2021 Volvo XC40 Recharge
2021 Volvo XC40 Recharge

Closing loops: how Volvo plans to reduce its impact on the planet

By Pritesh Ruthun Time of article published Apr 22, 2021

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JOHANNESBURG - Volvo Cars has announced that it’s aiming for annual savings of SEK 1 billion and reductions of 2.5 million tons in carbon emissions from 2025 using circular business principles.

Supporting the company’s long-term goal of becoming a circular business by 2040, Volvo Cars will create closed material loops for emission-heavy materials such as steel and aluminium. It will also remanufacture, repair, reuse and refurbish parts.

Inside the Volvo battery assembly plant in Ghent

“Volvo Cars has one of the most ambitious climate plans in the car industry, and if we are to reach our goals, we need to embrace the circular economy,” said Anders Kärrberg, head of global sustainability at Volvo Cars. “This requires us to rethink everything we do and how we do it. We put a strong focus on integrating sustainability into the way we think and work as a company, and we are making it as important as safety has always been to us.”

Anders Kärrberg, head of global sustainability at Volvo Cars

To become a circular business by 2040, Volvo Cars is convinced that every part in its cars should be designed, developed and manufactured to be used and reused, either by the company or its suppliers. By focusing on resource efficiency and retaining the value created in materials and components for as long as possible during the life cycle, the company wants to optimise the use of materials, components and cars, and eliminate waste in the process. This is said to lead to financial savings and new revenue streams, as well as significantly lowering its environmental impact.

Laying the groundwork for sustainability

Volvo Cars already remanufactures parts such as gearboxes and engines to make better use of materials and reduce emissions.

In 2020, around 40 000 parts were remanufactured, saving nearly 3 000 tons of CO2 emissions. By 2025, Volvo Cars aims to more than double its remanufacturing business. To ensure that valuable material can be kept in circulation, the company recycled 95% of its production waste last year. This included 176 000 tons of steel, avoiding the generation of nearly 640 000 tons of carbon dioxide.

The rise of new businesses around EVs

New business models such as giving electric vehicle batteries a second life are important from a circular business perspective. By using batteries in energy storage applications outside of cars, new revenue streams and cost savings can be realised while also extending the batteries’ life cycles.

Together with suppliers and partners, Volvo Cars is exploring the potential in second-life applications for its high-voltage batteries. A current example is the collaboration with BatteryLoop, a company within the Swedish Stena Recycling Group that reuses batteries from the automotive industry.

Volvo is exploring the second life of its EV batteries

BatteryLoop and Volvo Cars use batteries from electrified Volvo cars for a solar-powered energy-storage system. From this month, the system will power charging stations for electrified cars and electric bikes at Swedish hygiene and health firm Essity’s business centre outside of Gothenburg. In a similar project, Volvo Cars, Comsys AB, a Swedish cleantech company, and Fortum, a European energy company, are engaged in a commercial pilot project. It aims to increase supply flexibility at one of Fortum’s hydropower facilities in Sweden while contributing to a second life for electric vehicle batteries at the same time. Battery packs from Volvo plug-in hybrid cars will serve as a stationary energy storage unit, helping to supply so-called “fast-balancing” services to the power system.

Through these and other projects, Volvo Cars is investigating how batteries age when reused in second-life applications that have significantly less aggressive cycling compared to in-car use.

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