Vulcan Green Steel has signed a memorandum of understanding with carmaker Volkswagen to supply low-carbon steel, the automotive company said June 12.
This partnership announcement is one of a series of initiatives by Volkswagen Group to increase the use of low carbon-steel in its production process. Volkswagen has been in partnership with Salzgitter since 2022. It also has a stake in Swedish green steel manufacturer H2 Green Steel via its Scania subsidiary.
“The volumes of low-carbon steel that Volkswagen AG expects to order will cover a significant proportion of total steel requirements and will be used by the Group’s production facilities from 2027 onwards,” Volgswagen said in a statement on its website.
Vulcan Green Steel is part of Jindal Steel Group, an industrial conglomerate with steel, iron ore mining and energy operations as well as activities in India, Oman, Africa and Australia.
The Vulcan Green Steel facility in Duqm, Oman, is currently in the construction phase and is slated to come on stream in 2026. Starting in 2027, Vulcan Green Steel will produce automotive grades and other high-strength steels at its Duqm site. Natural gas will be used at the site during the initial years and later operations will be switched over to hydrogen, cutting carbon emissions by 70% once the transition is complete, Volkswagwn said.
Jindal Steel Group is investing more than $3 billion (Eur2.76 billion) to develop the steel project at Duqm. It aims to produce 5 million mt/year of green steel on an annual basis.
Companies in various industries across the steel value chain are buying increasing volumes of low-carbon and low-stainless “green” steel to reduce their Scope 2 and 3 emissions, closing supply agreements to secure low-emission steel for their products.
Platts, part of S&P Global Commodity Insights, launched its carbon-accounted price assessments in May 2023.
Platts assessed Northwest European hot-rolled carbon-accounted coil at Eur755/mt ($809.964/mt) ex-works Ruhr June 11, down Eur10/mt on the day.
