122 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Sustainability Statement This significantly reduces CO2e emissions, even if it increases electricity consumption. The plant in Debrecen sources all of its production-related electricity needs from electricity from renew- able sources. These decarbonisation levers are helping the BMW Group to achieve its overall targets in a manner which is proportionate to the total volume of emissions allocated to each scope. In the supply chain, the biggest lever for CO2e-reducing measures is the use of electricity from renewable sources, while the second biggest lever is the use of secondary materials and raw materials from CO2e-reduced production processes (for ex- ample steel and aluminium). Expanded innovation and infra- structure management process for logistics measures are reduc- ing emissions related to logistics. During the use phase, the big- gest lever is the electrification of the product portfolio across all brands. In addition, other drive technologies such as hydrogen are being further developed and will be gradually integrated into the product range. The BMW Group is also implementing effi- ciency improvements for conventional drivetrains and continu- ously increasing the use of electricity from CO2e-free sources for vehicle charging. The BMW Group expects the largest contribution to achieving the 2030 CO2e emissions reduction target – approximately 65% in absolute terms – to come from the electrification of the vehicle fleet (automobiles), which is allocated to the Scope 3 category Use phase. The majority of the remaining reductions will be achieved by implementing measures in the supply chain and lo- gistics. The LCA (Life Cycle Assessment) comparison of current all-elec- tric vehicles shows improvements that have already been real- ised. The next generation of battery technology in the NEUE KLASSE vehicles is expected to reduce emissions in the supply chain for the battery cell approximately by another third. By using electricity from renewable sources in selected process steps, CO2e emissions can be reduced further over the entire life cycle. Compared to comparable vehicle concepts with an internal com- bustion engine, Scope 3 CO2e emissions can be reduced by up to three quarters. Regardless of the drivetrain technology, the decarbonisation of the supply chain in particular makes significant contributions to achieving the target. The continuously growing proportion of electric vehicles in the BMW Group’s range may cause emissions in the supply chain to increase in the short to medium term. The main reason for this is the higher product carbon footprint (PCF) of the high-voltage battery compared to conventional drivetrain concepts. In the supply chain and in the component manufactur- ing process, the BMW Group therefore relies on electricity from renewable sources at selected stages of the process, in addition to using recycled materials and technical measures that have been developed to limit the increase in CO2e in the supply chain. High reduction contributions result from agreements with raw material suppliers for aluminium and precious metals as well as from suppliers of high-voltage battery cells. These measures are already being implemented with the current battery generation. With the use of upcoming battery generations, these effects are to be further expanded. For example, by using materials with CO2e-reduced manufacturing processes or higher proportions of recyclates, CO2e emissions can be reduced by up to 80% for al- uminium and up to 70% for steel. This includes the use of direct reduction processes in steel production. For other material groups such as glass and plastics, the use of electricity from re- newable sources has a particularly beneficial effect on the CO2e footprint of the supply chain. The BMW Group takes into account the trends in key customer segments, drivetrain technologies, and forecasts for the decar- bonisation of supply chains and energy generation when opera- tionalising emission targets across all three scopes. CO2e credits (certificates) are not factored in when these targets are set and monitored - Only actual reduction measures are counted. The target achievement is subject to uncertainties, some of which cannot partially or cannot be completely influenced by the BMW Group. For example, future deliveries of battery electric ve- hicles (BEV) as a proportion of total sales may not be in line with current assumptions. The availability of appropriate infrastruc- ture and incentives to purchase BEVs will have an impact on de- mand. It became clear in the reporting year that the BEV market remains fragmented worldwide. Different markets are develop- ing at different speeds. External factors such as the removal of incentives are having a significant impact. The flexibility of the BMW Group’s production network puts it in a position to react ef- fectively to these developments. Higher overall sales volumes or a higher proportion of combustion-engine vehicles would make additional supply chain decarbonisation measures necessary in order to achieve the CO2e targets. Geopolitical risks can also have a significant impact on the BMW Group’s ability to achieve climate targets. External market-specific developments in the supply chain may also lead to the decarbonisation of energy-intensive upstream stages in particular taking a different course than planned. Not all factors that impact decarbonisation can be directly influenced, particularly in the production of CO2e-intensive raw materials such as steel and aluminium and the subsequent value creation stages in the supply chain. Furthermore, the ambitious forecasts of the International Energy Agency (IEA) – which are used to cal- culate emissions in the use phase of electrified vehicles – may be missed if, for example, the use of renewable energy does not pro- gress quickly enough. In contrast, additional actions, such as the provision of CO2e-free charging for customers, may result in an improvement in downstream Scope 3 emissions (Use phase). Fi- nally, changes in legally prescribed measurement and assess- ment procedures may have an impact on the BMW Group's tar- gets and their achievement. Implemented actions and metrics for a holistic CO2e reduction The overarching CO2e targets for all scopes are the basis for the specific actions that are an integral part of the corporate, product and topic-specific strategies (including Purchasing, Develop- ment, Production and Sales). Specific targets and implementa- tion steps are derived from the overarching goals of the Com- pany. The actions taken to reduce emissions are identified, assessed, approved and implemented individually for each scope. Particu- larly as regards the own locations (Scope 1 and 2), these actions involve the gradual substitution of fossil fuels and making contin- uous increase in energy efficiency to reduce energy require- ments. To this end, emissions related to production are primarily reduced through energy efficiency actions and the use of