And: How can we do that?
We are placing particular priority on certain areas of focus on the road to CO₂ neutrality. These are materials and components that are particularly CO₂-intensive to manufacture and process, such as battery cells, plastics, aluminum and steel.
Our most important goal is to ensure that our suppliers meet our requirements regarding CO₂ reductions and also pass these on to their sub-suppliers. In our working group, we have therefore developed requirements that address the upstream process stages beyond our direct suppliers. We want our supply chain to follow our claim of climate neutrality. For this reason, we only allow suppliers to be awarded who have confirmed to us in writing that they will supply us with CO₂-neutral products from 2039 at the latest. This means that CO₂ neutrality must be guaranteed at all stages of the value chain. This is done via a so-called "Ambition Letter". Only when this has been signed, the suppliers have a chance of being selected for the contract. In this way, we create a good basis for initiating actual reductions with our direct suppliers and in the supply chain. Suppliers who account for almost 90% of Mercedes-Benz's annual purchasing volume have already signed an ambition letter, agreeing to supply us only with CO₂-neutral products in future. Among them are also important steel suppliers.
What milestones have we already reached on the way to sustainable steel?
(laughs) How much time do I have to answer? There are a few!
In principle, we are pursuing the goal of a green steel supply chain along with all our steel suppliers as part of Ambition 2039. In doing so, we deliberately focus on avoiding and reducing CO₂ emissions rather than offsetting them. And we have already made significant progress in reducing CO₂ emissions in our steel supply chain. For example, since 2020 we have been sourcing steel from our US steel supplier Big River Steel, whose production has reduced CO₂ emissions by more than 70% compared to the traditional blast furnace route by using recycled steel scrap and renewable energy. Incidentally, Big River Steel was recently awarded the Daimler Sustainability Recognition 2021 Award. And since this year, we have been purchasing flat steel from Salzgitter AG, which consists of 100% recycled steel scrap, which has reduced the steel's CO₂ emissions by more than 60 per cent.
And what about CO2-free steel?
We are already working on that, too, and have just recently started two really exciting partnerships here. The aim here is to obtain steel in the future that will be almost completely CO₂-free due to its production with hydrogen instead of coking coal.
For one, we were the first car manufacturer to take an equity stake in the Swedish start-up H2 Green Steel (H2GS). Through this investment, we are promoting the transformation of the steel industry as a whole on the one hand, and we will be bringing green steel to the market in various vehicle models from 2025. Furthermore, we have started a partnership with Swedish steel producer SSAB . The production will be almost CO₂-free through the use of hydrogen and 100% fossil-free electricity. Together, we are setting the course to bring green steel into our series-produced vehicles as quickly as possible. The first prototype parts for body shells made of CO₂-free steel from SSAB's pilot plant are already being planned for next year.
All this progress requires a trusting and responsible partnership with our suppliers. For long-term change, however, the development of industry-wide sustainability standards is also necessary. This is because companies can use these as concrete guidelines for reducing their CO₂ emissions and for the sustainable production of materials. For this reason, we are involved in initiatives that develop such sustainability standards.
One such initiative is the Responsible Steel Initiative. What goals are we pursuing with this?
The Responsible Steel Initiative is currently developing a sustainability standard for steel mills and the steel supply chain with the aim of ensuring environmentally friendly and socially responsible steel production along the entire value chain. Like many other stakeholders, such as non-governmental organisations, environmental associations, but also operators of steelworks, we actively contribute to the development process with our experience and requirements. For example, it is important for us that the standard is actually applicable and as concrete as possible. With so many players, it is of course an elaborate process. But one that is worthwhile. Standards that are developed within the framework of such a multi-stakeholder approach have the best chance of becoming established in later application, as they are the most widely accepted.