Volkswagen to Source Up to 300,000 Tons of Low-Carbon Steel Annually for European Production Starting in 2027

25.06.2024
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“Decarbonising supply chains is crucial for the Volkswagen Group on its path to carbon neutrality. Our goal is to achieve this by 2050, and utilizing low-carbon steel is a significant step in that direction. Green steel will help us make Volkswagen’s supply chains more environmentally friendly.”
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.

Highlights
Up to 300,000 tons of Europe’s annual steel requirements will be covered.
From 2027 onwards, Volkswagen AG plans to cover a substantial portion of its total steel needs with low-carbon steel.

Mine-to-metal strategy: from iron ore mining to green energy and hydrogen production leading to finished flat steel.
The fully integrated production process in Oman includes everything from mining iron ore, generating green energy, producing green hydrogen, and secondary metallurgy.

Oman: ideal conditions for renewable energy sources like wind and solar power.
Oman’s high wind speeds and strong solar radiation provide perfect conditions for generating green power essential for producing low-carbon steel using green hydrogen.

Aim to reduce carbon emissions in steel production by 70%.
Vulcan Green Steel aims to cut carbon emissions in their future steel production processes by up to 70%.

Partnership with Vulcan Green Steel

The partnership between Volkswagen AG and Vulcan Green Steel marks an important milestone in VW’s commitment towards sustainable practices. This collaboration forms part of several initiatives aimed at increasing the use of eco-friendly materials within VW’s manufacturing processes. Besides working with Vulcan Green Steel, VW has been collaborating with Salzgitter AG since 2022 and holds shares in Swedish firm H2 Green Steel through its subsidiary Scania.

The Jindal Steel Group owns Vulcan Green Steel; it operates across various sectors including mining iron ore as well as energy projects spanning India,Oman,Africa,and Australia . Starting from 2027,Vulcan will produce automotive-grade steels along other high-strength variants initially powered via natural gas before transitioning entirely over time into greener alternatives reducing emission levels significantly once completed.The facility currently under construction expects operational status achieved around late-2026 period .

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