Gas-guzzling German carmakers face uphill struggle to go green -Breaking
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© Reuters. FILE PHOTO – Mechanics are working on the Volkswagen e-Golf manufacturing line at Glaeserne Manufaktur in Dresden (Germany), May 8, 2018. REUTERS/Matthias RietschelBy Victoria Waldersee
BERLIN, (Reuters) – As Germany increases investment in renewables and the consumption of energy by its carmakers reveals how dependent the country’s largest industry on fossil fuels. A Reuters analysis of data on environmental data shows.
They are dependent on each other and this reveals the challenges automakers have in changing their energy consumption to move the transport sector (which accounts for about 30% of German energy use) towards electric mobility.
Russia’s incursion in Ukraine and the spiking prices of gas have made it more urgent for Germany’s industry, which uses 30% more energy than the rest of the country, to shift away from fossil fuels. There are tools such as carbon offsets and renewable certificates that can help achieve this goal.
Volkswagen (ETR) was dependent on non-renewable energies for about 80%, while BMW relied on them for over 60%. This is according to data from 2021 Carbon Disclosure Project, (CDP), based on 2020 figures supplied by the companies.
Half of all the cars’ energy use was from fossil fuels. However, more than half were using CDP data, the largest global repository of environmental data.
While carmakers increasingly have their own renewable power generators on-site, these covered a miniscule amount of their global energy appetite – around 1% for Volkswagen and even less for Mercedes-Benz and BMW, according to the data.
Mercedes-Benz says its Sindelfingen factory is the most energy-efficient in terms of energy. It gets 30% of its power from solar panels.
In April, it stated that the renewables provided 45-50% of the company’s energy requirements at the moment and that 15% would be supplied by on-site power generators.
According to BMW, the Leipzig plant that makes the electric car i3 generates 20% from the four windmills on site.
Although the company did not say how much of Germany’s total energy use is from renewable sources, a spokesperson stated that it wasn’t enough to provide adequate coverage in case the gas shuts off.
Tesla (NASDAQ: )’s Gruenheide new plant features solar panels. A spokesperson didn’t respond to requests for comment about whether or not the panels are capable of producing any renewable energy.
Silke Mooldijk (energy researcher, environmental think tank New Climate Institute), said that it is important for companies to disclose how much electricity they use. The institute monitors companies’ carbon footprints and energy mix.
They play an important role reminding people there is still much to be done.
German environment agency data showed that half of Germany’s industrial energy use in 2020 was from natural gas and coal. A lot of this is supplied by Russia.
Bosch, world’s biggest supplier of autos, stated to Reuters that only 1% of their energy needs are met by on-site renewable energy production. India is the source of the majority of the rest. According to a spokesperson, it aims to bring this number to 5% in 2030.
BMW stated in the responses to the CDP questionnaire, that 39.55% of their global energy consumption came from renewable sources. This was mainly because they bought electricity on the open marketplace.
BMW purchases more than half its renewable energy from renewable suppliers. BMW can use this to communicate demand for renewable energy, which could encourage investment in additional capacity. However, it doesn’t mean that renewable energy actually flows into its plants.
Christoph Riechmann from consultancy Frontier Economics stated that there is an oversupply in certificates from European hydropower plant decades old, which means the sale of these certificates does not always spur investment.
Riechmann stated that the whole issue would not be so problematic if green energy certificates were traded in a non-revolving market. However, transparency is essential for customers to know the source of their electricity and allow them to make informed choices.
BMW claimed it works to stimulate the construction of new plants through direct contracts with suppliers and is looking at how it might increase the amount of on-site energy.
Carmakers need to find alternative heating sources for their paint and production facilities, which are currently heated primarily by gas.
Mercedes-Benz wants to reduce its need for heat, Harald Wilhelm, finance chief at Mercedes-Benz, stated on an earnings conference earlier in the week.
Carbon Disclosure Project data shows that just 12-13% heating is provided by renewable sources for the major automakers.
Some carmakers like Audi and Porsche use combined heat-and-power plants. These generate heat by burning biomass, however, there is not usually enough biomass to do this at scale. Albert Waas (an automotive expert and partner with Boston Consulting Group), said that some cars utilize these power plants.
Mercedes production chief Joerg Buzer stated that it is simpler to be electric than green at a conference. Energy is more difficult.
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