Porsche AG and the Swedish industrial start-up H2 Green Steel have signed an agreement for the supply of CO₂-reduced steel. The aim is to further improve the emissions balance of Porsche vehicles by using CO₂-reduced steel.

H2 Green Steel plans to produce steel using renewable electricity in Boden, Sweden, starting end of 2025. From 2026, Porsche and various direct Porsche suppliers of production material are to be supplied with near zero-emission steel from the company. This agreement marks the second contract between H2 Green Steel and a company in the Volkswagen Group, following that of Scania announce earlier in 2023.

The material would have one of the lowest carbon footprints on the market. H2 Green Steel relies on an innovative production process with hydrogen and electricity from renewable energy sources. Production of the steel is therefore almost CO₂-free. According to H2 Green Steel, this results in up to 95 percent lower CO₂ emissions than conventional steel production with coking coal. Up to 35,000 tonnes of the low-emission steel produced in Sweden are to be used per year for the series production of Porsche vehicles. By way of comparison: in 2022, 220,000 tonnes of steel were used in Porsche vehicles.

Related Article: Ingka Group (IKEA) and H2 Green Steel Sign Agreement for Supply of Green Steel across Warehouse Operations

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

The proportion of steel in Porsche’s vehicles has been continuously reduced in recent years. In the meantime, Porsche is increasingly relying on aluminium for lightweight construction. However, steel remains one of the key elements in sports car construction due to its excellent mechanical properties. “Energy, processes and materials account for a significant share of CO₂ emissions in the supply chain. That is why we want to increase the use of recycled materials and green electricity in the production processes of direct suppliers as part of our decarbonization efforts,” comments Barbara Frenkel.

“Few brands are as iconic as Porsche. It stands for quality and a premium product.  It’s also a company that is working actively towards a sustainable future, with clear expectations on how the supply chain contributes to that. Having Porsche place an order for near zero-emission steel is a real boost both for us as a company, but also the transformation of the steel industry, which has very much been driven by the demand from the automotive industry”, says Henrik Henriksson, H2 Green Steel’s CEO.