Merecedes-Benz and H2 Green Steel announced June 7 that the two sides had signed a binding agreement that will see H2 deliver 50,000 tons of green steel to the automaker’s European production facilities each year. The companies also signed a Memorandum of Understanding (MoU) for the potential supply of green steel to Mercedes-Benz's North American factories as well.

“With the supply deal of around 50,000 tons almost of CO2-free steel from H2 Green Steel for our manufacturing plants in Europe, Mercedes-Benz and H2 Green Steel are accelerating the creation of a decarbonized, regional and resilient steel supply chain,” said Markus Schäfer, member of the Board of Management of Mercedes-Benz Group AG and chief technology officer of Development & Procurement. “At the same time, we are taking our partnership to the next level with the aim of establishing a sustainable steel supply chain in North America, another important step towards making the auto industry more resilient and sustainable.”

The products that will be used in Europe will be produced at H2's green hydrogen-powered iron and steel plant located in Borden, Sweden. Additionally, Mercedes-Benz and H2 will work together to create a closed-loop recycling process for the Boden plant, ensuring all scrap steel going to the facility comes from reused and recycled post-consumer products.

“Emissions-reduction efforts are triggering bigger changes across automotive supply chains,” writes The Wall Street Journal’s Paul Page, who explains that this agreement underscores “a broader shift by the industry to reduce greenhouse-gas emissions in supply chains.”

Prior to this deal, in April 2022, Mercedes-Benz announced the company would be launching several initiatives aimed at halving the amount of CO2 emissions produced by each passenger car over a vehicle's lifecycle by the end of the decade.