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The 'green steel' carmakers are buying is far from carbon-free

Automobile manufacturers and steel producers around the world are making deals for green steel, trying to highlight their identity with their environmental approaches, but the steel they buy is currently still forged using fossil fuels and it is not clear how soon this will change.

The 'green steel' carmakers are buying is far from carbon-free

German steelmakers Thyssenkrupp AG and Salzgitter AG find buyers for green steel; buyers, including Mercedes-Benz Group AG, Volkswagen AG, BMW AG and Ford Motor, are willing to pay for environmentally friendly products. However, since there is no green hydrogen supply required for large-scale production, most of this steel will be supplied to the automotive industry using natural gas in the first place.

European steelmakers are scrambling to transform an industry that still burns billions of tonnes of coal and produces about 7% of the world's carbon dioxide emissions. For example, solutions such as the combination of electric arc furnaces and hydrogen are being sought. Automakers acknowledge this will only be a gradual transition, as green fuel production is expected to fall far behind demand in the coming years. Everyone is aware that the transformation will not be quick.

According to Oliver Sartor, senior consultant at Agora Industry, the use of natural gas is only the first step in the transformation of the steel industry. Statements made by experts in this field revealed that there are deficiencies in the green energy transition. For this reason, a labeling system that will show the emission performance of different products needs to be developed. In his words on the subject, Sartor said, "Steel produced with natural gas is not a steel that does not harm the climate, and in the end, that is what is important," and emphasized that it is not possible to completely switch to green steel, yet.

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