BLOG: Green Steel 101: The Future of Automotive Manufacturing

Introduction

Today, the auto industry is one of the largest buyers of new steel in the United States, accounting for nearly half of primary steel sales in 2022. The process of making this steel relies heavily on coal-burning blast furnaces, which release massive amounts of hazardous air and climate pollution each year. This pollution leads to significant health issues and deaths in communities near steel mills while exacerbating the climate crisis.

The good news is that the future of steel production is here, and it’s green. But the path to a widespread green steel supply relies on proactive commitments from industry leaders like yourself.

In this six-part blog series, we’ll explore the environmental and health impacts of traditional steel production, the benefits and feasibility of green steel, and the critical role automakers play in driving this shift. Keep reading to learn more.

The Impact of Traditional Steel Production

The steel industry is a significant polluter, responsible for 9% of the world’s greenhouse gas emissions. In the U.S., seven integrated steel mills burn massive amounts of refined coal called coke to produce iron and steel.  Each of these facilities emits as much carbon dioxide as a coal-fired power plant.

Beyond climate pollution, blast furnaces release toxic pollutants into neighboring communities, including heavy metals and particulate matter. This pollution leads to serious health issues such as chronic obstructive pulmonary disease (COPD), asthma, lower respiratory tract infections, cardiac disease, cancer, and premature death.

The Transition to Green Steel

Fossil-free steel is possible today. A proven method of ironmaking known as direct reduced iron (DRI) can be powered by green hydrogen—generated by renewable energy—to produce fossil-free steel.

By transitioning from coal-burning blast furnaces to direct reduced iron (DRI) facilities and electric arc furnaces (EAF) powered by renewable energy, steel producers like U.S. Steel and Cleveland-Cliffs can slash their climate and health-harming pollution, putting you on the path to truly clean cars.

Benefits of Green Steel

Integrating green steel into your manufacturing offers a multitude of benefits for automakers and their stakeholders:

  • Gain Competitive Advantage: By adopting green steel, you can not only meet but anticipate the growing demand for ethical and sustainable products, securing a competitive edge in a market increasingly focused on sustainability.

  • Reduce Scope 3 Emissions: Integrating cleaner steel into your cars will reduce Scope 3 emissions in your supply chains, moving you closer to your sustainability goals. This is essential for addressing the more than 40 million metric tons of carbon dioxide equivalent emitted annually by coal-based steel production in the U.S.

  • Align Your Supply Chain with ESG Goals: Embracing green steel early sets you apart as a pioneer in sustainability and innovation, aligning with ESG goals that increasingly guide investor decisions.

  • Support Public Health: Switching to sustainable steel allows automakers to slash the emissions of harmful pollutants like NOx and SO2, which currently total over 14,116 tons and 23,153 tons in steel-producing communities yearly. Reducing air pollution is crucial to enhancing respiratory health and overall quality of life for countless Americans in our manufacturing heartland.

Collective Procurement: Closing The Gap Between Intention and Action

One of the most exciting opportunities to support green steel today is by joining RMI’s Sustainable Steel Buyers Platform. Through this platform, automakers gain insights into the emerging U.S. near-zero steel market and can leverage their purchasing power alongside other first-movers like Microsoft and Nextracker. 

The SSBP will issue a request for proposal (RFP) open to all producers. This collective effort allows the buyers' group to turn their climate commitments into offtake agreements to help bring green steel to market in North America.

Small Steps, Big Results

In addition to supporting collective procurement programs, automakers can also take important strides toward a green steel future by:

  • Requesting an Environmental Product Declaration (EPD): EPDs are like a nutrition label for steel, providing transparency and allowing automakers to compare the carbon footprints of different products. These declarations are independently audited to ensure they accurately reflect a product’s environmental impact throughout its life cycle.

  • Joining the First Movers Coalition: Members of this coalition have committed to purchasing at least 10% near-zero steel by volume by 2030, setting a strong market signal to steelmakers.

Conclusion

Are you ready to take the next step towards incorporating lower-emissions steel into your supply chain? We’re here to support automakers and other buyers in creating a more sustainable steel market. Connect with us at maricela@industriouslabs.org.

Together, we can drive the transition to green steel and build a cleaner future for the automotive industry and beyond.

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