Volkswagen to source low-carbon steel from Jindal Steel Group company

Starting in 2027, Vulcan Green Steel will produce automotive grades and other high-strength steels in Oman. The mine-to-metal strategy covers everything from mined iron ore to green energy and hydrogen all the way to finished flat steel.

Autocar Pro News Desk By Autocar Pro News Desk calendar 19 Jun 2024 Views icon8800 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Volkswagen to source low-carbon steel from Jindal Steel Group company

Volkswagen and Vulcan Green Steel, a Jindal Steel Group company, have signed a Memorandum of Understanding (MoU) for a partnership for low-carbon steel – a key element of Volkswagen’s green steel strategy.

The partnership is one of a series of initiatives by the Volkswagen Group to expand the use of green steel in production. In addition to the collaboration with Vulcan Green Steel, Volkswagen has been in partnership with Salzgitter AG since 2022. The Group also has a stake in Swedish green steel manufacturer H2 Green Steel via its subsidiary Scania.

The Jindal Steel Group, to which Vulcan Green Steel belongs, is a diversified industrial conglomerate with steel, iron ore mining and energy operations as well as activities in India, Oman, Africa and Australia.

Starting in 2027, Vulcan Green Steel will produce automotive grades and other high-strength steels in Oman. Natural gas will be used in the Duqm operations during the initial years and later the operations will be switched over to green energy in a move that will cut carbon emissions by 70 per cent once the transition is complete. The facility is currently in the construction phase and is slated to come on stream in 2026.

“Decarbonising supply chains is a decisive factor for the Volkswagen Group on the road to carbon neutrality. We want to achieve this goal by 2050 at the latest, and using low-carbon steel is an important step in this direction. Green steel will help us make supply chains at Volkswagen even more environmentally friendly going forward,” said Dirk Grohe-Loheide, Member of the Board of Management of the Volkswagen Brand responsible for Procurement and Member of Volkswagen AG’s Extended Executive Committee.

As per the MoU, up to 300,000 tons of Europe’s annual steel requirements will be covered. The volumes of low-carbon steel that Volkswagen AG expects to order will cover a significant proportion of total steel requirements and will be used by the Group’s production facilities from 2027 onwards. 

The mine-to-metal strategy covers everything from mined iron ore to green energy and hydrogen all the way to finished flat steel. The fully vertically integrated production of flat steel in Oman will extend from mined iron ore to own generation of green energy and production of green hydrogen all the way to secondary metallurgy of the finished steel.

Strategically located in the Al Wusta region of the Sultanate of Oman, Vulcan Green Steel will have an initial capacity of 3 MTPA in Phase 1. Its location benefits from exceptional solar and wind profiles making it an ideal choice. 

Oman: ideal conditions for renewables
High wind speeds and strong, continuous solar radiation in Oman create ideal conditions for generating green power from wind and solar energy – an essential basis for the production of low-carbon steel using green hydrogen. This will see carbon emissions in steel production to be reduced by 70 percent. Vulcan Green Steel’s low-carbon steel is expected to lower carbon emissions in steel production by 70 percent in the future.

Strategically located in the Al Wusta region of the Sultanate of Oman, VGS is set to be a ground-breaking greenfield steel complex with an initial capacity of 3 MTPA in Phase 1. Situated in Duqm, its location benefits from exceptional solar and wind profiles making it an ideal choice. 

Lead image: JIndal Green Steel 

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