Mercedes-Benz Cars is forming multiple agreements with European steel suppliers as the automaker aims to use 200,000 tons of CO2-reduced steel per year.

“The increased availability of green steel enables us to gradually introduce CO2 reduced steel and in a second step to use almost CO2 free steel in our vehicles, significantly helping to lower our carbon footprint,” said head of procurement & supplier quality Gunnar Guethenke.

Mercedes-Benz and Thyssenkrupp Steel have entered into a preliminary agreement for the supply of CO2 reduced steel.

The agreement will see the companies work towards an almost CO2 free production process through direct reduction plants and advanced smelters, contingent on the availability of green hydrogen.

Steel supplier Salzgitter Flachstahl uses an electric arc furnace for steel production, which can lead to a 60% reduction in emissions compared to blast furnaces.

Both Salzgitter Flachstahl and Arvedi plan to supply raw steel produced with green electricity.

The automaker said that “further increases the savings potential to more than 75%”.