Norsk Hydro to supply Mercedes-Benz with low-carbon aluminium

Bangkok International Motor Show
The Mercedes-Benz logo is seen at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha

OSLO, Dec 15 (Reuters) - Norsk Hydro (NHY.OL) will supply Mercedes-Benz (MBGn.DE) with low-carbon aluminium for a range of models from 2023, including its electric EQ models, as the luxury carmaker plans to decarbonise its supply chain, the companies said on Thursday.

Mercedes-Benz, which already uses Hydro-supplied components, aims to reach near-zero carbon aluminium by the end of 2030 and targets halving its CO2 emissions by 2030 and becoming CO2-neutral by 2039.

Makers of electric cars are looking to use more aluminium to make them lighter to increase mileage and the batteries themselves contain the lightweight metal.

"This is an important signal to accelerate change in the aluminium industry and increase the availability of low carbon aluminium," Markus Schaefer, Mercedes-Benz's chief technology officer, said in a statement.

A fully electric luxury Mercedes-Benz limousine, including the battery, can contain more than 700 kilograms of aluminium, the carmaker said.

The two firms will also collaborate on further research on how low-carbon and recycled aluminium can be used in vehicles.

Hydro's low-carbon product, REDUXA 3.0, will have a carbon footprint of below 3.0 kilograms of carbon dioxide per kilogram of aluminium produced - one kilogram less than Hydro's current low-carbon standard for primary metal.

The global average in 2021 was 16.7 kilograms of CO2 per 1.0 kilogram aluminium.

"This is a pretty big milestone," Eivind Kallevik, head of Hydro's Aluminium Metal business, told Reuters.

"Last year we said we would produce 3.0 before 2025 and now we will do it already in 2023 - not only produce it but also sell it to one of the most demanding customers."

The process involves Hydro using scrap sourced in the market at one of the primary plants in Norway and recycle it for use in Mercedes-Benz cars.

"It's really about understanding which type of scrap we can use, as the material has to comply with primary metal standards," Kallevik said.

He declined to say how much Hydro expected to sell to Mercedes-Benz as a result of the deal but said the volumes were "meaningful".

Editing by David Evans

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