Mercedes-Benz & Hydro partnership for green aluminium supply chain

Mercedes-Benz has signed a letter of intent with Norwegian Aluminium maker Hydro for a low-carbon technology roadmap between 2023 to 2030, a key milestone on the way toward enabling a green aluminium supply chain. Hydro and Mercedes-Benz agreed on the gradually supply of very low CO₂ emission aluminium for automotive applications on the road to decarbonisation. As an immediate result of the partnership, the CO₂ footprint of the aluminium supplied by Hydro will be almost 70% lower than the European average already by next year.

“Aluminium is becoming increasingly important as a lightweight material in electric vehicles. We are intensively working with our partners on finding levers to lower CO₂ emissions in the aluminium supply chain. Therefore, I am very happy that we now join forces with Hydro as a long-standing expert in producing renewable energies to tackle one of the biggest challenges in the automotive industry. This is an important signal to accelerate change in the aluminium industry and increase the availability of low carbon aluminium.”

Markus Schäfer, Member of the Board of Management of Mercedes-Benz Group AG. Chief Technology Officer, Development & Procurement.

Already today Hydro supplies Mercedes-Benz with CO₂ reduced aluminium for its foundry in Stuttgart Mettingen. The strategic partnership raises the cooperation to a new level to optimise decarbonisation processes for aluminium used in vehicle manufacturing. As a result, the first testing material made of further CO₂ reduced aluminium from Norway with a CO₂ footprint reduction of almost 70% is already expected for next year. Moreover, Mercedes-Benz and Hydro not only look into further reduction of emissions but also aim to reduce the use of primary resources through increased use of secondary materials from post-consumer scrap.

Low carbon aluminium as major lever for a sustainable supply chain

Together with steel, aluminium is proportionally the most widely used material in many vehicles. Therefore, this agreement marks a decisive step for the supply of low emission aluminium and thereby reducing the carbon footprint of Mercedes-Benz products.

As part of Mercedes-Benz’s “Ambition2039”, the focus is on the reduction of CO₂ emissions as well as the responsible use of resources along the entire supply chain. In close cooperation with its suppliers the Stuttgart-based luxury carmaker with the three-pointed star is working on levers for the consistent reduction of CO₂ as well as seeking to significantly reduce the input of primary materials.

Mercedes-Benz is retooling its supply chain to focus on the prevention and reduction of CO₂ emissions rather than through offsetting. The strategic partnership will help the Stuttgart-based carmaker towards achieving its ambitious emission reduction goals.

CO₂ reduced manufacturing technology

For realizing the path towards near zero CO₂ aluminium it is important to optimise both the primary aluminium production process, starting with a CO₂-optimised aluminium oxide production, as well as reducing the CO₂ emissions resulting from the electrolysis process. With many years of expertise in this field and ambitious research plans, Hydro is a competent partner supporting Mercedes-Benz on this path.

At the same time, next to technological improvements, increasing the use of recycling material plays a major role for realizing further CO₂ reductions. Producing aluminium by using secondary material only requires five percent of the energy compared to aluminium production based on primary resources. As part of the collaboration Mercedes-Benz and Hydro even want to take it one step further by exploring solutions how to implement a closed-loop-recycling.

“Mercedes-Benz is a forward-leaning company, and a perfect partner for Hydro. The ambition of making their entire fleet of new passenger cars CO₂-neutral by 2039 matches Hydro’s ambition to deliver industrial-scale zero-carbon aluminium by 2030. Partnerships and collaboration in the value chains can accelerate technology developments needed to reduce emissions, and we are excited to have Mercedes joining us on our path to zero carbon aluminium.” said Hilde Merete Aasheim, President and CEO in Hydro.

Active engagement for a sustainable and just aluminium supply chain

Mercedes-Benz is committed to the responsible sourcing of aluminum, relying on the application of recognized standards and robust certificates. The Stuttgart based car manufacturer is part of the non-profit Aluminium Stewardship Initiative (ASI) to support the spread of an independent certification scheme for the entire aluminium value chain. The aim is to intensify dialogue with all stakeholders in the aluminium supply chain to achieve continually measurable improvements in the areas of human rights, the environment and responsible business management – from aluminium production and usage to recycling. Today the ASI standard is applied in Mercedes-Benz press shops in Europe. Moreover, an effective award criterion is in place for supply contracts for all primary aluminium destined for Mercedes Benz press shops and foundries in Europe.

For Mercedes-Benz engaging with local communities a priority in addressing human rights risks in raw material supply chains. To build expertise around community participation in audits and standards processes, the company supported a project in cooperation with the Initiative for Responsible Mining Assurance (IRMA) focused on increasing the involvement of affected local communities before, during and after the assessment of mine sites and ensuring that the process has a positive impact on the situation on-site.”

Following this principle Mercedes-Benz and Hydro plan to jointly work through their respective memberships in standard initiatives towards transparent and inclusive processes that lower the hurdles for stakeholder participation, especially for mining communities and indigenous peoples. Both potential partners share the same understanding of sustainability, which is the prerequisite for a long-term partnership.