Scania Implements Mandatory Green Purchasing Requirements to Drive Supply Chain Decarbonization

(IN BRIEF) Scania, a leader in the transportation industry, has announced a significant step in its commitment to sustainability by making its supply chain decarbonization target mandatory for purchasing requirements. The company aims to transform its supply chain by targeting 100 percent green purchases of steel, batteries, aluminum, and cast iron for its European operations by 2030. These materials account for approximately 80 percent of carbon emissions in Scania’s production processes. The “green” criteria require the elimination of emissions through the use of new technologies, green electricity, and recycled materials. Scania will now incorporate these requirements into future contracts and reviews, ensuring that suppliers play a crucial role in achieving these sustainability goals. The company has already made progress in engaging with suppliers, including orders for green steel and partnerships for low-carbon batteries. Scania’s CEO, Christian Levin, envisions extending this decarbonization strategy to cover the entire global supply chain in the future.

(PRESS RELEASE) SÖDERTÄLJE, 24-Nov-2023 — /EuropaWire/ — Determined to use its spending power to drive the shift towards a sustainable transport system, Scania now turns its supply chain decarbonisation target into mandatory purchasing requirements.

“We are excited to announce this transformative move, prepared in close collaboration with our suppliers and partners. Implementing green purchasing requirements is both a question of making sustainable transport a reality and ensuring access to low-carbon material in a rapidly increasing competition”, says Christian Levin, CEO at Scania.

Scania has introduced an industry-leading strategy to significantly remove supply chain emissions. By 2030, the company targets 100 percent green purchases of steel, batteries, aluminium and cast iron for its European operations.

These four hotspots constitute around 80 percent of carbon emissions arising from Scania’s production materials. Scania’s definition of “green” requires eliminating the main sources of emissions by utilising new technologies, green electricity and/or recycled material. In batteries, for example, access to green energy in production is decisive. In flat steel production, replacing coal with green hydrogen is key.

Now, as arguably the first company in the industry, Scania implements these levers as mandatory purchasing requirements. Requirements on technologies mentioned will be on the table in negotiations of future contracts as well as in reviews of existing ones regarding deliveries of batteries, steel, aluminium and cast iron for Scania’s European production.

Supplier engagement is foundational for preparedness and success in the green transition, and important progress is being made. This spring, Scania placed its first order of green steel from H2 Green Steel. Mid-November, a joint target was announced with SSAB to decarbonise all current steel deliveries in 2030. Green steel supplies for Scania’s European production are targeted to start in 2026. When it comes to batteries, Scania and Northvolt have developed a battery cell specifically designed for heavy-duty transportation with world-class performance and a uniquely low carbon footprint.

“We are now working on extending the scope of the decarbonisation target, so that the strategy eventually will cover the entire global supply chain”, says Christian Levin.

Media Contact:

Erik Bratthall
Corporate Public and Media Relations manager
erik.bratthall@scania.com

SOURCE: Scania