SDI to supply steel to Mercedes-Benz in Alabama

Mercedes-Benz AG has signed an agreement with Steel Dynamics Inc. (SDI), Fort Wayne, Indiana, to source more than 50,000 metric tons of CO₂-reduced steel annually for its plant in Tuscaloosa, Alabama.

Without identifying which facility, Mercedes says SDI will supply steel made using an electric arc furnace (EAF), and will use electricity from 100 percent renewable sources.

“With EAFs powered by green electricity, emissions can be reduced more than half to 1.0-ton [of] CO₂ per ton of steel on average, compared to primary steel production which uses blast furnaces and basic oxygen furnaces," Mercedes says.

Mercedes, which has had a business relationship with SDI since 2015, says the move marks “another crucial milestone" toward decarbonizing its global steel supply chain.

The automaker says SDI flat-rolled steel made of 70 percent or more scrap content is being used in all Mercedes-Benz models assembled at its Tuscaloosa plant, including two sport utility vehicle (SUV) models.

“Both parties agreed to potentially increase the share of scrap in the near future, which would reduce the carbon footprint even further,” Mercedes says. The CO₂-reduced steel from SDI specified in the new agreement is being introduced into series production at the Tuscaloosa plant as early as September of this year.

“Our ambition is clear: Together with our partners we want to make our entire fleet of new vehicles net carbon-neutral along the entire value chain by 2039,” says Dr. Gunnar Güthenke, head of procurement with Mercedes-Benz.

“Following this strategy. our agreement with SDI to procure more than 50,000 metric tons CO₂-reduced steel annually is another important milestone to establish a sustainable steel supply chain in North America.”

Mercedes-Benz also is a member of the Responsible Steel initiative and has an aim “to ensure environmentally compatible and socially acceptable steel production along the entire value chain.”