June 6 (Reuters) - ArcelorMittal North America said on Tuesday the steelmaker will supply General Motors with recycled and renewably produced steel, which substantially lowers CO2 emissions.

Material will be supplied from ArcelorMittal Dofasco in Hamilton, Ontario and shipments are expected to begin in the second quarter of 2023, the company said. The terms of the deal were not disclosed.

The global steel industry - one of the most energy-intensive industries worldwide, accounting for approximately 8% of global annual carbon dioxide emissions - is under pressure to cut back.

XCarb recycled and renewably produced (RRP) steel is made via the Electric Arc Furnace (EAF) route and contains a stated minimum of 70% scrap, with up to 90% scrap, ArcelorMittal said.

Chief Executive Officer Aditya Mittal had said in March that stripping out carbon from steel production would drive up prices by about 10% to 20%, adding this could make green producers' business models unviable.

"It is steel with physically lower CO2 emissions, which will help drive the achievement of ArcelorMittal's goal to be carbon-neutral," said Peter Leblanc, CMO Automotive, at ArcelorMittal.

The automotive sector is facing aggressive U.S. targets for reductions in vehicle emissions, while also grappling with problems in the supply chain for EV batteries.

The U.S. Environmental Protection Agency in April proposed sweeping emissions cuts for new cars and trucks through 2032.

If finalized, this represents the most aggressive U.S. vehicle emissions reduction plan to date, requiring annual average pollution cuts of 13%.

ArcelorMittal, the world's second-largest steelmaker, has committed to becoming carbon-neutral by 2050. (Reporting by Kannaki Deka in Bengaluru; Editing by Pooja Desai)