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The Independent Automotive Aftermarket Federation

Schaeffler to buy ‘green steel‘ from Swedish start-up company H2greensteel

Date: Thursday 02 December 2021

After recently announcing its target of becoming climate-neutral by 2040, Schaeffler has entered into an agreement with Swedish start-up company H2greensteel (H2GS), to annually purchase 100,000 tons of the virtually CO2-free steel from 2025. This makes Schaeffler the first global Tier 1 supplier to become a customer of the innovative start-up company.

It is intended to be a long-term agreement that includes the delivery of strip steel, which is produced in Sweden using hydrogen, which will reduce Schaeffler’s annual CO2 emissions c. p. by up to 200,000 tons.

As Schaeffler uses a significant quantity of steel for its original equipment and aftermarket component production, the move is a crucial driver in supporting decarbonisation.

Producing ‘Green steel’ is still very energy-intensive, so must be undertaken using sustainable sources. H2GS produces its steel without carbon dioxide by using a direct reduction method, in which hydrogen produced from renewable energies is used instead of coking coal, thus enabling a 95 percent reduction in the CO2 emissions produced by previous methods.

Klaus Rosenfeld, Chief Executive Officer of Schaeffler AG, says:

“The use of green hydrogen for the direct reduction of iron ore is a crucial component in making steel clean and sustainable in the future. Hydrogen is an important technology and growth area for Schaeffler. Our partnership with H2greensteel is a very important step for us in improving sustainability.”

H2GS, which was founded in 2020, aims to produce five million tons of virtually CO2-neutral steel annually by 2030.

“We are delighted to have found an experienced global partner, in Schaeffler, to support us in our goal of decarbonizisng the steel industry, with whom we can work toward making the world more sustainable for the future,” said Henrik Henriksson, CEO of H2GS.