The high pressure to innovate and the growing demands placed on the automotive industry by CO2 legislation necessitate high levels of expenditure on research and development. In 2014, the Volkswagen Group invested €11.5 billion in research and development. This expenditure is set to increase over the next few years: between 2015 and 2019, the Volkswagen Group Automotive Division is planning to invest around €85.6 billion in new models, innovative technologies and its global presence. Around two-thirds of all investments are dedicated to more efficient vehicles, alternative powertrains and more environmentally compatible production. The investment program has earmarked €21.9 billion for development work alone. The total investment sum of €85.6 billion does not include our joint ventures in China, which will be investing a further €22.0 billion in new factories and products between 2015 and 2019, financed from their own funds.
Climate Protection Strategy
Climate protection is at the heart of the Group’s environmental management philosophy, spanning every stage of the value creation process. We report regularly on our climate protection strategy to the CDP (formerly known as the Carbon Disclosure Project), a consortium of institutional investors. In 2014, the Volkswagen Group was again awarded 99 out of a possible 100 points for its transparency, and a top grade of A for its performance (see "Ratings and Indexes"), as well as being listed in both Leadership Indices.
Absolute CO2 emissions from our in-house energy generation at production locations (Scope 1) and from purchased energy (Scope 2) increased slightly in recent years, whilst specific emissions (in kg per vehicle) have fallen. This can be explained by the increase in production volume, coupled with an increase in the volume of purchased energy (see "Indicators"). One of the Group’s key environmental targets is to reduce specific energy consumption per vehicle during production by 25% by 2018 (compared with the base year 2010), and to cut specific CO2 emissions by the same amount.
For our German locations, which currently account for around 45% of our Group-wide CO2 emissions from production, the Volkswagen Group has set itself an even more ambitious target: CO2 emissions from energy supplies in Germany are to be reduced by 40% by 2020 compared with 2010. We aim to achieve this by improving energy efficiency, partially replacing coal with gas in our in-house energy production, and purchasing electricity from renewable sources. We are urgently awaiting a clear political framework for the energy industry in order to make further investments in power station conversion measures.
Volkswagen delivered the first XL1• in May 2014. With test cycle fuel consumption of 0.9 l/100 km, this is the world’s first “1-liter” car.
Greenhouse Gas Inventory Tool (Scope 3)
Alongside production-related energy consumption, the fuel consumption of our fleet is another key consideration. Since 2012, the Volkswagen Group has published a so-called Scope 3 Inventory for CO2 Emissions (see "Group GHG emissions (Scope 3) (cars and light commercial vehicles)"), corresponding to the Scope 3 Standard of the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). The Inventory analyzes CO2 emissions generated outside the factory gates, for example in the supply chain, and in the use and disposal of vehicles. Other examples of emission sources covered by the Scope 3 Inventory include logistics processes and business trips. The wider scope of this analysis poses a number of major challenges for companies in terms of both data collation and interpretation. The Volkswagen Group is one of the forerunners here and collates data in 12 out of the 15 Scope 3 categories.
Our data indicates that the emission category “Purchased goods and services” accounts for around 17% of the total Scope 3 Inventory, and the “Use phase” 75%. The data from both these categories is validated by external auditors. The Inventory reveals that our most effective lever for cutting CO2 emissions is the development of more fuel-efficient vehicles.
Powertrain and Fuel Strategy
Continuous fuel efficiency improvements for our gasoline and diesel engines, a range of CNG vehicles and further electrification of the model portfolio – these are the cornerstones of the Volkswagen Group’s Powertrain and Fuel Strategy (for further details see "Product Development"). According to the Center of Automotive Management, the Volkswagen Group is now the world’s leading powertrain innovator (siehe "Product Responsibility"). Our Powertrain and Fuel Strategy also aims to replace fossil fuels with renewables, as part of our long-term goal of achieving carbon-neutral mobility.
Today, most of our customers across the world still opt for conventionally powered vehicles. So for a long time to come, electrified powertrains and conventional internal combustion engines will continue to coexist as parallel technologies. However, this technological diversity will be accompanied by a steady increase in the use of carbon-neutral fuels, for example in the form of renewable electricity for electric vehicles, or next-generation biofuels – most notably biomethane from organic waste, and synthetic natural gas.
The Volkswagen Group
is the world’s leading powertrain innovator.
“Power-to-gas” storage of renewable electricity in the form of synthetic hydrocarbons is a sustainable energy technology whose importance extends far beyond the automotive industry. The Audi e-gas plant in Werlte (Germany) – the world’s first industrial power-to-gas plant – was connected to the grid in 2013. This plant produces methane from a chemical process involving wind power, CO2 and water. As far as possible, the electricity is used at times when the grid has surplus supply, and when wind turbines, for example, would normally have to be shut down. This surplus green power is first used to split water molecules into oxygen and hydrogen. At some point in the future it may be possible to use this hydrogen in fuel cell vehicles. However, the large-scale hydrogen storage, distribution and refueling infrastructure this will require has yet to be developed. At the present time therefore, the second step in the process is methanation, whereby the hydrogen reacts with CO2 to produce synthetic methane. The resulting Audi “e-gas” meets the same quality standards as fossil-based natural gas. The Werlte plant has been feeding this gas to the German grid since autumn 2013. E-gas can be purchased at CNG filling stations throughout Germany, using a special Audi e-gas fuel card. Werlte is currently expected to be able to produce enough e-gas to power up to 1,500 Audi A3 Sportback g-tron• models for 15,000 km of carbon-neutral driving per year (see "Eco-Friendly Driving").
The Audi e-gas project has implications that go far beyond the automotive industry. E-gas has potential not only as a carbon-neutral, renewable fuel, but also as a means of storing large amounts of renewable wind or solar power efficiently and independently of where the power is actually generated – by converting it into methane gas and storing it in the natural gas grid. Power-to-gas technology has now also been embraced by a number of major German energy providers, who are following Audi’s lead with initial projects of their own.
Our Commitment to Emissions Targets
In the context of our commitment to the World Business Council for Sustainable Development (WBCSD) we are supporting the “WBCSD Road to Paris”, which is aimed at ensuring successful discussions on the realization of the “2 degrees” target at the United Nations COP 21 climate conference in Paris at the end of 2015.
Back in March 2013, the Volkswagen Group set a benchmark when it became the first and only automaker to commit to the ambitious goal of reducing its European new-car fleet-average emissions to 95 g CO2/km by 2020.
Emissions of 95 g CO2/km correspond to average fuel consumption across all vehicle classes and segments of less than 4 l/100 km (gasoline: 4.1 l, diesel: 3.6 l). Greenpeace Germany hailed Volkswagen’s decision as an “important symbol of commitment to environmental protection and society, and to the mass production of climate-friendly technical solutions.” Today, 57 models from the Group’s portfolio already emit meet the target of 95 g CO2/km.
For 2015, the Volkswagen Group’s individual target for its average new-car emissions under EU law is 132 g CO2/km. In fact, we were able to comply with this target ahead of schedule. This was confirmed in figures published by the European Commission in the Official Journal of the European Union, L315, in November 2014, which showed that the average new-car CO2 emissions of the Volkswagen Group in 2013 already stood at 129 g CO2/km (at the time of going to press, the latest data indicates that the figure for 2014 was 126 g).
THE ROAD TO CARBON-NEUTRAL MOBILITY
With the TGX Hybrid, at the IAA Commercial Vehicles show in September 2014 MAN showcased a concept hybrid model for long-distance haulage.
The Audi A3 g-tron presents a level of fuel efficiency previously confined to sub-compact models.
For light commercial vehicles (vans), the EU has set CO2 emissions targets of 175 g/km for 2017 and 147 g/km for 2020. Here too we are making excellent headway: in 2014, the average new-vehicle CO2 emissions of the Volkswagen Commercial Vehicles brand’s models stood at 171 g/km.
In the meantime, other major markets too have adopted caps on new-car CO2 emissions. In China, Volkswagen Passenger Cars models comply with the corporate average fuel consumption limits in force in that market since 2012. And measures are in the pipeline for further ambitious improvements, including improvements to the efficiency of our internal combustion engines and the introduction of alternative drive technologies. For 2015, China has set a new-car fleet-average fuel consumption target of 6.9 l/100 km. In the USA and Canada, a cap of 103 g CO2/km will apply from 2025.
By using resources efficiently
, we can reduce not only environmental impacts but also manufacturing costs.
NEDC Test Cycle Comes in for Criticism
The New European Driving Cycle (NEDC), the procedure used by the EU to measure passenger car fuel consumption, has repeatedly come in for criticism from environmental organizations. The critics claim that the CO2 emissions measured under the NEDC’s 20-minute laboratory-based test cycle are much lower than the figures generated under realistic modern driving conditions. Like all other vehicle manufacturers, however, we must comply with this legally mandated test cycle. NEDC figures are the only figures we are allowed to quote. Now, the European Union is considering the introduction of a new test cycle, the “World Light Vehicle Test Procedure” (WLTP), which is designed to more closely represent modern driving conditions. Like the NEDC, the WLTP aims to provide an objective measurement standard for comparing technical products. The run-up to the WLTP’s scheduled introduction should be used to define a transparent and sustainably robust conversion procedure, because the existing EU target of 95 g CO2/km for 2020 was also defined on the basis of the values generated in the NEDC test cycle.
Resource efficiency is a topic of exceptional strategic importance for Volkswagen. Across their life cycle, we must ensure that our products’ consumption of natural resources is kept to a minimum. By using resources efficiently, we can reduce not only environmental impacts but also manufacturing costs. In line with the recommendations of the EU’s European Resource Efficiency Platform, we focus particularly on our consumption of raw materials, energy, water, air and land.
Improving resource efficiency at Volkswagen is a matter for the entire Group. All business areas make their own specific contribution to this challenge, and use their own specific indicators to measure and manage their performance. Systematic planning and implementation is coordinated by the Corporate Resource Efficiency Steering Group, which comprises members from a variety of business areas and brands. Currently the Steering Group is developing a methodology for measuring resource efficiency based on a defined set of indicators. For the general public, the term “resource efficiency” tends to be interpreted very broadly, covering many different environmental aspects, and meaning different things to different people. The challenge therefore is to develop a set of indicators that on the one hand are meaningful to the public, while at the same time providing a fit-for-purpose controlling tool for in-house decision-makers. In parallel, a pool of best practices on resource efficiency is being developed, which will be made available to other business areas and brands. 46
Environmental considerations from the very earliest stages of the product development process.