Volvo joins the SteelZero initiative, a new enterprise to reduce the use of fossil steel, in its grand strategy of transitioning into a carbon-neutral company.
Volvo made it clear on several occasions that it’s an environmentally responsible company, not only because it cares about climate change but also because it sees it as a profitable business strategy in the long term.
Its latest action was joining the SteelZero initiative. This step gives the company a major publicity boost, simply because it’s the first automaker to do so.
Some commentators may wonder whether that was a wise move or an economically viable one. Especially when you take into consideration the industry’s heavy reliance on steel.
Kerstin Enochsson, chief procurement officer at Volvo Cars gave some reassurance on this particular subject in a recent statement; “A sustainable approach to steelmaking is not just good news for the environment, it is also good business because it limits our exposure to future climate risks and regulations,” adding; “By signaling our demand for responsibly-sourced low- and zero-carbon steel, we aim to help drive an increased supply to our sector.”
Volvo’s new commitment can be divided into two phases, the first phase should end by 2030 and it stipulates that at least 50% of Volvo’s supply of steel should come from one of these three sources; the one bearing a Responsible Steel certification, low embodiment steel with defined specific emissions intensity, or steel that was made at a site where the owner has made a public commitment to long-term emissions reductions.
The second phase is more radical and it’s scheduled for 2050. In it, 100 percent of the steel supply will come from net-zero suppliers.
All of these plans fall neatly into Volvo’s plans of becoming a carbon-neutral company by 2040.
Volvo executives stated that one of the main reasons for joining the SteelZero initiative was their realization that steel accounts for about 33 percent of a vehicle’s carbon footprint. So, securing a clean source for said steel would make an immense difference to the environment.
As a demonstration, Volvo has already produced a vehicle made entirely out of carbon-free steel, in collaboration with the Swedish steelmaker SSAB.
Jen Carson, the head of industry at Climate Group, and godfather of the SteelZero initiative was very excited about Volvo’s decision to join, she stated that; “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,” adding “This sector plays a central role in driving the net-zero transition of steel.”
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