Climate protection & air quality

Decarbonization of production

On the road to CO2-neutral production

GRI 103-1

As part of our sustainable business strategy, we have set ourselves the overall goal of making the mobility of the future more sustainable. One important target is the reduction of greenhouse gas emissions. This applies not only to our mobility solutions but also to our own production plants. By pursuing our goal of making our production processes CO2-neutral over the long term we are fulfilling our voluntary commitment to the Paris Agreement and complying with other national and international climate protection guidelines.

How we make our production more environmentally and climate-friendly

GRI 103-2

Daimler operates 72 production facilities all over the world that are subject to a variety of regional and national laws.

The environmental and climate protection measures at our production locations are controlled and coordinated across business units by three regional committees (Germany/Europe, North and South America, and Asia). These committees enable our experts in these theme fields to create networks linking companies and plants and serve to develop globally accepted standards and procedures. Their mission is to continuously improve our environmental and climate protection performance by developing standards, sharing tried-and-tested as well as innovative processes, and communicating our environmental goals.

Climate protection goals for our plants

We have also set ambitious climate protection goals for our plants.

  • Starting in 2022: CO2-neutral production at our own Mercedes-Benz Cars and Vans production plants worldwide and at the Daimler Trucks & Buses production plants in Europe.
  • By 2025: CO2-neutral production at all Daimler Trucks North America (DTNA) production plants. The Portland truck manufacturing plant already achieved CO2-neutral production in 2020.
  • By 2030: At Mercedes-Benz Cars & Vans we are striving to reduce the CO2 emissions at our plants (Scope 1 and 2) by 50 percent relative to the reference year 2018 by 2030. This target has been confirmed by the .
  • By 2039: CO2-neutral production at all of our plants and in all of our business units worldwide.

Our goal for the future is CO2-neutral production

Mercedes-Benz AG is pursuing an ambitious target for its own production plants and the procurement of the energy they consume: Starting in 2022, the operations of Mercedes-Benz AG’s own production locations — more than 30 car and van plants around the world — are to be CO2-neutral. All of the company’s bus and truck production locations in Europe are also planned to have CO2-neutral production operations by the end of 2022 at the latest.

13 | Direct and indirect CO2 emissions from production

Direct and indirect CO2 emissions from production (Graphic)

We procure green electricity

In the first step toward CO2-neutral production, we aim to reduce or — wherever possible — completely eliminate the greenhouse gas emissions that are generated by the plants’ vehicle production and energy supply. One important pillar of this project is the establishment of a sustainable energy supply for the plants, for example by purchasing green electricity. Starting in 2022, all the locations of Daimler AG, Mercedes-Benz AG, Daimler Trucks AG, and Daimler Mobility AG in Germany plan to purchase 100 percent of their electricity from renewable energy sources to ensure that it is CO2-free. An electricity contract for all Daimler locations will ensure that their energy needs will be fully covered at all times by a mix of wind, solar, and hydroelectric power. A large proportion of the green electricity that is purchased must be produced in Germany, for example in wind power stations whose subsidies have expired after 20 years of operation in line with the Renewable Energy Sources Act (EEG). One of the reasons for this stipulation is that it will safeguard the continued operation of six wind farms in northern Germany over the long term.

14 | Energy consumption in production

Energy consumption in production (Graphic)

In the reporting period, many of our production plants were supplied with electricity from renewable sources. Examples include the production of the EQC electric vehicle (combined electrical consumption: 21.5–20.1 kWh/100 km; combined CO2 emissions: 0 g/km)1,2 at the Mercedes-Benz location in Bremen and battery production at the Deutsche Accumotive GmbH & Co. KG plant in Kamenz, Saxony. The van production plant in Vitoria (Spain), which produces the eVito electric models, also used only green electricity throughout the entire location. Since 2020 it has also manufactured the EQV (combined electrical consumption: 26.4–26.3 kWh/100 km; combined CO2 emissions: 0 g/km)1,2.

We generate green energy at more and more locations

GRI 302-1

Another major pillar of CO2-neutral production involves increasing the production of energy from renewable sources at the various locations.

At the Sindelfingen location, Factory 56, Mercedes-Benz’ most modern production facility, was commissioned during the reporting year. It too has been supplied with CO2-neutral energy from the very start. A photovoltaic system installed on the roof of the production hall supplies green electricity for the manufacturing operations below. Factory 56 is also equipped with many sustainability features that reduce its energy consumption. About 40 percent of the roof’s surface is covered with plantings, which offset the paved areas at the facility and also retain rainwater.

Factory 56 is supplied with direct current produced by the facility itself. This is the first Mercedes-Benz plant to install such a system; this is a technological milestone for the company. The photovoltaic system on the roof generates direct current and has a total output of more than 5,000 kWp. The power it generates is fed directly into the plant’s own direct-current network without any inverters or power losses. As a result, it does not need to be converted into alternating current, which would result in an energy loss of 10 to 15 percent. Fluctuations in the energy supply due to changing weather conditions or times of day are balanced out by a battery storage unit developed by Mercedes-Benz Energy GmbH with a total capacity of 1.4 MWh. In addition to making a measurable contribution to reducing energy consumption and CO2 emissions, the new technology improves the supply security of the production operations and also stabilizes the local power grid, for example by smoothing the .

Many photovoltaic systems have also been installed at the production locations of Daimler Truck AG worldwide. One example particularly worth mentioning is the plant in Chennai, India, which covered about 16 percent of its energy needs in 2020 via its own photovoltaic system. Photovoltaic systems have also been commissioned in Japan (Kawasaki), the United States (Portland, Cleveland, High Point), Turkey (Istanbul), and Germany (Neu-Ulm, Rastatt, Gaggenau, and Kassel, for example). We are now surveying potential locations worldwide for the installation of additional photovoltaic systems. The continued expansion of our locations’ on-site generation of green power is one of the pillars of decarbonization.

In the reporting year, renewable energy accounted for 60 percent of the total electricity consumption at Mercedes-Benz Cars production plants and for 26 percent of the total energy consumption. At Vans, it accounted for 62 percent of the total electricity consumption and 20 percent of the total energy consumption. The Trucks & Buses division achieved a proportion of 45 percent for the total electricity consumption and 18 percent for the total energy consumption.

The heat supply is becoming more sustainable

Mercedes-Benz AG is also using similar levers to boost the sustainability of the plants’ heat supply. Among other things, the company is planning to use biogas and biomass as well as geothermal and solar thermal energy. It is also commissioning heat pumps powered by green electricity. At the Bremen plant, for example, CO2 emissions are being significantly reduced, partly by the use of district heating. During the reporting year the Mercedes-Benz plant in Jawor (Poland) used such technologies for CO2-neutral engine production and its production of plug-in hybrid batteries, which began this year. The plant will also derive electricity from a wind farm and cover its heat requirements by means of a biomass-pellet heating plant and a boiler that burns biomethane from renewable raw materials. Mercedes-Benz AG is thus one of the first large industrial companies in Poland to have signed contracts with local green power and heat supply utilities. We are currently looking at additional plants and measures.

Unavoidable emissions are offset

To supplement these measures, starting in 2022 Mercedes-Benz AG aims to implement qualified climate protection projects to offset all the CO2 emissions that so far have been impossible to avoid. In a first step, Daimler Truck AG is taking the same approach for Europe. Unavoidable emissions are produced primarily by our own generation of heat and energy in our existing natural gas-powered cogeneration plants. All of the previous and future offsetting projects comply with the high quality standards of the of the United Nations (UN) and have also been validated according to the . These projects do more than just avoid CO2 emissions. They also promote sustainable, socially beneficial, and environmentally friendly development in many ways in the countries where the projects operate. Our portfolio also includes projects that promote a renewables-based energy supply — for example, geothermal energy in Indonesia and energy for the reduced-CO2 purification of drinking water in Uganda.

Daimler is investing over €1 billion in a battery production network

The local production of batteries is an important success factor for Mercedes-Benz AG’s electric mobility offensive — a key factor in its ability to meet the global demand for electric vehicles. The company is therefore creating a global battery production network, in which it is investing more than €1 billion.

In the future, the network will consist of locations in Europe, North America, and Asia. The wholly owned Mercedes-Benz subsidiary Accumotive GmbH & Co. KG in Kamenz (Germany) will be playing a special role: As a center of expertise for the global battery production network, it has been producing drive batteries for electric and electrified vehicles from Mercedes-Benz and smart, as well as for vans, since 2012. A second plant that has been built in Kamenz in the meantime was designed to be CO2-neutral from the very start. Production here includes the battery systems for the EQA (combined electrical consumption: 15.7 kWh/100 km; combined CO2 emissions: 0 g/km)1,2. Ever since Accumotive started up production, more than a million batteries based on lithium-ion technology have been manufactured in Kamenz for electric and plug-in hybrid vehicles and .

Together with its local partner Thonburi Automotive Assembly Plant (TAAP), Mercedes-Benz Cars also built a battery production plant in Bangkok (Thailand) that was commissioned in 2019. Moreover, Mercedes-Benz and the Chinese manufacturing company BAIC built a local battery production plant at the Beijing location. In 2020 our battery factory in Jawor (Poland) also began production. Battery factories are also under construction in the Brühl and Hedelfingen sections of the Mercedes-Benz plant in Untertürkheim (Germany). In the Hedelfingen section, final preparations are now being made for the production of the battery systems of the EQS, which is scheduled to roll off the production line in nearby Sindelfingen in the first half of 2021. Plans also call for the battery systems of the EQE to be produced in Hedelfingen. Yet another factory is being built near the existing Mercedes-Benz plant in Tuscaloosa (Alabama, United States). And a new production plant for batteries is also being planned for the Mercedes-Benz plant in Sindelfingen.

In the future, the Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd. (Farasis) will also be an important strategic partner within the Mercedes-Benz AG battery production network. Our strategic partnership with Farasis was reinforced when Daimler bought approximately three percent of shares in the company in July 2020. The agreement with Farasis is another important milestone on Mercedes-Benz AG’s road to CO2 neutrality as part of “Ambition 2039.” Key elements of the agreement include the development and industrialization of advanced battery cell technologies, as well as ambitious goals regarding cost competitiveness.

We regard the EU Emission Trading System as an incentive

Industrial facilities that generate CO2 emissions as a result of the combustion of fossil fuels and whose approved exceeds 20 MW are required by law to participate in the . 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 emissions permits in the amount of the reported CO2 emissions. The company is permitted to generate one ton of CO2 per CO2 emission permit (European Union Allowance — EUA).

A total of twelve Daimler Group facilities in Germany, France, Spain, and Hungary are currently subject to this requirement. These facilities generate on their own sites most of the electricity and heat energy they need for their production operations. All of them are highly efficient and utilize natural gas almost exclusively. The Daimler plant in Mannheim also operates a foundry that is subject to the regulations governing the EU ETS.

The permitted total number of EUA certificates within the EU’s emissions trading program is limited. A small number of EUA certificates are assigned to industrial plants free of charge. Fewer and fewer free CO2 emissions permits are issued each year, which means that by the end of the fourth trading period (2021 to 2030) the number of such permits available to the automotive industry and many other sectors will have been reduced to zero. A large portion of the CO2 emissions permits that are needed must therefore be acquired at a cost via EUA auctions, the emission certificate market, or direct trading. At Daimler, an in-house committee consisting of experts from various departments defines the procurement strategy and the risk management for the CO2 emissions permits needed by the Group.

More than half of the CO2 emissions generated at our European production locations are currently covered by emissions trading activities. We are trying to further reduce our CO2 emissions by implementing projects to increase energy efficiency and expanding the capacity of systems that generate heat and electricity from renewable sources.

We have also prepared ourselves for the fuel emissions trade in Germany

Since the beginning of 2021, Germany has also had a legally prescribed fuel emissions trading process that complements the European emissions trading scheme. The new Fuel Emissions Trading Act (BEHG) has introduced CO2 pricing as part of a national emissions trading process for amounts that are not already subject to the EU Emissions Trading Scheme (EU ETS). The law applies to the heating and transportation sectors in particular. This means that we must acquire certificates for the fossil energy carriers we use that are not subject to the EU ETS.

In order to adapt to this new legislation, Daimler informed the locations and the responsible in-house managers about the legal requirements and the new tasks connected with them. In order to avoid double burdens arising from the European and the national emissions trade, we need to prove that a plant is already subject to the EU ETS, for example. Together with our fuel suppliers, we have therefore adapted our invoicing procedures and installed meters to provide the corresponding verification if it is needed. We have also implemented the corresponding processes for trading these certificates at Daimler.

Transport logistics are helping to protect the climate

Our global transport logistics operations currently serve 75 manufacturing plants in around 30 countries and about 8,500 retailers in almost every part of the world. We transported around 2.7 million vehicles worldwide in 2020. In addition, almost 4.5 million tons of production materials were transported within Europe in the first half of 2020 alone. Our global transport volume amounted to around 350,000 standard containers of sea freight and about 120,000 tons of air freight. The measures taken against the global covid-19 pandemic caused a 15 percent decrease in this volume relative to 2019.

We are working hard to optimize our logistics network in order to reduce the associated CO2 emissions. Our main goal is to optimally connect transportation hubs with one another so as to reduce the distances traveled and utilize capacity more efficiently. Innovative transportation concepts and new modes of transport also play a major role here.

We select logistics concepts not only on the basis of their costs, duration, and transport quality, but also according to their CO2 emissions. When selecting providers of logistics services, we also take sustainability criteria into account — ranging from environmental certificates and the use of environmentally compatible equipment to the utilization of low-emission trucks that meet the latest Euro emissions standards.

Mercedes-Benz Cars is continually working to optimize its global logistics network. In particular, the company is steadily increasing the volumes it transports via the railroad network and focusing on sustainable and digitalized innovations. In its implementation efforts, Mercedes-Benz Cars is now taking the next step toward CO2-neutral mobility: At the beginning of 2020, Mercedes-Benz cooperated with its logistics partner DB Cargo to switch the transport logistics to a CO2-free energy supply. From now on, the production material for the Mercedes-Benz car plants in Germany and the plant in Kecskemét (Hungary) will be transported in trains powered by green electricity. The volume of these rail shipments is the equivalent of about 270 truckloads per day, which do not need to be transported by road.

The green electricity that is used for rail shipments in Germany and Austria is supplied exclusively by local sources of renewable energy. Today it is mainly generated by hydroelectric power plants.

In addition to the focus on reducing greenhouse gas emissions, activities to reduce traffic volume, waste generation, and energy demand were also pursued.

In this connection we also launched a pilot project for reducing the greenhouse gases generated by local transportation at the production locations. The first plant to participate was that in Kecskemét. Starting in May 2020, a fleet of seven Mercedes-Benz Actros trucks has been using only an alternative fuel () as they complete their seven daily rounds of up to 100 deliveries. As a result, the plant was already able to reduce its CO2 footprint by at least 58 tons (this corresponds to approximately the amount of emissions that would have been generated by a megatrailer driving 15 times the distance between Madrid and Moscow using conventional diesel fuel).

The aim of this pilot project is to let the findings from the test operations flow into the CO2 reduction strategy of other plants.

How we assess the effectiveness of our management approach

GRI 103-3

On the road to CO2-neutral production, we have already achieved success in a number of areas. In 2019 we already reached the long-term CO2 reduction targets we had wanted our production operations to reach by 2020. In 2020 Mercedes-Benz AG reduced its CO2 emissions by 18 percent relative to the previous year partly thanks to a variety of efficiency-boosting measures to decrease greenhouse gas emissions in production processes. These are systematically documented in a Group database that is used to control progress toward Group-wide goals. Greenhouse gas emissions were also reduced by 20 percent at Trucks & Buses.

Mercedes-Benz AG and Daimler Truck AG have set new future goals for themselves as part of their “Ambition 2039” and as an expression of their commitment to the Paris Agreement on climate protection.

We use internal and external tools to monitor the progress we are making toward the climate protection goals we have set for our production plants. We use the results of our reviews to adapt and refine our climate protection measures. Mercedes-Benz AG and Daimler Truck AG have defined the parameters for in-house reviews, and they monitor these parameters by means of a scorecard. We have commissioned an auditing company to conduct the external review. This company annually evaluates a selected number of our corporate goals and their implementation.

CO2 emissions from energy consumption (in 1,000 t)*
GRI 305-1/-2

 

2016

2017

2018

2019

2020

CO2 direct (Scope 1)

1,056

1,192

1,247

1,239

1,027

CO2 indirect (Scope 2) - market-based

1,882

1,763

1,687

1,276

1,035

CO2 indirect (Scope 2) - location-based

2,141

2,041

1,985

1,706

1,492

Total - market-based

2,938

2,955

2,934

2,516

2,062

Total - location-based

3,197

3,233

3,232

2,946

2,519

*

Since 2016, the “market-based” and “location-based” accounting approaches have been implemented in accordance with GHG Protocol Scope 2 Guidance. Since then, the market-based approach has been the standard accounting approach. The historical data for 2006–2015 were calculated using a method similar to the location-based approach.

Specific CO2 emissions (in kg/vehicle)*
GRI 305-1/-2

 

2016

2017

2018

2019

2020

Cars – CO2 direct (Scope 1)

245

250

267

279

326

Cars – CO2 indirect (Scope 2) – market-based**

611

565

562

431

426

Total – Cars – Scope 1 & 2

856

815

829

711

752

Trucks*** – CO2 direct (Scope 1)

746

663

629

676

742

Trucks*** – CO2 indirect (Scope 2) – market-based**

1,286

1,084

933

834

954

Total – Trucks – Scope 1 & 2

2,032

1,747

1,561

1,510

1,696

Vans – CO2 direct (Scope 1)

372

340

355

346

333

Vans – CO2 indirect (Scope 2) – market-based**

201

157

196

160

147

Total – Vans – Scope 1 & 2

573

497

551

506

479

Buses – CO2 direct (Scope 1)

1,408

1,177

977

1,083

1,471

Buses – CO2 indirect (Scope 2) – market-based**

1,421

1,059

948

911

1,245

Total – Buses – Scope 1 & 2

2,829

2,236

1,924

1,994

2,716

*

Excluding CO2 from liquid fuels

**

Since 2016, the “market-based” and “location-based” accounting approaches have been implemented in accordance with GHG Protocol Scope 2 Guidance.

***

Reman scopes have no longer been taken into account in the Trucks division since 2020.

1 Electricity consumption and range were calculated on the basis of Commission Regulation (EC) No. 692/2008. Electricity consumption and range depend on the vehicle configuration.

2 The actual range is also dependent on individual driving style, road and traffic conditions, outside temperature, use of air conditioning/heating systems etc. and may therefore differ.

Provider/Privacy

Daimler AG Mercedesstraße 120
70372 Stuttgart
Germany
Tel.: +49 711 17 0
E-Mail: dialog@daimler.com

Represented by the Board of Management: Ola Källenius (Chairman), Martin Daum, Renata Jungo Brüngger, Wilfried Porth, Markus Schäfer, Britta Seeger, Hubertus Troska, Harald Wilhelm

Chairman of the Supervisory Board: Bernd Pischetsrieder

Commercial Register Stuttgart, No. HRB 19360
VAT registration number: DE 81 25 26 315

Science Based Targets Initiative

The Science Based Targets Initiative (SBTI) is a joint initiative of the CDP, the UN Global Compact, the World Resources Institute, and the World Wildlife Fund (WWF). It aims to encourage companies to set targets for reducing greenhouse gas emissions in line with the level of decarbonization that scientists are calling for in order to limit global warming to less than 1.5° C/2° C compared to preindustrial temperatures.

All glossary terms

Peak loads

Peak loads occur in power grids, for example, when energy demand suddenly increases steeply for a short period of time. In order to meet this demand and ensure that supply is uninterrupted, more electricity has to be fed into the grid at short notice. This can be done by means of battery storage devices, for example, or by pumped-storage electrical power stations.

All glossary terms

Clean Development Mechanism (CDM)

The Clean Development Mechanism (for environmentally compatible development) was introduced as part of the Kyoto Protocol in order to make it easier for industrialized countries to achieve their targets for reducing greenhouse gas emissions and at the same time promote technology transfer to developing countries. The mechanism enables emission reduction measures to be implemented in developing countries and the resulting decreases to be certified. The corresponding certificates (Certified Emission Reductions/CER) can be credited to the reduction targets of the industrialized countries.

All glossary terms

Gold Standard

The Gold Standard is the highest quality standard for carbon offsetting projects. Gold Standard projects not only avoid CO2, they also contribute to the project location’s sustainable environmental and social development. The Gold Standard was developed under the direction of the WWF and with the assistance of the German Ministry of the Environment.

All glossary terms

48-volt system/on-board electrical system

An on-board electrical system refers to the totality of electrical components in a vehicle. A 48-volt network is much more effective because it uses an operating voltage of 48 volts instead of the commonly used 12 volts. This makes it better suited for electric drive systems that consume a lot of electricity.

All glossary terms

Rated thermal input

The rated thermal input stands for the thermal energy that can be fed to a combustion plant in continuous operation by burning fuel. After energy losses are subtracted, the result shows the thermal output of the respective heating system.

All glossary terms

European Union Emission Trading Scheme (EU ETS)

The European Union Emission Trading Scheme is a climate-protection tool for the reduction of greenhouse gas emissions. A government-stipulated upper limit states how many tons of CO2 may be emitted in total. A company needs an emission allowance for every ton of CO2. These emission allowances can be freely traded on the market. However, the number of these allowances is limited. This results in a price for CO2 emissions in order to give companies an incentive to reduce their emissions.

All glossary terms

HVO diesel

HVO (hydrogenated vegetable oil) diesel is a biofuel that is manufactured by hydrogenating (adding hydrogen atoms to) production waste, vegetable oils, or other materials.

All glossary terms