German automotive producer Volkswagen has announced that it has signed a memorandum of understanding with Oman-based Vulcan Green Steel, a subsidiary of India-based Jindal Steel Group, to procure low-emission steel starting from 2027. Vulcan Green Steel will supply steel in automotive grades and high strength steel from its new green steel plant currently under construction in Duqm, Oman.
The up to 300,000 mt of low-carbon steel that Volkswagen will order will cover a significant proportion of total steel requirements. The partnership with Vulcan Green Steel is one of a series of initiatives by Volkswagen Group to expand the use of green steel in production. Decarbonizing supply chains is a decisive factor for Volkswagen Group on the road to carbon neutrality and they aim to achieve this goal by 2050 at the latest.
In 2027, VGSL will start manufacturing automotive grades and other high-strength steels in Oman. Natural gas will power the Duqm operations for the first few years. Following that, the activities will switch to renewable energy, cutting carbon emissions by 70 percent. VGSL plans to have two production lines of 2.5 million mt each per year, comprising direct reduction iron (DRI), an electric arc furnace (EAF) and a hot strip mill. It will produce high value-added steel catering to automobile, wind turbine and domestic consumer durable goods manufacturing across Europe and Japan.
Vulcan Green Steel’s new plant, which is scheduled to be completed in 2026, will have an annual production capacity of five million mt of carbon-free steel, as SteelOrbis previously reported.