Mercedes-Benz [MBG:GR] has entered into an agreement with Steel Dynamics, Inc. (SDI), a prominent US steel producer and metals recycler, to secure a supply of more than 50,000 tons of carbon-reduced steel annually for its manufacturing facility in Tuscaloosa, Alabama, as reported by ESG Today on September 18. Under the agreement, SDI will manufacture the steel from recycled ferrous scrap using an electric arc furnace (EAF) powered exclusively by 100% renewable electricity sources. This approach is significantly more environmentally friendly than traditional methods involving blast furnaces and basic oxygen furnaces. In comparison, the EAF process can reduce emissions by more than half and is less energy-intensive. The carbon-reduced steel produced by SDI will be incorporated into all Mercedes-Benz models manufactured at the Tuscaloosa facility. This includes vehicles like the EQS SUV and EQE SUV, with production scheduled to commence as early as September 2023.

This procurement deal represents a significant step in Mercedes-Benz’s ongoing commitment to decarbonize its steel supply chain. The automaker has outlined plans to purchase over 200,000 tons of CO2-reduced steel annually from European suppliers by 2030. This initiative is part of the company’s broader goal to achieve carbon neutrality throughout the supply chain for its entire lineup of new vehicles by 2039. Mercedes-Benz has also committed to reducing the lifecycle CO2 emissions per passenger car by 2030, with a target to halve emissions compared to 2020 levels. To reach these ambitious objectives, the company has implemented a series of decarbonization initiatives. These include the electrification of its vehicle portfolio, the adoption of renewable energy sources in production processes, advancements in battery technology, increased utilization of recycled materials, and the use of green electricity for vehicle charging.

Sources：

https://www.esgtoday.com/mercedes-benz-signs-deal-for-more-than-50000-tonnes-of-low-carbon-steel-annually-for-u-s-production/

https://group.mercedes-benz.com/sustainability/climate/co2-reduced-steel-tuscaloosa.html

Mercedes-Benz Sets Goal to Use 200,000 Tonnes of Low Carbon Steel per Year

https://group.mercedes-benz.com/sustainability/climate/ambition-2039-our-path-to-co2-neutrality.html