Mercedes-Benz enhances transparency of its CO₂ reduction pathway and announces steps to decarbonise its supply chain with First Movers Coalition and Hydro offtake agreement

• Mercedes-Benz quantifies 90% CO₂ reduction ambition for own production emissions, an 80% cut in vehicle use phase emissions as market conditions allow, and an overall 70% reduction in emissions across all relevant value chain stages by 2039 compared with 2019
• Mercedes-Benz joins the First Movers Coalition and commits to source at least 10 percent of its annual primary aluminium demand in line with the coalition’s criteria
• Hydro long-term off-take agreement: step-by-step reduction of the primary aluminium carbon footprint to 3.5 kg CO₂e per kg by 2028 and targeting 3.0 kg CO₂e per kg from 2030 onwards, with Hydro CIRCAL use planned from 2027
• New steps for steel: Mercedes-Benz pilots a value chain approach for steel

Mercedes-Benz remains committed to advancing decarbonisation and circularity as part of its transformation plans, management processes, product development and business operations. On Tuesday, Mercedes-Benz enhanced the transparency of its CO₂ reduction pathway and took further steps to decarbonise its supply chain, even amid volatile market conditions and heightened geopolitical uncertainty and while taking into account customer demand and infrastructure development.

Mercedes-Benz presented its detailed CO₂ reduction steps at its Sustainability Dialogue x Sustainability Update in Sindelfingen, along with its more focused sustainable business strategy. Mercedes-Benz remains committed to reducing emissions at source, driven by the electrification of its vehicle fleet, the use of renewable energy in production and through the use of low carbon and circular materials in production. That is why Mercedes-Benz Group is today outlining its commitment to a 90% reduction in production emissions, an 80% cut in use-phase emissions as market conditions allow, and an overall 70% reduction in CO₂ across all relevant value chain stages by 2039 compared to 2019. Beyond 2039, Mercedes-Benz will continue its ambitious reduction pathway, targeting net zero in the course of the following decade. Net-zero means that the CO₂ emissions will be reduced by at least 90% compared to 2019. Remaining CO₂ emissions (< 10%) will be neutralized permanently. (further information see CTAP)

“Even in challenging market conditions, Mercedes-Benz puts sustainability at the core of its strategy alongside resilience and competitiveness. With the enhanced transparency of Ambition 2039 we are outlining new milestones in our decarbonisation pathway to turn sustainability into operational reality: tangible, measurable and infused into the heart of our products. The latest example is our all-electric GLC which has reduced its CO₂ emissions by around two thirds compared to its non-electric predecessor model.”
Olaf Schick, Member of the Board of Management of Mercedes-Benz Group AG, Integrity, Governance & Sustainability

Our CO₂ reduction efforts are supported by continued product momentum. Between 2025 and 2027 alone, Mercedes-Benz plans to launch 14 fully electric vehicles. Furthermore, the company continues to benefit from its use of renewable energy which already covers 51% of total energy consumption at Mercedes-Benz Cars production sites and by 39% at Mercedes-Benz Vans. Today, 100% of externally sourced electricity worldwide comes from renewable sources. 

Sharper focus: Recalibrated to four areas

Sustainability is a guiding principle of the Mercedes-Benz strategy and a key factor for the resilience and long-term success of its business. From 2027, Mercedes-Benz will sharpen its Sustainable Business Strategy by focusing on four strategic topics, further strengthening the link between sustainability, business relevance and measurable impact:

• Decarbonisation: decarbonising the core business along the value chain in line with Ambition 2039, with a focus on electrification and on supply chain, logistics and production.
• Circularity: decoupling resource consumption from volume growth and increasing the use of secondary raw materials to 40 percent within the next decade, in line with Ambition 2039.
• Safety: traffic safety and digital trust are now addressed together – for example in driver assistance systems.
• People: social responsibility towards employees, especially in times of change, and respect for human rights across product value chains.

The focus areas are complemented by binding targets, concrete measures and dedicated resources integrated to steering the business.

Production: resource efficiency and renewable energy

In its plants, Mercedes-Benz is turning its ambition into outcomes. By systematically improving energy efficiency across its global production network, the company has achieved cumulative energy savings of around 570 gigawatt-hours over the past two years. Greater resource efficiency helps reduce both environmental impact and costs, contributing to more competitive production. Mercedes-Benz is also making significant progress in expanding renewable energy and strengthening the resilience of its energy supply. At the Papenburg test track, 20 wind turbines with a combined capacity of 140 megawatts are scheduled to start generating electricity by mid-2027. In addition, a long-term agreement with Iberdrola will secure more than 140 megawatts of renewable electricity from the Windanker offshore wind farm from 2027 onwards. Together, these two projects can cover around half of Mercedes-Benz’s annual electricity needs in Germany.

Decarbonising the supply chain

At its Sustainability Dialogue x Sustainability Update, Mercedes-Benz unveiled new steps to decarbonise the supply chain for aluminium and steel, two of the most widely used materials in its vehicles. 

Mercedes-Benz is now joining the Aluminium Sector of the First Movers Coalition (FMC). As a member of the FMC’s Aluminium Sector, Mercedes-Benz plans to source at least 10 percent of its annual primary aluminium demand in line with the coalition’s criteria by 2030 (further information see CTAP). The FMC brings together companies that pool their purchasing power to create early markets for technologies in carbon-intensive sectors. By making future demand visible, Mercedes-Benz aims to support the scale-up of qualifying lower-carbon aluminium solutions.

“Aluminium is one of the most important levers in our supply chain. By joining the First Movers Coalition, we are sending a clear signal to the market: we want lower-carbon aluminium in our vehicles. This gives our partners planning security and strengthens the resilience of our supply chain.”
Jörg Burzer, Member of the Board of Management of Mercedes-Benz Group AG, Chief Technology Officer, Development & Procurement

“Commitments like this matter because they turn ambition into demand. When companies make their future purchasing visible, producers gain the confidence to invest in new technologies.”
Alois Zwinggi, President and CEO World Economic Forum

Off-take agreement with Hydro: translating commitment into long-term demand

In another step, Mercedes-Benz signed a binding long-term off-take agreement with Hydro. Mercedes-Benz will source primary aluminium from Hydro from 2026 until beyond 2030, with a contractually defined, step-by-step reduction of its carbon footprint. It is set to reach 3.5 kg CO₂e per kg by 2028 and 3.0 kg CO₂e per kg from 2030 onwards. The primary aluminium Mercedes-Benz currently sources from Hydro, produced using electrolysis powered by renewable energy, has a footprint of around 4.0 kg CO₂e per kg. That is around 72 percent below the global average of 14.4 kg CO₂e per kg. The agreement covers at least 10 percent of the company’s primary aluminium demand.
The agreement also covers Hydro CIRCAL, with use planned from 2027. It contains at least 75 percent post-consumer recycled content and has a carbon footprint of no more than 2.0 kg CO₂e per kg. In summer 2026, Mercedes-Benz was the first car manufacturer company in Europe to announce the integration of Hydro CIRCAL into series production for the next generation of large electric vehicles from 2027. Beyond carbon, both companies are working through the Corridor Program to further develop measures addressing potential impacts on people and the environment in communities along Hydro’s 244-kilometre bauxite pipeline in the Brazilian state of Pará.

“Long-term demand is the single most important investment trigger for decarbonizing how materials are made. When partners like Mercedes-Benz commit to reliable, long-term offtake of low-carbon and recycled aluminium, they strengthen the business case for investing in further emissions reductions – making meaningful progress possible.”
Eivind Kallevik, President and CEO, Hydro 

Steel: pilot project links mine, hydrogen-based ironmaking to vehicle components

In steel, Mercedes-Benz is building on its experience in aluminium and taking a value-chain approach from raw-material extraction to component manufacturing. In a pilot project, iron ore fines from the Sishen mine, operated by Anglo American’s Kumba Iron Ore business in the Northern Cape of South Africa, were processed by HyIron directly into direct reduced iron (DRI) using hydrogen and its proprietary rotary kiln technology, bypassing energy-intensive pelletisation. According to HyIron, the scope 1 and 2 emissions of the process are only 10kg per ton of DRI produced resulting in a high potential for CO₂-reduction in steelmaking. The material was then used in steelmaking and formed into a demonstrator component for the Mercedes-Benz EQS. Iron ore fines are mainly used in blast furnaces today. Using them in DRI production directly could broaden the feedstock options for lower-emission steelmaking.

Sishen and Kolomela have been independently audited against the standard of the Initiative for Responsible Mining Assurance (IRMA) and has achieved IRMA75. The IRMA 75 achievement level means the operations at least substantially met all 40 critical requirements of the IRMA Standard, as well as at least 75% of the Standard’s criteria in each of the four principle areas: social responsibility, environmental responsibility, business integrity and planning for positive legacies. The audit provides independently verified information across areas including human rights, worker health and safety, environmental management and community engagement. To date, Kumba’s Sishen and Kolomela mines are the only iron-ore mines in Africa to have achieved IRMA75. Mercedes-Benz has been an IRMA member since 2021 and supports efforts to increase transparency and the availability of independently verified information in mining supply chains. 

The pilot successfully demonstrated technical feasibility across the value chain. Building on these results, Mercedes-Benz and HyIron have signed a Memorandum of Understanding to advance technical validation towards industrial scale-up and potential next steps. 

“In steel, we are building on what we have learned in aluminium: progress happens when partners along the entire value chain work together – from the mine to the finished component. The pilot project with Anglo American and HyIron shows how transparency, responsible sourcing and lower emissions can be considered together. The insights from this pilot will help us decide where such approaches can make a contribution in our steel supply chain.”
Yanni von Roy-Jiang, Head of Procurement and Supplier Management, Mercedes-Benz AG

Competitiveness and transparency go hand in hand 

For Mercedes-Benz, sustainability is an integral part of our business and key to strengthening our competitiveness. Responsible sourcing, decarbonisation and circularity can help strengthen the resilience of supply chains. By securing long-term access to low-carbon and recycled aluminium, the company strengthens supply security, reduces its exposure to raw-material market volatility and supports greater cost predictability. 

Transparency is a key element of the company’s due diligence approach. The fourth Raw Material Report provides insights into transparency, traceability and due diligence activities as part of Mercedes-Benz’s systematic assessment of 24 critical raw materials, with a particular focus on steel. Its findings informed the steel pilot. For the first time, the report is complemented by the “Transparent GLA”, an interactive format showing 19 raw materials used in selected components of the new GLA. 

Mercedes-Benz anniversary year “140 Years of Innovation”

Since Carl Benz filed the patent for the first automobile 140 years ago and Gottlieb Daimler built his motorised carriage shortly afterwards, Mercedes‑Benz has dedicated itself to constant innovation and to creating the world’s most desirable cars for customers. This ambition has driven every innovation – from the world’s first automobile in 1886 to the biggest product launch programme in the company’s history that is currently underway. With its passion for performance and pioneering power, excellence and an unwavering commitment to customer service, the brand has consistently shaped the future of mobility. The result goes well beyond engineering achievement – it creates the unmistakable feeling that runs through everything Mercedes‑Benz does: Welcome home.

Mercedes‑Benz is celebrating 140 years of innovation: Three new S-Class saloons went on a trans-continental journey to 140 locations worldwide as part of the “140 Years. 140 Places” tour. Each place highlighted the brand’s technology, heritage, pioneering spirit and worldwide presence. Along the way, customers, fans and colleagues got to join in the celebrations right up to its grand ‘Homecoming’ finale at the Mercedes-Benz Museum. Highlights of the tour can be found on our “140 Years of Innovation | Mercedes‑Benz Media” special.