Multinational steelmaker ArcelorMittal has signed a supply agreement with General Motors to provide the automaker with recycled steel in an effort to cut carbon intensity.
“It is steel with physically lower CO2 emissions, which will help drive the achievement of ArcelorMittal’s goal to be carbon-neutral,” said Peter Leblanc, Chief Marketing Officer of Automotive at ArcelorMittal.
Through the agreement, steel produced for GM will include a minimum 70% recycled material sourced from subsidiary ArcelorMittal Dofasco in Hamilton, Ontario, with shipments expected to begin in the second quarter of 2023. The steel can include a maximum of 90% recycled material, and ArcelorMittal will not use carbon offsets to achieve promised emissions reductions, the company said in a release.
The deal is part of the company’s commitment to cut the carbon intensity of its steel by 25%. ArcelorMittal says its claims for the steel’s reduced carbon intensity were independently verified through a life cycle analysis that includes Scope 1, 2 and 3 emissions, writes Mining Technology.
Previously, ArcelorMittel CEO Aditya Mittal had stated that stripping carbon from steel production would increase supply costs by 10 to 20%, which would in turn increase the cost of an average car by around $100 to $200 and could undercut green steel producers’ business models.
Sustainable production and procurement are also part of GM’s steel sourcing strategy, and the automaker has signed a separate agreement with US Steel for product made with 90% recycled material, Supply Chain Dive says.
The global steel industry is among the world’s most energy-intensive, responsible for about 8% of global final energy demand and 7% of the energy sector’s carbon dioxide emissions. With global steel demand expected to increase by more than a third by 2050, the industry is under pressure to reduce emissions—according to the International Energy Agency, meeting global climate targets will requires that steelmakers cut emissions in half and reduce their product’s carbon intensity by 60% by 2050.
The ArcelorMittal-GM deal comes as the automotive sector faces pressure to reduce vehicle emissions, and is struggling with supply chain challenges to acquire materials for EV batteries, reports Reuters.