Charting a course for the green transformation of the automotive industry
BMW Joins Forces with Suppliers to Build a Sustainable Supply Chain

(Shenyang) BMW is working shoulder-to-shoulder with its suppliers in China to build a sustainable, high-quality automotive supply chain. On December 13-14, 2021, BMW Brilliance Supplier Media Visit is held in Shenyang alongside high-performing supplier partner Shenyang Jinbei Yanfeng Automotive Interior System Co., Ltd. The Visit focused on the challenges and opportunities of green transformation in the automotive industry, and how sustainability is key to the high-quality development of supply chains. The two-day event presented the successful best practices of BMW and its suppliers in building a sustainable supply chain and emphasized the importance that BMW places on implementing its sustainability strategy throughout the entire value chain.

“No sustainability, no premium. As a responsible company, BMW aims to lead the way in sustainability by making the entire lifecycle of our vehicles more sustainable, in the supply chain and manufacturing process, through the vehicle use-phase, and to end-of-life recycling. We will do this by working together with our supplier partners to embed sustainable practices in the processes and operations along the supply chain. Through these actions, we are supporting China’s green and high-quality development targets and contributing to a more sustainable world”, said Dr. Johann Wieland, President & CEO of BMW Brilliance Automotive.

Reduce supply chain emissions to achieve sustainable development in the whole value chain

In order to speed up low-carbon transformation and the high-quality development of the supply chain, BMW has built an integrated supplier sustainability management system in China with suppliers evaluated on four factors: Environmental, Health & Safety (EHS); Social Responsibility; Climate Change; and Financial Risk Management.

In practice, BMW aims to accelerate the low-carbon transformation of the supply chain by focusing on 3 key areas: reducing the carbon footprint of energy-intensive extraction and manufacturing of raw materials; promoting circularity of materials; and utilizing renewable energy. By 2030, the BMW Group is planning a reduction of CO2 emissions across the entire life cycle of a vehicle by at least 40%, including reducing CO2 emissions in the supply chain by at 20% per vehicle produced compared to 2019.

BMW is highly selective when it comes to sourcing raw materials such as steel, aluminium, and positive and negative electrodes of high-voltage batteries, with renewable energy usage in the raw material extraction and processing considered a key factor for signing new contracts or extending the existing contracts with suppliers. Some aluminium ingot suppliers will eliminate 360,000 tons of carbon dioxide emission in the contract period of 2021-2023 by using renewable energies in upstream electrolytic aluminium and aluminium ingot production processes.

With regard to circularity, BMW has implemented a number of mechanisms for raw material and power battery recycling. It recently established a closed-loop system for steel in China by working with its steel-manufacturing partners to incorporate scrap steel back into the manufacturing process, which recovered 45,000 tons of steel in 2020 alone. BMW also partners with suppliers to recycle aluminum and commits to use 100% recycled aluminum in the production of BMW’s fifth generation power battery. Through cooperation with battery suppliers in China, BMW recovered 4,347 waste power batteries weighing 98,261kg in 2020, with a recovery rate of nickle, cobalt and manganese of 98.5%.

Another high priority for BMW is using renewable energy in its operations. The BMW Plants in Shenyang, which are designated “National Green Plants”, have been 100% powered by electricity from renewable sources since 2019. In September 2021, BMW completed a green trading volume of 2.78 billion kWh in China’s first green power trading event, making it number one nationwide, and accounting for 35% of the nation’s total trading volume.

Promote the sustainable development of China’s automotive industry together with suppliers

For BMW, sustainability begins in the supplier network. Win-win partnerships with high-quality suppliers is the foundation for the long-term sustainable development of the industry. BMW launched the Supply Chain Climate Change Initiative, which covers Tier-1 to N-Tier suppliers, and established a supply chain sustainability management project team focusing on carbon disclosure, energy efficiency and green power to boost green low-carbon transformation together with suppliers.

In the course of improving transparency of CO2 emissions disclosure across the supply chain, BMW has developed customized toolkits and offered one-on-one training to supplier partners to support them in disclosing carbon emission data on third party platforms. In the pilot project, BMW cooperated with 20 selected Tier-1 and Tier-2 suppliers to conduct on-site audits with third-party professionals, and provided a summary report and list of energy efficiency improvement and carbon emission reduction measures for every supplier after the audit, including management improvement, equipment upgrades, process optimization and awareness enhancement. So far, the 20 pilot suppliers have been well prepared for further improving the transparency of CO2 emission data disclosure in the future.

Combining its own sustainable development experience with the actual development situations of suppliers, BMW is cooperating with its suppliers to work out their respective sustainability strategies to boost low-carbon green transformation from the aspects of energy, materials and craftsmanship. Take interior supplier Jinbei Yanfeng as an example: Jinbei Yanfeng will use 100% renewable electricity in its production process from January 2022, which will lead to a reduction of 15,600 tons of carbon emissions year on year. In terms of materials, Jinbei Yanfeng is increasing its use of recycled materials, and reducing product weight with lightweight design while ensuring safety to bring down energy consumption. Jinbei Yanfeng is also reducing energy consumption by optimizing its manufacturing processes, and has developed water-based paints to effectively reduce the volatilization of hazardous substances in the coating process and minimize environmental pollution. With the joint efforts of BMW and more than 400 of its suppliers across the country, BMW is developing a sustainable supply chain that is driving the high-quality development of the automotive industry in China.

Achieving carbon neutrality will require more than just a new energy revolution: it will a require a complete industrial transformation with the joint efforts of all stakeholders. As well as cooperating with suppliers to build a high-quality and sustainable supply chain, BMW is taking action to make every aspect of its business more sustainable, including in its production processes and product use phases, with the aim of shaping the circular economy. As a pioneer of sustainability in the automotive industry, BMW is determined to lead the green transformation, from automotive parts, materials and manufacturing, and contribute to China’s sustainable future.