Climate protection

Climate protection in production

Strategy and concepts

CO₂-neutral on the balance sheet production

GRI 2-23

The Mercedes-Benz Group formulates the holistic goal of making the mobility of the future more sustainable in its sustainable business strategy. One of the most important targets is the reduction of greenhouse gas emissions. This applies not only to mobility solutions but also to the Group's own production plants. By pursuing its goal of making its own production processes CO₂-neutral on the balance sheet, the Mercedes-Benz Group intends to act in accordance with the Paris Climate Agreement.

Thus the CO₂ emissions arising from Mercedes-Benz' production operations and the energy supply of the brand's plants will be consistently reduced or, wherever possible, completely eliminated. In order to accomplish this, Mercedes-Benz is relying on the purchase of green electricity, the expansion of other renewable energy sources at its locations and the implementation of a sustainable heating supply system.

The expansion of electric mobility is the key to more sustainable mobility in the future: this is why the Mercedes-Benz Group has designed its worldwide production network with a flexibility that allows the manufacture of fully electric vehicles. Since 2022, eight Mercedes-EQ models have been rolling off the production lines at seven locations. Production at all manufacturing locations operated by the Mercedes-Benz Group has been CO₂-neutral regarding Scope 1 und Scope 2 since the reporting year.¹ Since early 2022, all CO2 emissions (Scope 1 and Scope 2) at production facilities operated by the Mercedes-Benz Group that have been as yet unavoidable have been offset by means of carbon offsets from qualified climate change mitigation projects.¹

Responsibilities and organisation

The Mercedes Benz Group has 30 production locations worldwide, each of which is subject to different regional and national laws. Environmental and climate protection in production is managed and coordinated across the business units by three regional committees – Germany/Europe, North/South America and Africa/Asia. Through the committees, experts can network across companies and plants and exchange information on legislation, procedures and innovations. In addition, these committees draw up globally valid internal standards and procedures.

European Union Emissions Trading System

Industrial plants in which CO₂ emissions are caused by the combustion of fossil fuels, and whose licensed rated thermal input exceeds 20 MW, must by law participate in the European Emissions Trading Scheme (EU ETS). The operators of such facilities are required to calculate on an annual basis the CO₂ emissions they generate, report the figures to the responsible authorities, and then submit to the same authorities CO₂ emission certificates in the amount of the reported CO₂ emissions. A major proportion of the CO₂ emission certificates needed must be acquired at a cost via EUA auctions, the commodity exchange or direct trading. At the Mercedes-Benz Group, an in-house committee of experts from various departments defines the procurement strategy and the risk management for the EUA certificates needed by the Group.

Currently, more than 60% of the CO₂ emissions generated at the European production locations of the Mercedes-Benz Group are covered by the EU emissions trading scheme. Through various measures, the Mercedes-Benz Group is attempting to further reduce CO₂ emissions – these also include projects to increase energy efficiency or to expand capacities for regenerative power and heat generation.

German National Emissions Trading System

The new Fuel Emissions Trading Act (BEHG) has introduced CO₂ pricing by means of a national emissions trading process for amounts that are not subject to the EU Emissions Trading System (EU ETS). This law applies to the heating and transport sectors in particular. Accordingly, the Mercedes-Benz Group must ensure the acquisition of certificates for the fossil fuels it uses that are not subject to the EU ETS.

Measures

Procuring green electricity

The goal of the Mercedes-Benz Group is to consistently reduce – and, where possible, completely avoid – the CO₂ emissions generated in vehicle production and in the energy supply to the plants. The procurement of green electricity plays a key role in these efforts. Since 2022, all the Mercedes-Benz Group’s own production plants worldwide have obtained 100% of their external electricity from renewable sources.

For the procurement of green electricity, the Mercedes-Benz Group in Germany currently relies on a mix of solar, wind and hydroelectric power for external electricity purchases. The electricity is generated in a solar park near Ingolstadt as well as by more than 160 wind turbine systems throughout Germany, plus hydroelectric power plants. This green electricity is generated at the same rate as it is consumed. This ensures that the company’s exact electricity needs are met with quarter-hour accuracy using green electricity from the grid.

Expansion of renewable energies

Another important pillar of CO₂-neutral on the balance sheet production for the Mercedes-Benz Group is the expansion of renewable energies at its locations. The aim is to cover more than 70% (cars) and 80% (vans) of the energy requirement in production with renewable energy sources by 2030. In order to continue to cover the energy requirements in production with renewable energies, the Mercedes-Benz Group is, among other things, planning to expand solar and wind energy at its own locations, and to conclude corresponding power purchase agreements.

Up to 2025, the Mercedes-Benz Group will make further investments to continue the expansion and installation of photovoltaic systems (PV systems) at more than 50 locations around the world.

The installation of PV systems is already in progress at the German locations in Rastatt, Bremen, Hamburg, Kölleda and Sindelfingen; other sites in the company’s global production network will follow, including Kecskemét (Hungary) and Tuscaloosa (USA).

In September 2022, the Mercedes-Benz Group began its planning for the installation of a wind farm on its test site in Papenburg, northern Germany. By 2025, the plan is to construct several wind turbine systems there, generating more than 100 MW and covering over 15% of the annual power requirement of Mercedes-Benz Group AG in Germany. To this end, the company is planning a long-term cooperation with a partner in the form of a power purchase agreement (PPA) to the value of hundreds of millions of euros. Furthermore, internal studies are ongoing to determine whether the large-scale installation of photovoltaic systems is feasible on the test site. When planning project implementation and ecologically sustainable use of the site, Mercedes-Benz Group AG collaborates closely with the relevant local authorities and interest groups.

In addition, Mercedes-Benz Group is in the final phase of concluding a long-term power supply contract with a major energy provider. The power will be generated by a newly constructed offshore wind farm in Germany, which is due to go into operation by 2027. The supply contract covers more than 25% of the company’s entire power requirement in Germany.

The production of the EQS at Factory 56 in Sindelfingen since May 2021 is a great example of the sustainable and CO₂-neutral on the balance sheet vehicle production of the future at Mercedes-Benz. A PV system supplies the production shop with around 30% of self-generated, green electricity each year – but also feeds a stationary battery bank operated by Mercedes-Benz Energy. It has a capacity of 1400 kWh and serves as a buffer on days when there is little sun, for example.

More sustainable heat supply

The Mercedes-Benz Group is also reducing CO₂ emissions arising from the plants’ heat supply. Among other things, biomethane and geothermal energy are to be used, and heat pumps powered by green electricity are to be put into operation.

In 2022, Mercedes-Benz Cars gradually increased its purchases of biomethane for production processes at German locations. Several Mercedes-Benz production locations use district heating, including the Mercedes-Benz Vans plant in Ludwigsfelde (Germany). This is generated from over 60% renewable energy sources and thus reduces the CO₂ emissions of the company’s own Sprinter production at the site. Other Mercedes-Benz locations are supplied by biomass heating plants.

Offsetting CO₂ emissions

Since early 2022, all CO₂ emissions (Scope 1 and Scope 2) at production facilities operated by the Mercedes-Benz Group that have been as yet unavoidable have been offset by means of carbon offsets from qualified climate change mitigation projects.¹

Remaining emissions are produced mainly in the combined heat and power plants which generate electricity and heat with natural gas. All offsetting projects comply with international accounting requirements and the high quality demands of the Gold Standard. In this way, the Mercedes-Benz Group supports projects that meet very high quality criteria, are subject to a reliable calculation methodology and avoid double counting. The climate-protection projects not only avoid CO₂ emissions but also promote sustainable, socially beneficial and environmentally friendly development in many ways in the countries where the projects take place. The portfolio includes offset projects such as small-scale biogas plants in Nepal and CO₂-reduced drinking water treatment in Nigeria and Kenya.

The focus of the Mercedes-Benz Group’s climate policy is to reduce and avoid CO₂ emissions. According to the Intergovernmental Panel on Climate Change (IPCC), the global climate targets cannot be achieved through reduction measures alone. In addition, CO₂ would also have to be removed from the atmosphere. The Mercedes-Benz Group therefore also intends to include CO₂ removal projects in its portfolio in the future.

Global battery production network

Mercedes-Benz aims to be fully electric by 2030 – wherever market conditions permit. In this process, the local production of batteries is a crucial element for flexibly and efficiently meeting the global demand for electric vehicles. To this end, Mercedes-Benz relies on a global battery production network, which is an important component of the worldwide production network.

The network consists of factories on three continents: battery systems are manufactured in Kamenz (Saxony), in the Hedelfingen part of the Untertürkheim plant in Stuttgart, as well as in Bangkok (Thailand), Beijing (China) and Jawor (Poland). The battery plant in Esslingen-Brühl near Stuttgart started production of plug-in hybrid batteries in mid-2022; the battery factory in Tuscaloosa, USA, began operations in the reporting year. The Mercedes-Benz battery production network will also be supplemented by a further battery factory at the Sindelfingen location. To further reinforce its capacities in the global battery production network, the company is cooperating with GROB in Mindelheim – a specialist in the field of battery plant technology. The goal is to jointly develop and set up assembly systems for upcoming battery modules and systems. The plants are to produce batteries for the Mercedes-Benz EQ models that will leave the production lines from 2025.

More sustainable transport logistics

On the way towards CO₂-neutral on the balance sheet transport logistics, Mercedes-Benz AG is committed to the prevention and reduction of CO₂ emissions in the global transport network. In 2022 around 2 million Mercedes-Benz vehicles were transported around the world. In addition, the European production networks of Mercedes-Benz AG received nearly 6.6 million t of production materials. Mercedes-Benz AG is continually optimising its logistics in order to reduce the associated CO₂ emissions.

Among other things, in the reporting year, the company improved the transport network for the supply to the Asian markets: thanks to shorter transport routes, around 20,000 t of CO₂ were avoided, compared with the previous year. The company also wants to shift more transport from road to rail, and is focusing on an expansion of rail transport: in August 2022, work began on a new rail siding with logistics centre at the Mercedes-Benz plant in Jawor (Poland). This expansion is to facilitate the delivery of batteries from Jawor to Mercedes-Benz plants around the world from 2024.

Together with DB Cargo, the company opened the logistics centre for the Mercedes-Benz plant in Bremen in 2021. The Centre for Battery Logistics is the hub of the CO₂-neutral on the balance sheet logistics concept for the battery systems of the new Mercedes EQ model, the EQE. Since 2022, DB Cargo has been transporting the systems on a CO₂-neutral on the balance sheet basis from the Mercedes-Benz Hedelfingen plant in Stuttgart to Bremen by using green electricity. For marine transport of components from Bremerhaven to India, Mercedes-Benz AG relies on biofuels and was able to reduce CO₂ emissions by around 9000 t in the reporting year compared with the previous year. Furthermore, in close cooperation with its transport service providers,  Mercedes-Benz AG is examining innovative transport concepts and new means of transport such as freight sailing ships to further avoid and reduce emissions in its logistics. Until these climate-friendly transport alternatives and technologies become available, Mercedes-Benz AG continues to support qualified climate protection projects.

More sustainable sales operations

The Mercedes-Benz Group has set itself the goal of making its sales more climate-friendly – but this can only be achieved with the support of its sales partners.

By 2030, all sales partners worldwide are expected to achieve the goal of CO₂-neutral on the balance sheet operation. The focus here is on identifying and implementing measures that help to avoid and reduce CO₂ emissions. This includes switching to green electricity contracts, the energy-efficient refurbishment of existing buildings and the construction of highly energy-efficient new buildings. This is based on the global CO₂ emissions of the Mercedes-Benz Sales Organisation, which the company determined for the first time in the reporting year, as well on continuous reporting for subsequent years. This enables the Mercedes-Benz Group to check the effectiveness of the implemented measures and to measure the realised CO₂ reduction. In addition, it plans to develop an interactive platform in 2023 which includes all concepts, tools and measures relevant to CO₂ reduction. At the same time, the platform is intended to provide the strategic framework for the sustainability efforts of the Mercedes-Benz Sales Organisation.

The own-retail outlets of Mercedes-Benz AG in Germany, like the Mercedes-Benz plants, have been operated on a CO₂-neutral on the balance sheet basis with effect from 2022. In addition to the nationwide switch to green electricity, the focus in the reporting year was on avoiding or reducing energy consumption in the own-retail outlets and sales buildings – for example, by switching to LED lighting and taking modernisation measures. Increasing energy efficiency remains the focus of the dealerships.

Effectiveness and results

Effectiveness of the management approach

GRI 3-3

The Mercedes-Benz Group uses internal and external tools to determine how much progress its plants are making in achieving the climate-protection targets. The Mercedes-Benz Group has defined the parameters for in-house reviews, and it regularly monitors these parameters. An external auditing company annually audits a selection of corporate goals and their implementation. The company uses the results to adapt and further develop its climate protection measures.

Results

The Mercedes-Benz Group has been systematically recording climate protection measures in a database for many years. Using the data, it can efficiently monitor its self-designated targets, as the respective measures can be stored and tracked in the database with the corresponding calculations for CO₂ reduction.

During the reporting year, Mercedes-Benz Cars and Mercedes-Benz Vans employed a bundle of measures that enabled them to reduce CO₂ emissions in production (Scope 1² and Scope 2³) from 946,038 t in 2021 to 537,821 t in the year under review, and thus by 43% compared to the previous year. In the reporting year, the Mercedes-Benz Group already achieved its target of reducing CO₂ emissions at its own plants (Scope 1² and Scope 2³) by 50% by 2030 compared to 2018. This target was confirmed by SBTi (in 2018, Scope 1 emissions comprised 650,000 t CO₂ and Scope 2 emissions 1,040,000 t CO₂) and is also being pursued beyond the production sites for the central functions considered. Since early 2022, all CO₂ emissions (Scope 1 and Scope 2) at production facilities operated by the Mercedes-Benz Group that have been as yet unavoidable have been offset by means of carbon offsets from qualified climate change mitigation projects.¹

Scope 1 (direct) and Scope 2 (indirect) CO₂ emissions in production

GRI 302-1/-5

In the production of Mercedes-Benz Cars, renewable energies accounted for 100% (1956 GWh) of total electricity consumption and 48% (2044 GWh) of total energy consumption in the reporting year. At Mercedes-Benz Vans, renewable energy accounted for 100% (337 GWh) of total electricity consumption and 38% (341 GWh) of total energy consumption.

Energy consumption in production

GRI 302-1/-5

1 This information was audited in order to obtain limited assurance

2 Scope 1 emissions are direct greenhouse gas emissions from sources that are the direct responsibility of or controlled by the company

3 Scope 2 emissions are indirect greenhouse emissions from bought-in energy, such as electricity, or district heating that are externally generated but used by the company

Key figures