Supply chains need to be top of the agenda for the automotive industry at COP27
Dr. Thomas Becker, Vice President Sustainability and Mobility Strategy BMW Group, looks at the growth of electric vehicles and the benefits they can bring to reducing emissions, provided manufacturers think carefully about supply chains.
Purchases of electric cars continue to accelerate around the world, with new industry figures showing that more than a fifth of registrations in the UK to date in 2022 were electric vehicles (EVs). It’s clear that attitudes towards EVs are changing but, EVs are not a silver bullet solution for climate-friendly mobility. Manufacturing electric vehicles is resource intensive and it’s crucial that the automotive industry reduces its reliance on primary materials.
In the manufacturing of EVs we need to find more efficient production processes and lower impact component materials. Interestingly EVs require specialist battery cell materials that come with their own set of environmental considerations, not to mention the fact that these elements are often located in areas affected by political, social and economic instability, which adds a new layer of responsibility to the mix.
However, looking at manufacturing alone is still not enough. To manage these challenges and meet the ambitious climate targets many of us have set, it’s crucial that we consider the full value chain. This will allow us to study a vehicle’s entire life cycle when measuring its impact – from the time a design is conceived, to the moment it rolls off the production line and to the point of its eventual recycling.
This means scrutinising supply chains which are complex and often unwieldy. But by looking more closely at the parts and materials that we buy and where we buy them from, businesses can uncover countless opportunities to act responsibly and drive impact. This can be both within our own operations and in our suppliers’ operations too, by encouraging them – or even contracting them – to make changes for the better.
Circularity and closed-loop systems must be a priority if we are to reduce our dependency on raw materials and the emissions their production creates. Today on average, BMW Group vehicles are manufactured using almost 30% recycled and reused materials. BMW Group’s ”Secondary First” approach aims to successively increase this figure to 50%.
Good examples are initiatives like the closed loop for reusing nickel, lithium and cobalt from high-voltage batteries in EVs, that has been established by the BMW Brilliance Automotive joint venture (BBA) in China. The batteries come from fully and partially electric development vehicles, test systems and production rejects and, in the future, also from end-of-life vehicles. The raw materials obtained in this way are then used in production of new battery cells for the BMW Group. The closed-loop material cycle conserves resources and, at the same time, reduces CO2 emissions by 70%, compared to using newly extracted primary material. Elsewhere, we have established closed loops for steel and aluminium between production sites and suppliers, enabling a high percentage of steel and aluminium waste to be reused.
Energy supply is another key consideration, and an area where the industry can make a significant difference – as brands we have an opportunity to influence the sustainability of our supply chain by preferring those who use renewable energy. The BMW Group has already entered more than 400 contracts with its suppliers to use 100% renewable electricity, including aluminium suppliers and battery cell producers. From 2024 onwards, all cast aluminium wheels for BMW and MINI vehicles will be produced using only green energy. Long-term BMW Group plans to source aluminium produced with green power to avoid approximately 2.5 million tonnes of CO2 emissions over the next ten years.
The automotive industry also has a powerful opportunity to push sustainability in a wider context. For example, alongside WWF Germany, we launched our ‘No Deep-Sea Mining’ initiative calling on global businesses not to mine or finance ocean mineral mining until comprehensive scientific research into its environmental impact has been fully conducted and assessed. Elsewhere, while no cobalt from the Democratic Republic of Congo is used in fifth-generation BMW eDrive high-voltage batteries, in 2019 we launched a local partnership project there to source cobalt in a responsible manner. One of the big issues surrounding cobalt mining is that, in a lot of cases, is done with disregard for even the smallest ethical norms. Our work with the German Society for International Cooperation improves the working and living conditions of mining workers and residents in surrounding communities.
Industry, and the automotive industry in particular, has a tremendous social, environmental, and economic responsibility. Collaboration and knowledge-sharing across the industry will be key in addressing the sustainability challenges we continue to face – and in making the most of the opportunities they afford. We need to challenge ourselves constantly to make our supply chains examples of exemplary social and environmental responsibility.
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