ESG Today writes that H2 Green Steel's upcoming steel manufacturing facility in Sweden is set to be one of the largest in the world, with a green hydrogen production unit rated at one gigawatt capacity.

Mercedes-Benz is another customer for H2 Green Steel, who attracted other companies and aims to get more under its supply chain of steel manufactured with reduced emissions and clean power.

Henrik Henriksson, CEO of H2 Green Steel, said that "this is a true milestone contract for H2 Green Steel, not the least because of its size. ZF’s role in the automotive ecosystem is undeniable and they are a true partner to us where we also see potential to move into other regions, like North America."

Neither company disclosed how much steel would be delivered through the agreement, but H2 officials said that the amount would cover "a significant share" of ZF's steel requirements of 2.5 million tons per year. Additionally, it is said that 2.3 million tons of CO2 emissions will be avoided by using the company's clean steel, with deliveries expected to begin in 2026.

ZF's climate goals imply reducing Scope 1 and 2 emissions by 80% and Scope 3 by 40% before the next decade. Also, company officials say that a general net-zero target is on sight for 2040.

ZF Board of Management member Stephan von Schuckmann said that "H2 Green Steel is a good example of startups working together with established players to drive change faster than the incumbent industry has managed. For ZF, this is a strategic agreement in our significant efforts to reduce CO2 emissions from our supply chain."