher Anh Bui said. “This should be seen as a win-win for both the environment and the industry.”
The report highlights opportunities to increase commitments to fossil-free steel, to make vehicles lighter and easier to recycle, and to push for greater industry transparency on emissions.“Automakers can accelerate the shift by committing to specific procurement targets for fossil-free steel. It’s a matter of acting now to avoid locking in high-carbon technologies,” Bui emphasized.
Policymakers can support this shift by providing financial incentives to encourage further investments in clean technologies that currently entail higher costs. Other suggestions include introducing a green steel quota and requiring vehicles to be designed for recycling.
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For editors:
Title: Which automakers are shifting to green steel? An analysis of steel supply chains and future commitments to fossil-free steel
Authors: Marta Negri, Anh Bui, Ysak Ordonez, Georg Bieker, and Aaron Isenstadt
Please use this link when citing the report: https://theicct.org/publication/green-steel-automakers-US-Europe-sep-24
Media contact
Susana Irles, Senior Communications Specialist
communications@theicct.org
+49 (0) 302 332 68412
About the International Council on Clean Transportation (ICCT)
The International Council on Clean Transportation (ICCT) is an independent nonprofit research organization founded to provide exceptional, objective, timely research and technical and scientific analysis to environmental regulators. Our work empowers policymakers and others worldwide to improve the environmental performance of road, marine, and air transportation to benefit public health and mitigate climate change. We began collaborating and working as a group of like-minded policymakers and technical experts, formalizing our status as a mission-driven non-governmental organization in 2005.
Find us at:
www.theicct.org
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