ZF Group has concluded a long-term supply agreement with Swedish start-up H2 Green Steel, making a further step towards its carbon footprint reduction by purchasing sustainably produced steel. Starting 2025 through to 2032, the Scandinavian supplier company will ramp up and supply ZF with 250,000 tons of steel annually from its production plant in northern Sweden.
This accounts for 10% of ZF’s current steel requirements and will save around 475,000 tons of CO2 per year. ZF directly and indirectly processes around 2,5 million tons of steel per year worldwide. The Swedish start-up H2 Green Steel was launched in 2021 with the aim of accelerating the decarbonization of heavy industries, starting with the steel industry through new production processes and technologies, and by using green hydrogen. The steel will be produced in a fully integrated production process, using end-to-end digitalization, electricity from renewable energy sources and green hydrogen instead of coal.
In traditional steel making, reduction of iron ore is done by heating it together with coal, utilizing a chemical reaction that separates the oxygen from the iron, forming and emitting CO2. In H2 Green Steel’s production process, green hydrogen reacts with iron ore similarly to carbon, resulting in the extraction of oxygen. However, instead of creating CO2, the main by-product is water.
“With the introduction of low-CO2 production processes and sustainable products, the steel industry is in the midst of a profound transformation. Innovative companies with new concepts are in demand. We are supporting this transformation through our long-term supply relationship with H2 Green Steel”, says Daniele Pontarollo, head of ZF Group-wide materials management. ZF is also in dialogue with other leading steel suppliers to explore opportunities for sourcing green steel.
“We believe that by working closely with sustainable suppliers, we can significantly and sustainably reduce upstream emissions. The cooperation with H2 Green Steel is an excellent example of this”, says Michael Karrer, who is responsible for sustainability, environmental management and occupational safety throughout the ZF Group.