Mercedes-Benz signs Hydro aluminium deal to hit 2039 CO2 targets

Mercedes-Benz has agreed a binding multi-year primary aluminium supply contract with Hydro covering at least 10% of its primary aluminium requirements, running from 2026 until beyond 2030, as the carmaker pushes toward its 2039 emissions targets.

The deal anchors Ambition 2039, Mercedes-Benz's decarbonisation program, which sets three headline reductions against 2019 levels: a 90% cut in greenhouse gas emissions from manufacturing sites, an 80% cut in vehicle use-phase emissions where market conditions allow, and a 70% cut across relevant value-chain stages. The company plans to hold those reductions after 2039 and reach net zero during the following decade.

What does the aluminium contract actually require?

Hydro's aluminium currently carries an emissions intensity of about 4.0 kg CO₂e per kg (a measure of total greenhouse gas emissions per kilogram of material, standardised to carbon dioxide's warming impact), against an international average of 14.4 kg CO₂e per kg. The contract locks in further cuts:

• 3.5 kg CO₂e per kg by 2028
• 3.0 kg CO₂e per kg from 2030

The arrangement also includes Hydro CIRCAL, an aluminium grade containing at least 75% post-consumer scrap with a footprint of no more than 2.0 kg CO₂e per kg. Mercedes-Benz intends to use the material in series production of its next-generation large battery-electric vehicles from 2027.

Alongside the Hydro agreement, Mercedes-Benz has joined the First Movers Coalition's Aluminium Sector, committing to source at least 10% of its annual primary aluminium demand in line with the coalition's criteria by 2030.

What's happening in steel?

Mercedes-Benz also completed a trial using iron ore fines from Kumba Iron Ore's Sishen operation in South Africa. HyIron processed the ore directly into direct reduced iron (iron stripped of oxygen without melting) via a hydrogen-fuelled rotary kiln, skipping pelletisation and producing scope 1 and 2 emissions (direct and energy-related emissions) of 10 kg per tonne. The resulting steel went into a test component for the Mercedes-Benz EQS.

The two companies have signed a memorandum of understanding covering technical studies into industrial scale-up and possible further projects.

What does this change for the plants?

On the manufacturing side, the group reported cumulative energy-efficiency savings of around 570 GWh across its plants over the past two years. That's the operational base under the 90% site-emissions reduction target.

The materials push runs in parallel with product timing: Mercedes-Benz plans to launch 14 fully electric models between 2025 and 2027, and the low-carbon aluminium is slated for the next-generation large BEV platform from 2027.

Board member for integrity, governance and sustainability, Olaf Schick, framed the strategy in direct terms. "Even in challenging market conditions, Mercedes-Benz puts sustainability at the core of its strategy alongside resilience and competitiveness," he said. "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."

What to watch next

The near-term markers are contractually dated, not aspirational: Hydro's intensity drop to 3.5 kg CO₂e per kg by 2028, the series-production debut of Hydro CIRCAL aluminium in the large BEV platform from 2027, and progress on the First Movers Coalition sourcing threshold by 2030. The HyIron MOU is the loosest piece — watch whether technical studies convert into an industrial-scale steel agreement.