Volvo joined SteelZero, the project which seeks to boost demand for fossil-free steel and hasten the transition of the global steel sector to carbon neutrality, underscoring its position as a pioneer in climate action.
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Volvo to reach carbon neutrality by 2040
Volvo Cars pledges to strict CO2-based steel procurement criteria by 2030 by joining SteelZero. According to the company’s goal of being carbon neutral by 2040, all the steel it sources should be net-zero steel by 2050.
For a new Volvo vehicle in 2021, the manufacture of steel accounted for an average of 33% of all production-related emissions, making it a significant source of CO2 emissions for the automotive sector. Around 7% of all greenhouse gas emissions worldwide are caused by the manufacture of steel.
“A sustainable approach to steelmaking is not just good news for the environment, it is also good business as it limits our exposure to future climate risks and regulations. We are pleased to join the SteelZero initiative and support its ambitions to transform the steel industry. By signaling our demand for responsibly sourced low- and zero-carbon steel, we aim to help drive an increased supply to our sector,” said Kerstin Enochsson, chief procurement officer at Volvo Cars.
Volvo joined SteelZero in support of a global standard
The Climate Group and ResponsibleSteel, a global standard-setting and certification organization for the steel sector that also includes Volvo Cars, launched SteelZero together. Volvo has access to trustworthy, third-party verified and certified information on its steel supply chain and pertinent sustainability credentials via ResponsibleSteel, helping to guarantee that the steel is obtained ethically.
“Volvo Cars joining SteelZero marks an important step change in the global demand signal for low emission and net zero steel and a pivotal moment for the automotive industry. This sector plays a central role in driving the net zero transition of steel. It’s supporting the creation of a decarbonized steel market internationally, that can enable the sector to meet its own net zero targets and deliver a product that is truly aligned with the climate agenda,” said Jen Carson, head of industry at Climate Group.
Along with CO2 reductions, ResponsibleSteel also pays attention to other crucial concerns in the steel production chain, such as labor and human rights, community involvement, water consumption, and the influence on biodiversity.
The agreement with SteelZero is only the most recent effort by Volvo to address one of the industries largest sources of CO2 emissions. It just recently established a partnership with Swedish steel producer SSAB to investigate the creation of high-quality, fossil-free steel for the automobile sector via SSAB’s HYBRIT program.
Volvo Cars is the first automaker to collaborate with SSAB and HYBRIT, an ambitious and cutting-edge initiative in the creation of fossil-free steel. Coking coal, which is typically required for the production of steel from iron ore, will be replaced by hydrogen and fossil-free power via HYBRIT. The end product should be the first carbon-virtually-zero steelmaking technology in the history of the planet.
Volvo’s future is electric
One of the most ambitious climate action plans in the car sector, Volvo Cars’ goal to become climate neutral by 2040 is a component of it. It intends to introduce a complete new family of all-electric vehicles in the next years and hopes to produce only electric vehicles by the year 2030.
The company’s intentions to electrify its fleet are a part of its goal to lower the carbon footprint of each vehicle across its lifespan by 40% between 2018 and 2025, including by cutting carbon emissions in its supply chain by 25% by that year.
The business plans to achieve climate-neutral manufacturing in its own operations by 2025. All of Volvo’s facilities in Europe now use only clean power, and its Torslanda facility in Sweden is completely carbon neutral. Its Chengdu and Daqing locations in China are likewise powered by energy that is not harmful to the environment.
The first automaker to adopt such a system across all of its activities was Volvo Cars, which imposed an internal carbon pricing of 1,000 SEK for every tonne of carbon emissions from its whole company last year. As more countries impose carbon prices in the years to come, the organization wants to be future-proof and ahead of the regulatory curve.
Every automotive project is subject to a “sustainability sense-check” under the program, and a CO2 cost is assessed for each tonne of predicted carbon emissions over the course of the vehicle’s lifetime. The objective is to make sure that each automobile model would turn a profit even under a severe carbon price plan, guiding all project and sourcing choices in the direction of the most environmentally friendly choice available.