A new report by the International Council on Clean Transportation (ICCT) finds that only four of the 17 major automakers selling vehicles in Europe and North America have committed to start using any fossil-free steel by 2030. The commitments total an estimated 2% of the global steel used by all these major automakers. When including commitments to use lower-emissions steel, this figure rises to only 4%.

Source: “Which automakers are shifting to green steel?”, ICCT

The auto industry can play a pivotal role in cleaning one of the world’s dirtiest industries by committing to procure fossil-free steel. Their demand can send a powerful signal to the steel industry, but current commitments are far from sufficient. With just 2% of future steel demand committed to fossil-free sources, automakers have an opportunity to increase their commitments and lead in this transition.

—Dr. Marta Negri, ICCT Associate Researcher and lead author

The ICCT report analyzes the global supply chain networks and greenhouse gas (GHG) emissions intensity of steel supplied to the 17 major automakers in Europe and North America. The report also compares their commitments to procuring fossil-free steel in the future.

The steel industry is responsible for 7% of global GHG emissions, and automakers, as one of the largest steel consumers, can drive transformation to reduce this high-polluting impact. The shift from traditional coal-based steel production to fossil-free technologies, such as green hydrogen and renewable energy, can drastically cut up to 95% of GHG emissions from producing the steel for passenger vehicles, while adding less than 1% to vehicle costs.

Currently, automakers rely heavily on coal-dependent steel producers, where GHG emissions remain high. In Europe, using conventional methods to produce steel for a typical vehicle results in 1.4 tonnes of carbon dioxide equivalent (CO₂e) emissions; in the United States, it’s 1.9 tonnes. A full transition to fossil-free steel could cut these emissions to below 0.1 tonnes.

Switching to fossil-free steel would have a minimal impact on vehicle pricing. For 100–200 euros per vehicle, automakers can significantly cut carbon emissions in the supply chain—much less than the cost of a custom paint job. This should be seen as a win-win for both the environment and the industry.

—ICCT researcher Anh Bui

The report highlights opportunities to increase commitments to fossil-free steel, to make vehicles lighter and easier to recycle, and to push for greater industry transparency on emissions.

Policymakers can support this shift by providing financial incentives to encourage further investments in clean technologies that currently entail higher costs. Other suggestions include introducing a green steel quota and requiring vehicles to be designed for recycling.