Mercedes-Benz has signed a binding, multi-year primary aluminium supply contract with Hydro that runs from 2026 until beyond 2030, covering at least 10% of the carmaker's primary aluminium requirements as it chases deep emissions cuts by 2039.

The deal anchors a sharpened version of the company's Ambition 2039 decarbonisation programme. Here's what the targets now say, all measured against 2019 levels:

• 90% reduction in greenhouse gas emissions from Mercedes-Benz manufacturing sites
• 80% reduction in vehicle use-phase emissions, where market conditions allow
• 70% reduction across relevant value-chain stages

The company plans to hold those reductions after 2039 and reach net zero during the following decade.

Why aluminium?

Aluminium is carbon-heavy stuff. Hydro's aluminium currently carries an emissions intensity of about 4.0 kg CO₂e per kg (CO₂e per kg measures total greenhouse gases per kilogram of material, standardised to carbon dioxide's warming impact). The international average sits at 14.4 kg CO₂e per kg — more than three times higher.

The contract pushes Hydro's figure down further. It must fall to 3.5 kg CO₂e per kg by 2028 and 3.0 kg CO₂e per kg from 2030. That ratchet is the mechanism: the longer the contract runs, the cleaner each kilogram becomes.

The arrangement also includes Hydro CIRCAL, a grade containing at least 75% post-consumer scrap with a footprint of no more than 2.0 kg CO₂e per kg.

Where does the metal go?

Mercedes-Benz intends to use the material in series production of its next-generation large battery-electric vehicles from 2027. That timeline fits a broader electric push: the company plans to launch 14 fully electric models between 2025 and 2027.

Alongside the Hydro contract, Mercedes-Benz has joined the First Movers Coalition's Aluminium Sector. That commitment requires sourcing at least 10% of its annual primary aluminium demand in line with the coalition's criteria by 2030 — matching the Hydro deal's coverage.

What about steel?

Aluminium isn't the only front. In steel, Mercedes-Benz 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 with oxygen removed, a steelmaking feedstock) using a hydrogen-fuelled rotary kiln. The process avoided pelletisation entirely and produced scope 1 and 2 emissions — direct and purchased-energy emissions — of just 10 kg per tonne.

The resulting steel went into a test component for the Mercedes-Benz EQS. The two companies have now signed a memorandum of understanding covering technical studies into industrial scale-up and possible further projects.

Efficiency gains already banked

The group also reported cumulative manufacturing energy-efficiency savings of around 570 GWh over the past two years. That's operational evidence, not pledge-book arithmetic — real energy that plants no longer consume.

Olaf Schick, Mercedes-Benz Group board member for integrity, governance and sustainability management, 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."

"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 does the deal actually change?

Two things. First, supply certainty: a binding contract through and beyond 2030 gives Mercedes-Benz guaranteed access to aluminium with roughly a quarter of the average carbon intensity, on a fixed improvement curve. Second, contractual accountability: Hydro's emissions targets are written into the agreement, not left to voluntary goodwill.

The bet is straightforward. Regulators are tightening, buyers are watching supply chains, and battery-electric vehicles only deliver their promised climate benefit if the materials inside them are clean too. Locking in low-carbon aluminium now, at 10% of demand with room to grow, puts the 70% value-chain reduction target within technical reach rather than rhetorical range.