Global Compact Case Study 2002 - BMW Group

May 2002 

updated 

February 2005 

BMW CleanEnergy Project. 

Global Compact Case Study 2002. 

BMW CleanEnergy Project 

The following summarizes the BMW Group’s ”CleanEnergy Project” which we 

submit to the Global Compact Learning Forum as our Best Practice Case Study. 

This case study reflects three of the Global Compact’s nine principles: 

Principle 7: Support a precautionary approach to environmental challenges 

Principle 8: Undertake initiatives to promote greater environmental 

responsibility; 

and most of all 

Principle 9: Encourage the development and diffusion of environmentally 

friendly technologies 

While the BMW Group is convinced that the example of best practice chosen 

also reflects Principles 7 & 8, we are most proud of the results produced 

regarding the development and diffusion of environmentally friendly technologies, 

encompassed in Principle 9 of the Global Compact. 

Introduction 

Mobility is life. Mobility offers the chance for a high standard of living, quality of life 

and economic strength. For the individual, mobility means personal freedom 

while for the economy it means prosperity. Mobility, or its resulting traffic, helps 

reduce the disadvantages emanating from this world’s inequalities, for example 

the unequal distribution of resources in the different regions, for the better of us 

all. Thus it is that mobility and freedom are closely linked. 

Mobility takes on many forms. For the BMW Group, today’s mobility is based on 

the automobile. It is our most important means of mobility – for the individual, the 

public and for the economy as a whole. All forms of mobility require energy. 

Today, and in the near future, this is the energy generated from fossil fuels: 

predominantly from crude oil. However, fossil energy has two crucial 

disadvantages: 

the supplies are finite - in the not too distant future a very large proportion of the 

energy needed in our society will have to come from renewable sources 

and 

when it is utilized (in the combustion process) carbon dioxide (CO 2 ) is produced 

which has an effect on the aggravation of the global climate situation (the 

natural ”greenhouse effect”). 

BMW Group



For these reasons, one objective has become consistently ever more important 

for the BMW Group as an automobile manufacturer: to abandon the 

consumption of finite energy sources, that means to switch to sustainable forms 

of energy and to reduce drastically CO 2 -emissions. 

The realization of this objective will call for an enormous economic, strategic and 

political strength that can only be mastered by a broad-based social alliance. This 

example of best practice for the United Nations Global Compact Learning Forum 

website shall be seen as another small step towards this alliance. 

What triggered the ”CleanEnergy Project”? 

Considering the abovementioned finite nature of fossil fuel resources and the 

aggravation of the global climate situation, the BMW Group started as early as 

the 70’s to think about how mobility (as a basic human need and a prerequisite of 

prosperity) can be sustainably provided in the future. This has led to a level of 

expertise that, in alignment with BMW’s reputation as a driver of innovation, 

culminated in the ”BMW CleanEnergy Project”. 

For the BMW Group, ”CleanEnergy” means closing the loop for zero CO 2 

emissions. The technical process for this is: water to hydrogen and back to water. 

When used in vehicles, hydrogen is converted back into vapour and returned to 

the atmosphere. One of the most important challenges will be the production of 

hydrogen from renewable resources such as wind, solar or hydro energy, this will 

transform our current economic system that is based on ”once-off consumption” 

of resources into one based on their reuse. At the BMW Group, using the 

detailed ”well to wheel” analysis process, we can ensure that we are not just 

transferring emissions from fuel consumption stage to fuel production stage. As 

we understand the CleanEnergy-System we feel responsible to ensure the 

implementation of production, distribution and application of hydrogen based on 

renewable energies. 

In addition to the obvious effect of strengthening the BMW brand in a highly 

competitive market, there is another side effect to this development: the BMW 

Group prepares itself for internal and external requirements expected to be even 

more stringent than current ones: e.g. the Kyoto Protocol 1997, the Association 

of European Automobile Manufacturers (ACEA) CO 2 self-commitment to the 

European Commission or the California Zero Emission Vehicle Legislation. 

For more information on the background of these developments please refer to 

BMW Group’s environmental policy at www.bmwgroup.com/responsibility. 




Further information on how the BMW Group seeks to reduce the use of nonrenewable 

resources in the area of design for the environment, with regard to 

production practices and concerning BMW Group’s approach to end-of-life 

vehicles please refer to the Sustainable Value Report, 

www.bmwgroup.com/sustainability. 

What actions have been taken? 

As the vehicles of the future will not be using the same fuels as today, BMW 

started preparing itself quite early for this challenge. For decades key BMW 

research projects have been anticipating this development – experimental 

vehicles designed for everyday use as well as series models with power units 

based on alternative fuels provide ample evidence of BMW’s development 

expertise. The following examples of actions taken represent just the main 

milestones of the many steps taken since BMW first started the quest for 

sustainable mobility: 

Shift away from fossil fuels via natural gas technology (BMW Group as the first 

European supplier of natural gas-fuelled series cars: the 316g Compact on the 

market in 1995) towards hydrogen technology (BMW Group is in the serial 

development of a production car with a hydrogen combustion engine which will 

be offered to customers during the production period of the current BMW 7 

Series). 

Networking with industry partners for developing a global sustainable (in other 

words ecological, social responsible and economically viable) hydrogen 

infrastructure. Further, the BMW Group has been supporting the global 

distribution of hydrogen and its application in a variety of mobile and stationary 

processes in order to facilitate a leading role in the field of hydrogen car 

technology. 

One such project is the ”VES Verkehrswirtschaftliche Energiestrategie” (TES 

Transport Energy Strategy). This joint initiative by the BMW Group and 

DaimlerChrysler with the German Federal Ministry of Transport, Building and 

Housing (including others such as ARAL, BP, General Motors, MAN, RWE, Shell 

and Volkswagen) was designed to craft a common strategy between government 

and both the automotive and energy industries for reducing the dependency on 

crude oil, optimising fossil resources use, and lowering polluting emissions 

especially CO 2 through replacement with alternative fuels on a large scale. This 

project also prepared field tests that included supply to customers. 




The ”Hydrogen Project Airport Munich” is the first fully automated public 

Hydrogen Filling Station at the Munich Airport. This project is designed to 

demonstrate the feasibility for potential customers and is financially supported by 

the Bavarian Ministry for Economy, Traffic and Technology. 

Along with nine partners and support from the European Commission, the 

BMW Group founded the ”European Integrated Hydrogen Project ” to develop a 

dual-approach strategy for hydrogen- top-down to provide assistance in framing 

the necessary legislation and bottom-up to develop the necessary technology. 

In 2001, the BMW Group set off with the full fleet of hydrogen cars on the 

CleanEnergy WorldTour. The CleanEnergy WorldTour concept is to globally 

raise awareness and build up a long-term stable political framework for a vision of 

a sustainable future, based on a hydrogen economy and society (as opposed to 

an oil-economy and society). Each location stop-over of the CleanEnergy 

WorldTour provided different focus depending on the location (e.g. possibility of 

hydrogen generation through renewable solar energy in Dubai, zero emission in 

Los Angeles, European political framework in Brussels). 

On an educational front, the BMW Group has implemented distribution of 

learning material for schools, which allows them to educate the students 

regarding sustainable energy and the possibilities about a future hydrogen-based 

economy. This material is currently available in German, English and Mandarin. 

Since 2003, the BMW Group displays tomorrow’s hydrogen mobility in the 

traffic centre of the Deutsches Museum in Munich. As a founder member of the 

traffic centre, the BMW Group underlines its commitment to the hydrogen 

technology in both an interesting and entertaining exhibition. 

Already in the year 2000, the cooperation between the Deutsches Museum and 

the BMW Group led to a large display of CleanEnergy in the framework of the 

EXPO project. 

In 2004, the BMW Group launched the CleanEnergy project in China. In 

conjunction with the Science & Technology Museum in Beijing, the BMW Group 

opened a CleanEnergy exhibition. It showed the complete hydrogen cycle and 

provided an interactive and informal means of experiencing and learning about 

the production, distribution and application of hydrogen. 

On September 19 th 2004, the hydrogen race car BMW H 2 R set up 9 records on 

the Miramas proving grounds. The homologation of the records is subject to FIA 

recognition. Highlighted by a top speed above 300 km/h, the BMW Group has 

clearly proven its conviction that hydrogen is able to replace conventional fuel 

without requiring the driver to make the slightest compromise in terms of 

dynamic, up-to-date performance. 




BMW's motive in setting up these records was not only to prove the power and 

performance the hydrogen combustion engine is able to offer. Rather, the 

reliability and durability of the technology used clearly demonstrates the 

supremacy of BMW in developing the hydrogen combustion engine to 

production standard. 

Together with German government representatives and project partners of the 

Clean Energy Partnership (CEP), the BMW Group opened the German capital’s 

first public hydrogen filling station at the end of 2004. The involvement in the 

CEP Berlin is part of the BMW Group’s involvement in setting up an 

infrastructure for hydrogen vehicles. 

All of these actions are not only taking place company wide, they extend beyond 

the borders of the BMW Group, reaching out in every area of the society – and 

are to be seen in the light of a very broad-based approach to environmental 

protection: For example BMW Group being the first automobile manufacturer 

since 1999 to have bespoken certified Environmental Management Systems in 

all plants worldwide. For other examples of the involvement of every associate 

within the BMW Group as well as e.g. our suppliers please refer to BMW Group’s 

Sustainable Value Report at www.bmwgroup.com/sustainability. 

But those actions mentioned above are not where it stops: The Board of 

Management has decided to follow on the results of these actions into the 

product development process to produce series models with hydrogen engines 

whilst at the same time developing the necessary infrastructure. The target we 

have set for ourselves is to bring an hydrogen 7 Series onto the market within the 

production cycle of the present model - this can be seen more as a revolution 

towards hydrogen instead of an evolutionary step towards hydrogen! 

Who was involved? 

Here a few examples of the partners in the various facets of the CleanEnergy 

project: 

Industry partners include: 

in the ”VES Verkehrswirtschaftliche Energiestrategie” (TES Transport Energy 

Strategy) the BMW Group together with ARAL, BP, DaimlerChrysler, General 

Motors, RWE, including the German Federal Ministry of Transport, Building and 

Housing. 




In the Pilot Project ”Clean Energy Partnership” (CEP) to set up the hydrogen 

infrastructure (production, distribution, application) involving the BMW Group 

together with ARAL/BP, DaimlerChrysler, Linde, General Motors, Ford and 

others, supported by the German Federal Ministry of Transport, Building and 

Housing. In the ”Hydrogen Project Airport Munich” the BMW Group together 

with ARAL, Bayerngas, Linde, MAN, Mannesmann, MTU, Proton, Siemens, E- 

ON Energie as well as the State of Bavaria. 

In the ”European Integrated Hydrogen Project EIHP” the BMW Group together 

with Air Liquide, BP, DaimlerChrysler, Det Norske Veritas, Ford, Messer 

Griesheim, Norsk Hydro, Shell, Volvo and Raufoss. 

Consultancies include: 

TÜV Süddeutschland Holding AG, LBST Ludwig Bölkow Systemtechnik, 

Forum für Zukunftsenergien and others. 

Universities and other Research Institutes include: 

FfE Forschungsstelle für Energiewirtschaft, 

Institute for Mobility Berlin and others. 

Others: 

The BMW Group is in constant contact to third parties through its participation in 

different working groups and pursues continuous contacts to politicians and 

governmental organizations. 

One might ask how BMW Group deals with the competitive business-tobusiness 

issues that may arise from such a network of contributing partners. The 

answer for us at the BMW Group is quite simple: The implementation of a new 

economy based on hydrogen necessitates a paradigm shift. The first steps in this 

process concerning the change of energy production and supply are for the 

benefit of all parties involved, so this is not so much a competitive environment at 

this point in time. 

This of course might not apply for other partners such as e.g. energy suppliers. 

To answer this question on their behalf one might state that it is important to 

remain a player in this new challenge and thereby ensure future market presence 

– but even for them competition is not so much an issue. 




How is progress measured? 

To keep track on the results achieved so far the BMW Group follows up on 

internal milestones and review points within the project plan, as well as the 

normal gateways in the automobile process development management. In 

addition, the BMW Group regularly conducts market research to assess projectrelated 

trends in society. As one of the outcomes a shift of perception can be 

noticed: BMW Group’s corporate image improved with regard to innovation, but 

also concerning environmental responsibility. 

A status report of the BMW CleanEnergy project as well as the next mid-term 

goals such as the availability of a hydrogen powered model of the new 7 Series 

for the market or the implementation of hydrogen filling stations can be obtained 

at www.bmw.com/cleanenergy. 

Costs and benefits 

With regard to costs one must note that, as we speak, we are in the transition 

phase ”from lab to industrial development process”. For the BMW Group this 

project is part of a long-term strategic investment providing evidence for mobility 

in the future. Therefore it is clear that at the end of the day the return must justify 

the investment as in every other business. 

A lot of research has been done with regard to the benefits of such a technology, 

e.g. first quantifications of possible emission reductions were researched in the 

TES (Transport Energy Strategy): This initiative had the objective to define a 

reliable fuel supply with significant CO 2 -reductions, in more detail 

satisfy at least 30% of Europe’s road-vehicle requirements for a period of 50 

years, 

reduce traffic-related CO 2 -emissions in the entire chain ”well-to-wheel” at least 

20% for alternatively fuelled passenger cars, 10% for alternatively fuelled 

commercial vehicles, 

maintain acceptable fuel and vehicle costs. 

Under those prerequisites it was established with which amount of CO 2 

emissions and for which costs hydrogen can be generated through renewable 

energies. Now depending on the degree of substitution of today’s fossil fuel such 

as petrol by hydrogen different scenarios were developed, e.g. starting from 

2,5% via 15% within 10 years up to 30% in 2050 (see ”TES - An Initiative for 

Tomorrow’s Fuel”, in ”Energies of Change - The Hydrogen Solution”, Editor 

Carl-Jochen Winter, Gerling Akademie Verlag, 2000, Munich, Germany). 




What have we learned? 

One thing the BMW Group learned from this research is: The public demand is 

very high for government and policies to create stable and reliable framework 

conditions for such an innovative approach to a sustainable mobility for the 

future. 

Besides the normal challenges that occur in such a project that includes partners 

which are partly competitors, the key technical challenges remaining are 

concerning the implementation of the infrastructure. One of the challenges being 

the so-called ”chicken-or-egg-discussion”: Whereas the oil industry will not 

commit to building the hydrogen infrastructure without the commitment of the 

car manufacturers to introduce a significant amount of hydrogen-fuelled vehicles 

to the market, in return the automobile industry will not commit to produce such 

vehicles in large numbers without having the necessary infrastructure to provide 

fuel. However all industries involved require certain long-term stability with regard 

to the political framework to be able to plan for the decades ahead. 

The biggest obstacle still to overcome is likely to be the costs. One could 

compare the development stage of hydrogen as a fuel with the development of 

the combustion engine at the time of its first application in an automobile. On the 

one hand hydrogen as a fuel for automobiles is very much in its infancy and on 

the other hand the current infrastructure is completely implemented to support 

fossil fuels. This means that only with a broad alliance of all parties involved - 

research, production, finance, insurance and policy can a shift in technology be 

achieved, which will be a feasible and convenient alternative for our customers. 

Another thing that we learned about the challenges and successes in working to 

diffuse this technology came as we went along with the BMW CleanEnergy 

Project: From our research activities as well as from the different awareness 

actions like discussions, presentations, exhibitions, brochures, requests for 

information and last but not least the BMW CleanEnergy WorldTour we learned 

that there is an immense need for information about this technology. This lead us 

to create – together with educationalists – didactic learning material for schools, 

describing the whole context of the CleanEnergy-System. This material is 

currently available in German, English and Mandarin language versions. 




Key lessons which could be useful to other companies: 

We hope that the BMW CleanEnergy Project as a Best Practice case study, 

which highlights both the enormous potential for change as well as the 

challenges ahead, provides many lessons for other companies. Hopefully other 

companies may also gain information from this case study, which will motivate 

them to support our or other comparable initiatives. 

Certainly, some of the main learning points include: 

the high degree of networking with partners: e.g. oil industry, energy suppliers, 

development partners, suppliers, politicians, 

practicing open communication with all parts of society involved, thereby 

generating public awareness, creating motivation and commitment in many 

areas, 

enabling technology transfer - especially for significant, even still confidential 

cutting-edge technologies. 

Even more so, this applies as well to all mechanisms facilitating knowledge and 

technology transfer successfully inside the company. 

Conclusion 

In the introduction of this case study the BMW Group stated the fact that one 

objective became more and more important for the BMW Group as an 

automobile manufacturer - to abandon the consumption of finite energy 

sources, switch to sustainable forms of energy and reduce CO 2 emissions. In 

order to achieve this, ”carbon reduction” of the fuel is key to a sustained longterm 

reduction in CO 2 – the less carbon a fuel contains, the less CO 2 is 

generated during combustion for the same amount of energy. 

A further reduction in the amounts of other legally limited exhaust components 

is a welcomed side effect. On this point hydrogen is the ideal fuel since it does 

not contain any carbon at all. Above that it is available in almost infinite quantities 

as a chemical constituent of water and can be separated out, stored and 

transported on a large scale. There are therefore no environmentally relevant 

side effects of using hydrogen obtained through regenerative processes. 

Hydrogen obtained through a regenerative process such as wind, solar or hydro 

energy will transform our current ”once-off consumption” economic system into 

one based on the reuse of resources. 




This provides a secure basis for both the economy where jobs are depending on 

transport and for personal mobility which allows for the freedom of the individual – 

all this without any negative effects on the climate. Regenerative production of 

hydrogen will therefore make an important contribution to ”sustainable mobility”. 

Energy supply, transport and traffic are not only of national, but also of international 

importance. The gradual implementation of a stable hydrogen-based system as an 

alternative to our current conventional fossil fuel based economic system can only 

take place on a global scale and requires the necessary infrastructure. 

This is why the BMW Group is looking for partners worldwide e.g. in the 

automotive industry, oil industry and on the political level that want to engage with 

us on this process. In cooperation with its industry partners, the BMW Group 

intends to ensure that a comprehensive network will be established in the near 

future. The BMW Group is nearly ready to begin series production of vehicles that 

can run on hydrogen. 

A prerequisite of this is that all partners share the same vision and are convinced of 

the path forward. Therefore the BMW Group is keen to continually have our 

strategies analysed and judged by experts. It is precisely due to this desire for 

transparency and openness that the BMW Group has chosen the CleanEnergy 

Project to be submitted to the Learning Forum of the United Nations Global 

Compact.

Global Compact Case Study 2002 - BMW Group

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