Greenpeace says automakers fail to disclose emissions from steel

A new report published by Greenpeace East Asia claims that automakers are “steering us toward climate catastrophe” by failing to decarbonise their steel supply chains.

The new report analysed estimated automotive steel usage by major carmakers. Calculations were based on sales data sourced not from the automakers themselves but from group level estimates from market research firm MarkLines.

Additional information that went into Greenpeace’s calculations included the average weight of 13 vehicle types, the share of steel in each vehicle type’s weight – between 50% and 65% – and the global average CO2 emissions per tonne of steel produced – which is around 1.91 tonnes of CO2.

Greenpeace therefore concluded that steel production for the world’s automakers is responsible for an estimated 573 million tonnes of CO₂ emissions per year, approximately equivalent to the annual emissions of Australia.

“Automakers are steering us toward climate catastrophe by failing to decarbonize their steel supply chains,” said Wenjie Liu, senior analyst with Greenpeace East Asia.

“Automotive steel has a massive carbon footprint, but major automakers like Hyundai, Volkswagen, and Toyota have not disclosed their steel emissions. We need automakers to both consume less steel and to drive the transition to zero-carbon steelmaking.”

According to Greenpeace, in 2022, the 16 largest automakers in the world used at least 39 million tonnes of steel, generating an estimated minimum 74 million tonnes of CO₂ emissions.

Specifically, during 2022, Toyota used the most steel of all 16 automakers at around 6.3 million tonnes, resulting in an estimated minimum 12 million tonnes of CO2 emissions.

Worth noting is that these figures are not inherently anyone’s “fault”, as they simply represent sales volumes, and the greater amount of steel used is representative of a company’s success.

Greenpeace claims that the average passenger vehicle is comprised of approximately 50-65% steel by weight, and that steel is responsible for between 30% and 40% of an average vehicle’s material emissions.

This, therefore, represents an important decarbonisation opportunity, given that, with the advent of electric vehicles reducing operational emissions, more than 60% of a vehicle’s life-cycle emissions will be from materials by 2040.

Conversely, however, the Greenpeace report fails to include any mention of Tesla – a seemingly significant oversight, considering that just last week it was reported that the Tesla Model Y was now the best-selling car in the world, beating out the Toyota Corolla.

This is particularly confusing given that Tesla published its impact report for 2022 at the beginning of May, in which it claimed that emissions from steel accounted for only 8% of its total Scope 3 emissions (including purchased goods and services and upstream logistics).

For comparison, in the same chart, Tesla reported that its aluminium emissions were 18% and battery emissions were 27%.

Greenpeace also looked at the larger picture of automotive steel decarbonisation, noting that “no major automaker has set a specific target to reduce steel consumption and associated emissions.” This, however, probably has a lot to do with the lack of available “green” steel suppliers, a burgeoning opportunity for steelmakers.

Greenpeace does acknowledge that “In some cases, automakers and steelmakers have partnered in low-carbon steel initiatives, particularly in Europe.” However, Greenpeace was unimpressed with some of the announcements and expressed concern that “existing steel decarbonization initiatives lack pathways to adopt renewable energy.”

Pointing to announced partnerships such as the March 2022 announcement between Volkswagen Group and Salzgitter, one of the largest steel producers in Europe. With plans to begin low-CO2 steel production from the end of 2025, Volkswagen intends to become Salzgitter’s first major industrial customer with a hope of seeing CO2 savings of more than 95%.

However, Greenpeace were nevertheless leery of this announcement, too, describing the terms of the deal as “ambiguous” in regards to its low-carbon bona fides.

Volvo has also announced it has started using fossil free steel, both in its cars and electric trucks.

“If they are serious about decarbonization, by 2030, automakers must halve their emissions from steel,” said Liu.

“The first step is the disclosure of steel-related emissions, but we unfortunately haven’t seen this happen yet.

“Automakers should also issue green steel procurement commitments, which would signal steelmakers to invest in new technology. In the longer term, automakers must achieve net zero emissions across their supply chains, both via reduced use of steel and a full transition to zero-carbon steel.”