One of Schaeffler’s undisguised goals is for its supply chain to be carbon-neutral by 2040. To this end, an agreement was signed with H2greensteel start-up to supply CO2-free green steel. From 2025, it is planned to procure 100,000 tonnes of green steel per year, which could reduce CO2 emissions by up to 200,000 tonnes per year.
Schaeffler, an automotive and industrial supplier, has entered into an agreement with a Swedish start-up, H2greensteel, to purchase 100,000 tonnes of virtually CO2-free, hydrogen-produced steel per year from 2025 onwards. With this, Schaeffler is the first “tier 1.” world-class supplier who has become the number one customer for an innovative start-up. The agreement is for the long-term supply of strip steel.
H2greensteel (H2GS) was founded in 2020 and aims to produce five million tonnes of virtually CO2-neutral steel per year in Sweden by 2030.
“We are delighted to have found a global and experienced partner in Schaeffler who will support us in achieving our goal of decarbonisation in the steel industry and with whom we can work to make the world more sustainable for the future,” –
says Henrik Henriksson, CEO of H2GS .
As a greenfield project, the company is planning a new steel plant with grid-connected and digital production that will produce “green steel” in Boden and Luleå. The first European steel plant and a dedicated hydrogen production plant have been built here for about 40 years.
The production of green steel is energy-intensive and must therefore come from a sustainable source. Northern Sweden offers excellent conditions for this. Carbon-free steelmaking is carried out using the H2GS direct reduction method, which uses hydrogen from renewable energy sources instead of coking coal, allowing a 95 percent reduction in CO2 emissions from previous methods. The founder and majority shareholder of H2GS is Vargas Holding, co-founder and majority shareholder of Swedish battery cell manufacturer Northvolt.
Klaus Rosenfeld, CEO of Schaeffler AG, said:
“The use of green hydrogen for the direct reduction of iron ore is a key element in producing steel in a clean and sustainable way in the future. Hydrogen is an important area of technology and growth for Schaeffler. In light of this, the partnership with H2greensteel is a very important step in promoting sustainability. ”