SSAB to collaborate with automotive groups on potential supply of fossil-free steel

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Sweden’s SSAB has announced collaboration plans with two European auto groups on the potential supply of fossil-free steel for auto bodies and parts.

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SSAB to collaborate with European auto groups on potential fossil-free steel supply

Postmodern Studio/Adobe StockThe flats and specialty steelmaker said Sept. 2 that it has agreed to collaborate with French company Faurecia on fossil-free steel to equip its automotive seating structures from 2026.

Faurecia has its headquarters just west of French capital city Paris. Besides auto seats, the company designs and manufactures exhaust systems, as well as interior systems that include dashboards, center consoles, door panels and acoustic modules.

SSAB also jointly announced with Mercedes-Benz on Sept. 1 that it would supply fossil free steel for the German group’s auto bodies, the specialty steelmaker said.

The first fossil-free steel prototypes for the auto group are due to be ready by 2022. Mercedes-Benz plans to become carbon-neutral by 2039 along its entire value chain, the companies stated.

An SSAB official declined to indicate the prospective volumes of steel that the steelmaker could supply to Mercedes-Benz, citing confidentiality agreements.

The collaboration announcements follow SSAB’s Aug. 16 announcement that it has produced the first batch of fossil-free steel at its Oxelösund site. DRI used in the fossil-free steel came from a pilot plant at the company’s Luleå works in central Sweden.

The pilot plant uses HYBRIT technology, which replaces coking coal with hydrogen to reduce iron ore and thus cuts emissions, information from the group stated.

Swedish automaker Volvo has also expressed interest in acquiring the fossil-free steel, and was among the first to receive part of the test batch, the official added.

The cost of producing fossil-free steel is now 20-30% higher per metric ton than via conventional methods, the SSAB official admitted.

“But there has been a significant cost rise in the rise of CO2 emissions,” the official added, referring to the European Union’s carbon policies.

Fossil-free reception

Industry watchers were also positive about the concept of fossil-free steel, yet gave some caveats over the technology and feedstock.

Iron ore suitable for the direct reduction process is normally more expensive, as it is more difficult to find, one industry watcher said in August.

A second analyst warned of potential difficulties in the process that could lead to porosity, scaling as well as compromised strength in the steel via the HYBRIT process.

He noted, however, that SSAB and its partners are still developing the process.

SSAB to invest in new plant

SSAB now plans to invest SEK 10 billion ($1.16 billion) in a three-way joint venture with compatriot iron ore miner LKAB and Swedish energy producer Vattenfall to build a plant at Gällivare, in the country’s north, for commercial production of direct reduced iron via its HYBRIT technology.

That plant will have an annual DRI capacity of 1.3 million metric tons and will tentatively go on stream by 2026. That is the same time that SSAB plans to start up a new electric arc furnace (EAF) at Oxelösund to replace the two blast furnaces now operating there.

Projected crude steel capacity from the Oxelösund EAF will be slightly over 1 million metric tons per year, the official told MetalMiner.

Plans call for the group’s Luleå and Raahe plants, respectively in northern Sweden and central Finland, to also convert their hot ends to EAFs no later than by 2045.

Luleå has one blast furnace. Meanwhile, Raahe has two.

Power to operate furnaces and the HYBRIT plans will also come from renewable sources. Sweden has nuclear power in the south as well as water and wind in the country’s north, the official stated.

“We want to make the whole value chain fossil-free,” the source added.

In addition to the joint venture, LKAB plans to build a duplicate HYBRIT plant next to the original one, which will have the same capacity and tentatively start up by 2029, the official added.

LKAB mines iron ore at Kiruna and at Malmberget in northern Sweden.

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