The company, which supplies sheet metal to the auto industry, says the move will cut carbon emissions from production by approximately 70%, a reduction equivalent to removing more than 900,000 cars from the road each year. This is good news for the climate and for the auto sector. As the second-largest consumer of steel after buildings and infrastructure, the auto industry needs low-carbon steel products if it’s going to meet its own emissions targets.

Virtually every vehicle on wheels is made primarily of steel. That’s a problem since the steel industry is one of the highest emitting sectors of the economy, responsible for 7% of global greenhouse gas emissions, mostly due to its reliance on coal. Currently, tailpipe emissions are responsible for the bulk of the pollutants from road transportation. But that’s changing as uptake of electric vehicles continues apace. EVs don’t produce exhaust and, in many places, the grid is increasingly generating power from renewable or other green power sources.

Increasingly, attention is turning to the carbon footprint of an automaker’s supply chain and all the materials that go into building a vehicle. Of those materials, steel makes up the largest proportion at 60%. Indeed, the embedded, or production, emissions of an electric car will likely account for around 60% of total life-cycle emissions by 2030, with steel making up anywhere from 16% to 27% of that, according to the EU-based advocacy group Transport and Energy.

Auto sector takes small steps toward green steel

To date, only a handful of automakers have pledged to increase their use of either fossil-free steel or steel with reduced carbon intensity by 2030. BMW announced its procurement of “carbon-reduced” steel supplied by H2 Green Steel, based in Sweden, and has partnered with Salzgitter AG to receive “low-carbon steel” in 2026.

Volkswagen has signed a memorandum of understanding with Salzgitter AG to procure carbon-reduced steel starting at the end of 2025; Volvo has pledged that 50% of its steel purchases in 2030 will be lower in emissions intensity compared to current levels. And General Motors announced a supply agreement with U.S. Steel and ArcelorMittal for reduced carbon steel. (Algoma will in all likelihood also supply the automotive industry with green steel given that approximately 30% of its products go to the auto sector.)

The climate impact of shifting to low-carbon steel is profound. If, as recommended by groups such as Transport and Energy, European automakers replace 40% of the steel used in their manufacturing process by 2030, carbon dioxide emissions from the production of cars plummets by 6.9 megatonnes, equivalent to the annual GHGs emitted from 3.5 million fossil fuel cars. Switching to 100% green steel in new cars by 2040 will reduce emissions equivalent to taking 8.1 million gas-powered cars off the road.

In a recent report, the International Council on Clean Transportation (ICCT) acknowledges the importance of the public announcements made by some of the biggest players in the auto industry while also pointing out that “among major automakers selling vehicles in Europe and North America, only four have pledged to procure any fossil-free steel by 2030.” The report authors note that those commitments apply to a mere 2% of the global steel used by all these major automakers. Adding in “commitments to procure steel with reduced GHG emissions,” they write, “increases the share of cleaner steel to 4% of all automotive steel.”

The authors further argue that the auto sector is in a unique position to push the steel industry to decarbonize. “Automakers have significant purchasing power,” says Marta Negri, an associate researcher at ICCT and lead author of Which Automakers Are Shifting to Green Steel? “They can influence demand for green steel.”

Steel’s great big carbon footprint

Around 75% of steel worldwide is manufactured using coal-fired blast furnaces. According to the International Energy Agency’s Net Zero Emissions scenario, the steel industry must reduce its carbon output by 25% by 2030 to achieve climate neutrality by 2050 – and the sector is nowhere close to being on track.

On the bright side, the carbon intensity of steel production can drop considerably through deployment of low-carbon technologies and resource efficiency. For starters, the coal-blast furnaces can be replaced with electric ones, like Algoma’s, reducing emissions by as much as 95%. Scrap steel can be incorporated at much higher volumes than is done currently, and green hydrogen power is being actively explored for its potential as a cost-effective energy source.

Transportation, in turn, leaves a massive carbon footprint. Road transport in Canada is the second-largest source of carbon pollution after oil and gas, responsible for 22% of the country’s overall emissions. Electrifying road mobility is essential to meeting Canada’s international obligation under the Paris Agreement to limit global warming to below 1.5°C. Steel’s importance in the auto sector is becoming increasingly visible in part because more of it is needed in electric vehicles – due to their large battery units – than in combustion vehicles.

To see a significant dent in steel-related emissions, carmakers will need to employ a combination of strategies. “Green steel can be a competitive advantage for an automaker,” Negri notes. “Some companies are exploring this and being very vocal about their green steel use.”

Still, the road to industrial decarbonization is long. “We’d like to see more ambition,” Negri adds. “Two-thirds of the automakers we analyzed haven’t made any commitments to purchase low-carbon or fossil-free steel. And we need to see that the commitments made are carried through.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post Green steel may be a climate game-changer. Which carmakers are making the shift? appeared first on Corporate Knights.

Longer-range capabilities and the new federal incentive program, iZEV, are combining to make battery electric vehicles a more appealing and attainable option than ever. But if you’re looking for even more motivation to choose an EV, consider the lower total cost of ownership.

EVs don’t have oil to change or sparkplugs to replace, and that means fewer trips to the shop. According to current estimates, EV owners can expect to spend roughly a third less on maintenance over the life of their vehicles as compared to their internal combustion engine (ICE) equivalents.

Add in the fuel savings and the differences can be stark. Here, we’ve analyzed the popular Nissan Qashqai subcompact crossover against a similarly sized battery electric, the Kia Niro EV, and we’ve compared the Mercedes-Benz C-Class Sedan to the Tesla Model 3. As was the case when Corporate Knights conducted faceoffs with the Nissan Leaf, Chevy Bolt and Hyundai Kona Electric, the numbers show the benefits of choosing electrons over emissions.

Here’s an explanation of the figures we’ve used in this analysis:

• As of this writing, fuel prices are at historic lows due to the market forces at play during the COVID-19 pandemic. However, these prices are not expected to last. Since we’re assuming a 10-year period of ownership in our estimates, and prices over the past 10 years have swung anywhere from the current $0.75 to as much as $1.50 per litre in some markets, we’ve chosen a median average per-litre (L) cost of $1.25, understanding that this is the most volatile variable. For power rates, we’ve used a figure of $0.10 per kilowatt-hour (kWh). The published range and efficiency figures are as rated for each model by Natural Resources Canada (NRCan), (population-weighted average electricity bill per province, including taxes, assuming majority of charging occurs during off-peak hours).
• We’ve assumed the EV buyer would be a new owner, so we’ve factored in the purchase and installation cost for a Level 2 charger, using the total cost for a FLO Home unit of $1,745.
• We’ve made our calculations using the national average Canadian sales tax of 11.075%.

Kia Niro vs. Nissan Qashqai

Crossovers have become wildly popular with Canadians, and several EVs sporting this body style have hit the market to compete with mainstream equivalents.

One is the Kia Niro EV, the battery electric version of this subcompact crossover, which is also available in ICE and plug-in hybrid variants. The EV has an impressive 385-kilometre (km) range and comes in two models, or trims; here we examine the SX Touring trim, which is more expensive, at a manufacturer’s suggested retail price (MSRP) of $54,995 and a total cost of $55,929 with fees. Since the base model is priced under $50,000, this trim also qualifies for the iZEV program, and yet it adds features owners won’t want to live without, such as a heated steering wheel, front and rear heated seats, and a heat pump, which not only make it more suited to Canadian life but also make in-cabin comfort significantly more efficient (heated seats use less energy than cabin heaters and therefore less electricity, increasing the EV’s range). NRCan doesn’t account for these differences in efficiency in its ratings, which show the Niro EV averaging a combined 18.6 kWh/100 km.

Nissan’s subcompact Qashqai is a popular player in this growing segment. The SL Platinum grade carries an MSRP of $34,133 – slightly higher than advertised because there are no zero-cost paint colours – and a total of $36,213 with fees. This model matches the Niro EV SX Touring closely in features but offers one significant difference: it comes with all-wheel drive (AWD), which is desirable in winter driving and on imperfect roads but drives up its fuel use. According to NRCan, a Qashqai AWD averages 8.4 L/100 km combined, as opposed to the 8.2 L/100 km average seen in front-wheel-drive models.

We calculated based on both vehicles needing to be financed in full, less a $1,000 deposit, and used a 2.9% interest rate over a 72-month term, which are common numbers for each of these vehicles.
After running these through our estimator using the assumptions outlined above, the Niro EV ends its 10 years of ownership with a total cost of $86,264.50, which is $833.72 less than the Qashqai’s $87,098.21 – and all while producing 45.3 tonnes less in CO2 emissions over its life.

Tesla Model 3 vs. Mercedes-Benz C-Class

To look at this comparison fairly, we need to assess the Tesla Model 3 against the only four-door, non-performance variant of the Mercedes-Benz C-Class sold in Canada: the C-Class 300 4MATIC (AWD). This model has an MSRP of $46,400 and costs $48,575 after fees, and has a combined fuel efficiency rating of 9.4 L/100 km.

Longer-range models are available, and a lower-cost, “million-mile” battery has been announced that will debut in the Model 3 in China late this year or early next. For now, we presume for the purposes of this comparison that the buyer wants a Model 3 variant that qualifies for the iZEV program, making the best match the Standard Range Plus. This strikes a good balance between price and capability, with an estimated range of 402 km and an advertised price of $55,990, which includes destination charges and delivery fees. However, it comes equipped as rear-wheel drive only; to get the two-motor, AWD version, it’s necessary to pay $10,000 more for the Long Range model and give up the rebate, for a total hit of $15,000. The trade-off is in efficiency, which in the Standard Range Plus model is the best in the Model 3 lineup, at 14.9 kWh/100 km combined. This variant has heated 12-way front seats and includes the autopilot feature, but it doesn’t come equipped with self-driving features like autopark and summon, which are available only as a post-delivery, added-cost option.

We’ve also factored in a deposit of $5,000 since luxury brands typically request a down payment of 10%. In preparing this comparison, we found different interest rates on offer: Mercedes-Benz advertises a rate as low as 1.9% on the C-Class for qualified buyers, while Tesla’s website shows 4.6%.

Even in doing so, our model estimates the total cost of ownership for the Model 3 at $90,866.90 over 10 years versus $102,475.95 for the C-Class, for a savings of $11,609.06 over 10 years – and 50.9 tonnes less CO2 being pumped into the atmosphere.

According to a study cited recently by incoming Honda Canada president Jean Marc Leclerc, Canadians are currently willing to spend up to $700 more to buy EVs, which doesn’t cover the difference in production cost. Would more effective communication of the total cost of ownership, which clearly demonstrates savings of much more than $700 over the long-term, help car buyers mentally bridge the gap and tolerate higher up-front vehicle prices? Perhaps incorporating these figures into window stickers and engaging in education programs would help push electric vehicles into the consciousness of everyday consumers and bring this technology into the mainstream.

Stephanie Wallcraft is a multiple-award-winning automotive journalist based in Toronto and is the president of the Automobile Journalists Association of Canada (AJAC).

The post Assume EVs are pricier? Our latest showdown proves otherwise appeared first on Corporate Knights.