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Tackling Dirty Steel in Auto Supply Chains

By Carly Oboth

Imagine you’ve just bought a brand-new car. Did you know that before you even turn on the ignition for the first time, the materials in your new car have already emitted up to a third of its lifetime carbon pollution? While the transition to electric vehicles will eliminate tailpipe pollution from driving around a new car or truck, the proportion of emissions generated from extracting and processing materials to build them, like steel and aluminum, will rise–unless automakers take action now to decarbonize their supply chains. 

The modern steel industry, which still relies on coal, generates about 7-9% of global carbon emissions. This is on par with the annual carbon footprint of India. As one of the most widely used materials in the world that also comprises up to 60% of your new car, the steel industry is a strategic target for automakers to slash their emissions.

The good news is that there are new, cleaner technologies available that could be used to manufacture steel without harming the planet or nearby communities. Refining iron ore to produce steel requires a significant amount of heat. For centuries, steelmakers have burned coal to refine iron ore using blast furnaces. Not only does this archaic process drive climate change, but it pollutes communities living near steel mill operations, increasing the likelihood of residents developing respiratory illnesses and exposing them to cancer-causing toxins, further underscoring the need for steel made through cleaner, and safer practices.

Several pilot projects in Europe are demonstrating that steel manufacturers can swap out coal for hydrogen made using 100% clean energy to produce fossil-free steel, or what’s sometimes called “green steel.” While this technology is still relatively new, there is enormous potential for it to completely transform the steel industry and substantially shrink its carbon footprint. And even better, just last month, the U.S. Department of Energy announced new funding for two green steel projects in the United States.

For steelmakers to be convinced to invest in the technology to produce fossil-free steel, they need to hear from the customers that generate the most profit for them: automakers. Major automakers like Ford Motor Company must demand more green steel—and demand that it be produced in America. Ford has committed to becoming carbon neutral by 2050, but if it’s serious about accomplishing this goal, it will have to address its dirty steel problem. 

Ford also recently ranked number one in the Lead the Charge’s second-annual Leaderboard, which evaluates automakers’ progress towards remaking equitable, sustainable and fossil-free supply chains. Part of Ford’s increased score since last year is due to the automaker’s recent efforts to cut emissions from its steel supply chain. In particular, Ford joined the First Movers Coalition, a coalition of major companies’ committed to decarbonizing polluting industries like steel. As one of the only automakers to sign on to the First Movers Coalition, Ford has pledged that at least 10% of its steel purchases will be low-carbon steel by 2030. This commitment sends a powerful message to steelmakers that their customers want fossil-free steel.

Ford has also signed three letters of intent with European steelmakers to procure fossil-free steel. Although these are not binding, these agreements are another tool for automakers to signal their strong support for decarbonizing the steel industry. So far, Ford is making more progress than other US automakers, but we need Ford to do more than just publicize its intentions. To meaningfully clean up the steel industry, we need Ford to take action now by signing binding purchase agreements, which will pressure its competitors to do the same. As one of the largest American automakers, Ford’s purchasing power wields significant influence in shaping the trajectory of the steel industry, in the U.S. and beyond.

That’s why we sent this letter to Ford’s CEO Jim Farley demanding that Ford Motor Company take action to procure fossil-free steel now for its vehicles, as part of our new campaign. It’s critical for automakers to swap out fossil-fuel-powered engines for batteries, but it’s not enough to only care about reducing tailpipe emissions. Automakers, like Ford, must also prioritize eliminating all of the emissions generated from cars, including the materials, to prevent irreversible climate chaos.