As of 2025, the Swedish H2 Green Steel firm announced it would provide Mercedes-Benz with 50,000 tonnes of steel produced without the use of fossil fuels.
A contract for the possible supply of green steel made in North America was also inked by the two businesses.
In place of the highly polluting coal used in conventional steelmaking, H2 Green Steel, whose first facility is currently under construction in northern Sweden, proposes to build steel using hydrogen created from renewable energy.
A tentative agreement with Mercedes-Benz “has now been further developed into a binding agreement covering volumes of about 50,000 tonnes per year, which will be produced in H2 Green Steel’s green hydrogen-powered iron and steel plant in Boden in northern Sweden,” the two companies said in a joint statement.
According to industry estimates, each car requires about 900 kilos (1,985 pounds) of steel, thus the contract would allow Mercedes-Benz to build about 55,000 automobiles with a smaller carbon footprint.
In the previous year, Mercedes-Benz sold almost two million automobiles.
The deal’s financial specifics were not made public.
The two businesses announced the signing of a memorandum of understanding for the prospective supply of green steel made in North America.
H2 Green Steel CEO Henrik Henriksson said only that “We have spoken to various stakeholders in both Canada and the US for some time.” He did not provide any other information.
According to H2 Green Steel, their process cuts emissions by 95% when compared to conventional steel production.
One of the most CO2-polluting heavy sectors, according to the World Steel Association, accounts for seven to nine percent of global man-made emissions.
Access to electricity, particularly that supplied from renewable sources, is said to be the main barrier to full-scale production.
Vargas, the co-founder of the Swedish electric battery company Northvolt and a climate tech investment firm, is one of H2 Green Steel’s largest backers.
H2 Green Steel’s Boden factory, which is scheduled to start producing in 2025, has officially gained environmental approval.
It is anticipated to have a capacity of up to five million tonnes of steel annually using hydropower to manufacture hydrogen, according to the business.
In the area, a number of businesses are making investments in steel made without the use of fossil fuels.
Swedish steelmaker SSAB has partnered with mining firm LKAB, state-owned utility Vattenfall, and a prototype facility that already uses renewable hydrogen to produce decarbonised steel.
In 2026, the partnership plans to establish a larger facility.