Mercedes-Benz Digital ESG Touts Cutting CO2 Emissions

Ken Zino of on Mercedes-Benz Digital ESG Touts Cutting CO2 Emissions

Too little, too late?

At its first digital ESG (Environment, Social and Governance) Conference for investors and analysts, Mercedes-Benz announced actions aimed at cutting CO2 emissions while creating value for all  stakeholders. “The shift towards climate neutrality is changing the financial world and green financing is gaining in importance. Therefore, the variety of green financing instruments like Green ABS and green KPI-linked bilateral funding agreements will be increased. Mercedes-Benz also expects a significant increase in EU taxonomy aligned CapEx until 2026 in accordance with its all-electric strategy,” said Mercedes. As promised at the COP26 UN Climate Change Conference* in November 2021, Mercedes-Benz wants a faster transition to electric cars. The question facing all major automakers is whether this it too little to late to stop the extreme weather, property destruction, social disruptions and perhaps extinction of people inhabiting planet earth.

The German auto industry is currently under heavy criticism for its lobbying the German government to not impose sanctions on the use of Russian or other fossil fuels, saying it can’t be done. However, the latest UN report – IPCC’s Sixth Assessment Report (AR6) – says: “The application of diverse policy instruments for mitigation at the national and sub-national levels has grown consistently across a range of sectors By 2020, over 20% of global GHG emissions were covered by carbon taxes or emissions trading systems, although coverage and prices have been insufficient to achieve deep reductions. By 2020, there were ‘direct’ climate laws focused primarily on GHG reductions in 56 countries covering 53% of global emissions. Policy coverage remains limited for emissions from agriculture and the production of industrial materials and feedstocks.”

Mercedes says it aims to at least halve CO2 emissions per passenger car over the lifecycle by the end of this decade compared to 2020 levels. To achieve this goal, the key factors include electrifying the vehicle fleet, charging with green energy, improving battery technology, an extensive use of recycled materials and renewable energy in production. Mercedes-Benz plans to cover more than 70% of its energy needs through renewable energy by 2030 by rolling out solar and wind power at own sites as well as through further Power Purchase Agreements.


Electrification of the Mercedes-Benz portfolio aims to achieve up to 50% share of plug-in hybrid (yes, old tech fossil fueled)and BEVs by 2025 on the way toward going all-electric by 2030 “wherever market conditions allow.” Globally, the portfolio already includes six, and soon nine, all-electric models. To-date, Mercedes-Benz has unveiled a range of global offerings from the EQA, the EQB, the EQC, the EQS, the EQE 350+ as well as the EQV. Further models will follow for certain markets around the globe: the EQS SUV, the EQE SUV and the EQT. The company plans to assert its leadership in electric mobility among commercial vans, too, through the ongoing electrification of its entire model range.

Green Charging – Renewable  Electricity

In the lifecycle of an electric vehicle, using renewable energy for charging is a significant lever for helping to avoid CO2 emissions. Mercedes-Benz enables “green charging” at all of the around 300,000 public charging points in the Mercedes me Charge network throughout Europe and ensures that a “sufficient amount” of electricity from renewable sources is fed into the grid.


The battery is the “biggest lever for reducing CO2. With the current EU electricity mix, supply chain and production account for more than half of the lifecycle CO2 emissions. This proportion can be reduced significantly through the use of renewable energy. By transitioning to CO2-neutral cell production, it is possible to cut emissions for the production of the entire battery pack by 20%,” claims Mercedes.

“Additional CO2 savings are expected to be achieved through further measures – i.e., by improving the anode and cathode production process. Strategic partnerships have thus been formed to develop and industrialize highly advanced and competitive cell technologies. With more than 800 watt-hours per liter at cell level by mid-decade, high- silicon anodes offer great potential in respect of energy density. At the same time, Mercedes-Benz expects to be able to use LFP batteries in its series-production vehicles. These batteries have a completely cobalt-free cathode. Together with research partners the company is also working on solid-state batteries. To keep control of the battery lifecycle in-house, the company is starting a CO2-neutral recycling factory in Kuppenheim, Germany, to recycle end-of-life electric vehicle batteries using a new hydrometallurgical technique which increases the recycling rate to 96%,” said Mercedes.

 Green Steel and Aluminum

Mercedes-Benz is setting up a green steel supply chain to expand its use of low-CO2 and zero-CO2 steel. “Working closely with steel suppliers, the company is consciously steering clear of carbon offsets, focusing instead on the avoidance and reduction of CO2 emissions. In 2021, the company became the first car maker to take an equity stake in Swedish start-up H2 Green Steel (H2GS), with the aim of introducing green steel in a number of production models by as early as 2025. Through the adoption of a circular economy approach, Mercedes-Benz is steadily increasing the proportion of secondary aluminum it uses,” said Mercedes.

Mercedes claims to be the first automotive manufacturer to commit to sourcing only primary aluminum certified by the Aluminum Stewardship Initiative (ASI) for its stamping plants and foundries in Europe in future. “This confirms that the raw materials are obtained and processed responsibly and in an ecological manner irrespective of the source country – from mining through melting and refining all the way to the gates of the Mercedes-Benz plants. This requirement will be rolled out to other locations outside Europe in the medium term,” said Mercedes.

 Sustainable Materials

Some sustainable materials are already in series production in some vehicle models. “These include seat upholstery fabrics from 100% recycled PET bottles as well as floor coverings made with yarns from fishing nets recovered and fabric remnants from old carpets. The EQS and EQE will even feature cable ducting made with recycled landfill waste. Indeed, the components in the EQS, manufactured with efficient use of resources through recycled and renewable raw materials, already weigh more than 176 pounds,” said Mercedes. Mercedes-Benz Cars aims to increase the use of recycled materials per vehicle by 2030 to 40%.

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