BMW has a long-standing supply relationship for primary aluminium with Emirates Global Aluminium (EGA) which has become the first company in the world to also use solar electricity for commercial production of aluminium, which it will initially supply exclusively to the BMW Group
In automotive manufacturing, raw materials and the supply chain are being increasingly scrutinised for lightweighting, better fuel economy and lower CO2 benefits. The use of relatively expensive aluminium is increasing for premium OEMs, but one drawback is that producing aluminium in its raw state (smelting) is highly energy intensive, a potential issue for CO2 calculations. BMW is turning to more solar generated energy from an aluminium supplier in the UAE to source its light metal Landshut foundry.
BMW said earlier this month that it will begin sourcing aluminium produced using solar electricity with immediate effect. Further, it said the development marks an important milestone on the road to the company’s goal of lowering CO2 emissions in its supplier network by 20% by 2030. It’s a significant step: sourcing aluminium produced with green power in the long term will enable it to avoid approx. 2.5 million tonnes of CO2 emissions over the next ten years. This is equivalent to about 3% of the CO2 targets the company has set for its supplier network. BMW will be hoping to achieve incremental gains wherever it can in its supply chains, and this aluminium gain serves as an example.
“We aspire to lead the way in sustainability and implement our sustainability goals in a systematic manner. We will be able to meet over 50% of our CO2 targets for the supplier network, just by using green power. The use of solar electricity for producing aluminium is a major step in this direction,” said Dr. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.
The aluminium produced in the UAE using solar power is processed in the light metal foundry at BMW Group Plant Landshut to manufacture body and drive train components, including those needed for electric drive trains. Sourcing 43,000 tonnes of solar aluminium valued in the three-digit million euros will supply nearly half the annual requirements of the light metal foundry at Plant Landshut.
Supply chains vital to meeting CO2 targets
BMW estimates that without corrective measures, CO2 emissions per vehicle in the BMW Group supply chain would increase by more than a third by 2030. It says it not only wants to stop this trend, but also reverse it – and even lower CO2 emissions per vehicle by 20% from 2019 levels.
The BMW Group says it has already agreed with suppliers for its current fifth-generation battery cells that they will only use green power for producing battery cells.
BMW also says that as e-mobility takes off, aluminium will become increasingly important as a lightweight material that can partially offset the heavy weight of the batteries in electrified vehicles. It is therefore taking the step to source aluminium produced with green power.
The problem with aluminium (which partly explains why it is much more expensive than steel) is that producing aluminium is extremely energy-intensive. Generating the electricity needed to produce primary aluminium, i.e. aluminium obtained directly from the mineral compound alumina, is alone responsible for about 60% of the global aluminium industry’s greenhouse gas emissions. The use of solar electricity, BMW maintains, is therefore an effective lever for reducing the CO2 emissions associated with aluminium smelting.
The UAE aluminium supplier, EGA
The BMW Group already has a long-standing supply relationship for primary aluminium with Emirates Global Aluminium (EGA), based in Abu Dhabi in the United Arab Emirates (UAE). It is is owned equally by Mubadala Development Company of Abu Dhabi and Investment Corporation of Dubai (the UAE state effectively runs the show). EGA is an aluminium conglomerate with interests in bauxite/alumina and primary aluminium smelting. EGA is the largest industrial company in the United Arab Emirates outside oil and gas and describes itself as the world’s biggest ‘premium aluminium’ producer. Since 1979, EGA has taken the UAE from no aluminium production to the fifth largest aluminium-producing country in the world. EGA operates aluminium smelters and an alumina refinery in the UAE and a bauxite mine in the Republic of Guinea. With more than 400 customers in over 50 countries, EGA says it is one of the largest suppliers of foundry alloys to the automotive industry worldwide.
EGA has now become the first company in the world to also use solar electricity for commercial production of aluminium, which it will initially supply exclusively to the BMW Group.
EGA has now become the first company in the world to also use solar electricity for commercial production of aluminium, which it will initially supply exclusively to the BMW Group. EGA sources the electricity used to produce the aluminium destined for the BMW Group from the Mohammed Bin Rashid Al Maktoum Solar Park in the desert outside of Dubai, which, in the final stage of development, is set to become the world’s largest solar park. It is operated by the Dubai Electricity and Water Authority, which has the electricity it produces sustainably certified by third parties, ensuring that it can supply EGA with power that is traceable and transparent.
Abdulnasser Bin Kalban, Chief Executive Officer of EGA, said: “We are delighted to have the BMW Group as our first customer for low-carbon CelestiAL aluminium from EGA. Aluminium is light, strong and infinitely recyclable. That is why it plays such an important role in the development of a more sustainable society and in making modern life possible. But how sustainably the aluminium is produced is also important. Solar aluminium is a step in the right direction – it uses a natural and abundant source of energy in our desert environment to produce a metal that is vital to the future of our planet.”
Dr. Andreas Wendt adds: “In EGA, we have found a strong partner who values sustainable development just as much as we do. It is a special honour for us to be the first customer to receive aluminium produced using solar electricity. Aluminium plays an important role in e-mobility and using sustainably produced aluminium is tremendously important to our company.”
BMW Plant Landshut and meeting sustainability standards
The light metal foundry is the largest production unit at BMW Group Plant Landshut and the company’s only European manufacturing facility for light metal casting. Last year, the more than 1,600 employees at the light metal foundry at BMW Group Plant Landshut produced a total of 2.9 million cast components. The scope of production includes engine components such as cylinder heads and crankcases, components for electric drivetrains and large-scale structural components for vehicle bodies.
BMW says the light metal foundry has innovative and sustainable production processes. It was certified for its sustainable use of aluminium back in December 2019 and meets the standards of the Aluminium Stewardship Initiative (ASI), an international non-profit organisation supported by environmental and industrial associations, NGOs, aluminium producers and processing companies. ASI aims to maximise aluminium’s contribution to a sustainable society and defines sustainability criteria for an environmentally and socially responsible aluminium value chain. Through this initiative, following an audit by an independent third party, the BMW says it received confirmation that its light metal foundry ‘handles aluminium in a conscious and responsible manner’.
The light metal foundry also works with shaping sand cores, among other methods, to manufacture cast parts. The sand cores are produced using inorganic binders – making the casting process virtually emission-free. Five different casting methods are used for standard production of cast components. The most suitable casting method is selected, depending on the component concept, technological requirements and production volume.
Other supply chain initiatives – recycling, going circular and contract criteria
In addition to using green power to produce aluminium, the BMW Group says it is also taking additional steps to safeguard reserves of critical raw materials. For instance, it has set itself the goal of significantly increasing the percentage of recycled raw materials, so-called secondary material, by 2030 and using raw materials multiple times in a circular economy. The use of secondary material reduces CO2 emissions substantially compared to primary materials and also conserves natural resources.
At the same time, the BMW Group is establishing carbon footprint as a new contract award criterion for its supply chain and already began implementing this for the tenders with the biggest carbon footprint in 2020.
BMW claims these measures are already delivering results in the BMW iX. It says relying on renewable green power to produce battery cells, in combination with increased use of secondary material, reduces CO2 emissions in the BMW iX supply chain by 17%, compared to the same vehicle produced without these measures.
Supply chains are complex and the buck tends to be seen as increasingly stopping with the OEM at the top; vehicle makers are having to look much more closely and comprehensively at their supply chains and participants. BMW Group aims to have more than seven million electrified vehicles on the roads by 2030 – two thirds of them fully-electric. For this order of magnitude, BMW acknowledges it has to be heavily engaged with companies all along its supply chain. It says BMW Group Purchasing is working with suppliers to ensure not only that the supply chain can manage the growth in volumes, but also that it can implement the requirements for sustainable development.
As electrification gathers pace, supply chains and sustainability will undoubtedly come under increasing scrutiny. BMW’s aluminium strategy serves as an example of how working closely with key suppliers can help to resolve complex issues – in this case, the energy intensive nature of primary raw material production. Through its partnership with EGA it can both meet tighter sustainability objectives alongside direct needs – lightweight material components – for future electric vehicle product development.
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