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BMW Sourcing Low-Carbon Steel for Global Manufacturing

Updated: Dec 21, 2022


As part of its chain decarbonization activities, BMW Group announced today a series of new supplier agreements for CO2-reduced steel in the United States and China.


The purchase agreements include agreements with U.S. producers Steel Dynamics (SDI) and Big River Steel to use renewable energy sources in their local steel production for use in BMW plants in the United States and Mexico, and an agreement with HBIS Group to supply the BMW plants in Shenyang, China with CO2-reduced steel beginning in 2023.


The new agreements follow BMW's extension of its efforts to battle climate change with objectives to cut vehicle lifecycle emissions by 40% by 2030 and steps to boost the use of sustainable materials in its products during the past year.


The steelmaking industry is one of the largest emitters of CO2 in the world, with total greenhouse gas emissions (GHG) accounting for 7% to 9% of direct emissions from the use of fossil fuels worldwide. According to BMW, around 20% of a mid-sized fully-electric vehicle's supply chain CO2 emissions are related to steel.


The announcement is the most recent in a succession of low-carbon steel transactions for BMW, including agreements with Swedish startup H2 Green Steel in 2021 and steel manufacturer Salzgitter earlier this year.


Joachim Post, a member of BMW AG's Board of Management, stated:


"One of the primary sources of CO2 emissions in our supply chain is steel. In order to supply our global manufacturing network with more than a third of CO2-reduced steel beginning in 2026, we are reorganizing our steel portfolio thoroughly. This will cut our supply chain's carbon footprint by 900,000 tonnes per year while accelerating the transformation of the steel sector."


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