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Volvo Trucks says launches world's first fossil-free steel vehicle

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STOCKHOLM, Oct 13 (Reuters) - Truck maker AB Volvo said on Wednesday it had produced a prototype of what it said would be the world"s first vehicles made of fossil-free steel.

Volvo and steel-maker SSAB announced in April an agreement to produce the vehicles and start the production of prototypes this year. Volvo, which aims to be climate-neutral by 2040, said the first concept machine was a load carrier for use in mining and quarrying. "This initiative with SSAB sets the benchmark for a fossil-free future," Volvo CEO Martin Lundstedt said in a statement. Volvo added that smaller-scale series production was planned by 2022, with mass production to follow.

SSAB, state-owned utility Vattenfall and miner LKAB said in August that fossil-free steel had been delivered to Volvo as a trial run before their green steel venture HYBRIT starts full commercial production in 2026. Volvo Cars, owned by China"s Geely Holding which also has a stake in AB Volvo, aims to be fully electric by 2030 and is also working with SSAB to explore the use of fossil-free steel in the automotive industry. A "green" shift in the transport sector, which generates roughly a quarter of global carbon dioxide emissions, is widely seen as important to help align with global climate goals.

< (Reporting by Helena Soderpalm; Editing by Simon Johnson)

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