Volvo To Build Cars Using Fossil Fuel-Free Steel

(Credit: SSAB)

Volvo is collaborating with SSAB, a Swedish steelmaker, to manufacture cars using fossil fuel-free steel made with hydrogen by 2026.

Mercedes-Benz also recently announced a new commitment to launch green steel in vehicle models by 2025, marking a significant step in the company’s efforts to decarbonize its supply chain.

While many automakers have announced electric vehicle goals to address climate change, the industry still faces emissions issues from its supply chain. Steelmaking accounts for 7% to 9% of direct emissions from fossil fuels. According to Mercedes-Benz, a sedan is made from about 50% steel, which accounts for about 30% of carbon emissions in production. As manufacturers around the world aim to decarbonize their supply chains, demand for green steel is expected to increase significantly.

“We are determined to be a climate-neutral company by 2050 in line with the Paris Agreement,” said Martin Lundstedt, president and CEO at Volvo Group. “This means that our vehicles and machines will be emission-free when in operation but also that we will review the materials, like steel, used in our products and will gradually switch to fossil-free alternatives. This is an important step on the road to completely climate-neutral transport.”

Volvo is a good candidate to develop the cleaner steel technology in part because of abundant renewable energy, particularly in northern Sweden. Renewable energy will be crucial to make zero-emissions hydrogen from water with electricity, rather than relying on a fossil fuel process that still releases carbon dioxide.

Volvo hopes to use green steel in a concept car by 2025, with commercial applications arriving by 2026 at the earliest. That would help the company reduce its cars’ average emissions before a 2030 target to make battery electric cars only. By 2040, Volvo is aiming to be climate-neutral.