Climate groups launch campaign urging German car manufacturers to address links with major polluter–Korean steel giant POSCO

July 3, 2024 (Berlin/ Seoul) – A coalition of 19 civil society organizations from around the world has sent letters to BMW, Mercedes-Benz and Volkswagen, urging the German automakers to address their use of steel from POSCO, a major coal user and one of the top steel producers for the global automotive industry.  

Image 1. Activists from Solutions for Our Climate are holding signs in front of the BMW headquarters in Munich, Germany (Source: SFOC).

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“Despite having some of the most ambitious climate targets, German automakers still procure materials that are emissions-intensive. They need to be more diligent about building up truly clean supply chains,” said Kate Kalinova, Senior Associate for Steel Corporate Engagement at Solutions for Our Climate (SFOC).

The letter calls out the German automakers’ links to POSCO, the largest corporate emitter in South Korea. The company also faces criticism for plans to extend the use of coal in its steelmaking. Last year, SFOC took legal action against POSCO for promoting “carbon-neutral” steel while investing close to US$400 million to reline its blast furnaces, which would prolong its coal-based steelmaking by approximately 15 more years and result in an additional 199 megatons of CO2 emissions.  

"We cannot address climate change without eliminating coal from steel production. Using metallurgical coal to manufacture steel is disastrous for the climate, emitting over two tonnes of CO2 for every tonne of liquid steel.  Any investment in extending the life of blast furnaces and coal-burning assets is a risk to the planet," said Caroline Ashley, the Director of SteelWatch.

As a locally produced but globally traded commodity, the steel industry’s carbon footprint has implications for global supply chains and local communities alike. 

“Gwangyang, home to five POSCO coal-powered blast furnaces, is the No. 1 emitter of air pollutants in South Korea. While POSCO has declared carbon neutrality by 2050, their GHG emissions increased by 1.8 million tonnes from last year and the steelmaker maker has yet to provide a phase-out plan for their polluting coal-based steelmaking facilities. For the sake of industrial competitiveness and the health and lives of Korean citizens, POSCO must urgently accelerate the green transition of its facilities,” said Yang Kook Baek, Director at the Korean Federation for Environmental Movement Gwangyang.

This latest campaign is part of a larger call to urge automakers, accounting for 12% of global steel demand, to shift to clean steel. Steel and iron make up around 16% and 30% of supply chain emissions for electric vehicles and internal combustion engine vehicles, respectively. 

"As major steel clients, German car makers such as BMW, Mercedes and VW should act responsibly and ask their steel suppliers to stop relining plants. At the same time, we need to grow demand for green steel through green lead markets. Car and steel companies should work together with policymakers and civil society to implement robust lead market policies by 2025," said Tilman von Berlepsch, Policy Adviser for Climate Neutral Industry, Germanwatch.

ENDS. 

For media inquiries, please contact: 

• Euijin Kim, Communications Officer, SFOC, euijin.kim@forourclimate.org

• William Fitzgerald, The Worker Agency, william@theworkeragency.com

• Shiori Matsumoto, Communications Specialist, SteelWatch, shiori@steelwatch.org

• Deutsche Umwelthilfe Newsroom, presse@duh.de 

• Christina Stoldt, Officer for German and European Industrial Policy, Deutscher Naturschutzring e.V. (DNR), christina.stoldt@dnr.de