Transport & Environment (T&E), a trans-European organisation campaigning for emission-free transportation and traffic, says the automotive industry can become the lead market for low-carbon steel production in Europe if lawmakers set requirements.
If carmakers were to switch 40% of their steel use to green steel (with less than 400kg of CO2 emissions per tonne), it would add just €57 ($63) to the sticker price of an electric vehicle. This analysis by T&E is based on a new study by consultancy Ricardo titled “The use of green steel in the automotive industry.”
By 2024, switching to 100% green steel would cost only €8 – compared with using conventional steel – due to CO2 pricing as well as the falling costs of green steel production. But securing the billions of euros in investment needed for low-carbon steel production will be highly dependent on having a reliable offtake market for producers, the organisation notes.
The automotive sector is very well positioned to create this demand as it currently consumes 17% of steel in the EU, Kallanish learns from T&E. The organisation calls on lawmakers to help create a lead market for green steel in Europe by setting targets for carmakers to use an increasing amount of it in new cars from 2030.
“For less than a tyre change, Europe can build a green steel industry,” says Alex Keynes, cars policy manager at T&E. “The extra cost will be negligible and in time it will be cheaper than conventional steel. But we first need lawmakers to kick start the shift to low-carbon steel in the automotive industry.”
Christian Koehl Germany