Automotive companies accelerate towards a sustainable future

Sustainable product lifecycles are key if automotive companies are to realize growth ambitions while also meeting green production targets. Fossil-free steel from SSAB can play a pivotal role in helping the automotive industry become sustainable.

The steel and automotive industries have developed together for more than a century, each helping the other to grow and improve. They remain tightly entwined, and today the automotive sector accounts for approximately 12 percent of global steel consumption. 1

“The use of steel in the automobile industry has evolved throughout the 20th century,”

says Jonas Adolfsson, who heads projects within mobility business development at SSAB. “New and better steels continue to reach the market and today we supply our Docol ultra-high-strength steels which are 4-6 times stronger than traditional steel.”

The automotive industry has constantly pushed the boundaries of how steel is used, requiring steel production to evolve and innovate over time. Improvements in weight, performance, robustness and cost efficiency have all helped the sector to improve safety and profitability.

“The newest challenge, which will become stronger in the future, is sustainability,”

Adolfsson says. “Previously much of the focus has been on the properties of steel, such as making it stronger and lighter. Now the focus is shifting to the lifecycle of steel; lowering the emissions throughout the entire life of the material, including production, is not negotiable. If quality was the base factor in the past, sustainability will be the base factor in the future.”

Demand for more sustainable materials and production

Automotive companies are under extreme pressure from customers, investors and governments to become more sustainable. More sustainable vehicles are also a huge business opportunity: global electric car sales reached 3.2 million in 2020, a 400 percent increase in five years.

Until now, the main sustainability focus on vehicles has been on their operation. For decades, automobiles have become more efficient, yet even a vehicle that operates with no greenhouse gas emissions – such as an electric car charged with renewable energy – is no longer good enough.

“The future trend is to develop more sustainable solutions for materials and how cars are made,” says Adolfsson. “There are methods to produce more sustainable steel such as carbon capture, reuse and storage, or scrap-based steel production. However, these are not enough to reach the Paris Agreement commitments.”

Fossil-free steel is crucial to the automotive industry’s success

On average, 900 kilograms of steel are used per vehicle, so more sustainable steel is critical for the entire industry. The International Energy Agency (IEA) says the CO2 intensity of crude steel needs to fall 2.5 percent annually in order to meet their Sustainable Development Scenario (SDS). Energy efficiency improvements are inadequate, and the IEA is instead placing their hopes on significant innovations in production methods.

Fossil-free steel is one of these major innovations. SSAB has partnered with the iron ore producer LKAB and the energy company Vattenfall to form HYBRIT. HYBRIT technology will replace coking coal, which is traditionally used in ore-based steelmaking, with fossil-free electricity and hydrogen.

“The demand for environmentally friendly products in the automotive industry will increase to such an extent that it will be a base requirement for even participating in the sector,

Adolfsson believes. “If you don’t have it, you can’t be in the automotive industry.”

Early adopters could win big

Early adopters of more sustainable solutions may beat the competition in the marketplace as well. One of the best examples is how Tesla’s market capitalization challenged traditional car companies. Consumers and investors seem to fully expect sustainability to be a driving force for the future of the automotive industry. With sustainability one of the key factors for cars, and steel being one of the main components of the product, fossil-free steel is likely to be an integral part of the industry’s future.

“The demand for more environmentally friendly cars come from a variety of sources,” Adolfsson says. “We have the efforts of young generations, such as those of Greta Thunberg and students. We also have governments who are mandating greener solutions. There are also big influencers who can change the entire industry like Toyota and Volvo. But in the end, all this demand for better solutions comes from individuals. It is up to each of us.”

  1. www.worldsteel.org/en/dam/jcr:f7982217-cfde-4fdc-8ba0-795ed807f513/
  2. www.weforum.org/agenda/2021/01/electric-vehicles-breakthrough-tesla-china/
  3. www.worldsteel.org/steel-by-topic/steel-markets/automotive.html
  4. www.iea.org/reports/iron-and-steel
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