Although the world’s top 10 automakers have doubled their efforts to replace combustion engines with electric engines, they have done little to decarbonize their supply chains for steel, an essential element in car manufacturing .
Far from qualifying the companies with respect, a Greenpeace study addressing the situation in main markets such as China, the United States, Europe and Japan indicates that the main producers generate around 74 million tonnes of carbon dioxide (CO2) each year. We do. Due to dependence on steel.
The report, which leaves out emerging markets, “which face additional challenges assuming a transition to electric vehicles in the very long term,” states that the top 16 automakers will use around 65 million tonnes of steel in 2022. Used.
The study qualifies manufacturers’ efforts in three areas: action to phase out combustion engines; decarbonization of the supply chain; and efficiency and reduction of resource consumption. The findings suggest that none of them have made aggressive enough progress to meet the emissions reduction targets of the Paris Agreement.
According to a Greenpeace report, Toyota, the world’s top automaker, will use 6.3 million tonnes of steel in 2022 alone, followed by Volkswagen at 5.2 million tonnes and Hyundai-Kia at 5.2 million tonnes.
Reliance on steel comes at a cost. The work emphasizes that the large amount of CO2 emissions derived from its production is one of the main factors pushing global warming closer and closer to the 1.5 °C limit, a level that scientists say could be achieved by a single plant. Will cause disaster.
“Vehicle manufacturers are driving us into a climate disaster by not decarbonizing their steel supply chains,” says Wenjie Liu, Greenpeace’s senior analyst for East Asia. “Automotive steel has a huge carbon footprint, but major manufacturers such as Hyundai, Volkswagen and Toyota do not disclose their emissions. We need to drive the transition to auto manufacturers consuming less steel and making carbon-free steel.
Global steelmaking emitted 573 million tonnes of CO2 last year, almost as much as the Australian economy emits in a year. “The strong global carbon footprint won’t change without greater involvement from the auto industry, which consumed 16 percent of the world’s steel last year,” Liu said.
In addition to Toyota, Volkswagen and Hyundai-Kia, the list of companies assessed by Greenpeace includes General Motors, Stellantis, Ford, Honda, Nissan, Suzuki, Geely, BMW, Renault, Mercedes-Benz, SAIC Motor, Great Wall Motor and Are. Mazda.
“None of them reveal the carbon emissions from steel use and only a few reveal their annual consumption of steel, which means emissions figures are rough estimates”, the report explains. thus, highlighting the opacity of this area. With regard to its contribution in combating climate change.
The Greenpeace paper, while acknowledging that some companies, notably European automakers, are attempting to decarbonize their steel supply chains, notes that their targets remain modest. “More effort is needed in East Asia, which accounts for 60 percent of the world’s steel production and where there are few auto-led initiatives,” Greenpeace said.
“If they are serious about decarbonisation, by 2030 vehicle manufacturers must halve emissions from the steel they use. The first step is disclosure of emissions, but unfortunately we have not seen that happen yet,” Liu explains.
From Greenpeace’s point of view, “manufacturers should also make a commitment to buy green steel, which would prompt steel companies to invest in new technology.” In the longer term, “manufacturers should achieve net zero emissions in their supply chains, through reduced steel use and a full transition to zero carbon steel,” the paper adds.
The study also highlights the efforts of major automakers to move forward in the electrification of their units: 499 out of every 500 cars sold by Toyota worldwide continue to be powered by fossil fuels. A ranking that barely leaves General Motors, Mercedes-Benz and Volkswagen, best case scenario, comes off better.
For now, sales of power units by large manufacturers in any case do not exceed 9% of their total sales. Additionally, companies are relying heavily on China for the development of their electric car supplies, which is creating a huge imbalance between the different markets.
“In 2022, 96% and 83% of electric units sold by General Motors and Honda, respectively, were to be made in China; Whereas in their home markets, i.e. USA for GM and Japan for Honda, they were 3% and 2% respectively.
Added to the almost zero progress that automakers are making in terms of decarbonizing their steel supply chains and slow progress in replacing combustion units with electric ones is another problem: the insatiable demand from consumers for all-terrain vehicles.
The Greenpeace report suggests that this type of entity will represent 46% of global sales of major automakers in 2022, compared to 42% in 2021. A serious problem facing decarbonization. These are models that consume 25% more energy than a sedan on average and contribute to higher steel demand by the automotive industry due to the size of the units.
Green steel, a solution?
Green steel, also known as “green steel” or “fossil fuel-free steel”, is steel that produces zero carbon emissions during its production. Its cost is still higher than that of conventional steel, but the environmental and business benefits of investing in innovative technologies are clear.
Steel represents between 50% and 80% of a vehicle’s weight and is the third most polluting element in this sector after lithium battery cells and aluminium. The challenge is not small. The World Economic Forum considers that the decarbonization of processes involving steelmaking as well as processes involving iron and cement is “complex” due to the limited options presented by heavy industries.
Greenpeace estimates that if they were a vehicle manufacturer, they would be the third most polluting country behind China and the United States. Therefore, non-governmental organizations and experts are pressing for making green steel a real option. In its manufacture, fossil fuels are not used, but so-called “green hydrogen”, which emits only water when burned. And if that hydrogen is produced using electrolysis and renewable electricity, it’s completely CO2-free.
For the time being, intensive use of green steel is off the horizon for automakers. Not available. In addition, some steel mills are undertaking research and investments to achieve production levels capable of meeting the demand of the automotive sector, the fastest growing segment of the steel industry, at competitive prices.