Progress Report on MAN’s Climate Strategy

MAN adopted a climate strategy in 2011. By 2020 we aim to be recognized as one of the companies in our sector that is best able to handle the challenges of climate change. This progress report on the implementation of MAN’s Climate Strategy provides a transparent account of what we have achieved in the past year, what measures we have implemented, and what we are planning.

25% reduction in CO2 emissions at MAN sites by 2020 (baseline: 2008) We reduce CO2 emissions at MAN sites by applying four principles: improving energy efficiency, using renewable energy sources (sun, wind, geothermal energy, and biomass), generating energy using combined heat and power (CHP) plants, and applying integrated technical and organizational energy management systems.

MAN is responsible for its production processes and for its products. Our sites consume raw materials and electricity and use resources to generate energy, giving rise to CO2 emissions. In adopting MAN’s Climate Strategy, we set ourselves the target of achieving a 25% reduction in CO2 emissions at MAN sites by 2020. This first step makes an important contribution to climate protection in our production operations.

In concrete terms, this means that — compared with 2008, when we emitted 500,000 tons of CO2 — we will have to save 125,000 tons of CO2, which is equivalent to the emissions of a small German town with a population of 14,000. At the end of the year under review we had saved 24,000 tons of CO2, which is 5% of the 2008 figure and represents one-fifth of our target for 2020. In other words, we have gotten off to a good start on the road we must rigorously follow to meet our target.

CO2 savings in our business areas (rounded)

  CO2 emissions
in base year 2008
CO2 emissions
in 2012
Difference in %
 
Commercial Vehicles 373,300 339,500 - 9.1
Power Engineering 117,800 127,600 + 8.3
Total 491,100 467,100 - 4.9

Measures taken to reduce CO2 emissions in 2012

Principle Steps taken in 2012
Improving energy efficiency
  • Energy efficiency analyses completed at all MAN Truck & Bus locations.
  • We improved the energy efficiency of our buildings at a number of sites.
  • Replacement of the ventilation system at the MAN Truck & Bus plant in Munich has resulted in more efficient heat distribution, bringing a substantial reduction in our energy consumption.
  • At the MAN Truck & Bus site in Poznan´ (Poland) we reduced our energy requirements for compressed air by optimizing the use of compressors.
  • More efficient air locks and air curtains were installed at several MAN Truck & Bus sites to retain the heat in the production shops.
Using renewable energy sources
  • At the Munich factory a roof-mounted photovoltaic system installed in 2012 has since been reducing CO2 emissions.
  • We investigated the possibility of using renewable energy from photovoltaic, co-generation, and biogas systems at our MAN Truck & Bus plant in Plauen (see flagship project).
Generating energy with CHP systems
  • We are currently investigating the use of cogeneration with MAN engines at the MAN Truck & Bus factories in Munich, Nuremberg, Salzgitter, and Steyr (Austria).
  • We completed preparations to install two MAN engines at the Plauen plant for efficient energy generation using CHP.
Energy management
  • Our energy experts at MAN Truck & Bus and MAN Diesel & Turbo hold regular meetings to share information about improving energy efficiency and optimizing energy management.
  • We are currently investigating the introduction of the ISO 50001 energy management system at all German Truck & Bus sites.
  • At MAN Diesel & Turbo’s Augsburg factory the decision was made to introduce a certified energy management system.
  • We continued with organizational measures such as lowering the temperature of the halls outside of production times.

In 2012 the activities performed under Core Initiative 1 were aimed at reducing our own CO2 emissions. These measures were based on four principles which were drawn up and established over the past years by MAN Truck & Bus, and they are now being extended to the other subgroups. This structured approach has led to the division’s success in cutting emissions.

The effects of most of the measures implemented in 2012 will not be felt until later years. To enable us to monitor and compare progress at the individual sites, we work with key performance indicators (KPIs) (Core Initiative 5).

Flagship project: Energy-efficient factory in Plauen

We aim to achieve a 25% reduction in CO2 emissions at all sites by 2020. The MAN Truck & Bus NEOPLAN plant in Plauen is to play a pioneering role in this. A pilot project here is not only implementing a climate-friendly, efficient, and innovative energy strategy, but also making this factory in Saxony more competitive and independent of rising energy costs.

By 2015 we will have transformed the Plauen plant into one of the most modern bus production facilities in the world. During the first phase we expanded our logistics center. Intelligent routing, energysaving lighting, and boiler optimization all reduce CO2 emissions. During the second phase, in 2013, we will install the heart of the energy supply system: the “Energy House.” This energy center will supply the factory with electricity, heating, and process heat. These will largely be provided by two CHP plants using MAN engines. An efficient peak-load boiler will supply any additional heat needed at the factory on cold days. The internally generated heat will supply the entire paint complex, the adhesive and competence center, and from 2015 onward the assembly shop, administration building, and delivery department, representing the last phase of conversion.

Over the course of the year, the site will produce more electricity than it needs. The surplus production of eco-friendly electricity will be fed into the public grid.

Consistently Efficient product portfolio We position ourselves in the Commercial Vehicles and Power Engineering business areas with sustainable products and solutions.

Low fuel consumption not only reduces CO2 emissions, but also saves costs. Customers frequently base their decision to buy a vehicle on the total cost of ownership. This is an important incentive for us to steadily reduce consumption and constantly improve the efficiency of the products in our portfolio.

As part of MAN’s Bluefire strategy, during the year under review MAN Diesel & Turbo presented various gas technologies that offer efficient alternatives for energy production: natural gas engines for power plants, dual-fuel engines that can run on both natural gas and diesel for stationary and maritime applications, and industrial gas turbines. By making use of heat energy – a by-product of power generation — the MAN Bluefire technologies achieve fuel efficiency levels of 86%. Reduced CO2, NOX, and SOX emissions mean that natural gas engines and gas turbines ensure cleaner fuel consumption than conventional energy generation technologies.

On the basis of the results of the product life cycle analysis (Core Initiative 4) and analyses of our customers’ needs, we are constantly working to reduce fuel consumption and improve efficiency.

In the Megatrends Demand Innovations brochure which accompanies this report, we have for the first time compiled a systematic overview of efficient products and innovations from all our business areas.

Customer involvement and dialog We involve our customers and talk to them about ways to reduce the global carbon footprint. After all, many of our customers have already set themselves ambitious targets for cutting CO2 emissions.

We include our customers in our annual stakeholder survey and ask them to assess our CR engagement (see here). We also pursue dialog with our customers at trade fairs (see here). We have started a particularly intensive dialog with some of them — Deutsche Post DHL, for example. In March 2012 we invited customers to share information in the MAN Truck Forum. Participants had the opportunity to introduce their company’s CR activities; joint targets in the field of CO2 emission reductions were also on the agenda. It is important for MAN to understand the future needs of its customers. Businesses like Deutsche Post DHL benefit from this by being able to contribute their ideas and needs to the process of developing our products and services at an early stage. Further meetings with key customers are planned for 2013.

Potential for reducing CO2 emissions along the product life cycle To identify potential for reductions, we measure CO2 emissions along the entire product life cycle.

For our Consistently Efficient product portfolio we have developed a Product Carbon Footprint — Life Cycle Assessment tool for calculating CO2 emissions. We use this to capture and calculate various emissions occurring from raw materials extraction all the way to recycling and total them as CO2 equivalents. Since the upstream chains, production, and use phases of our products in the Commercial Vehicles and Power Engineering business areas show wide variations, we have tailored our Product Carbon Footprint tool to the relevant conditions. For both areas, however, it is based on the same logic and considers the following phases of the product life cycle on the lines of the Greenhouse Gas Protocol:

phases of the product life cycle (chart)

For MAN Truck & Bus this tool was used to calculate CO2 emissions for vehicles in all truck and bus product segments in which we are represented. The Product Carbon Footprint tool takes account of twelve different material groups, energy consumption figures for production sites, including the logistics chain, and data on our products in practical use. In the MAN Diesel & Turbo division the tool was used for a selected dualfuel four-stroke engine (51/60 DF).

All calculations confirmed our assumptions: Whereas a maximum of 10% of all CO2 emissions arise during production and the upstream chain, more than 90% are generated during the use phase. The analysis of the MAN Diesel & Turbo dual-fuel four-stroke reference engine shows that this figure is already reached during the first year of use. Assuming a service life of over 40 years, which is by no means unusual for large-bore diesel engines, the share of emissions due to production decreases to less than 1%. This shows that the strongest potential for reducing global CO2 emissions lies in the use phase of our products.

We use these findings for our Consistently Efficient product portfolio and inform our customers about the CO2 emissions along the product life cycle of our vehicles (Core Initiative 2). And that is not all: At a political level, we advocate a standardized CO2 declaration system throughout Europe. This would improve transparency between different manufacturers’ models and thereby increase competition — which would benefit not only customers, but also the environment.

Climate Strategy management We manage the implementation of our Climate Strategy and have defined KPIs that are regularly measured and published.

During the year under review we developed a management model for Group-wide control of the Climate Strategy. This monitors our progress with implementing the five Core Initiatives and measures our success.

In the future, MAN’s performance on the climate protection front will be measured in terms of selected key performance indicators (KPIs). We selected and defined these in 2012 on the basis of relevance and measurability criteria. They will be approved by the Executive Board in 2013.

Measures and activities for the Core Initiatives in 2013

1. 25% reduction in CO2 emissions at MAN sites by 2020 (baseline: 2008)
  • Put the roadmap into effect for all production sites and implement and monitor it with relevant KPIs
  • Continue developing the energy-efficient plant in Plauen
  • Introduce certifiable energy management systems at selected sites
  • Identify and assess further Group-wide environmental targets
2. Consistently Efficient product portfolio
  • Continue focusing on consumption reduction projects for Consistently Efficient products
  • Expand Product Carbon Footprint tool to include additional environmental aspects
  • Reduce total cost of ownership of our products and make further reductions in CO2 emissions during the use phase
  • Share ideas with Sales and raise awareness of climate and environmental issues in the sales process
3. Customer involvement and dialog
  • Continue dialog on CR and climate strategy with key customers
4. Potential for reducing CO2 emissions along the product life cycle
  • Improve data quality for the Product Carbon Footprint tool
  • Take account of findings from the Product Carbon Footprint assessments when making product development
    decisions
  • Expand product life cycle analyses to include other MAN Diesel & Turbo product segments
5. Climate Strategy management
  • Approve relevant KPIs under the climate strategy management model
  • Expand the management model to include the CR strategy
  • Complete a policy on CO2 reporting
  • Continue to develop reporting on implementation of MAN’s Climate Strategy