BMW [BMW:GR] has signed a memorandum of understanding (MOU) with UK-based mining company Rio Tinto [RIO:US] to buy aluminum produced in Canada using hydroelectric power, with an aim to decrease its carbon footprints, as reported by Reuters on February 21. Under the agreement, Rio Tinto will supply aluminum to BMW’s Spartanburg, South Carolina plant for use in vehicle body components from 2024. The low-carbon primary aluminum from Rio Tinto’s hydro-powered operations in Canada, combined with recycled content, could generate a reduction of up to 70% in CO2 emissions compared to the BMW Group’s benchmark for aluminum.

The move replenished BMW’s efforts to combat climate change by reducing vehicle emissions throughout the lifecycle. In September 2021, the automaker vowed to cut vehicle lifecycle emissions by 40% by 2030 on 2019 levels, up from a previous goal of a third. To reach the target, the firm plans to raise the share of recycled and reusable materials used in manufacturing its vehicles from 30% to 50%. Moreover, it aims for a 20% reduction in supply chain emissions by 2030, compared to that in 2019. The recent collaboration between the two companies also involves deploying Rio Tinto’s blockchain-based sustainability solution for aluminum, START. Rio Tinto launched the program in 2021 to ensure supply chain traceability and provide customers with information about provenance and environmental, social, and governance (ESG) standards.

Sources:

https://www.reuters.com/markets/commodities/rio-tinto-enters-agreement-with-bmw-provide-hydro-produced-aluminum-2023-02-21/

https://finance.yahoo.com/news/rio-tinto-partners-bmw-low-124409829.html