the BILSTEIN GROUP's cold-rolled strip with a reduced carbon footprint

Climate change affects us all. The steel industry is one of the leading emitters of greenhouse gases, so the sooner it can make progress in reducing its emissions, the better off we'll all be. Ambitious projects like BILCO2 are helping us tackle this issue. BILCO2, which was added to our portfolio in mid-2023, is a cold-rolled strip with a significantly reduced carbon footprint.

The product name "BILCO2" combines the comprehensive expertise we've built up since BILSTEIN & Co. (BILCO for short) was founded back in 1911, with our vision – which is a huge reduction of the carbon footprint of our steel products.

Product details

BILCO2 is offered across all our steel products and grades, at both BILSTEIN and HUGO VOGELSANG.

Our customers can choose from low-carbon steel with three different emissions values – regardless of the raw material origin, grade, volume or dimensions:

  • 2,000 kg CO2equivalent per tonne
  • 1,500 kg CO2equivalent per tonne
  • 1,000 kg CO2equivalent per tonne

The history of BILCO2

Carbon accounting model

One method for reducing the carbon footprint of steel products, and one that is quickly gaining traction in the industry, is the carbon accounting model. We've chosen to implement this method because the accounting model is currently the only practical and legally watertight way for us to provide our customers with low-carbon cold-rolled strip that can be easily reproduced.

The underlying principle of the accounting model is simple: it combines all production-related CO2 savings achieved via a variety of steps and measures across the process chain. Any optimizations that we would have implemented anyway, for economic reasons, are not included – it only accounts for steps and measures taken specifically to reduce greenhouse gas emissions. These savings are verified by an independent third party and added up in a digital solution. This solution then allows us to calculate the actual carbon savings achieved, and allocate them to the relevant products. Our accounting model was audited and validated by the external certifying body GUTcert in 2023.

The starting point: the product carbon footprint (PCF)

The carbon accounting model uses the relevant product carbon footprint (PCF) – so the amount of CO2emissions specific to a certain product – compared to an up-to-date, representative base period. Where is the product manufactured? How much "green power" is used in production? Which energy sources are used, and in what quantities? The PCF is determined by factors like these, and is recalculated every year in November upon submission of the latest emissions factors and values.

We've developed a validated tool to calculate the PCF of our 7,000+ individual cold-rolled strip products. All the BILSTEIN GROUP's German plants, and therefore our entire product portfolio, were successfully validated for the first time in 2023 by the accredited certifying body GUTcert, and will be re-validated every year. Meanwhile, the PCFs for each product are calculated in accordance with the GHG Protocol Product Standard and ISO 14067.

During the 2021 reporting year, there was …
… a volume-weighted average of 2,361 kg CO2equivalent per tonne for all BILSTEIN plants.
… a volume-weighted average of 2,636 kg CO2equivalent per tonne for all HUGO VOGELSANG plants.

Assigning carbon "credit" to products

The carbon accounting model allows us to calculate the CO2 savings achieved within the actual processes across the supply chain for each individual product. The biggest advantage of this is that, if customers require specific grades that raw material suppliers can't yet provide in a low-carbon format, we can use the accounting model to pass on the desired CO2 savings regardless. That's because it's always possible to make savings at other points in the supply chain.

The path to "green" steel products:

how are we reducing the carbon footprint of our cold-rolled strip?

Three key steps

BILCO2 is the result of three core CO2 savings methods that are calculated and allocated to products using the carbon accounting model.

  • Use of low-carbon raw materials with trustworthy, third-party certification/validation
  • Use of electricity generated from renewable sources
  • In the medium term, use of carbon-neutral hydrogen as a substitute for natural gas In the carbon accounting model, the actual CO2 savings achieved are then added up in a digital solution so they can be allocated, or credited, to the BILSTEIN GROUP's individual products.

In practice, it might look like this: the CO2 savings from a certified raw material, i.e. low-carbon hot-rolled strip, are entered into the solution. The same applies to the CO2 savings achieved through the use of electricity made from renewable energy sources and – where available – from carbon-neutral hydrogen (H2). We can then pass on the CO2 savings stored in this digital solution to our customers.

Green hydrogen

A prerequisite for achieving climate-neutral steel production and processing is the use of renewable energy sources. And replacing natural gas with hydrogen offers one extremely exciting solution to this. Currently, a key driver of the CO2 emissions in steel production is the process heat generated by the combustion of natural gas. We need process heat for annealing and tempering steel, for example. From a technical standpoint, it is possible to operate our batch annealing lines with hydrogen by modifying the burner. We successfully carried out the world's first hydrogen-based – and therefore local carbon-neutral – heat treatment of around 100 tonnes of cold-rolled strip in an annealing furnace in mid-May 2023. Using carbon-neutral hydrogen here will lead to significant reductions in the CO2 emissions of our production.

However, carbon-neutral hydrogen is not currently available in sufficient volumes. To ensure the energy source is available in Lennetal as soon as possible, in 2021 we joined forces with other local companies and regional grid operators to launch the "Future RuH2r" initiative. The project aims to ensure the provision of a high-performance green hydrogen infrastructure in our region.

Resource-efficient production

Furthermore, we have been working for decades to conserve resources, and we've already raised the bar in terms of energy efficiency. In this respect we have zoomed in on targeted, long-term goals:

  • Optimization of production processes, alongside customers
  • Development of production technologies, in collaboration with suppliers
  • Expansion of our internal heat recovery system
    To do this, we've integrated innovative technological solutions such as an organic Rankine cycle (ORC) plant in the annealing process, which was even sponsored by the German Federal Ministry for the Environment as part of its environmental innovation programme, and was recognized with an award by KlimaExpo.NRW.
  • Continuation of our decarbonization strategy, e. g. by hopefully switching from natural gas to hydrogen

These measures are not included in the carbon accounting model, but they do have a positive impact on a product's PCF, which is the basis for the model's calculations. Thanks to the resource-efficient design of our production processes, this PCF is higher than it would be without this focus on sustainable measures. This means less of the available CO2 savings or "credit" available in the digital solution needs to be used up to reach the final, desired emissions value for a product.

The future of raw material procurement

For BILSTEIN, the biggest factor in sustainably reducing the carbon footprint of our products is being able to procure low-carbon hot-rolled strip. More than 90% of the carbon footprint of our cold-rolled strip coils comes from upstream processes. So, we're in close discussion with suppliers on how to change this. The goal of our agreements with suppliers is to ensure the availability of significant volumes of low-carbon steel grades in both the near and long term.

However, there isn't a great deal of transparency over the actual volumes of "green" steel available at present. Ambitious projects such as the Swedish start-up H2 Green Steel are helping accelerate the transformation of the steel industry: the new steelmaker is guaranteeing almost exclusively carbon-neutral steel. As an early investor in H2 Green Steel, we're one of the first customers to sign a purchase agreement for its steel. This was signed on 17 April 2023 as part of a binding seven-year supply contract worth over 250 million euros. The first deliveries of "green" steel are scheduled to arrive in 2026.

H2 Green Steel

Our strategic partnership with the new Swedish steelmaker H2 Green Steel is critical to ensuring we can source raw material with a small carbon footprint in the near future. In comparison with traditional steel mills, the innovative start-up expects to emit around 95% less CO2 in the production of its steel.

How does it work? In north Sweden, where the five-million-tonne steelwork is currently under construction, there is an abundance of energy available from renewable sources. At the same time, the start-up is implementing new, innovative concepts. By 2025/26, the approx. 270 hectares of land in Boden-Luleå will be home to hydrogen, iron and steel production plants.

By 2035: step by step to carbon neutrality

We aim to be industry leaders in anticipating the needs and expectations of our customers and other stakeholders: in spring 2021, the BILSTEIN GROUP's board of directors decided that, by 2035 at the latest, all production, logistics and administrative processes at all German companies in the BILSTEIN GROUP should be operated via carbon-neutral methods – provided sufficient volumes of carbon-neutral (renewable) energy sources (electricity or hydrogen as a substitute for natural gas) are available by then. Furthermore, we resolved, also by 2035, to transition a significant proportion of our raw material procurement to materials produced using either carbon-neutral processes or methods with significantly lower CO2 emissions, depending on the availability of these materials and customer requirements.