Scania
Securing future access to low-carbon steel through early supplier commitments
Climate-related procurement risk: Climate policy, carbon pricing, customer decarbonisation expectations, scarcity of low-carbon steel, supplier transition risk and future material price volatilityÂ
Solution pathway: Long-term supplier commitments, early procurement of low-carbon materials, strategic partnerships and supply-chain decarbonisation planningÂ
Business type: Large corporate manufacturerÂ
Sector: Automotive, heavy vehicles and industrial manufacturingÂ
Geography: Sweden / European steel supply chainsÂ
In practice
Heavy vehicle manufacturing depends on large volumes of steel, aluminium, cast iron and battery materials. These materials are increasingly exposed to climate-related transition risks. Carbon pricing, regulation, customer expectations and corporate climate targets are changing what kinds of materials manufacturers need to buy. At the same time, low-carbon alternatives such as green steel are still emerging and may be more expensive, less available or dependent on new production capacity.Â
For manufacturers, this creates a procurement challenge. If they wait until low-carbon materials are widely required, they may face limited supply, high premiums, weak bargaining power or difficulty meeting customer and regulatory expectations. Supplier relationships therefore need to be built before markets become fully liquid or competitive.Â
Scania has responded by placing its first green steel order with H2 Green Steel, now Stegra. The agreement is intended to provide sustainably produced steel for Scania trucks, with supply linked to the development of a new steel plant in Boden, northern Sweden. Scania has also set wider ambitions to purchase 100% green steel, batteries, aluminium and cast iron for its European operations by 2030.Â
The adaptation is not only about reducing emissions. It is also a procurement strategy for managing future market instability. By entering early agreements with suppliers, Scania helps create demand certainty for new low-carbon production while securing future access to materials that may become strategically important as climate policy and customer requirements tighten.Â
This approach also strengthens supplier relationships. Rather than treating low-carbon steel as a future spot-market purchase, Scania is working with suppliers as part of a longer-term transition pathway. This can reduce uncertainty for both sides: suppliers gain clearer demand signals, while Scania gains better visibility over future material availability.Â
The case is useful for this section because it shows how businesses can adapt procurement before transition risks crystallise as shortages or price shocks. In climate-exposed and policy-sensitive markets, stable supplier relationships may depend on early commitments, shared investment signals and long-term procurement planning.Â
Why this example was selected
This case study was curated because Scania’s low-carbon materials procurement has been externally profiled as an example of supply-chain decarbonisation. The World Economic Forum’s Net-Zero Supply Chain Support Hub highlights Scania’s green steel order and wider ambition to purchase green key materials for European production. We Mean Business Coalition has also profiled Scania’s road to decarbonising its supply chain, including its order from H2 Green Steel and partnership work with steel suppliers.Â
The case has a strong external basis because Scania’s green steel order was publicly announced by both Scania and H2 Green Steel, with deliveries linked to the new Boden plant. It is also relevant to a wider market challenge: low-carbon steel remains an emerging, constrained and potentially premium market, making early supplier relationships strategically important for manufacturers.Â
The example is useful for the Business Knowledge Hub because it shows a procurement adaptation to climate transition risk. It demonstrates how businesses can use long-term supplier commitments to secure future access to critical low-carbon inputs and reduce exposure to unstable or immature supply markets.Â
