A new agreement between Gestamp and Tata Steel UK will see the percentage of recycled steel in the components they supply to the automotive sector nearly double, as the two companies work to increase the circularity of steel in the automotive supply chain. The initiative will allow Gestamp to pass the benefits of increasing its recycled content, such as a reduced carbon footprint, to vehicle manufacturers.

OEMs need low-emission steel to meet their decarbonisation targets with guaranteed quality and safety. This new circularity concept contributes to achieving sustainability goals by using high-quality scrap as a secondary raw material for the production of low-emissions steel.

Tata Steel’s automotive steel grades already include 17% recycled content – made up of scrap steel that re-enters the steel production process.  The recycled content provided by Gestamp will be additional to the existing recycled content. This new partnership sees the percentage of recycled content associated with the steel provided to Gestamp jump to 30% with no impact on quality, strength or formability. This is, in turn, passed on to automotive manufacturers, reducing the overall carbon footprint of their supply chain and production process.

Steel is 100% circular, it can be re-melted to produce material of the same quality an infinite amount of times. When a component, for example a bumper bar, is processed from steel, it is typical for the manufacturing process to generate some scrap material. Normally, this high quality scrap is sold on to a third party scrap buyer and mixed with steel grades of different qualities. 

In this new partnership, Gestamp will channel its high quality scrap (through efficient collection and transport management) to Tata Steel’s steelworks in Port Talbot so that it can be used again in future steelmaking. By using the mass balance principle, the returned steel will then be accounted for as part of the component’s recycled content. The traceability and quality of pre-consumer scrap provided by Gestamp will enable the recycled content of new steel to be increased and the quality of the steel to be preserved.  

To ensure accountability, Tata Steel will provide evidence to demonstrate the volume of high quality scrap supplied and the associated CO₂ savings by setting up a Gestamp Recycled Content Bank, which will be independently audited.

Peter Quinn, director of sustainability & environment at Tata Steel UK, said: “Reducing the automotive supply chain’s carbon footprint is a priority for us and many of our customers, including Gestamp. We believe that improving circularity in the supply chain is an effective and immediate way to reduce overall CO₂ emissions in the automotive sector, as well as the most efficient way to recycle steel. The approach we have taken with Gestamp demonstrates the innovative and collaborative thinking possible, not only in our two organisations, but in the UK automotive supply chain as a whole.”

Ernesto Barceló,  chief esg officer at Gestamp, said: “This agreement strengthens our circular economy model and benefits our customers on their way to neutrality and net-zero-car thanks to the use of high quality scrap as a secondary raw material while guaranteeing the quality and safety of our products”. “The excellent management of Gestamp in collection, sorting and transport this high quality scrap, will provide  Tata Steel with (the possibility of) lower emissions steel”. 

Any additional revenue earned by Tata Steel UK as a result of this partnership will be reinvested into further decarbonisation projects, in turn accelerating the company’s path to net zero. So far, Tata Steel UK has reduced the amount of energy required to make one tonne of steel by 30% since 1990.

Steelmakers, including in Europe, are looking to reduce their carbon emissions, such as by recycling scrap to create new high-quality steel for customers. Earlier this month (September) Tata Steel announced the proposed route to decarbonise its UK operations by switching to electric arc furnace steelmaking (EAF) technology which produces new steel from scrap steel. The proposal is subject to relevant regulatory approvals, information and consultation processes, and finalising detailed terms & conditions. Bringing back steel scrap from customers like Gestamp to its Port Talbot steelworks is, therefore, an important step helping to secure raw materials for steel products both now and in the future. It also means recycled, reduced carbon steel is available to automotive manufacturers in the short term until EAF steel is in production.

Last year Tata Steel UK launched Optemis Carbon Lite, which enables steel users to reduce products’ carbon footprint by up to 90% by drawing upon credits in its CO₂ bank, earned from independently-verified CO₂ savings made by its decarbonisation projects.