Sustainable steel survey reveals automotive industry’s thinking, targets, and actions

What are the automotive industry’s sustainability objectives?

The survey asked, “When it comes to [steel] sustainability, which objective is most important for your company? Please select the top three issues.”

Clearly the most popular way for vehicle OEMs and Tier 1s to articulate their sustainable steel objectives is under the category of “lowering carbon footprint.” This is critical for steel suppliers to understand: “lowering carbon footprint” was consistently the top choice for all three regions, with 51% for Europe, 54% for Asia, and 47% for North America. On the other hand, many of the listed objectives are overlapping: for example, increasing the use of recycled steel also lowers the carbon footprint, promotes circular economies, and improves life cycle assessment. 

57% seriously consider a steel supplier’s sustainability  

“On a scale of 1 to 5, how much does your company consider sustainability aspects when choosing a steel supplier?” 

Put another way, 57% consider their steel supplier’s sustainability “very much” or “quite a lot.” But 31% consider it only “moderately,” “slightly,” or “not at all,” and 11% “don’t know” if their company even considers sustainability when selecting automotive steels. This is a sobering reminder that a significant portion of the auto industry still needs to be convinced about steel sustainability — or that there is a lack of clarity regarding the automaker’s sustainability goals.

What sustainable steel processes/technologies are of most interest?

The question here was, “What is your level of interest in the following initiatives? Please rank each.”

The leading choices are fossil-free (direct reduction with green hydrogen) and scrap-based (recycled steel) with zero CO₂ emissions with 79% and 78%, respectively, either “very interested” or “quite interested”. These two processes’ popularity may be explained by the fact that both are proven – while the potential of carbon capture methods is yet to be definitively demonstrated.

Why the limited adoption of targets for using recycled steel?

“Have you set up a target for recycled steel content?”

Surprisingly, 56% of respondents said “no” or “don’t know”. So only 46% have established recycled steel content levels for their vehicles. Of that, 15% have targets of 50% or more recycled steel, 19% are targeting levels of 20%-to-50%, and 12% have targets of 0%-to-20%.

Targets vs. secured agreements for recycled steel suppliers

Secured supplier agreements demonstrate, obviously, a much more committed stance than “targets”. So the survey asked, “Have you made an agreement for recycled steel? Select all that apply.”

Again, we were surprised to see the low level of commitment to recycled steel, with only 29% of the respondents having secured agreements in place with either steel suppliers or recycling companies. All the survey responses had some variances based on regions: you can see the complete list of regional variances by downloading the full survey. But here we think it’s important to note that 23% of Asian respondents have made an agreement with a recycled steel supplier, compared to 15% for North America and just 9% in Europe.

The auto industry’s perceived challenges for using sustainable steel

“What are the perceived challenges in adopting sustainable steel? Please select the top three issues.”

Concern over a cost premium for sustainable steel dominated the results (74%), while limited availability (38%) and relatively few suppliers (36%) were also on respondents’ minds. But at 40%, the concern was “Defining ‘green’, ‘low carbon’ & ‘fossil-free’ steel”. This underscores the need for the auto industry to set aside steel manufacturers’ marketing claims and instead focus on third-party audits of the sustainable steel product as determined by Environmental Product Declarations (EPDs).

The mobility industry picks current leaders in sustainable steel

“Which of the following steel suppliers do you associate with sustainable steel? Please select all that apply.”

Going back to an earlier survey question – which asked which sustainable steel processes/technologies are of most interest – the “very interested” and “quite interested” responses were 79% for fossil-free (direct reduction with green hydrogen) and 78% for scrap-based (recycled) with zero CO₂ emissions. Arguably, SSAB is furthest along for both approaches, with its pilot plant producing the world’s first fossil-free steel in 2021 and with its 2023 market introduction of SSAB Zero™ steel, the world’s lowest CO₂e (CO₂ and CO₂ equivalents) emissions steel product on the market.

What’s needed now to make automotive steel sustainable

Every year, climate change becomes more dire. The results of this survey can instruct us regarding next steps for sustainable automotive steel:

1. Better educate the auto industry regarding their sustainable steel options. What does each option entail? What are its limitations? Advantages? And will the end results – vehicle parts and systems made from sustainable steel – change in any way how parts are formed or how the vehicle performs?
2. Eliminate the use of confusing or misleading terms for sustainable steel. The term “green steel,” without any qualification, is meaningless. What really matters is all the emissions involved in making a steel grade as determined by Environmental Product Declarations or EPDs. 
3. Promote steel as a leading material for sustainable vehicles. It’s infinitely recyclable, and renewable energy is available to steel recyclers, e.g., SSAB Zero™ steel. That said, world demand for steel greatly exceeds the amount of scrap steel available. That reality creates the need for sustainable steel made from iron ore. And, as the survey respondents indicate, direct reduction using green hydrogen – e.g., SSAB Fossil-free™ steel – is what the automakers are following.
   
   

The survey’s methodology – in brief

• 54,812 invitees, seeking responses only from individuals qualified to answer
• 221 responses or 0.4% response rate
• 5.7% margin of error at a 90% confidence rate. In other words, if AMS were to repeat the survey again, 90% of the time the response percentages reported would be within 5.7% of the percentages for this survey. 

For complete methodology, download the full survey results.