Mercedes-Benz and Hydro Join Forces in the Brazilian Amazon to Foster Long-Term Development Along Their Aluminum Supply Chain

• Corridor Program: Mercedes-Benz and Hydro extend their strategic partnership to support the long-term development of communities along the aluminum supply chain in the state of Pará, Brazil.
• Just Transition: Lighthouse project to create positive impacts for both people and nature throughout aluminum supply chain in Brazil.
• Joint efforts: Mercedes-Benz, Hydro and local NGOs form a steering committee to enhance community involvement in mining area.
• Decarbonization: In 2022, Hydro and Mercedes-Benz agreed to work together on a technology roadmap for producing low-carbon aluminum.

At the New York Climate Week, Mercedes-Benz and Hydro elevate their strategic partnership by enhancing the vertical integration of their aluminum supply chain and launching the long-term Corridor Program for a sustained development in the Amazon. Following their joint decarbonization roadmap Mercedes-Benz and Hydro signed a Memorandum of Understanding (MoU) to collaborate with local NGOs and partners in the state of Pará, Brazil. Their goals include promoting human rights, generating income for local communities, fostering biodiversity and low-carbon value chains in the Brazilian Amazon.

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Mercedes-Benz and Hydro join forces in the Brazilian Amazon to foster long-term development along their aluminum supply chain (Graphic: Business Wire)

“In managing our supply chains responsibly, we concentrate on three goals: The decarbonization of our products, the promotion of human rights and the focus on more sustainability over the vehicles' entire life cycle. The joint Corridor Program manages to connect all three. In close cooperation with our partners, it has the potential to push the vertical integration of our supply chain to a new level.”

Dr. Gunnar Güthenke, Head of Procurement and Supplier Quality Mercedes-Benz Cars

The Corridor coalition aims to create a positive impact for the communities along the 244-kilometer bauxite slurry pipeline operated by Hydro, which runs through seven municipalities in the state of Pará, Brazil – from the Paragominas bauxite mine to the Alunorte alumina refinery in Barcarena. The goal is to engage local communities along the aluminum supply chain and empower them to improve their economic, ecological, and social well-being. Mercedes-Benz is part of the program's governance, helping to establish necessary structures and build knowledge for sustainable risk management in raw material supply chains.

The Corridor initiative reflects the company’s commitment to a "Just Transition": Prioritizing people and human rights along with responsible policies and community engagement as the decarbonization of the Mercedes-Benz Group’s business model leads to significant changes in technology, products, and workforce. The program has the potential to become a blueprint for the involvement of local communities and getting vertically engaged in vulnerable mining areas.

“The joint program with Hydro in Brazil serves as a model: We are sourcing aluminum with reduced CO₂-emissions and are firmly committed to uphold human rights along our supply chain. In doing so, we are putting our sustainable business strategy into practice. A special focus is placed on engaging with the local communities. This example demonstrates that decarbonization measures and social considerations can go hand in hand for a successful sustainable transformation.”

Renata Jungo Brüngger, Member of the Board of Management of Mercedes-Benz Group AG. Integrity, Governance & Sustainability

“We are excited to further develop our strategic partnership with Mercedes-Benz, expanding our collaboration beyond low-carbon product development to create positive social and environmental impact in the Amazon. Working together, we aim to lift sustainability throughout our shared value chain, from mine to end-consumer product, while fostering economic opportunities and biodiversity conservation in the communities where we operate.”

Eivind Kallevik, President and CEO in Hydro

The program has been rethought from the ground up and is built on a fundraising concept. While some projects, like scaling up local farming (Tipitix) or sewing initiatives (Estilo), are already underway, the Corridor coalition aims for long-term value creation. Local communities living around the pipeline will identify and prioritize projects, ensuring they directly benefit their regions. This approach empowers local stakeholders to foster ownership and align with the project's overarching goals. This way Corridor intends to achieve improvements for the local people. Hence, data-based tracking of effectiveness will be a crucial part of the governance.

The program will be anchored on three strategic pillars:

• Economic Development: Identifying obstacles to the economic development and finding solutions to improve the conditions for raw material value chains in the territory.
• Social Development: Large scale approach to social development, targeting basic human needs, well-being, and opportunities. The program will pursue practical ways to implement improvements to the condition of life in the communities, both in urban centers but mainly in rural areas (e. g. ongoing TerPaz program).
• Environment and Biodiversity conservation: Working on the conservation of biodiversity in the Amazon, required to ensure positive gains for people and nature. The program will identify opportunities to reduce degradation of forests as a first target but with an ambition to contribute to the regeneration of nature.

The projects will operate in strict compliance with Brazilian laws and regulations. Moreover, the program will be implemented by a multi-institutional project organization composed by the companies and organizations. Partners include (but not limited to) Hydro Brazil, Alunorte, MPSA, Mercedes-Benz, IPAM*, IMAZON**, CEA***, Hydro Sustainability Fund and BCG.

About Mercedes-Benz

Mercedes-Benz is dedicated to responsible raw material sourcing and advancing global mining standards. Key to this is ensuring low participation barriers for mining communities and indigenous peoples as well as effective certification schemes. The company is actively involved in various raw material initiatives and has extended partnerships with Bon Pasteur in the Democratic Republic of Congo and Terre des Hommes in India to support human rights. Mercedes-Benz aims to merge commercial success with responsible actions towards the environment, people, and society across the entire value chain.

Moreover, Mercedes-Benz will consistently create the preconditions for a net carbon-neutral**** new vehicle fleet by 2039. The company focuses on reducing CO₂ emissions and preserving resources through its "Design for Environment" approach. Mercedes-Benz collaborates with partners to research sustainable materials and promote circularity.

About Hydro

Hydro is a Norwegian leading aluminum and energy company that builds businesses and partnerships for a more sustainable future. Hydro is committed to leading the way towards a more sustainable future, creating more viable societies by developing natural resources into products and solutions in innovative and efficient ways. Hydro is through its businesses present in a broad range of market segments for aluminum, energy, metal recycling, renewables and batteries, offering a unique wealth of knowledge and competence.

* IPAM Amazonia

** Instituto do Homem e Meio Ambiente da Amazônia

*** Centro de Empreendedorismo da Amazônia

**** Net carbon-neutral means that carbon emissions that are not avoided or reduced at Mercedes-Benz are compensated for by certified offsetting projects.

Further information on Mercedes-Benz Group is available at:

media.mercedes-benz.com and group.mercedes-benz.com

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