Mercedes-Benz deepens partnership with Hydro in effort to reduce emissions while improving supply chain resilience
Through its expanded partnership with low-carbon aluminium producer Hydro, Mercedes-Benz will become the first European automotive manufacturer to integrate Hydro CIRCAL aluminium into series production for its next generation of electric vehicles. This aluminium is made with at least 75% post-consumer recyclate, allowing Mercedes-Benz to cut down on carbon emissions and bolster the resilience of its aluminium supply chain.
Mercedes-Benz became the first European OEM to use Hydro CIRCAL recycled aluminium, produced in the electrolysis hall at Hydro ÅrdalHydro
By deepening its partnership with low-carbon aluminium producer Hydro, Mercedes-Benz is actively working to reduce emissions in its supply chain. Hydro CIRCAL aluminium is made with 75% post-consumer recycled content, representing a significant increase from roughly 25% recyclate in the aluminium Mercedes-Benz currently uses.
Based in Norway, Hydro recovers aluminium from a range of sources – including end-of-life vehicles, buildings and infrastructure – and, through advanced recycling processes, returns them to the market as primary aluminium that can be used in vehicle production.
Mercedes-Benz and Hydro initially partnered in 2022, when both parties signed a letter of intent (LoI) for a low-carbon technology roadmap spanning from 2023 to 2030. Then in 2024, this collaboration was extended to cover the entire aluminium value chain from raw material to finished product.
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In addition to Hydro's latest CIRCAL offering, the company has been supplying Mercedes-Benz with its REDUXA product – low-carbon aluminium produced using electrolysis that is powered by renewable energy. As a result of this process, Hydro REDUXA aluminium has a carbon footprint more than 70% lower than the global average.
Mercedes-Benz has said that this collaboration set out to address a central challenge in the automotive sector: combining decarbonisation with competitiveness. The OEM recognised that if the industry is to be successful in its transition to low-carbon mobility, regional value chains, resource efficiency and close cooperation along the supply chain will all be essential factors.
The business case for circularity
During the European Association of Automotive Suppliers' (CLEPA) Materials, Regulations and Sustainability Event in May this year, industry leaders highlighted the value of circularity – not just from an environmental perspective, but also from a business point of view.
"Circularity can be a very good strategy in order to respond to the three dependencies that we have currently: the geological one; the energy one; and the clean tech and AI one," outlined Arthur Corbin, business adviser in the cabinet of executive vice president Stephane Séjourné at the European Commission.
A circular economy not only enables firms to better meet their decarbonisation goals, but reduces reliance on virgin materials – in turn creating a more resilient supply chain. Where previously sustainability initiatives might have been seen as an inhibitor to financial performance, executive boards today are recognising that it can provide a strategic advantage. When a business' sustainability strategy is aligned with its wider objectives, it is much more likely to succeed.
"To grow and to make circular economy grow in business we need to be profitable, otherwise there is no growth possibility," explained Anna Rossi, sustainability and partnerships director at Forvia, while speaking at the CLEPA conference.
Rossi noted that Europe’s circular economy innovators are focusing on building profitable closed-loop automotive systems spanning dismantling, reuse, repair, remanufacturing and recycling.
"The next generation of automotive supply chains will be defined by higher levels of circularity, a lower carbon footprint and a deeper level of localisation to enhance resilience and quality," commented Yanni von Roy-Jiang, head of procurement and supplier management at Mercedes-Benz. "Together with Hydro, we are helping to shape that future."
As well as demonstrating that high levels of post-consumer recycled content can be achieved without compromising stringent requirements for performance, quality and safety, Mercedes-Benz has noted that by collecting, remaking and reusing aluminium in close proximity to production, it is able to create shorter, more efficient and more resilient regional supply chains.
"The automotive industry needs materials that can cut emissions without compromising quality, safety or performance," added Eivind Kallevik, president and CEO of Hydro. "By combining Hydro CIRCAL recycled aluminium with Hydro REDUXA low-carbon primary aluminium, we can accelerate the transition to lower-carbon vehicles while building more resilient value chains."
GM to use Hydro CIRCAL aluminium in Cadillac OPTIQ front bumpers
Shortly after the announcement of Hydro's extended partnership with Mercedes-Benz, the company announced a collaboration with General Motors and supplier Shape Corp that will see Hydro CIRCAL aluminium implemented in Cadillac vehicles produced in the US.
Hydro is set to supply its latest product from its US recycling facility in Cassopolis, Michigan, to Shape Corp. The supplier will then use the aluminium to engineer and assemble front bumper systems to GM's specifications, to be integrated into the Cadillac OPTIQ platform.
By sourcing recycled aluminium locally and making it in Michigan, GM expects to strengthen its production and supply chain resilience while demonstrating how regional recycling networks can return valuable materials to new vehicle applications.
“By bringing recycled aluminium back into demanding vehicle applications, we can reduce embedded emissions, strengthen material circularity and make better use of the resources already in circulation,” commented Duncan Pitchford, vice president of recycling at Hydro Aluminum Metal.
Hydro CIRCAL aluminium will be used to manufacture front bumpers for the Cadillac OPTIQGM
Mercedes-Benz and Hydro's responsible supply chain initiative in Brazil
As part of Mercedes-Benz and Hydro's joint decarbonisation roadmap, the two companies signed a memorandum of understanding (MoU) to collaborate with local non-governmental organisations and partners in the state of Pará, Brazil, with the goal of ensuring responsible supply chains in the country.
Launched in 2024, the goals of the 'Corridor' programme include promoting human rights and generating income for local communities, as well as fostering biodiversity and low-carbon value chains in the Brazilian Amazon.
The project focuses on having a positive impact on the communities along the 244km bauxite slurry pipeline operated by Hydro in Pará, helping local communities in seven of the state's municipalities improve their economic, ecological and social wellbeing.
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As part of its involvement in the programme, Mercedes-Benz has helped to establish necessary structures and build knowledge for sustainable risk management in raw material supply chains.
Mercedes-Benz and Hydro's 'Corridor' programme aims to foster fair and sustainable practises in Brazil's aluminium supply chainMercedes-Benz
