Mercedes suppliers must plan to be carbon neutral or miss out on new contracts

Mercedes suppliers must plan to be carbon neutral or miss out on new contracts

Almost half of about 2,000 Daimler suppliers have signed an Ambition Letter of Intent and are committed to supplying only CO2 neutral parts, said Gunnar Guethenke, head of procurement and supplier quality for Mercedes-Benz Cars.

Under its 'Ambition 2039' plan, Mercedes-Benz wants to offer a CO2 neutral new car fleet in less than 20 years. The switch to electric mobility poses supply chain challenges because, compared to ICE vehicles, the production of an all-electric is twice as CO2 intensive, mainly because of the lithium-ion batteries. But, despite the higher energy demand for production, plug-in hybrids and electric vehicles offer a clear advantage in terms of CO2 emissions compared to conventional drives already today, since only when the entire life cycle of the vehicles is considered a realistic picture emerges: electric vehicles can make up for a large part of the initially higher CO2 emissions from the upstream value chain due to their emission-free driving.

R&D head Markus Schaefer said: "With the electric EQS luxury sedan, we have already achieved important milestones in close cooperation with our partners - for example by purchasing CO2 neutrally produced battery cells.

"When awarding contracts for our subsequent electric vehicle platform - Mercedes-Benz Modular Architecture (MMA) for compact and medium-sized cars - we are already applying CO2 as a key criterion."

The automaker said it was talking with all other suppliers to jointly develop strategies for CO2 reduction.

Climate-neutrality is incorporated into contractual terms, and the ambition letter is a key criterion for awarding contracts. From 2039 at the latest, only production materials which are completely CO2 neutral will be purchased and any supplier declining to sign the ambition letter will not be awarded new contracts.

Mercedes-Benz will additionally focus on materials and components that are particularly CO2 intensive in manufacturing and processing until 2039 - items such as battery cells, steel, and aluminium which account for about 80% of the CO2 emissions in the supply chain of a fully electric vehicle.

CATL (Contemporary Amperex Technology) and Farasis Energy have committed to supply battery cells that are produced using electricity from renewable sources such as hydropower, wind, and solar energy. This reduces the CO2 footprint of an entire battery by more than 30%. The rest of the supply chain will be included next.

The goal is to consistently reduce the use of primary raw materials for electric drives by 2030 and gradually increase the share of secondary and renewable materials in vehicles.

Mercedes-Benz plants, including the global battery production network, will produce on a CO2 neutral basis worldwide from 2022. This will make them role models for the supplier network. In line with plant procedure, suppliers are required to avoid and reduce emissions as a fundamental principle. Only then can compensation via high-value projects be considered. The areas of approach for climate-neutral production are diverse, and range from reducing consumption to purchasing energy from renewable energy sources.

The company aims to have plug-in hybrids or all-electric vehicles to make up more than 50% of its car sales by 2030. Other major goals include involvement in shaping the charging infrastructure and agreeing to specific CO2 measures with suppliers.