Production and Logistics
By 2018, the Volkswagen Group is aiming to reduce levels of the five key environmental indicators per vehicle manufactured – energy and water consumption, waste for disposal, and CO2 and VOC emissions – by 25% compared with the 2010 baseline. This target applies to all the Group’s production locations for passenger cars and light commercial vehicles, and builds on the general production process requirements defined in the Group Environmental Principles. We have already made considerable progress towards reducing all five key indicators.
In terms of environmental impact reduction per unit (UEP), we had already reached our goal by the end of 2016, having cut production-related environmental impacts by 25.3%. The status at the end of 2016 compared with the 2010 baseline breaks down as follows (2015 figures in brackets):
- specific energy consumption: –17.0% (–16.4%)
- specific CO2 emissions: –19.5% (–19.5%)
- specific VOC emissions: –41.3% (–30.5%)
- specific water consumption: –14.2% (–8.8%)
- specific waste for disposal: –34.6% (–32.1%)
The reduction in environmental impacts across the Group is the result of specific environmental programs by the individual brands, including:
- Think Blue. Factory. – Volkswagen Passenger Cars and Volkswagen Commercial Vehicles
- ultra-strategy – Audi
- Green Factory – ŠKODA
- ECOMOTIVE Factory – SEAT
- Environmental Factory – Bentley
- Resource-efficient Production – Porsche
- Blue Rating – Scania
- Climate Strategy – MAN
We encourage close integration and communication between the brands worldwide in order to create synergies, for example with our Environment Task Force. We record and catalog environmental measures in an IT system and make these available for Group-wide sharing of best practices.
In the reporting period, more than 1,600 implemented measures relating to energy and the environment were documented in this system, all serving to improve passenger car and light commercial vehicle production processes. As well as being worthwhile from an environmental viewpoint, these activities also make financial sense, resulting in annual savings of around €49 million. The measures are helping us reduce all five key environmental indicators, although additional negative effects meant that the indicators for energy consumption and CO2 emissions did not change very significantly.
Although 2016 was – yet again – the world’s warmest year since climate records began, a colder winter resulted in increased heating demand across Group locations.
Environment Task Force
We set up the Environment Task Force in 2014, with the aim of identifying and implementing savings initiatives at Group locations. This team of analysts from the Group environmental research unit acts as a networking intermediary between departments involved in planning, maintenance and operations, helping to close any gaps by providing additional capacity and local expertise.
The broad-based knowledge of the Environment Task Force, combined with the many excellent ideas and solutions from colleagues in our various locations, plus the sharing of initiatives via massnahmen@web, all help to promote a lively, Group-wide dialog.
At Volkswagen-branded component manufacturing facilities, the team works hand in hand with the energy management teams in Component Planning, who also help identify potential savings.
Up to and including 2016, the Environment Task Force was involved in 25 projects around the world. Over this period, they implemented savings measures worth €2 million and identified potential savings at Group locations estimated at an additional €9 million.
Energy Consumption and CO2 Emissions
In 2016, energy consumption per vehicle fell from 2,106 kWh in 2015 to 2,090 kWh in 2016. Absolute volumes increased due to the larger number of vehicles produced. This meant that we reduced energy consumption by –17.0% (against the 2010 baseline).
CO2 emissions (Scope 1 and 2) per vehicle rose from 882 kg in 2015 to 883 kg in 2016. Absolute volumes also increased due to the larger number of vehicles produced. This represents a –19.5% reduction in CO2 emissions compared with the 2010 baseline.
Our strategy for meeting our targets includes improving energy efficiency, replacing coal with gas for our in-house energy production, and purchasing electricity from renewable sources. We now meet around one-third of our global electricity requirements from renewables.
Since 2011, VW Kraftwerk GmbH has been investing in the ongoing development of renewables and the construction of highly efficient combined heat and power (CHP) plants driven by natural gas. In the period to 2016, the company invested around €26 million in renewables such as wind farms and photovoltaic power plants. As part of our fuel conversion strategy, VW Kraftwerk GmbH also invested some €15 million in a cogeneration plant in Braunschweig and some €65 million in a gas and steam turbine (combined cycle) plant in Kassel. Furthermore, alongside the company’s own electricity generation activities, we are currently implementing a proportional energy program for the Volkswagen Group’s production sites in Germany using carbon-neutral Volkswagen Naturstrom®. Over the next few years, VW Kraftwerk GmbH is planning to invest in a new combined cycle plant in Wolfsburg (by 2022) and in the further development of renewables.
Examples of Best Practice
We set a particularly positive example in Brazil, switching to 100% renewable energy despite the country’s ongoing economic difficulties. This measure is reducing CO2 emissions by approximately 21,000 t per year.
In 2016, the first industrial combined heat and power plant in the greater Shanghai metropolitan area went into operation at Volkswagen’s Chinese plant in Anting, in the form of a MAN CHP plant. The power plant supplies the site with 26 MW of electricity and 60 t/h of steam. This covers most of the energy and all of the steam requirements of Car Plant 3, meaning that Anting is now making annual savings of around 95,000 MWh of energy and 59,300 t of CO2.
- Lamborghini: New combined cooling, heat and power (CCHP) and district heating plants, coupled with a 17,000 m2 photovoltaic system on the roof of the central production shop at the Sant’Agata site in Italy, were the main factors contributing to the brand’s certification as a carbon-neutral manufacturer. Annual CO2 emissions at the Lamborghini site have been cut by around 820 t. By the end of 2017, the CCHP is expected to reduce annual CO2 emissions to around 5,600 t, and the company is also planning to convert the plant to run on biogas. Compensatory measures will be taken to offset the remaining CO2 emissions. Lamborghini is the first company in the world to be certified by DNV GL (Det Norske Veritas Germanischer Lloyd) under their “Carbon Neutrality” program. DNV GL is one of the world’s leading service-providers in the classification, verification and management of environmental risks.
A number of other examples illustrate our success in saving energy and reducing CO2 emissions:
- VW: One important lever for reducing energy consumption is on-demand operation of all facilities. In 2016, we reinforced the energy efficiency gains from the first pilot projects involving the load-dependent operation of paint dryers by rolling out the technology at more locations. The change has cut energy requirements by around 7,300 MWh a year, saving around €290,000 and reducing annual CO2 emissions by approximately 1,900 t.
- In 2016, MAN successfully recovered thermal energy at the ship engine test facility in Frederikshavn, Denmark, using the newly installed heat recovery system. The recovered energy was supplied to the municipal district heating system. The heat recovery system is enabling us to avoid over 1,300 t in CO2 emissions.
- VW: We use energy value stream analysis to identify suitable measures for reducing our energy KPI. This technique was trialed at our Bratislava location and others in 2014, reducing annual energy consumption by 12,916 MWh with annual savings of more than €900,000. This methodology has since been rolled out to other sites.
In our quest for improved environmental performance, the Volkswagen Group does not limit its efforts to the internal workings of our production facilities. We also keep a close eye on our buildings and real estate. With our Blue Building standard and internal “Blue Building” award for energy-efficient, sustainable construction, we aim to reduce CO2 emissions from our properties while ensuring that they are built and continue to operate sustainably. We aim to significantly undercut statutory energy consumption thresholds.
Volkswagen Immobilien completed the first Blue Building – a Volkswagen-brand car showroom in Hanover – at the end of 2015. In the course of this project, the old building was demolished, reprocessed on site and then reused as part of the foundations for the new building and its outdoor facilities. Recycled waste glass was used as insulation underneath the building. All lighting in the building and its external facilities is provided by LEDs, while heat and power are supplied by a photovoltaic system and a CHP unit (manufactured by Lichtblick). This cuts CO2 emissions by up to 58 t per year.
A ventilation and cooling system delivers a steady supply of fresh air, improving the overall quality of life within the building as well as the wellbeing of employees. At night or during the daytime, special louvered windows can be used to cool down the showroom by purely natural means.
Our aim is to steadily refine and improve the Blue Building standard. To do so, we systematically evaluate experience acquired during the planning, construction and operation of our buildings.
Material Flow Management
Volkswagen uses material flow management as a tool for analyzing and evaluating material flows in production and the associated environmental impacts.
Material flows are resources and energy which flow within specified system limits and can be allocated to production processes by originator. Material flow analysis allows us to depict processes more transparently, making it easier to recommend actions for reducing environmental impacts and cutting production costs.
The informative value of a material flow analysis depends on the data available. Incoming and outgoing material flows in processes must be measured both qualitatively and quantitatively, by reference to both internal environmental information systems and external databases. Any missing data is obtained from in-process measurements.
Material flow analyses are useful to a variety of players. They can be used to sensitize employees to the resource-efficient handling of process materials, as a useful aid for planning new, more resource-efficient plants, or as a decision-making tool for implementing specific measures.
Two comprehensive material flow analyses focusing on material efficiency were carried out in the paint shops of our Poznan and Bratislava car factories. The measures identified in the course of these analyses are currently being prepared for implementation in production.
The procedure for allocating CO2 emissions certificates under the European Union’s Emissions Trading System changed fundamentally in 2013, at the start of the third trading period (2013–2020). Since 2013, emissions allowances for electricity providers have been auctioned. For the manufacturing industry and certain types of power plant (e.g. CHP plants), a proportion of the certificates were initially allocated free of charge. However, over the course of the trading period, the number of such certificates has been steadily declining; providers requiring additional certificates must purchase them at auction.
In certain industry (sub)sectors, there is a risk that production will be transferred to countries outside Europe now that the amended provisions governing emissions trading have come into force (a phenomenon known as “carbon leakage”). Based on pan-EU benchmarks, a set number of certificates are being allocated free of charge over the 2013-2020 trading period. The automotive industry was included in the new carbon leakage list that came into effect in 2015.
A total of 30 Volkswagen Group locations are affected by the European Emissions Trading System. For 2016, 1,186,418 emissions certificates were allocated to the Volkswagen Group free of charge (39,769 fewer than in the previous year).
As well as the European Union, other countries in which the Volkswagen Group has production sites are also considering the introduction of emissions trading. Seven pilot projects have been launched in China, for example, although they have not yet affected the Volkswagen Group. The Chinese government plans to expand these pilot projects to form a national emissions trading system.
In 2016, VOC emissions per vehicle were reduced from 2.80 kg in 2015 to 2.42 kg. Compared with the 2010 baseline, emissions per vehicle were reduced by 41.3%. This impressive achievement, whereby targets were not only reached but exceeded in 2016, was driven by numerous VOC-reducing measures in many of the paint shops at Group locations, as well as the state-of-the-art painting and exhaust air treatment systems installed in new plants.
Examples of Best Practice
A new, low-impact top coat painting line came onstream in Ingolstadt. Featuring state-of-the-art technology such as air recirculation, dry scrubbing and exhaust air purification, the new facility has reduced the consumption of thermal energy and water per car by 20%. Furthermore, air recirculation is helping to reduce CO2 emissions per painted vehicle by 30%, while exhaust air purification is reducing VOC emissions by 90%.
In 2016, water consumption per vehicle was reduced from 4.14 m3 in 2015 to 3.90 m3. Despite the larger number of vehicles produced, freshwater consumption per vehicle has steadily fallen since 2010 thanks to a raft of recycling measures and the introduction of manufacturing techniques that use minimal water.
Alongside climate protection, conserving our planet’s freshwater reserves is one of the pivotal requirements for preserving the basic necessities of life. Water resources are already scarce in many regions of the world, and access to clean drinking water is an increasingly pressing problem for large sections of the global population. This prompted us to adopt water as a focus topic for 2014. Within our sphere of influence, we also support the United Nations’ Sustainable Development Goals (SDGs) adopted in September 2015.
Drawing on the comprehensive data collated in our life cycle assessments, we published a pioneering analysis of our water footprint in 2013, in which we identified those processes that consume the most water over the life cycle of a representative selection of Volkswagen-branded models. In 2015, we worked with the Technical University of Berlin to further refine the in-house methodology used to calculate our water footprint.
The water footprint analysis showed that the use phase plays only a minor role. Much of the water consumed is due to the fuel production process. Another significant water consumer is the supply chain for the extraction or creation of raw materials, over which we have no direct influence. Consequently, we are focusing our attention on areas where we can directly influence water consumption: our production sites. We are also making efforts to continuously reduce our water consumption by further improving our vehicles’ fuel consumption and using more secondary materials, such as recycled materials, in production. Our latest review indicates that 57% of our entire freshwater consumption – approximately 23 million m3 – is attributable to sites located in regions where groundwater resources are at risk, especially our plants in Mexico, Spain, South Africa, India and China. In these regions in particular, we have made minimizing water use an even higher priority. We adapt our water use to the varying regional availability of water resources worldwide. At the same time, we support a broad range of projects in which the protection or development of water resources is a key or even the primary objective. The same approach also characterizes the water management strategy adopted by the Corporate Environment & Energy Steering Committee, which defines four action areas:
- Safe and reliable water supply and sewerage. We aim to protect groundwater reserves against pollution, and to avoid production downtimes caused by water shortages.
- Efficient water use throughout the life cycle. By using water as economically and efficiently as possible during the production process, and by recycling as much water as possible, we aim to reduce total water consumption to the great possible extent.
- Social and environmental initiatives. Particularly through our biodiversity projects, we help protect water resources and promote public environmental awareness.
- Transparency. We communicate our goals and activities to the public. In 2013, Volkswagen became the world’s first automaker to commit to the United Nations’ CEO Water Mandate. Also, since 2011, we have been providing extensive disclosure of our water management practices and progress, by completing the very detailed CDP water management questionnaire. In 2015, we withdrew our responses in the light of the diesel issue. After a one-year suspension in 2015 as a consequence of the diesel issue, we rejoined the program in 2016, achieving a Leadership rating of A- for our Water Disclosure Project.
2016 – “Year of Water” in China
Given the high production volume in China, the country’s share of Group-wide water consumption is comparatively high. Consequently, 2016 was designated the “Year of Water” in China. Teams of experts analyzed water management at all Volkswagen production sites in China and implemented optimization measures in order to save even more water per vehicle produced. Between 2010 and 2015, we had already achieved water savings of around 14.1% in China. In 2016, we achieved further significant water savings, bringing total savings between 2010 and 2016 up to 22.4%. Systematic analysis enabled us to achieve savings in every part of the factory by, for example, optimizing cooling systems and introducing on-demand management of paint consumption in the paint shop.
Examples of Best Practice
- We use recycling facilities at some of the Group’s locations that use a membrane process to prepare biologically precleaned waste water for reuse, thereby reducing freshwater consumption levels. In 2015, we brought a recycling facility on stream at our Salzgitter plant. This facility processes half the plant’s wastewater into recycled water and uses it to feed the central cooling tower. As a result of this measure, we save around 75,000 m3 of freshwater annually, equivalent to around a quarter of the plant’s needs.
- Our Uitenhage plant in South Africa has managed to reduce its water consumption per vehicle by more than 50% (from 6.2 to 2.7 m³/vehicle). In 2015, this achievement so impressed the jury of the annual Greening the Future Awards competition that the plant won the national prize in the “Water Efficiency & Management” category.
- In 2016 alone, our Foshan plant successfully reduced its water consumption by more than 26%, from 3.9 to 2.9 m³ per vehicle, by implementing measures devised during the “Year of Water”.
In total, the Group saved 906,807 m³ of freshwater in 2016 compared with the previous year, thanks to a raft of individual measures and optimizations. However, factors beyond our control, such as fluctuating weather conditions, also influence freshwater consumption. With water prices ranging from around €0.3 – €1.0 per m³, this translates into water supply cost savings of approximately €0.5 million in the reporting period.
In order to permanently implement water-saving processes within the Group, a new internal White Paper defines key requirements for the various processes in the production sequence.
By the end of 2016, the volume of waste for disposal per vehicle had been reduced from 16.2 kg in 2015 to 15.2 kg, representing a reduction of 34.6% against the 2010 baseline.
We aim to use materials and products as efficiently as possible, and so reduce the volume of waste per unit manufactured.
In order to achieve this goal, we have adopted a three-stage waste strategy:
- Prioritizing waste recycling and reducing waste for disposal
- Reducing waste volumes via waste treatment
- Reducing waste volumes by optimizing production and ancillary processes
Wherever possible, we make great efforts to use standardized waste management systems to optimize our waste management in all divisions. These systems are already used to control waste management processes in all German factories run by the Volkswagen, Volkswagen Commercial Vehicles, Porsche, Audi and MAN brands, and for state-monitored disposal of hazardous waste in particular (Electronic Government). The aim is to roll out these systems in Europe and thereafter across regions around the world.
ŠKODA plants in the Czech Republic and Volkswagen plants in Slovakia also use waste management systems. In 2015/16, implementation in the VW and SEAT plants in Spain, Portugal and Poland was coordinated with in-house IT departments and preliminary plans were drawn up. In 2017, plants in Spain will be equipped with a waste management system.
In 2015, in order to review our waste management processes and recycling, we introduced audits of waste disposal processes as a key control mechanism at many of our sites. This reflects our duty of care to ensure controlled, environmentally friendly waste disposal. In Germany, a standardized procedure for these audits was developed in collaboration with other vehicle manufacturers (original equipment manufacturers or OEMs) and major suppliers. In 2015 and 2016, we carried out audits across multiple locations and OEMs in Europe. Audits have also been carried out in the regions, albeit exclusively for Volkswagen’s own brands. In order to set a common benchmark for the quality standards expected of waste disposal services, we also trained potential auditors at a number of eastern European sites, giving them the skills to carry out quality-assured audits so that the results could also be used by other OEMs and suppliers. Based on these positive experiences, similar training programs will be organized at other sites. Descriptions of the audit procedures, as well as audit documentation, are now available in the languages of the various countries in which the Group operates, with the exception of China.
Production waste from packaging and workshops, as well as the Technical Development department, is recycled to the highest possible standards. For the recycling of waste from production and logistics that has a resale value, such as paper, plastics, wood and metal, our Purchasing department has rolled out a Group-wide system to improve the efficiency of the entire process. The focus here is not only on revenue generation, but also on optimized preparation of the waste for efficient transportation.
- In January 2016, an advanced waste management system was introduced at our Bratislava plant for optimizing waste logistics processes. Transponder technology (based on Data Matrix code) is used to identify every single piece of waste at its point of origin and track it seamlessly all the way through to final disposal. At each stage of the disposal process, the system records the volume, fill level, degree of sorting and condition of waste container locations, as well as any wrongly disposed materials. Working together with the waste producers, the waste management department uses the collected information to develop suitable measures for optimizing container volumes, collection intervals, container locations and disposal routes in response to ambient production conditions. This tool has streamlined waste management at the Bratislava plant, as reflected in, for example, the 15% reduction in the amount of cost-incurring waste. Furthermore, substantially less time is required to collate waste figures for reports.
- At the Audi site in Neckarsulm, special containers for dewatering paint sludge are being used experimentally. So far – and contrary to previous experience – the experiment has been successful. The system has reduced the residual liquid content of the sludge, hence the amount of waste, and the sludge has a more solid consistency. Whether the containers are suitable for permanent use will be decided after a long-term pilot.
- At ŠKODA, transportable oil filtration systems are used to increase the service life of oils and so reduce the amount of waste oil. In addition, a new evaporator system for separating emulsions has gone into operation at the Vrchlabi plant, aiming to reduce the volume of waste emulsions for disposal. ŠKODA is also now using washable – i.e. reusable – cleaning cloths instead of disposable ones.
- At the Braunschweig plant, press containers used for household-type commercial waste, cardboard, paper and plastic film are equipped with a GPS signaling system. The system automatically tracks the fill level and position of the containers. Once containers are 75% full, a signal is automatically sent to the waste disposal specialist for transport scheduling purposes. This has enabled the plant to significantly increase full container weights and so reduce the number of disposal runs.
Logistics is part of the Volkswagen Group’s environmental focus. For example, we are optimizing the entire transport chain in order to avoid CO2 emissions. The aim is to avoid transportation completely or else shift to more environmentally friendly modes of transport, and to reduce fuel consumption. We are pursuing measures and activities for optimizing logistics processes across our brands.
The Corporate Green Logistics Working Group was set up in 2012. The Group is responsible for coordinating and jointly developing initiatives, accounting practices and training packages across the Group.
Choosing the right means of transport is a key starting point for reducing CO2 emissions. Maritime shipping is regarded as one of the most efficient transport options. So the Volkswagen Group is now involved in the Clean Shipping Network (CSN), an association of marine cargo owners, and is represented on its management board. CSN members can use the Clean Shipping Index (CSI) rating tool to compare environmental efficiency figures such as the emissions of individual ships on particular routes. This is useful for analyzing the environmental impact of shipping. At the request of Volkswagen AG and others, soot particles have now been included in the index, alongside CO2, NOX, SOX, water and chemicals.
Volkswagen Group Logistics is continuously expanding the number of CSI-listed vessels in its own transport network. The ratio is regularly updated and considered whenever the Group offers new transport services to tender.
Starting in 2019, the Volkswagen Group will become one of the first vehicle logistics OEMs to use two car-carrying vessels powered by liquefied natural gas (LNG) supplied by Siem Car Carriers AS between Europe and North America. The alternative, LNG-driven marine engine is improving the environmental compatibility of marine transport and sustainably reducing airborne pollution – CO2 by up to 25% and NOx by up to 30%; soot particles by up to 60% and SOx by up to 100%.
Furthermore, the Group is constantly working to find and use alternative and more environmentally compatible transport options for material logistics. Materials from Turkey destined for Volkswagen Autoeuropa in Palmela, Portugal, have been shipped from Izmir to Lisbon since late 2015. Previously, the materials traveled by truck. By changing the means of transport, the company is saving 240 t of CO2 per year and also cutting costs.
The Group Consolidation Center that opened in 2016 in Malacky near Bratislava is also helping to improve the environmentally friendly profile of logistics within the Volkswagen Group. Optimized thermal insulation is reducing heating costs; the use of double doors in the loading and unloading area is ensuring that heat losses are minimized, and LED lighting is cutting electricity consumption by around 50%. At the same time, the bundling of freight in the Consolidation Center has cut the daily traffic volume by an average of around 90 trucks in goods incoming, and around 65 trucks in goods dispatch.
Biodiversity signifies the variety of life on our planet, encapsulating the variety of species, genetic differences within species, and the diversity of ecosystems. We rely on it as the basis for our continued existence: healthy food, clean water, fertile soils and a balanced climate. Protecting biological diversity is one of the greatest societal challenges of our time. The United Nations has thus declared the current decade to be the “UN Decade on Biodiversity”.
Volkswagen has been committed to protecting biodiversity since 2007 and is a founder member of the Biodiversity in Good Company e.V. initiative. In our mission statement, we promise to support the protection of species at all locations. On the basis of this commitment, VW Mexico was invited to give a guest presentation at the Business and Biodiversity Forum in Cancun in December 2016. The Forum was part of the United Nations’ Conference of the Parties to the Convention on Biological Diversity (COP13-CBD). We primarily contribute to achieving the targets of the UN Convention on Biological Diversity by minimizing greenhouse gas emissions and utilizing materials and resources as efficiently as possible. As a consequence of the diesel issue, we are putting our membership of the Biodiversity in Good Company e.V. initiative on hold for the time being.
Biodiversity is a component of our environmental management. We have, among other things, appointed a biodiversity officer and commissioned external expert assessments of the risks to water, the soil and biodiversity at 32 locations belonging to the Volkswagen Passenger Cars, Porsche and MAN brands.
One of the projects we jointly implemented with Naturschutzbund Deutschland e.V. (NABU) was a wetland conservation project in Germany. In 2016, Volkswagen Financial Services AG once again made a donation in support of NABU’s International Peatland Conservation Fund. The company is currently sponsoring 13 wetland conservation projects in various parts of Germany ranging from Lower Saxony to Bavaria, as well as projects in Poland, Lithuania, Latvia and Estonia.
At our international sites, we collaborate with a range of partners to support the protection of nature and biodiversity. This means we can contribute to local implementation of the United Nations’ Sustainable Development Goals (SDGs). We also fund biodiversity research at our Urumqi site in the Chinese province of Xinjiang. We have been supporting the Dyer Island Conservation Trust in South Africa since 2011; in 2015, the Trust opened a care center for seabirds there. Since 2012, Volkswagen Slovakia has been engaged in a joint venture with Comenius University in Bratislava, breeding crayfish threatened with extinction with the aim of resettling them in Slovakia’s streams and rivers. In 2017, we are planning further research projects in Slovakia’s nature reserves and lakes.
Other nature conservation projects are described here.