U.S. Steel forges ahead on greener, lighter steel as aluminum competition heats up

But aluminum is on the rise.

An April study of automakers and Tier 1 suppliers commissioned by consultant firm Ducker Carlisle found that aluminum is expected to account for about 556 pounds per vehicle in North America by 2030, compared with 459 pounds in 2020 and 340 pounds in 2010. The study was commissioned by the Aluminum Association, which represents aluminum producers in the U.S.

It’s yet another indication that automakers are turning to aluminum to make their vehicles lighter, particularly EVs that are weighed down by heavy battery packs.

Automakers aim to roll out dozens of new EV models in the coming years. At the same time, they’re reforming their supply chains to become more environmentally friendly and sustainable, oftentimes warning their suppliers that they won’t get the business if they don’t meet aggressive emissions targets.

For U.S. Steel, that’s meant investing in new types of steel that can better compete with aluminum and can meet the needs of EV models and their components. It has also meant reimagining how it makes its products.

Take the company’s VerdeX green steel offering, for example. Jaycox said U.S. Steel would provide about 150,000 tons of VerdeX steel to GM, accounting for between 15 and 20 percent of its business with the Detroit automaker.

VerdeX, created with up to 90 percent recycled content, will be made at Big River Steel, an Arkansas mill fully acquired by U.S. Steel in 2021 for $774 million. The mill is LEED-certified, the rating system used by the U.S. Green Building Council to measure a building’s sustainability and resource efficiency. The new steel will also be made at the company’s Arkansas mill now under construction and expected to open in 2024.

Jaycox calls GM a “first mover” in coming to U.S. Steel with its environmental and sustainability goals and in signaling that green steel would be an important part of reaching those targets.

“I think of this as a first step, not a last step or final step, but a chance for us to begin a relationship and work with the mill down in Arkansas to support GM,” he said.

But given today’s limited supply, securing green steel can be a long process.

Jaycox said conversations with GM on green steel began about a year ago. The product requires “a lot more preplanning and forecasting” as they try to understand how much of it their customers — including nonautomotive companies — will need in the coming years, he said.

“The thing we’ve really tried to emphasize more than anything else is that these aren’t solutions we can turn over tomorrow,” Jaycox said. “Now is the time to engage. If you want to talk about … green steel production, these are 18-, 24- or 36-month journeys that require a lot of joint business planning.”

And that means a “different level of conversation” than what the auto industry is used to having, he said.

“It’s no longer just a procurement conversation,” Jaycox said. “It’s steeped in engineering and [an environmental, social and governance framework] and sustainability.”