Mercedes-Benz and H2 Green Steel have signed a binding agreement for the delivery of about 50,000 tonnes of green steel to the car maker’s European production annually. In a pioneer move Mercedes-Benz has also signed a memorandum of understanding with H2 Green Steel for the potential supply of green steel produced in North America.

Mercedes-Benz was an early investor in H2 Green Steel and was also early out in confirming customer demand for green steel through an off-take agreement. This agreement has now been further developed into a binding agreement covering volumes of about 50,000 tonnes per year, which will be produced in H2 Green Steel’s green hydrogen powered iron and steel plant in Boden in northern Sweden. In using high-quality steel that is sustainably produced, Mercedes-Benz takes yet another step towards reducing the environmental impact from its car manufacturing.

We can raise the bar when it comes to supply chain emissions, circularity, and social sustainability

“H2 Green Steel exists because pioneering companies in the automotive industry, like Mercedes-Benz, signalled the transition in the steel industry was too slow for them to meet their climate targets. Working side-by-side with Mercedes Benz, we have a partner with whom we can raise the bar when it comes to supply chain emissions, circularity, and social sustainability. They are a very strong player to liaise with for our European operations, but naturally also as we endeavour into the steel value chain in North America,” says Carl-Erik Lagercrantz, vice chairman of H2 Green Steel.

In addition to a sustainable production of green steel, Mercedes-Benz has a strong commitment to circularity and the two companies will create a closed-loop recycling of scrap steel to the Boden plant. The partnership also includes H2 Green Steel being able to leverage Mercedes-Benz extensive knowledge and expertise in supply chain human rights.  

With the partnership in Europe as the foundation, the two companies have also agreed to work together to enable a long-term supply of green steel produced in North America for Mercedes-Benz’s manufacturing plants in North and South America. By doing so, the companies will demonstrate the feasibility and value of a green steel supply chain.

“H2 Green Steel has talked to different stakeholders in both Canada and the US for some time. The possibility to leverage a large supply of renewable electricity for the production of green hydrogen and green sponge iron that can feed a sustainable steel production is a very interesting prospect for H2 Green Steel as we continue to push the steel value chain to decarbonize globally”, says Carl-Erik Lagercrantz.