Shanghai (ZXZC)- Beijing Benz Automotive Co., Ltd. ("BBAC") and Baosteel signed a memorandum of understanding (MoU) on Nov. 22 to jointly promote the application of cleaner raw materials in the manufacturing process of complete vehicles and build a green automotive steel supply chain, according to a post on BBAC's WeChat account.

Under the "Supply Chain 2039 Carbon Neutrality Action Plan" set by BBAC, the joint venture has raised requests on carbon emission reduction to its suppliers regarding the main raw materials and auto parts (such as steel, aluminum, plastic particles, and batteries), which generate a great deal of carbon emissions during production, in a bid to achieve carbon neutrality across its entire supply chain in 2039.

Photo credit: BBAC

As an important long-term supplier of BBAC, Baosteel is working on developing super-low-carbon-emission automobile plates. Both parties believe that the new MoU signing will help them improve their production and operation mechanisms, and lift carbon emission reduction efficiency.

Under the MoU, BBAC will start using low-carbon steels from 2023 and aims to gradually decrease the carbon emissions from automotive steel by 50%-80% from 2026 through the technical route of hydrogen-based shaft furnace plus electric furnace. Besides, the green steel, which targets a carbon emission decrease by 95% over the existing steel, will be used by the joint venture in the future.

Baosteel plans to put its hydrogen-based shaft furnace into operation in 2023, which will further lower carbon emissions amid the manufacturing process.