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HBIS Group and BMW Group Signed a Memorandum to Jointly Build a Green Low Carbon Steel Supply Chain

Facing the future, developing green products and providing users with full life cycle solutions is the core competitiveness of the steel industry. On August 4, HBIS Group and BMW Group signed Memorandum of Cooperation on Building Green Low Carbon Steel Supply Chain (“MOU”) in Shenyang. Based on the good cooperation basis and the concept of green and low-carbon development, both sides agreed to carry out comprehensive and long-term cooperation in sustainable development and jointly build a green low carbon steel supply chain. This marks a breakthrough in cross-sectoral cooperation on carbon reduction between the steel and automobile industries and opens a new era of deepening strategic cooperation and realizing coordinated development. Going forward, the two sides will work together to create a model of cooperation featuring "Deep Integration and Green Development" of industrial chains, and provide better solutions to global climate change and make greater contributions.

Dr Yu Yong, President of HBIS Group, and Dr Franz Decker, President of BMW Brilliance attended the signing ceremony and gave speeches and witnessed the sign. Thomas Schmid, President of BMW (China) Service, Vice President of BMW Group purchasing and supplier network Asia, Mr. Robert Kuessel, Senior Vice President in Technology and Production of BMW Brilliance, attended the ceremony and witnessed the sign. Li Yiren, Vice President of HBIS Group, and Martin Schlicker, Vice President of Purchasing and Quality of BMW Brilliance, signed the MOU cooperation on behalf of both sides.

Yu Yong said in the signing ceremony speech, HBIS and BMW signed Memorandum of Cooperation on Building Green Low Carbon Steel Supply Chain fully embodies the firm green low carbon development concept of both sides. It shows the two sides' responsibility to reduce carbon footprint and tackle global climate change. The signing is of great significance to both sides and the global automobile manufacturing industry.

As a world-renowned automobile brand manufacturer, BMW Group always attaches great importance to the "Sustainable Development of the Whole Industrial Chain and Value Chain". While continuously providing high-quality automobile products to the global market. BMW Group is committed to creating the greenest new energy vehicles and actively leading a green travel revolution.

As one of the world's largest steel material manufacturing and comprehensive service providers, HBIS has always adhered to the development concept of "Harmonious Coexistence of People, Steel and Environment", and regarded "Green and Low Carbon" as the core content of enterprise development strategy and conscious production and operation mode, and unswervingly became the leader of green and low carbon transformation in the steel industry. HBIS subsidiaries, ZHANGXUAN TECH took the lead in launching the world's first 1.2 million tons hydrogen metallurgy demonstration project. Tangsteel New District and Shigsteel New District are models of green transformation, whese contribute to the comprehensive realization of green, low-carbon and sustainable development of the steel industry in China and even the world.

Yu Yong said HBIS has always adhered to the cooperation concept of "Being with the Strong", and achieved the improvement of our competitiveness while cooperating with global well-known enterprises such as BMW Group. HBIS always emphasizes win-win cooperation and constantly strives to bring greater value to partners. Facing the future, HBIS will take this contract as a new starting point to jointly promote the innovation and application of "Green and Low Carbon" material technology with BMW, and jointly create a cooperation model of "Deep Integration and Green Development" in the industrial chain, so as to provide better solutions and make greater contributions to global climate change. With HBIS steel, BMW cars will be greener, and we jointly to lead human travel more green, and the world is more beautiful.

Franz Decker said BMW Group and HBIS Group, as representatives of the two pillar industries, will work together to take an important step forward on the path of sustainable development and jointly build a green and low-carbon steel supply chain for China's automotive industry. Reducing the carbon footprint of steel production from the source is one of the effective levers to reduce the CO2 emission of the whole life cycle of automobiles. This is important not only for BMW Group's sustainable development goals, but also for the green transformation of Chinese industry and China's Double Carbon goals.

Franz Decker said, BMW Group and HBIS Group have taken this important step together. Great minds think alike. First, we all share a vision for a sustainable future. Second, we share the belief that technology and innovation are key to a green transition. Third, we all know that achieving sustainable development together requires all industry partners and stakeholders to move forward together. The MOU signed today is another example of mutually beneficial cross-field cooperation. During our cooperation, we will promote the transformation of automotive production towards green low carbon steel applications. BMW is looking forward to deepening cooperation with HBIS and working together to transform China's industry into a clean, green and low-carbon future!

According to the MOU, the two sides will jointly build the supply chain of green low carbon steel materials, develop low-carbon and green automotive steel materials and complete relevant certification based on the research and development and use of green and low carbon steel materials and BMW's low-carbon base on steel materials. From mid-2023, BMW's Shenyang production base will gradually use the HBIS low-carbon automotive steel ("low carbon steel") for its mass-produced models. These low carbon steels produce 10 to 30 percent less CO2 than conventional steels. From 2026, BMW Shenyang production base will start to use low carbon steels in the mass production process of whole vehicles. Based on processes such as green electricity and electric furnaces, the production of low carbon steels will gradually reduce CO2 emissions by 95 percent.  Under the current procurement plan, CO2 emissions are expected to be reduced by about 230,000 tonnes per year from 2026.

“Carbon reduction in the automotive industry means more than just going electric. BMW sustainability strategy focuses on the full life cycle of vehicles, and the supply chain is an important part of it. In Europe, we have signed cooperation agreements with two steel mills. In China, we chose to work with HBIS.”  said Jochen Goller, President and CEO of BMW Group Region China. “Working with the steel industry to reduce carbon emissions is an important progress after we launched the Industrial Chain Green Transformation Initiative last year. It is also a breakthrough cooperation between the two industries on green transformation. In keeping with the commitment of Home in China”, BMW hopes to work with local partners in China to innovate, promote green and low-carbon development, and contribute to China's Double Carbon goal.”

The steel used to make a mid-size BEV (Battery Electric Vehicle) is estimated to account for about 20% of the carbon emissions at the end of the vehicle's supply chain, second only to high-voltage batteries (26%) and light metals (23%). Therefore, the production and use of green steel is one of the effective levers to reduce CO2 emissions in the whole life cycle of vehicles.

HBIS and BMW will also jointly establish a docking and exchange mechanism, actively promote the integration of talent, strategy, management and culture, and maintain and develop their respective leading advantages in the industry. In the whole life cycle of automotive steel products, both sides will conduct periodic evaluation of carbon emission data in a fully transparent manner, including from iron ore mining to steel products in HBIS subsidiaries, and from automotive steel to car scrapping in BMW Brilliance, these carbon emission data will be recorded one by one.  The two sides will actively carry out research, development and application of carbon negative technologies such as clean energy, and commit to the development of carbon neutral automotive steel.