South African manufacturer Malben Engineering, of Nigel, is pioneering the use of green steel in the production of automotive components for leading local original-equipment manufacturers (OEMs).

The company, which was established in 1974 and has developed into a Tier 1 supplier of stampings and welding components including for Ford South Africa, is trialling low-carbon steel produced by Salzgitter, of Germany, as part of the Salzgitter Low Carbon Steelmaking programme.

Still led by one of its original founders Amerigo Smargiasso, Malben Engineering has taken delivery of what is believed to be the first-ever green steel coil on the African continent, imported with the support of value-adding steel processor and merchant Allied Steelrode.

Operational director Luca Smargiasso believes the integration of green steel could be a “game changer” for the level 4 broad based black economic empowerment company in light of the increased use of low-carbon steel by global OEMs and given growing pressures to decarbonise the local steel supply chain.

“Companies such as ours are at the forefront not only of understanding this change, but ensuring that we are a market leader in the usage of green steel, which in the future will be as sought after as white gold,” Smargiasso asserts. 

Allied Steelrode chief marketing officer Lee-Ann Geyser also highlights that Europe, which is South Africa's main automotive trading partner, is moving to introduce taxes on imports with high carbon footprints.

These border adjustments could ultimately mitigate the higher cost of using green steel; costs that the three partners have agreed to absorb for the trial.

“This is no longer just a moral or environmental choice, but a strategic business decision,” Geyser adds.

Local Salzgitter agent Shane Barnard, of United Steel, is confident that the price gap between grey and green steel will close over time, as new regulations are introduced and the uptake of green steel rises.

National Association of Automotive Component and Allied Manufacturers Renai Moothilal says the trial is also aligned with the South African Automotive Masterplan 2035 vision for higher levels of localisation, where  decarbonisation is becoming a priority in each OEM’s sourcing decisions.

About 0.48 t of carbon dioxide (CO2) is emitted when producing a tonne of green steel, compared with the up to 2.4 t of CO2 emitted for every tonne of grey steel.

“First movers and early adopters such as Malben Engineering should be well placed when these  decisions are made - as their emission reduction strategies have been tried and tested, removing risk from sourcing,” Moothilal says. 

Malben Engineering, Allied Steelrode and Salzgitter will now evaluate the mechanical and chemical performance of the green steel to compare its quality-related aspects with conventional steel in areas such as formability to welding, and the potential for corrosion during transportation.

Luca Smargiasso is confident that discrepancies are unlikely, given that the steelmaking process rather than the end-product is adapted during the production of low-carbon steel.