ArcelorMittal and Gestamp sign circularity agreement to boost sustainability of automotive supply chain

24 July 2023

Flat Products and Tier 1 automotive supplier Gestamp have signed a ‘circularity agreement’ aimed at strengthening environmental sustainability throughout the industrial supply chain. The agreement involves jointly designing and implementing a circularity scheme that will enhance the recycling of steel between Gestamp and ArcelorMittal and ultimately, offer benefits obtained to their automotive customers.

In March 2022, Flat Products delivered its first tonnes of XCarb® recycled and renewably produced, which is made via the Electric Arc Furnace route using a minimum of 75% of scrap steel and 100% renewable electricity for the steel making process. This results in a CO2 footprint close to 70% lower than the same product made without XCarb® recycled and renewably produced substrate.

In July 2022, ArcelorMittal and Gestamp successfully trialed the use of low carbon-emissions steel and high scrap content for use in car parts that will ultimately be used in the production of vehicles in Spain and throughout Europe. At the time, this was the first publicly announced cooperation of its kind, paving the way for the greater use of low-carbon emissions steel in the automotive sector.

Since December 2022, Gestamp has also provided visibility on its roadmap to promote and extend the business’ circular economy model, focusing on the use of recycled steel. Securing the availability of high-quality scrap will support the increased usage of this low-carbon emission steels in automotive parts. The integration of scrap management into Gestamp’s business strategy allows for complete life-cycle traceability by integrating the collection, sorting and reuse of quality steel scrap into its production chain, in an environment where this secondary raw material is scarce.

Enhancing the reliability of the scrap supply chain for low carbon-emissions steel products is an important part of the decarbonization process. The new agreement signed offers the supply guarantee to the OEMs who want to use reduced CO2 steel solutions. Both companies recognize that this reliability is best achieved through collaboration among supply chain partners. This collaboration will allow automotive customers, once they have started with the CO2 performance on their vehicles, to maintain it over the lifespan of the vehicle until end of its production.

In June 2023 at its Capital Markets Day, Gestamp presented the main objectives to contribute to sustainable mobility for future generations. The short-term objective is to support OEMs in the transition towards more sustainable mobility by reducing the weight of metal components and therefore the CO2 emissions generated. Furthermore, the integration of scrap management for recycling steel scrap as a secondary raw material contributes to the long-term global goal of a net-zero car.

“The return of high-quality pre-consumer scrap, with traceability of its origin, quality and processing, for the production of low emission steel products,” affirms Ernesto Barceló, Chief ESG Officer, “allows Gestamp to secure the circular supply chain to our customers with a secondary raw material. Furthermore, this will grant us keep using natural resources in a responsible way even after decarbonisation objectives have been achieved.

Speaking about the agreement, Paul Brettnacher, CMO ArcelorMittal Europe – Flat Products, automotive, packaging and electrical steels, said: “We are delighted to have signed this agreement with Gestamp, that strengthens the work we are doing together on environmental sustainability in the automotive sector. This step is a new milestone for ArcelorMittal in our work to offer our automotive customers a broad range of low-carbon emissions steel grades, after other successes such as the commercialization of Usibor®1500 made with XCarb® recycled and renewably produced substrate”.