How the CO₂ footprint of a passenger car materializes — working on the Ambition2039

“Zero.” Sometimes an answer can be simple — for example when you ask Martin Henßler what drives him. Henßler spent months studying car bills of materials, entering materials information on components, and examining supplier data. He collected environmental and energy data from vehicle plants, as well as data on fuel and electricity consumption, and used countless tools, databases, and calculation methods to help him with his efforts. Henßler, who has a PhD in environmental engineering, has also spent the last six years calculating the CO₂ emissions of all model series and drive system types at Mercedes-Benz Cars. He will be one of the first to see whether Mercedes-Benz’ decarbonization efforts will be successful over the next few years — and if Mercedes can thus make Zero a reality.

Henßler, 37, likes to work with numbers and is dedicated to environmental protection. He explains that he believes he has a responsibility to create transparency and help keep the world a place worth living in. Besides conducting his CO₂ calculations, he and his colleagues also draw up complete environmental life cycle assessments for vehicles. These assessments take into account everything from the mining of the raw materials to the production of individual components, the assembly of the vehicle, the driving operation, the production of the fuel or electricity, and the recycling processes.

Henßler also publishes scientific studies — and he’s noticed that interest in his field has increased considerably over the last few years. “You can really feel the change within the company,” says Henßler. “The demand for life cycle assessments of our products, production processes, and components has increased significantly.” It’s not just customers who view environmental compatibility as being increasingly important. Also society at large, governments, and capital markets are calling for companies to display greater transparency and disclose information on their climate protection activities. The Paris Agreement on climate protection aims to limit global warming to significantly less than two degrees Celsius compared with the preindustrial level by 2050. Ideally, the limit should be even stricter — to 1.5 degrees. The provisions resulting from this target have been increasing pressure to reduce CO₂ emissions in particular. “We knew that if we want to have a climate-neutral vehicle fleet on the road by 2050, we would need to launch these CO₂-neutral vehicles on the market ten years before that — ten years more or less corresponds to the holding time of a car,” Henßler, who is a Daimler engineer, explains. “That’s actually how we came up with the year in the name Ambition2039.”

Ambition2039 Working Group — a team chasing Zero

The “we” that Henßler refers to is an interdisciplinary team consisting of buyers, developers, logistics experts, production specialists, strategists, and sales experts, all of whom monitor and manage CO₂ emissions for the Ambition2039 program. All of these people are dedicated to making vehicle decarbonization a success, and they also often mention something they call the “CO₂-Walk,” which is a calculation designed to achieve only one result: Zero CO₂ emissions. “The approach we are following to achieve this result is relatively simple,” says Henßler. “Prevent CO₂ emissions wherever possible, reduce CO₂ emissions as long as we can, and compensate for CO₂ emissions when we’ve reached the limits of what we can accomplish with the other elements of our approach.” The Ambition2039 Working Group achieved a small interim milestone last year, when the Science Based Targets initiative scientifically confirmed the climate targets that Mercedes-Benz Cars & Vans has set for the period up until 2030. “That was really pretty special and it felt good to hear a qualified body say that we’re on the right track with our strategic approach,” says Henßler.

It’s clear that most of the CO₂ emissions associated with a vehicle are not produced until after it leaves the factory and the customer starts driving it. However, the life cycle phases prior to that also significantly influence the overall CO₂ footprint.

No car built yet — but the CO₂ footprint is already growing

A passenger car already drags around a CO₂ footprint of 7.8 tons before it can even be recognized as a motor vehicle. These emissions are produced in the upstream value chain, at the suppliers. The expansion of electric mobility, particularly in the absence of other preventive measures, will initially lead to a further increase in CO₂ emissions in the supply chain. That’s because the production of the components needed to build electric vehicles results in a much larger CO₂ footprint than is the case when components for conventional vehicles are manufactured. Production of the EQC, for example, results in CO₂ emissions of approximately 16 tons, whereas conventional GLC production generates eight tons of emissions.

Michaela Hofmeister is responsible for Governance, Integrity, and Quality Management at Mercedes-Benz Procurement, and is also a member of the Ambition2039 Working Group. Her responsibilities include working with external partners to ensure compliance with safety and legal standards in the supply chain and the implementation of climate protection measures. “We will not be able to become a climate-neutral company by 2039 unless we have the full cooperation of our suppliers,” says Hofmeister, who has a master's degree in business administration. “It’s not enough to use green power at all of our plants and increase the efficiency of our vehicles; we also need to make sure that our batteries are manufactured in a CO₂-neutral manner and that we procure our components and materials in the regions where we produce our vehicles.” It’s not only the life cycle assessment of procured batteries that needs to be taken into account here, however, as the production of steel, aluminum, and plastics also involves extremely energy-intensive processes. All of this has a negative effect on the CO₂ balance of a Mercedes, and it also keeps Henßler busy having to juggle with more CO₂ in the supply chain than he’d like to when he performs his life cycle calculations. That’s where Hofmeister and her team come in. “The much-discussed lane change has now also made its way into procurement,” Hofmeister explains. Hofmeister and her team work with more than 2,000 direct suppliers to identify potential environmental risks and employ targeted measures in order to minimize these. This aspect becomes even more important when you consider the fact that there still aren’t any standardized requirements for the production and processing of a wide range of materials.

“We have the environmental impact of our most important suppliers evaluated by the CDP organization (formerly known as the Carbon Disclosure Project),” Hofmeister explains. The criteria of quality and prices have long since been supplemented here by other requirements when new projects are launched. “I’m happy that CO₂ and recycling targets are also now increasingly being taken into account in our decisions on whether to work with specific suppliers,” Hofmeister says. “In addition, we have now codified the demand for transparency on relevant environmental figures in our supplier contracts.” Mercedes-Benz has also announced that in the future it will only procure battery cells containing cobalt and lithium from certified mining operations. The company is even going a step further by expanding its audits of mines to include the use of standards from the Initiative for Responsible Mining Assurance (IRMA). This approach will not only help minimize the environmental risks associated with mining activities; the IRMA standards also help ensure that no materials that were extracted using child labor or other socially unacceptable practices will be used in production processes.

It’s like starting off again with a clean slate, is how Hofmeister describes it: “It takes a lot of energy and effort to do something that makes things better — but it’s also a lot of fun.”

Mercedes-Benz launched strategic partnerships with Farasis Energy and CATL just a few months ago. The goal here is to use battery cells manufactured in CO₂-neutral operations in order to reduce the carbon footprint of the entire battery by well more than 30 percent. Plans call for similar initiatives to be launched for steel and aluminum, but the challenges here are also extensive. For example, green steel production requires large amounts of energy generated from renewable sources. This energy is used for the furnaces and also for the production of the green hydrogen needed to manufacture pig iron in direct reduction plants.

An ideal scenario, which Henßler has already done the calculations for, of course, and in which Procurement and suppliers would implement wide-ranging measures for aluminum, steel, polymer, and battery production, would result in significantly lower CO₂ emissions in the average Mercedes model’s supply chain in ten years’ time. Still, how realistic is this? Hofmeister laughs and says, “not as unrealistic as it might seem at first. However, it’s also the case that long and extensive negotiations need to be conducted with suppliers, and even among our own internal departments, before we can implement any single measure, whereby costs play a major role here as well.” Indeed, there’s no denying that sustainability doesn’t come cheap, and experts are currently performing calculations to determine exactly how much will need to be invested in order to approach the supply chain targets that have been set for 2039.

The shorter the transport distances, the better

Andrej Nikolow also has plenty of stories to tell about the balancing act between cost pressure and the need to reduce emissions. Nikolow is responsible for compiling data on inbound and outbound logistics processes, which is then used in life cycle assessment calculations. This data relates to the emissions produced on the one hand by the supply of required goods and on the other by sales activities and deliveries to distribution centers. Nikolow uses numerous systems in order to get Henßler the data he needs. The procedures here are highly complex, as each mode of transport (e.g. plane, train, truck, or ship) requires the use of a different approach for calculating the emissions. At the same time, increasing digitalization in the logistics chains and the development of new system applications will make such calculations easier to perform in the future. The associated projects are therefore important to both the numbers guy, Henßler, and the planner, Nikolow.

When asked what the key is to achieving the greatest possible degree of sustainability in logistics chains, Nikolow immediately replies: “It’s transport — the shorter the transport distances, the better the life cycle assessment. That’s because shorter transports not only reduce CO₂ emissions; they also conserve resources.” If a specific transport operation is unavoidable, an optimal route and the best mode of transport must be selected. “Efficiency is the key with both variables — in terms of costs and CO₂ emissions,” Nikolow explains. Ocean transport has proved to be a good option with regard to both variables over the last few years: “Ships now travel more slowly and at constant speeds, which lowers both fuel costs and CO₂ emissions.” Since the beginning of this year, all inbound rail transports in Germany and Austria have been powered by electricity generated from renewable energy sources. According to Nikolow, it’s not a few major changes but rather the combination of many smaller projects that minimize the ecological footprint in logistics operations — a fact that experience has shown to be true.

Sebastian Bühler, who works as a technical production planning specialist for energy conservation and CO₂ reductions, says that Daimler’s commitment to environmentally friendly logistics operations demonstrates that the company is serious about utilizing an integrated approach to sustainability issues. Bühler is a member of the GreenProduction team, which is a corporate unit that works on transforming production systems in order to make them more sustainable. In addition to conducting his planning work, Bühler is involved in Green Lab Decarbonization and also heads a Daimler photovoltaic project group. “I’ve been promoting the use of renewable energy since I was 16 — there was never any question about this for me,” he says.

On the road to CO₂-neutral production

The production process for each vehicle manufactured produces 0.7 tons of carbon dioxide on average. Plans call for production at Mercedes-Benz AG’s own plants to be made CO₂ neutral by 2022. As a result, the company has firmly committed itself to consistently reducing emissions caused by production and energy supply at its plants, or to eliminate them completely wherever possible. The strategy employed by Mercedes-Benz AG here has three strategic pillars: A continuous increase in energy efficiency, utilization of green power, and the implementation of sustainable heat supply systems. The green power component also involves increasing the production of energy from renewable sources at Mercedes-Benz production plants.

In addition, beginning in 2022, all of Mercedes-Benz AG’s own production plants worldwide will only procure electric power from renewable sources. What will then remain will be the emissions produced by the use of natural gas, heating oil, liquefied petroleum gas, gasoline, and diesel fuel, as well as emissions produced directly at the plants by cogeneration plants or test rigs, and indirect emissions caused by district heating systems at some locations, for example. We will use CO₂ certificates to offset these residual emissions,” says Bühler, who along with his fellow team members is gradually examining each and every production location in order to identify additional potential for using energy from renewable sources in order to support the “CO₂-Walk” that Henßler is working so hard on. The recently opened Factory 56 in Sindelfingen serves as the model here. The facility was designed to operate as a zero-carbon factory — completely CO₂-neutral and with significantly lower energy consumption than a conventional factory.

Bühler says he recently saw a video on Instagram about the factory’s photovoltaic system, which made him very proud. The system does in fact play a major role in the innovative energy concept employed at the factory of the future. Bühler was closely involved its planning and implementation. “I’m a big fan of photovoltaic systems,” he explains. “We are now working in a company-wide project group on installing new photovoltaic systems at our German locations.” Bühler is also trying to figure out ways to enable employees to invest in these photovoltaic systems in a group of expert. His initial ideas on this landed him first prize in a competition during Daimler’s Group-wide Digital Life Day last year. However, Bühler admits that the projects he works on can sometimes be taxing, and that at times it costs even optimists like himself a great deal of strength to convince everyone else of the necessity of the energy transformation. “At the same time, it’s tremendously motivating to see that things are in fact changing, and that the changes are becoming noticeable,” he explains.

Tank-to-wheel: The source of the lion’s share of emissions in the life cycle of combustion engines.

Thomas Hug probably realizes more than anyone else just how much is changing at the company right now. Hug, a mechanical engineer, has been working at Daimler for 32 years, the last 12 of which he has spent in the CO₂ Strategy department. “I have seen over and over again how we just keep growing through our challenges,” says Hug with a smile. Indeed, it was hard for anyone to imagine twelve years ago how the CO₂ targets for the vehicle fleet for the period up until 2020 could be achieved. However, Hug says that thanks to new models, a “huge leap” will have been made by the end of this year in terms of average fleet CO₂ emissions, with the decrease expected to total more than 20 percent as compared to 2019. Hug himself is responsible for the tank-to-wheel phase of emissions. This means he provides the Ambition2039 Working Group with data on the CO₂ emissions produced during a vehicle’s driving operation, which account for the lion’s share of emissions in the life cycle of combustion engines.

The most important instrument Hug works with here is known as CO₂FI, which stands for “CO₂ fleet information.” CO₂FI is a tool which when combined with information on production figures and fuel consumption values enables fleet forecasts to be made for a period of up to ten years. “We then compare this information with legislation in various countries and utilize the results to formulate compliance statements,” Hug explains. This needs to be done because new-vehicle fleets must always conform to the legal requirements, which are different in different countries. The approach used here now serves as the basis for the development of a global CO₂ strategy. By 2030 —i.e. in the next ten years — this strategy calls for the share of all-electric and plug-in hybrid models (xEVs) in the model mix to increase to at least 50%. This target has been specifically defined in the Ambition2039 program. Regulations relating to CO₂ emissions have also led to a situation in which increasingly strict legal provisions require continuous improvements to be made to the CO₂ balance of new-vehicle fleets. In order to comply with these provisions, 50% of all vehicles sold worldwide in 2030 will have to be equipped with either a drive system in which electricity is used to power the vehicle most of the time or all-electric drive. The 50% figure is a minimum requirement that would correspond to a reduction in CO₂ emissions in the use phase (well-to-wheel) of 42% as compared to emissions in 2018. Plans also call for a significant reduction during the same period in the share of combustion-engine vehicle variants manufactured by Mercedes-Benz.

Hug believes that electric mobility will ultimately become the norm: “In my opinion, there is no technology for passenger cars that can compete with battery-electric drive systems at the moment,” says Hug. “Everything that involves changes made to the fuel used — for example, through the production of e-fuels that are produced using electricity — leads to losses that are too high to make them feasible for use in the fleet. It’s much easier to feed electrical energy directly into the battery and use it for the drive system.” Battery cells have also undergone extremely rapid development over the last few years, and the results have been very promising. The important thing now is to effectively manage upcoming production start-ups and ramp-ups, of which there are more than a few. For example, within the framework of its Electric First strategy, Daimler has announced that it will introduce four new electric models that will be based on the Group’s soon-to-be launched Electric Vehicle Architecture (EVA). The EQS luxury sedan will be the first model built with the new platform and will be followed by the EQE, the EQS SUV, and the EQE SUV. Plans also call for the electrification of AMG, Maybach, and G-Class models. Other models will round out the electric vehicle portfolio beginning in 2025. These models will be based on a second newly designed electric vehicle platform — the "Mercedes-Benz Modular Architecture" (MMA) for the compact and mid-range segment. Still, how exactly will the Mercedes new-vehicle fleet change between now and 2039?

“We are currently working with various future scenarios for the period up until 2039 in order to model our approach over time,” Hug explains. “Forecasts regarding 2039 depend on different factors, including customer demand patterns, political conditions, infrastructure development, and CO₂ pricing — it’s not possible to precisely predict today how all of these things will develop.“

Into the future with electric power

Mercedes-Benz is aiming to achieve a portfolio mix by 2030 in which most models will be equipped solely with battery-electric drive systems. Numerous challenges need to be addressed before it can get there, however, and such challenges don’t “only” involve vehicle range and efficiency. The biggest task, and also the most important one economically, will be to increase the contribution margin of electric vehicles. “That’s why we still encounter problems in terms of old ways of thinking,” Hug explains. “Nevertheless, the change in mindset has already occurred.” One of the main reasons for this is that costs for battery cells are declining much faster than originally expected. In addition, the vehicle platforms will lead to the achievement of economies of scale that will have a positive effect on the profitability of electric vehicles. However, along with profitability, Hug is also concerned about the issue of timing. “I believe the world will change more rapidly than many people think at the moment,” he says. “The really crucial question is when we will move from a push to a pull scenario on the market.” What Hug is referring to here is the moment when customer demand for electric vehicles begins to increase rapidly.

Obviously, even the self-professed electric vehicle enthusiast Hug knows that they are only as clean as the electricity that powers them. This means that an electric vehicle can only be CO₂-neutral in the use phase if the electricity used to charge the battery is also produced from renewable energy sources. When performing his life cycle assessment calculations, Henßler therefore must also always take into account the CO₂ emissions caused by the production of the fuel or electricity that powers the vehicle in the use phase (well-to-tank). The EQC offers a good example of the impact the energy source used for electric vehicles can have: Assuming a life cycle of 200,000 kilometers, the EQC produces a total of around 32 tons of CO₂. Production of the vehicle accounts for 16.4 tons of this total, whereby 80% of these emissions are due to steel, aluminum, and battery cells, which are therefore the elements that offer the greatest potential for CO₂ reductions in manufacturing operations. Looking at the use phase, a further 15.5 tons of CO₂ are produced, assuming the battery is charged with electricity from the EU electricity mix. If, however, the electricity used to power the vehicle over the 200,000-kilometer life cycle is produced from renewable energy sources, the resulting CO₂ emissions will be reduced to just 0.7 tons.

But how can the company influence where the customer gets his electricity from in the future? Through an internal project, a project team in Nico Dettmer's Business Development Charging Services department is investigating how customer experience and carbon footprint can be cleverly combined. “Customers who purchase an electric Mercedes-Benz model do so for very clear reasons, and sustainability plays a key role here,” Dettmer explains. “That’s why we want to be able to offer them a true CO₂-neutral experience when they charge their vehicle as well.” The exact form such a sustainable charging concept will take for Mercedes customers is currently being decided upon.

Henßler for his part is very confident that the company will “take a major step in the right direction” in this regard as well. He’s currently once again collecting data and performing calculations for the next Sustainability Report, which will be published in the spring of 2021. Henßler says that although the company still isn’t where it would like to be in terms of the results of its life cycle assessments, the numerous projects and initiatives that have been launched by the Ambition2039 Working Group make him confident that the “CO₂-Walk” is heading in the right direction over the long term. “Contrary to what its name suggests, the CO₂-Walk is by no means a cakewalk,” Henßler says with a smile. The next step taken in the process can only be successful if people from throughout the Group put all their effort into making Daimler an even better and more sustainable company.

“Our mission is to offer CO₂-neutral passenger and cargo transport,” Henßler says, “and I'm firmly convinced that we're up to the task of achieving this goal with our products.” The destination of the “CO₂-Walk” is clear: “The Green Zero is and will remain the ultimate goal.”