17-01-24
On the right track
KIRCHHOFF Automotive is taking further steps to achieve its sustainability goals and decarbonize its supply chain: We have agreed with the Swedish company H2Green Steel to supply virtually emission-free steel to the tune of 130 million euros.
Both companies have signed a 7-year contract for this.
"The message from our customers is clear: they want products with a lower carbon footprint. This is in line with our ambition to play a pioneering role in sustainable development in the industry. Sustainability has always played an important role for us. It's great to be working with the new player in the market, H2 Green Steel. The team has really pushed the steel industry to do more and move faster in terms of sustainability," says Michael Rank, Global EVP Procurement.
KIRCHHOFF Automotive is working very ambitiously on the sustainability of the company and its supply chain, where steel is the main product component and accounts for 50% of material purchases.
90% of the CO2 footprint is currently determined by the use of conventionally produced steel and aluminum. Based on orders from international car manufacturers for future vehicle generations, KIRCHHOFF Automotive assumes that the demand for safe and sustainable body components will rise sharply in the coming years.
The agreement that has now been concluded provides for green steel from the H2 Green Steel plant in Boden/Sweden to be supplied to KIRCHHOFF Automotive plants throughout Europe from 2027.
KIRCHHOFF Automotive has already started to determine the location of greenhouse gas emissions in its supply chain (Scope 3) in 2022, both upstream at suppliers and downstream at customers. In addition, the company is pursuing the overarching goal of establishing a high level of sustainability in the supply chains of the automotive industry, which is also reflected in the fact that KIRCHHOFF Automotive is one of the founding members of the "Responsible Supply Chain Initiative RSCI e. V." association.
"Suppliers to the automotive industry must align themselves with the ambitious plans set out by progressive car makers. But we also have a group of companies that are ahead of the others because they follow their own compass. KIRCHHOFF Automotive is one such company. They combine their impressive heritage with a strong focus on the future, where sustainable products are both a competitive advantage and important for the climate and sustainability goals," says Stephan Flapper, Head of Commercial, H2 Green Steel.
H2 Green Steel is committed to complying with Scope 1, 2 and upstream Scope 3 requirements as defined in the Greenhouse Gas Protocol. The company has committed to a gross carbon emissions intensity per ton of steel in its customer contracts. The ongoing work to reduce emissions will have an impact on KIRCHHOFF Automotive's material supply chain and its upstream Scope 3 emissions.
The two companies will also collaborate on a circular economy initiative with the aim of returning at least 30% of steel scrap to H2 Green Steel's electric arc furnaces in Boden for recycling.
