Tata Steel, the UK’s largest steel manufacturer, and Gestamp, a Tier 1 automotive supplier, have signed an agreement aimed at nearly doubling the percentage of recycled steel in components supplied to the automotive sector, with the common goal of increasing the circularity of steel in the supply chain.
This agreement will allow Gestamp to transfer to vehicle manufacturers the benefits of increasing recycled material, as well as the reduction of the associated carbon footprint. On the other hand, Gestamp’s excellent management in the collection, sorting and transportation of high quality scrap will provide Tata Steel with steel with lower emissions, thus meeting the decarbonization objectives with quality and safety guarantees.
Likewise, Gestamp presented at its Capital Markets Day in June 2023 its roadmap to lead and promote a corporate circular economy model, focusing on the use of recycled steel. The company has taken a step forward in driving low-emission steel by incorporating scrap management into the business strategy (through its subsidiary Gescrap), which enables full life-cycle traceability by integrating the collection, sorting and reuse of quality steel scrap into its production chain in an environment where this secondary raw material is scarce.
Tata Steel’s steel supplied to automotive already includes 17% recycled material, composed of steel scrap that re-enters the production process. The steel scrap provided by Gestamp will be added to the total amount of existing recycled steel. Thanks to this new alliance, the percentage of recycled material associated with the steel supplied to Gestamp rises to 30%, without affecting quality, strength or formability. This new circularity concept contributes to achieving these sustainability goals by using high-quality scrap as a secondary raw material for the production of low-emission steel.
Because steel is one hundred percent circular, it can be remelted to produce material of the same quality an infinite number of times.
“This agreement reinforces our circular economy model and benefits our customers on their path towards neutrality and Net Zero Car thanks to the use of high-quality scrap as secondary raw material, while guaranteeing the quality and safety of our products.” said Ernesto Barceló, Chief ESG Officer of Gestamp. “Gestamp’s excellent management in the collection, sorting and transportation of high-quality scrap will provide Tata Steel with steel with lower emissions.”
For his part, Peter Quinn, Director of Sustainability and Environment at Tata Steel UK reiterated: “Reducing the carbon footprint of the automotive supply chain is a priority for us and for many of our customers, including Gestamp. We believe that improving circularity in the supply chain is an effective and immediate way to reduce total 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 just in our two organizations, but in the UK automotive supply chain as a whole.”
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