Mercedes-Benz AG has entered into an agreement with Steel Dynamics Inc (SDI) of Fort Wayne, Indiana, to supply more than 50,000 metric tonnes per year of CO₂-reduced steel for its plant in Tuscaloosa, Alabama.
Mercedes said it will supply steel produced using SDI's electric arc furnace (EAF) and will use electricity from 100 per cent renewable sources, without specifying which plant.
Mercedes, which has had a business relationship with SDI since 2015, says the move is "another important milestone" on its path to decarbonising the global steel supply chain.
The carmaker said all Mercedes-Benz models assembled at its Tuscaloosa plant use SDI flat-rolled steel with 70 per cent or more scrap content, including the sports utility vehicle (SUV) model.
"With green electrically powered EAFs, emissions can be reduced by more than half to 1.0 tonnes of CO₂ per tonne of steel on average, compared with primary steel production using blast furnaces and basic oxygen furnaces," Mercedes says.
"Both parties have the potential to increase their share of scrap in the near future, which will further reduce the carbon footprint," said Mercedes. The CO₂-reduced steel from SDI specified in the new agreement will be put into series production at the Tuscaloosa plant in early September this year.
Dr Gunnar Güthenke, Head of Purchasing at Mercedes-Benz, said: "Our goal is clear: Together with our partners, we want to make our entire fleet of new vehicles net carbon neutral along the entire value chain."
"I am pursuing this strategy. Our agreement with SDI to supply more than 50,000 metric tonnes of CO2-reduced steel per year is another important milestone in building a sustainable steel supply chain in North America."
Mercedes-Benz is also a member of the Responsible Steel initiative, which aims to "ensure environmentally compatible and socially acceptable steel production along the entire value chain".