Volkswagen Group Signs MOU with Vulcan for Green Steel

Volkswagen AG and Vulcan Green Steel have entered into a Memorandum of Understanding (MoU) to collaborate on low-carbon steel, a pivotal component of Volkswagen’s strategy for sustainable steel.

"Decarbonizing our supply chains is crucial for the Volkswagen Group as we progress towards carbon neutrality. Our aim is to achieve this by 2050 at the latest, and integrating low-carbon steel is a significant stride in this direction. Adopting green steel will enhance the environmental sustainability of Volkswagen's supply chains moving forward," stated Dirk Große-Loheide, Member of the Board of Management of the Volkswagen Brand overseeing Procurement and a member of Volkswagen AG’s Extended Executive Committee.

Volkswagen AG plans to significantly impact Europe's steel demand, aiming to cover up to 300,000 tons annually with low-carbon steel starting in 2027. This initiative marks a pivotal shift towards sustainability, integrating a comprehensive "mine to metal" strategy in Oman. The fully integrated process spans from mining iron ore to generating green energy and producing green hydrogen, culminating in the refinement of flat steel through secondary metallurgy. Oman's advantageous conditions for renewables, including robust wind and solar resources, will underpin this ambitious endeavor. By harnessing these renewable energies, Vulcan Green Steel anticipates reducing carbon emissions from steel production by an impressive 70%, solidifying its role in advancing sustainable practices within the industry.

The partnership with Vulcan Green Steel is part of Volkswagen Group's broader efforts to increase the adoption of green steel in manufacturing. Alongside its collaboration with Vulcan, Volkswagen has partnered with Salzgitter AG since 2022. Furthermore, through its subsidiary Scania, the Group holds a stake in the Swedish green steel manufacturer H2 Green Steel.

The Jindal Steel Group, which includes Vulcan Green Steel, is a multifaceted industrial conglomerate involved in steel production, iron ore mining, and energy operations across India, Oman, Africa, and Australia.

From 2027 onwards, Vulcan Green Steel will manufacture automotive-grade and other high-strength steels in Oman. Initially, natural gas will power the Duqm operations, with plans to transition to green energy in subsequent years, resulting in a 70% reduction in carbon emissions upon completion. The facility is currently under construction and is scheduled to commence operations in 2026.

Based in Wolfsburg, Germany, the Volkswagen Group stands as a premier global automotive manufacturer. With operations spanning the globe, the Group boasts 114 production facilities across 19 European nations, as well as locations in 10 countries throughout North and South America, Asia, and Africa. Employing approximately 684,000 individuals, Volkswagen vehicles are distributed in over 150 countries worldwide.

With a diverse portfolio of globally recognized brands, advanced industrial-scale technologies, innovative strategies to capture future profit opportunities, and a leadership team driven by entrepreneurial vision, the Volkswagen Group is dedicated to shaping the future of mobility. This commitment is evident through investments in electric and autonomous vehicles, digitalization, and sustainability initiatives.