BMW Group Acquires CO2-Reduced Steel for Global Production Network

IT

The BMW Group has inked new agreements for the supply of CO2-reduced steel in the US and China, after initial contracts with European suppliers.

In the Americas region, agreements have already been established with domestic steel makers Steel Dynamics (SDI) and Big River Steel, a US Steel plant, to utilise renewable energy sources in their local steel production. 

The electric arc furnace (EAF) steelmaking process, which uses electrical energy to melt down iron and steel scrap, supplies over half of the BMW Group's flat steel requirements in the United States and Mexico. 

When compared to coal-based steel production in a blast furnace, this manufacturing technique has a large potential for CO2 savings. The CO2-reduced steel is then utilised to make car bodies for BMW automobiles at BMW Group plants in Spartanburg and San Luis Potosi. 

Steel from electric arc furnaces is particularly ideal for this use due to its material qualities.

With the recent announcement, the firm methodically worked toward its climate goals for their network of suppliers and drastically lowered the carbon footprint of steel sourcing. 

“Steel is one of the main sources of CO2 emissions in our supply chain. That is why we are comprehensively reorganising our steel portfolio – so we can supply our global production network with over one third of CO2-reduced steel from 2026.

This will reduce the carbon footprint of our supply chain by 900,000 tonnes per year, while at the same time driving the transformation of the steel industry,” stated Member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, Joachim Post.

Steel accounts for around 20% of supply chain CO2 emissions for a mid-sized fully electric vehicle, ranking third after battery cells and aluminium.

More than that, steel, despite its diverse qualities, is one of the key materials for automobile manufacture and will be as crucial for future vehicle models and generations.