Steel manufacturer Nucor Corporation announced today that it has signed an agreement with Mercedes-Benz to supply low-embodied carbon steel for the automaker’s production plant in Tuscaloosa, Alabama.

The agreement is the latest in a series of low carbon steel deals for Mercedes-Benz, including another agreement last year for the Alabama plant with Steel Dynamics, and with Swedish startup H2 Green Steel to supply low-carbon steel for use in vehicles in Europe.

Mercedes-Benz stated last year that it is pursuing a goal to achieve a green steel supply chain from 2039 at the latest, as part of a series of ESG-related goals and initiatives announced by the company at its ESG Conference to investors and analysts, which also included a target to achieve an 80% reduction in CO2 emissions from production by 2030.

The Tuscaloosa plant produces SUV models including the GLE, GLE coupé and GLS model series, as well as the all-electric EQS SUV and EQE. All models built in the plant currently use SDI flat rolled steel made of 70% or greater recycled scrap content. The plant produced approximately 295,000 vehicles in 2023.

Under the new agreement, Nucor will supply Mercedes-Benz with Econiq-RE brand steel for models produced at the Alabama plant. Launched in 2022, Econiq-RE certifies that steel is made with 100% renewable energy, enabling greenhouse gas emissions to be reduced to less than half that of extractive blast furnace-based steel production, including Scopes 1, 2 and 3 emissions.

Dan Needham, EVP of Commercial at Nucor said:

“Nucor is grateful for the opportunity to partner with Mercedes-Benz as a strategic supplier of lower-embodied carbon steel, which will reduce carbon emissions throughout their supply chain. Our Econiq brand is helping steel end-users meet their growth and sustainability goals, and we are proud that it is going to be a key piece of Mercedes-Benz’s path towards a net carbon-neutral new car fleet along the entire value chain.”

Steelmaking is one of the biggest emitters of CO2 globally, and one of the more challenging sectors to abate, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels.

Nucor produces steel using recycled scrap metal in an electric arc furnace, enabling the company to operate with GHG intensity more than 60% below the global average. Last year, Nucor set a goal to achieve net zero emissions across Scopes 1, 2 and 3 from the production of hot rolled steel, and outlined initiatives it will take to reach its target, including increasing the use of clean electricity, carbon capture and sequestration and near zero GHG iron making.