Porsche AG and H2 Green Steel sign agreement for CO₂-reduced steel supply

Porsche AG and the Swedish industrial start-up H2 Green Steel have signed an agreement for the supply of CO₂-reduced steel.

H2 Green Steel plans to produce steel using renewable electricity in Boden, Sweden, from the end of 2025. Porsche and Porsche's various direct suppliers of production materials will procure near-zero-emission steel from the company from 2026. This marks the second contract between H2 Green Steel and a company within the Volkswagen Group, following Scania, which was previously announced in 2023.

This material will have one of the lowest carbon footprints on the market. H2 Green Steel is based on an innovative production process with hydrogen and electricity from renewable energy sources. The production of the steel is therefore virtually CO₂-free. According to H2 Green Steel, this results in up to 95 per cent lower CO₂ emissions compared to conventional steel production with coking coal. Up to 35,000 tonnes per year of the low-emission steel produced in Sweden will be used in the series production of Porsche vehicles. For comparison: 220,000 tonnes of steel were used in Porsche vehicles in 2022.

Barbara Frenkel, Executive Board Member for Purchasing at Porsche AG, said: "Porsche is working towards a carbon-neutral balance sheet along the value chain of its cars by 2030. CO₂-reduced steel plays a key role in our sustainability strategy. With H2 Green Steel, we aim to further reduce the CO₂ emissions caused by this important material."

The proportion of steel in Porsche's vehicles has been continuously reduced in recent years. Meanwhile, Porsche is increasingly turning to aluminium for lightweight construction. However, steel remains a key element in sports car construction due to its excellent mechanical properties. "Energy, processes and materials account for a significant proportion of CO2 emissions in the supply chain. Therefore, as part of our decarbonisation efforts, we want to increase the use of recycled materials and green electricity in the production processes of our direct suppliers."

Henrik Henriksson, CEO of H2 Green Steel, said: "Few brands are as iconic as Porsche. Porsche stands for quality and premium products. It is also a company that is actively working towards a sustainable future and has clear expectations on how its supply chain can contribute to this. Porsche's order for near-zero-emission steel is a real boost for us as a company and for the transformation of the steel industry, which is largely driven by demand from the automotive industry."