“Decarbonizing supply chains is a decisive factor for the Volkswagen Group on the road to carbon neutrality. We want to achieve this goal by 2050 at the latest, and using low-carbon steel is an important step in making supply chains at Volkswagen Group even more environmentally friendly going forward. This MoU with Thyssenkrupp is an important building block in our strategic focus on the use of low-carbon steel,” says Dirk Große-Loheide, Member of the Board of Management of the Volkswagen Brand responsible for Procurement and Member of Volkswagen AG’s Extended Executive Committee.
“Signing this memorandum of understanding marks an important step on our path to decarbonizing key industrial processes in Germany. Our long-standing partnership with Volkswagen Group demonstrates that, alongside our technical development work, we can also collaborate in making great strides toward a sustainable future,” says Dennis Grimm, Spokesman of the Executive Board of Thyssenkrupp Steel.
The Thyssenkrupp Steel direct reduction plant is scheduled to be commissioned from 2027. It will operate with hydrogen and green electricity, which will significantly reduce its carbon footprint. At the start of the ramp-up phase, the plant will use natural gas as the reducing agent, before the process is switched successively to hydrogen. The resulting product – bluemint® Steel – will be certified in accordance with recognized standards and can qualify for the LESS Label A if the hydrogen used in production is generated entirely from renewable sources. This classification, developed by the German Steel Association flanked by Germany’s Federal Ministry for Economic Affairs and Climate Action, provides a full picture of a steel product’s climate impacts and documents its almost emission-free production.
Reducing CO2 in the supply chain
Volkswagen Group can benefit significantly from this innovative process to avoid CO2 emissions because 15 to 20 percent of an electric vehicle’s emissions are accounted for by the steel used. Moreover, this decarbonization concept allows the manufacture of the full product portfolio in accordance with the usual specifications and in premium quality. Supplies are scheduled to start in 2028 and will then be expanded step by step.
The collaboration between the two companies is increasing their focus on the field of electromobility. It covers economical lightweight solutions for highly stable vehicle structures and electrical steel for efficient electric drive systems. Steel is playing a key role in the mobility transition, not only as a material for generators and electric engines but also as the material of choice for the bodies and other structural components of electric vehicles. In the context of electromobility, steel is becoming an increasingly important material because more of it is needed in electric vehicles – due to their large battery units – than in combustion vehicles.
The Volkswagen Group green steel strategy
The partnership between Volkswagen Group and Thyssenkrupp Steel demonstrates how sustainable solutions can be created thanks to innovative technologies and strategic alliances. It is one of a series of initiatives by the Volkswagen Group to expand the use of green steel in production. In addition to the collaboration with Thyssen Krupp Steel, Volkswagen Group has been in partnership with Salzgitter AG since 2022. Volkswagen Group and Vulcan Green Steel recently signed a MoU in respect of long-term partnership. The Group also has a stake in Swedish green steel manufacturer H2 Green Steel via its subsidiary Scania.