BMW agrees green steel supplies from northern Sweden

BMW Group plans to source steel produced with hydrogen and green power from northern Sweden. Picture by Mats Engfors.

October 22 (Renewables Now) - Swedish start-up H2 Green Steel will supply steel produced with green hydrogen to BMW AG (ETR:BMW) from 2025 on as part of the efforts of the German carmaker to reduce carbon emissions in its steel supply chain by about two million tonnes by the end of the decade.

The two companies have signed a supply agreement, BMW said on Wednesday.

H2 Green Steel, founded in 2020, is building a production site in the province of Norrbotten close to the Arctic Circle and aims to produce 5 million tonnes of fossil-free steel by 2030. The Stockholm-based company will use hydrogen produced with green power to remove the oxygen from the iron oxide and cut carbon emissions in the process by 95% as compared with fossil fuel-based steel production. A hydrogen plant running on green electricity from the region will be integrated into the steel production site.

The supply agreement between BMW and the Swedish steel company is in line with the German carmaker's plan to realign its product range from 2025 on based on three criteria -- a redefined IT and software architecture, electric drive trains and batteries and more sustainability across the entire vehicle lifecycle.

Apart from green steel, BMW will source also battery cells for its electric cars from Swedish company Northvolt which is building a gigafactory in northern Sweden that will use only local wind and hydroelectric power.

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