The US Department of Energy has granted steel maker Severstal a $US730 million ($682 million) loan to produce lightweight products for the automotive industry.
Severstal will produce a wide range of advanced high strength steel (AHSS) products capable of reducing total vehicle weights by around 10 per cent without compromising structural integrity or safety.
The Department of Energy believes the project has the potential to reduce fuel consumption by almost 30 million gallons (114 million litres) annually and more than 260,000 tonnes of CO2 emissions every year.
The Russian-owned Severstal – the fourth-largest steel maker in the US – will use the loan to modernise its existing facilities in Dearborn, Michigan, as well as to support the design and construction of new facilities to produce the next generation of AHSS products for the automotive industry.
Although the Severstal project is not as glamorous as some other advanced technology projects to receive a loan from the Department, lightweight steel has the potential to reduce fuel consumption and emissions of all vehicles almost instantly.
US Energy Secretary, Steven Chu, said the funding would help local automotive manufacturers meet pending and future design targets and would create more than 260 permanent manufacturing jobs.
“The Severstal project will help make American automakers more competitive as demand for lighter, more fuel efficient vehicles increases,” Mr Chu said.
“By manufacturing more advanced high strength steel here at home, we rely less on imports and create thousands of new jobs that get people back to work.”
So far, the Department of Energy has provided more than $US9 billion ($8.4 billion) in loans to advanced technology vehicle manufacturers including Ford, Fisker, Nissan, Tesla and Vehicle Production Group.