Hydro and Mercedes-Benz shift gears with their low-carbon aluminium partnership

Hydro and Mercedes-Benz have expanded their long-standing partnership through a new long-term agreement covering the supply of low-carbon primary and recycled aluminium, strengthening efforts to reduce emissions across the automotive supply chain. The agreement will cover at least 10 per cent of Mercedes-Benz's primary aluminium demand and extend beyond 2030.

Under the agreement, Hydro will progressively lower the carbon footprint of the primary aluminium supplied to Mercedes-Benz to 3.5 kg of CO2e per kg by 2028. The partnership will also introduce Hydro CIRCAL recycled aluminium, which contains at least 75 per cent post-consumer aluminium scrap, into Mercedes-Benz production from 2027.

The agreement builds on the companies' collaboration established in 2022 and provides long-term demand visibility for Hydro as it continues investing in lower-carbon aluminium production. It also gives Mercedes-Benz greater access to primary and recycled aluminium with defined emissions profiles.

"Long-term demand is the single most important investment trigger for decarbonising how materials are made. When partners like Mercedes-Benz commit to reliable, long-term offtake of low-carbon and recycled aluminium, they strengthen the business case for investing in further emissions reductions, making meaningful progress possible," said Eivind Kallevik, President and CEO of Hydro.

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Low-carbon primary aluminium and recycled metal

The agreement brings together Hydro's low-carbon aluminium production capabilities and Mercedes-Benz's automotive manufacturing requirements. As vehicle production becomes increasingly electrified, the emissions associated with raw materials are gaining importance in efforts to reduce the automotive industry's overall carbon footprint.

Hydro REDUXA is produced using renewable energy and technology designed to reduce emissions throughout the production process. The target of bringing its carbon footprint down to 3.5 kg CO2e per kg by 2028 represents the next milestone in the decarbonisation roadmap established by the two companies in 2022.

Mercedes-Benz also sees greater use of lower-carbon and recycled aluminium as a way to strengthen supply chain resilience.

"Higher levels of circularity and a lower-carbon footprint can play a role in enhancing the resilience of our automotive supply chains. Together with Hydro, we are making low-carbon aluminium a key pillar in our mass production process," said Yanni von Roy-Jiang, Head of Procurement and Supplier Management at Mercedes-Benz AG.

Alongside primary aluminium, the agreement includes Hydro CIRCAL, which contains at least 75 per cent post-consumer aluminium scrap and has a carbon footprint of no more than 1.9 kg CO2e per kg. Its integration into Mercedes-Benz's next generation of large electric vehicles is planned from 2027.

In the summer of 2026, Mercedes-Benz became the first car manufacturer in Europe to announce the integration of Hydro CIRCAL into series production. The expanded agreement builds on that development by establishing a longer-term framework for using recycled aluminium in automotive applications.

Further emissions reductions targeted by 2030

Hydro and Mercedes-Benz will continue working towards a carbon footprint of 3.0 kg CO2e per kg for primary aluminium by 2030. The target was first outlined in a letter of intent signed by the companies in 2022.

Achieving further reductions will require continued technological development and investment. By combining lower-carbon primary metal with higher levels of post-consumer scrap, the companies aim to reduce emissions and primary resource consumption while meeting automotive requirements for quality, safety and performance.

Mercedes-Benz is also joining the First Movers Coalition, a global initiative that uses corporate purchasing commitments to encourage demand for emerging low-carbon technologies in hard-to-abate industries.

The latest agreement builds on several years of cooperation between the companies to increase the use of recycled and lower-carbon aluminium in automotive applications. Beyond aluminium supply, their collaboration also includes the Corridor programme in Brazil, which combines decarbonisation efforts with social responsibility initiatives across the aluminium value chain.

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