Vehicle major Volvo Group has signed a long-term agreement with Swedish steel company H2 Green Steel to secure the supply of near-zero emissions steel as it strives to decarbonise its supply chains.
Under the agreement, H2 Green Steel will supply green steel produced at its plant in Boden, Sweden, to Volvo Group from mid-2026.
In a press statement, Volvo said: “As commercial vehicles increasingly run on electrified solutions – reducing the emissions when the product is in use – the environmental footprint from the supply network and production becomes increasingly important.”
Volvo Group chief purchasing officer Andrea Fuder said the agreement will support its work to reduce emissions and contribute to its aim to transition towards net zero.
Fuder commented: “Steel is a big contributor to the footprint of our products, and working together with both established and new players for developing decarbonised materials is key to advancing our progress in sustainable transport and infrastructure solutions.”
First Movers Coalition, of which Volvo Group is a founding member, has set a target to have at least 10% of all steel purchased annually to be near-zero emissions by the end of this decade.
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Recently, H2 Green Steel raised €1.5bn ($1.6bn) in equity funding from an investor group led by Altor, GIC, Hy24 and Just Climate to build what it claims to be the world’s largest green steel plant.
The facility will have the capacity to deliver steel, which will have up to 95% less CO₂ emissions when compared with steel produced with traditional blast furnace technology.