Volvo Cars is teaming up with Swedish steel maker SSAB to jointly explore the development of fossil-free, high-quality steel for use in the automotive industry.
The collaboration makes Volvo Cars the first car maker to work with SSAB and its HYBRIT initiative, the steel industry’s most ambitious and advanced projects in fossil-free steel development.
HYBRIT was started by SSAB, iron ore producer LKAB and energy firm Vattenfall. It aims to replace coking coal, traditionally needed for iron ore-based steelmaking, with fossil-free electricity and hydrogen. The result is expected to be the world’s first fossil-free steelmaking technology, with virtually no carbon footprint.
As part of the collaboration, Volvo Cars will be the first car maker to secure SSAB steel made from hydrogen-reduced iron from HYBRIT’s pilot plant in Luleå, Sweden. This steel will be used for testing purposes and may be used in a concept car. In 2026, SSAB aims to supply the market with fossil-free steel at a commercial scale. Volvo Cars aims to also be the first car maker to use fossil-free steel for its own production cars.
“As we continuously reduce our total carbon footprint, we know that steel is a major area for further progress,” said Håkan Samuelsson, Chief Executive at Volvo Cars. “The collaboration with SSAB on fossil-free steel development could give significant emission reductions in our supply chain.”
“We are building an entirely fossil-free value chain all the way to the end customer,” Martin Lindqvist, President and CEO at SSAB, said. “Our breakthrough technology has virtually no carbon footprint and will help strengthen our customer’s competitiveness. Together with Volvo Cars, we aim to develop fossil-free steel products for the cars of the future.”
The global steel industry accounts for around seven per cent of global direct carbon emissions, due to the fact that the industry is currently dominated by an iron ore-based steelmaking technology, using blast furnaces depending on coking coal. For Volvo Cars, the CO2 emissions related to steel and iron production for its cars amount to around 35 per cent in a traditionally powered car and 20 per cent in a fully electric car of the total CO2 emissions from the material and production of the components going into the car.
The collaboration with SSAB is the latest initiative that supports Volvo Cars’ overall climate action plan, one of the most ambitious in the car industry. The centrepiece of the plan is Volvo Cars’ ambition to be a fully electric car brand by 2030, with only pure electric cars in its line-up.
Yet the plan goes beyond addressing tailpipe emissions through all-out electrification and also seeks to tackle carbon emissions in the company’s wider operations, its supply chain and through recycling and re-use of materials.
In the short term, these and other steps aim to reduce the lifecycle carbon footprint per car by 40 per cent between 2018 and 2025. By 2040, Volvo Cars’ ambition is to be a climate-neutral company.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world, with sales of 661,713 cars in 2020 in about 100 countries. Volvo Cars has been under the ownership of Zhejiang Geely Holding since 2010.
As of December 2020, Volvo Cars employed approximately 40,000 (41,500) full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected in a number of business ambitions: for example, by the middle of this decade it aims for half of its global sales to be fully electric cars and to establish five million direct consumer relationships. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.