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Volkswagen Joins Forces With Vulcan Green Steel For Low-Carbon Production
Volkswagen Group is taking significant steps towards carbon neutrality by 2050, with a focus on decarbonising its supply chains. Dirk Große-Loheide, Member of the Board of Management of the Volkswagen Brand responsible for Procurement, emphasised the importance of using low-carbon steel in achieving this goal. Volkswagen aims to cover up to 300,000 tons of Europe’s annual steel requirements with low-carbon steel from 2027 onwards.
The partnership between Volkswagen AG and Vulcan Green Steel is a key component of Volkswagen’s green steel strategy. The Memorandum of Understanding (MoU) signed between the two companies will see Vulcan Green Steel produce automotive grades and other high-strength steels in Oman starting in 2027. Initially, natural gas will be used in the Duqm operations, transitioning to green energy later to reduce carbon emissions by 70 per cent.
Vulcan Green Steel’s fully vertically integrated production process in Oman will span from mined iron ore to the generation of green energy and hydrogen, culminating in the production of finished flat steel. Oman’s favourable conditions for renewable energy, including high wind speeds and strong solar radiation, make it an ideal location for this initiative.
Partnerships and Collaborations
In addition to its collaboration with Vulcan Green Steel, Volkswagen has been partnering with Salzgitter AG since 2022. The Group also holds a stake in Swedish green steel manufacturer H2 Green Steel through its subsidiary Scania. These partnerships are part of Volkswagen’s broader strategy to expand the use of green steel in its production processes.
Volkswagen Group Overview
The Volkswagen Group, headquartered in Wolfsburg, Germany, is one of the world’s leading automotive manufacturers. It operates 114 production sites across 19 European countries and 10 countries in North and South America, Asia, and Africa. Employing around 684,000 people, the Group sells vehicles in over 150 countries.
In 2023, Volkswagen delivered 9.2 million vehicles globally, up from 8.3 million in 2022. The Group's sales revenue for 2023 was EUR 322.3 billion, compared to EUR 279.1 billion in 2022. Operating profit before special items amounted to EUR 22.6 billion in 2023.
Future Prospects
The facility in Oman is currently under construction and is expected to commence operations in 2026. This initiative aligns with Volkswagen's commitment to sustainability and reducing carbon emissions across its supply chains.
For further information, contact Esra Aydin at +49 (0) 152 588 700 25 or Kate Thompson at +44 (0) 7713 265562.
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