Automotive industry could become a leading market for green steel in Europe – T&E

The automotive industry could become the leading market for low-carbon steel in Europe if legislators set appropriate requirements. This is stated in a study by the Trans-European organization Transport & Environment (T&E).

According to the analysis, which is based on a study by Ricardo, a consulting company, steel produced using green hydrogen and electric arc furnaces or scrap could reduce carbon emissions from car production in Europe by 6.9 million tons in 2030.

If car manufacturers replace 40% of their steel with environmentally friendly steel (with less than 400 kg of CO2 emissions per ton), it will add only €57 to the cost of an electric car in 2030.

Switching to 100% green steel by 2040 will cost only €8 compared to using conventional steel due to carbon prices and falling costs of producing green steel products. But securing the billions of euros of investment needed to produce low-carbon steel is highly dependent on having a reliable market for producers.

The automotive sector is very well positioned to create such demand, T&E notes, as it currently consumes 17% of EU steel. The organization has called on lawmakers to help create a leading market for sustainable steel in Europe by setting targets for car manufacturers to use increasing amounts of it in new cars from 2030.

By 2030, Europe will be able to produce up to 172 million tons of low-carbon steel per year, according to a report based on Ricardo’s tracking of production announcements. This will be more than enough to meet the total demand for steel in the automotive sector, which will consume 36 million tons in 2022. In addition, the shift to lightweight cars will reduce steel consumption in the industry over the next decade.

Earlier this year, a coalition of non-profit organizations launched the Race to Green Steel campaign to encourage automakers to use green steel. The initiative aims to support companies in developing low-carbon steel targets and investing in innovative technologies.