Ahead of Climate Week NYC, we sat down with Annika Ölme, CTO & Senior Vice President Technology Development at SKF Group to talk about their SteelZero commitment. What challenges have they faced in transitioning to lower emission steel? How are they working with their supply chain to overcome these? Are there any examples which demonstrate their progress?
Check out the full Q&A to find out answers to these questions and more.
SKF provides innovative solutions around the rotating shaft including bearings, seals, lubrication management, condition monitoring, and services. By developing lighter, more efficient, longer lasting, repairable, and, ultimately, recyclable products we help our customers to improve their machine performance and reach their goals for sustainability and growth. Our collaboration with customers, partners and societies helps us to find innovative ways to help industries become more competitive and sustainable.
Obviously, steel is a critical material in bearings, and CO2 emissions from current steel production significantly impact our scope 3 upstream CO2 emissions. We know that reaching net zero is a considerable challenge for our steel suppliers, however we are committed to speeding up the shift to green steel. The urgency and scale of decarbonizing bearing production requires a unified and collaborative industry effort. SKF’s partnership with SteelZero is integral to our overall net zero strategy aiming for a supply chain with net zero CO2 emissions by 2050.
Given that we’re a relatively small steel customer, we recognise the power of joining forces with other businesses to advocate for change. Our SteelZero membership gave us critical insights on the challenges throughout the steel supply chain for businesses on the path to net zero. Through our collective ambition and action, we aim to send a strong demand signal for net zero steel.
The challenges are mainly due to traditional steel production methods, technological limitations to produce lower emission steel at scale, and the lack of coordination across the supply chain.
To overcome these, SKF is partnering with initiatives like ResponsibleSteel, working closely with suppliers to innovate technologies and reduce emissions, including advocating for structural changes in the steel industry, and setting ambitious net zero targets. That includes interim targets to ensure continuous progress. SKF joined the ResponsibleSteel Initiative (RSI) - the steel industry’s first global multi-stakeholder standard and certification initiative, as part of our Responsible Sourcing strategy.
Additionally, we are focusing on energy and material efficiency improvements in our own operations and switching to renewable energy sources, including banning fossil fuel investments in the Group. By addressing these challenges through collaboration and technological innovation, SKF is making significant strides towards a more sustainable future.
There are several examples, which will be achieved in cooperation with other companies. In 2022, SKF investigated the feasibility and technical implications of lower emission steel production processes which are currently being developed by various steel companies.
Recently, SKF and voestalpine Wire Technology, a subsidiary of the leading steel and technology group voestalpine, have successfully produced the first prototype bearing made from steel that contains hydrogen direct reduced iron (H-DRI). This is a breakthrough in the efforts to decarbonize bearing production as H-DRI is a low emission alternative and one of the key methods to make steel sustainable in the future.
SKF and voestalpine Wire Technology have been working together since 2022 to explore the possibilities of using H-DRI steel for bearing applications. By using H-DRI steel, we aim to meet the demand for green steel and help drive the global efforts to combat climate change.
Another example is SKF’s commitment to use recycled steel in products. For new materials, SKF has pledged to source at least 40% of steel from net zero steel plants by 2040. By increasing recycled steel usage, which requires significantly less carbon to produce, SKF plans to lower the environmental impact of products and support the industry’s shift towards more sustainable steel production.
We’ve set science-based targets to decarbonize our operations by 2030 and reach net zero emissions throughout the supply chain by 2050. Our targets are aligned with 1.5°C or less and we are among the first industrial companies to have been validated and approved by the Science Based Target initiative (SBTi) for both our near-term and long-term targets.
As there are quite a few ways to measure and report and as a global industrial company with operations in numerous geographical locations, this is a complex area for SKF – but one that is embedded across our business to show our progress. Adhering to laws and regulations is essential; however, adopting voluntary standards and engaging in partnerships further enhances our impact. We track and report our progress by aligning with globally recognized standards, frameworks, and initiatives. SKF continuously learns and evolves its approach so that the completeness, accuracy and value of this data as a management tool is improving every year.
For example, in the last few years, SKF has influenced energy-intensive suppliers by requiring them to implement energy management systems certified according to ISO 50001. That’s considered a pragmatic approach to cut emissions in the upstream value chain.
SKF has started to focus on this because steel, forgings, rings and rolling suppliers are by far our most energy- and carbon-intensive, representing more than 95% of weight of total direct material for bearings purchased by the company. SKF continues to extend that to other
categories of components like plastics and polymers, sheet metal parts and ceramics.
Looking forward, SKF will continue to discuss and challenge the targets and the improvement plans in terms of CO2 emissions of the major direct materials suppliers for more aggressive targets and for further reductions. Additionally, SKF has developed a tool which allows product designers and purchasing colleagues to estimate the upstream greenhouse gas impact of different steel supplier options. This allows SKF to meet increasing customer focus on reducing the embedded greenhouse gas emissions in the products they buy.
We know that to truly facilitate rotation for a better tomorrow, we must exceed the basics. Compliance is expected, but we aim to have an even greater impact through pursuing innovative, sustainable partnerships and advocating for positive change. Progressive business strategies and ambitious targets are important in helping us achieve that.
To find out more about Sustainability at SKF, visit www.skf.com/sustainability.