What are mobility OEMs and Tier 1s deciding, planning, and doing to make the steel in their vehicles sustainable? That is exactly what a survey from Automotive Manufacturing Solutions (AMS), in partnership with SSAB, wanted to uncover. What are the auto industry’s objectives for sustainable steel? What internally drives those objectives? What is the mobility industry’s awareness of various sustainable steel processes and technologies? What agreements have they made with sustainable steel suppliers?
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.
“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.
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.
“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%.
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.
“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).
“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.
Every year, climate change becomes more dire. The results of this survey can instruct us regarding next steps for sustainable automotive steel:
For complete methodology, download the full survey results.