The Life Cycle of a Car Environmental Commendations Document Progress

The Life Cycle of a Car Environmental Commendations Document Progress

Always One Step Ahead Volkswagen s goal in the next few years is to become not only the most successful but also the most eco-friendly automobile manufacturer in the world. It s not that we ve just discovered environmental protection at Volkswagen on the contrary: as long ago as 1947 we had already introduced systematic product recycling. It just went by a different name back then. We called it the remanufacturing some say reconditioning of used parts. Today it s standard practice for every Volkswagen plant around the world and for our Technical Development department to have a certified Environmental Management System in place. And needless to say, to ensure that we reach our goal, our cars too represent a high environmental standard. But for a long time now, Volkswagen has been going one step further... Our environmental activities start well before a car goes into production. For many years, the only measure of a car s environmental impact was what came out of the exhaust pipe. But those days are long gone. Today we need to consider the entire life cycle of the vehicle. Because if you re going to develop targeted innovations, you first have to know where, along the whole life cycle, improvements are going to have maximum effect. This is where Life Cycle Assessments come in. In these Life Cycle Assessments or LCAs for short, we analyse the creation of new vehicles and drivetrains, components and materials from the initial design sketch via their production and service life, all the way to recycling. That way, even our production processes come under the environmental microscope before we use them. To make at least part of these efforts visible for our 2 Environmental Commendations

We can assess everything Günter Damme, Head of Environment, Volkswagen Group talks about Life Cycle Assessments Günter Damme, what benefits do Life Cycle Assessments bring? The topic of environmental protection has long since become firmly anchored at Volkswagen. The aim of creating new products that are better than their predecessors is a permanent fixture. And the Technical Development department has always been tasked with ensuring that this is the case. By drawing up Life Cycle Assessments we have made it possible to analyse the entire process from start to finish. They also show us where there is room for improvement. Why did we introduce LCAs in the first place? Because they tell us whether the measures we take actually lead us in the right direction. And what are the drawbacks to a Life Cycle Assessment? Like the benefits, the drawbacks relate to the interpretation of the findings. It s always a question of deciding what is more important: water consumption or CO 2 emissions or soil acidification... That s very difficult and I think it s an aspect we can improve on. If we go a step further and include other aspects in Life Cycle Assessments financial or social aspects, for example then we have to define comparable metrics for these as well. That s the challenge facing LCAs. Are there any processes or technologies for which an LCA cannot be drawn up, or only to a limited extent? For everything that happens within Volkswagen we can draw up an LCA. I m not aware of anything at all where it wouldn t work. It s just a question of the degree of difficulty. Things only get critical when we add-in something from the outside, where we re not familiar with the production process, or when we re dealing with technologies that are still in the early stages of development and the database is still inadequate. When that is the case, we use LCAs as environmental management tools. They can help us deduce, for example, how much energy the production process can consume, if the product is going to represent progress in ecological terms as well. customers, we issue what we call Environmental Commendations. They document the findings of the Life Cycle Assessments verified in each case by independent experts which we ve drawn up for individual models or technologies. Today, LCAs are not only a proven environmental management tool but also an important one; a tool that will ensure we reach the goals set out in Volkswagen s Environmental Policy. Can you imagine LCAs ever being prescribed by law? We know that legislators are thinking about such steps. The vital thing for us is to make sure we are not caught napping. That s why we re already keeping an eye on future developments, so that we re well prepared and can perhaps even help shape the process. Politicians are keen on using such instruments. If legal requirements and threshold values don t deliver the required progress, the next step for them could be to try using LCAs. But LCAs should not be misused for such purposes. Can Life Cycle Assessments deliver even more in future? Let me put it this way: our ultimate goal is to deliver the optimum product in ecological terms. And LCAs are a fine way of documenting the fact that we re on the right road. Will LCAs one day shape the future of mobility? I don t think LCAs will ever displace the power of the market. Environmental Commendations 3

Everyone Needs Good Guidance In 1995, Volkswagen replaced its original Environmental Guidelines with a Corporate Environmental Policy. As practical implementation of this policy can only be achieved through ongoing dialogue with the workforce and its representatives, a Factory Agreement on Environmental Protection was also concluded with the Company Works Council. The Environmental Policy of the Volkswagen Group laid down in 1995 continues to provide the framework for the environmental activities of Volkswagen and the other Group brands and companies, such as Audi, Lamborghini, Skoda or the Volkswagen Bank. In the preamble, it says: Volkswagen develops, manufactures and markets motor vehicles worldwide with the aim of safeguarding personal mobility. The company accepts responsibility for the continuous improvement of the environmental compatibility of its products and for the increasingly conservative use of natural resources and energy, with due regard to economic aspects. Accordingly, the company makes environmentally efficient, advanced technology available 4 Environmental Commendations

Basic Principles 1. It is the declared aim of Volkswagen in all its activities to restrict the environmental impact to a minimum and to make its own contribution to resolving environmental problems at regional and global level. 2. It is Volkswagen s aim to offer high-quality automobiles which take equal account of the expectations of its customers with regard to environmental compatibility, economy, safety, quality and comfort. 3. In order to safeguard the long term future of the company and enhance its competitive position, Volkswagen is researching into and developing ecologically efficient products, processes and concepts for personal mobility. 4. Those responsible for environmental management at Volkswagen shall, on the basis of the company s Environmental Policy, ensure that in conjunction with suppliers, service providers, retailers and recycling companies, the environmental compatibility of its vehicles and production plants is subject to a process of continuous improvement. 5. The Volkswagen Board of Management shall, at regular intervals, check that the company s environmental policy and objectives are being observed and that the Environmental Management System is working properly. This shall include evaluation of the recorded environmentally relevant data. worldwide and brings this technology to bear over the full life cycle of its products. At all its corporate locations, Volkswagen works hand-in-hand with society and policy-makers to shape a development process that will bring sustainable social and ecological benefits. 6. Providing frank and clear information and entering into dialogue with customers, dealers and the public is a matter of course for Volkswagen. Cooperation with policy-makers and the authorities is based on a fundamentally proactive approach founded on mutual trust and includes provision for emergencies at each production site. 7. In keeping with their duties, all Volkswagen employees are informed, trained and motivated in respect of environmental protection. They are under obligation to implement these principles and to comply with statutory provisions and official regulations as these apply to their respective activities. Environmental Commendations 5

The Goal Is: Be Better than Before The Environmental Objectives of the Technical Development department help set Volkswagen apart from the competition to the benefit of its customers. For a long time now, Volkswagen has assigned absolute priority to the environmental impacts of its vehicles. With this in mind, we have defined goals designed to ensure the sustainable development and production of our models. These form part of the environmental strategy of the Volkswagen brand and serve as guidelines for all regions, worldwide. The Environmental Objectives concern three focus areas: 1. Climate protection Volkswagen is striving to reduce the fuel consumption of its vehicles and the related greenhouse gas emissions. Through these measures and by supporting fuel-efficient styles of driving, we aim to make a significant contribution to climate protection. 2. Resource conservation A conservative approach to the use of resources is prescribed across the Group. The key focal points here are to ensure the high recyclability of the materials used and to use renewable and secondary raw materials. We also develop and make available alternative powertrain technologies that enable the use of alternative fuels and other energy storage systems, in line with regional circumstances. 3. Healthcare The aim here is to further reduce the exhaust and interior emissions of our vehicles and cut exterior and interior noise levels. In addition, we aim to avoid the use of hazardous materials and pollutants, wherever possible in accordance with the most stringent materials legislation in the world. Volkswagen s objective is to develop each model in such a way that, in its entirety, it presents better environmental properties than a comparable predecessor. The ongoing improvement of our vehicle fleet in terms of environmental impacts and resource conservation forms part of Volkswagen s corporate policy, reflecting our awareness of our responsibility towards customers, society and the environment. Environmental Objectives of the Technical Development department of the Volkswagen brand To attain the highest possible environmental objectives, the Technical Development department is intensifying the continuous improvement of Volkswagen products in respect of environmental compatibility and resource conservation. Our activities and processes are designed for sustainability and to ease the load on the environment. In this way we aim to live up to our responsibilities towards our customers, society and the environment. In line with this approach, we have derived the following objectives: 1. Climate protection reduce greenhouse gas emissions reduce fuel consumption in the driving cycle and over the vehicle s service life with the customer be fuel-efficiency leader in each class of vehicle support fuel-efficient styles of driving contribute to/assess eco-compatible traffic management measures 2. Resource conservation improve resource efficiency pursue best possible recyclability and identification of the materials used use renewable and secondary raw materials develop and make available alternative powertrain technologies enable the use of alternative fuels 3. Healthcare reduce regulated and non-regulated emissions avoid the use of hazardous and harmful materials minimise interior emissions including odours attain best possible exterior and interior noise levels In future, we will develop each model in such a way that, in its entirety, it presents better environmental properties than its predecessor. As we do so, we will always make sure that the entire life cycle is taken into account during the development of our products. The environmental objectives set out above also serve to differentiate us from the competition to the benefit of our customers. In addition, we aim to place selected models in various environmental rankings. 18 July 2007 Member of the Board of Management Volkswagen Brand Environment Officer, Product Volkswagen Brand 6 Environmental Commendations

Focus on healthcare We re running our own healthcare reform For Volkswagen, healthcare means cutting emissions, avoiding the use of hazardous substances and pollutants, minimising interior emissions and reducing interior and exterior noise levels. All our models outperform the emission thresholds laid down in the Euro 5 exhaust standard. Some already undercut the target levels for Euro 6. Engine downsizing and locating catalytic converters close to the engine reduce harmful emissions from our TSI engines. And in the interior, we avoid using types of plastic that give off formaldehyde. Focus on resource conservation There s only one Planet Earth For Volkswagen, resource conservation means improving resource efficiency, targeting the best possible recyclability by exploiting the latest recycling technologies, and using renewable raw materials. That s why, for example, we use long-life oil in our cars and fit long-life light bulbs, install maintenancefree oil particulate filters and dispense with hydraulic fluid by using electromechanical power steering systems. The pollen, air and oil filters in our cars are mostly made of paper and in the Golf, for example, cotton alone accounts for 5.6 kilos of raw material. In all, secondary raw materials today make up 40 percent of a vehicle by weight, and 95 percent of those materials are metals. Focus on climate protection It s quite warm enough For Volkswagen, climate protection means cutting fuel consumption and greenhouse gas emissions by offering our BlueMotionTechnologies in every model series, forging ahead with downsizing our TDI and TSI engines and reducing drag and friction for example by designing more aerodynamic bodywork and using low-rolling-resistance tyres. We also drive forward lightweight design by using weight-saving materials such as plastics, aluminium or magnesium, and innovative production processes such as hot stamping. Environmental Commendations 7

Mastering the Material Mix To arrive at vehicles and technologies that present better environmental properties than their comparable predecessors, Volkswagen puts its faith in Design for Environment. Design for Environment starts at the very beginning of the product creation process, which is to say in the Technical Development department (TE) of the Volkswagen brand. But what exactly do we mean by Design for Environment and how do we set about designing something with the environment in mind? To achieve our goal of being better than before TE defined a set of Environmental Goals for itself. These goals are subject to ongoing review and are regularly brought into line with the latest environmental legislation, regulations and voluntary commitments. When we are about to start planning a new model, the rule is that the new arrival must consume less fuel and generate lower emissions than the current model. Its production must consume less raw materials and its components must be at least 95 percent recoverable. Given their knowledge of the past 100 years and more of automobile manufacturing, our engineers are well aware of which factors have the biggest impact on fuel 8 Environmental Commendations consumption and which materials are particularly hard to recycle. Among the key considerations here are weight reduction, optimum aerodynamic drag, material segregation, and the number of different parts. So we analyse and evaluate our current models and components and look at which parts or assemblies have already proved themselves and how we can further improve them. Where can we make something lighter, for example, without impacting on safety? Or how can we make use of renewable raw materials without impairing durability or functionality? Or which material mix can we use without encountering processing problems? There are so many factors to consider. Our development engineers are assisted here by a large number of controlling and computing tools that place an immense volume of data at their disposal. With the aid of these data, we design parts, modules or whole vehicles and simulate their properties and behaviour in the widest variety of challenging conditions. Needless to say, our engineers also make use of the

We need to look outside the box Design for Environment is above all a question of the necessary expertise and qualified personnel. We discussed the subject with Cornelia Wiedemann, Head of Product Planning Mid-Fullsize, and Dr. Alexander Wittmaier, Head of Wind Tunnel and Aerodynamics at Volkswagen. What requirements does Design for Environment (DfE) have to meet? Wittmaier: We aim to focus on the future. What kind of vehicles will our customers want to drive in 10-15 years time? How can we make car bodies more aerodynamic? Or what will a recycling plant look like 20 years from now? Our customers want cars that are quiet and safe, but that will also get them around fast. They also need to be fuel-efficient, have minimum impact on the environment and be affordable. Then you have to consider that the requirements for, say, Brazil and Sweden are going to be different: on the one hand you re dealing with heat and humidity and on the other with freezing cold temperatures. Wiedemann: That s why we ve defined a process that starts five years before the scheduled product launch with our very first thoughts and ideas about the new model. With the aim of ensuring environmentally compatible product design we draw up product specifications from three different viewpoints: market, technology and profitability. We use these specifications to derive fields of action, which we then work our way through together with the business units in a simultaneous engineering approach that spans the five-year period leading up to the launch of the car. latest scientific findings and the state of the engineering art. Among other things, they draw on Life Cycle Assessments (LCAs). LCAs clearly and unerringly document many properties of materials and ingredients. As a result, we are able to select components and production processes that benefit the environment for the development and production of our vehicles. All of these factors are flowed into the development of a new vehicle. They help make engines more economical and quieter, chassis lighter and bodywork more aerodynamic. To find out exactly which environmentally compatible technologies have gone into the latest Volkswagen models, turn to pages 10 and 11. How does Volkswagen ensure it continues to attract and retain qualified staff for Design for Environment? Wittmaier: We stay in close touch with the universities and keep them informed of our current needs. Volkswagen offers students internships and work-experience semesters so they can acquire some initial experience of working in the auto industry. We also set up programmes like StiP, an integrated degree and training scheme. This involves students undergoing training at Volkswagen in parallel with a course of study at Ostfalia University of Applied Sciences. They gain insights into the world of work and into the company, and we give them regular feedback. Wiedemann: We also make use of bonding, though job fairs, for example. At these events we re in direct contact with the students and can offer them the chance to write their dissertation or thesis at the company or maybe even discuss direct entry. We deliberately push the company at these fairs. But returning to DfE, there are other, related topics that also impact on product design for us like what will the traffic scenario of the future look like? And what solutions does the automobile industry have to offer? We really need to look outside the box, here. Environmental Commendations 9

Fuel-saving measures on the Passat BlueMotion Every Volkswagen comes with a wide range of features designed to reduce environmental impacts to a minimum. They include high-efficiency engines and gearboxes, aerodynamic body design and the use of innovative materials and components. Multifunction display with gear recommendation The intelligent engine management system helps the driver select the most efficient gear for the current driving situation the recommended ratio is shown in the multifunction display. Start/stop system The engine switches off automatically whenever the vehicle comes to a standstill and the driver shifts into neutral. To move away again, the driver simply dips the clutch and the engine restarts automatically. The start/ stop system can be deactivated by pressing a button on the centre console. Higher gear ratios The manual gearboxes in the BlueMotion and Blue- Motion Technology models have optimised gear ratios for improved fuel economy. 10 Environmental Commendations

Efficiency-optimised electric modules Permanent electrical consumers like the Traffic Information Memory, the anti-theft alarm or the radio remote control system draw less idle current from the battery. Optimised aerodynamics The optimised aerodynamics of the Blue- Motion models improve airflow and have significant benefits for fuel economy. The specially designed underbody tray, for example, helps cut drag. The aerodynamics are also enhanced by spoiler lips on the boot lid and forward of the rear wheel arches, a specially channeled airflow to the radiator grille, enhanced airflow to the brakes, and breakaway lips on the tail lights. Braking energy recovery (regenerative braking) The alternator converts the energy produced when braking or on overrun into electricity, which is stored in the battery. This electricity is used later on to supply electrical consumers reducing the amount of power that would otherwise have to be taken away from the engine to run the alternator. Long-life components These include long-life and LED lights and maintenance-free particulate filters and catalytic converters. Low rolling-resistance tyres Low rolling-resistance tyres reduce fuel consumption and therefore CO 2 emissions without compromising safety. Environmental Commendations 11

Focus on the Full Story What is the full extent of the environmental impact of a car? And which phases of its life cycle contribute the most? Life Cycle Assessments help Volkswagen deliver the right answers. Extraction and production of materials In our efforts to keep the environmental impact of our products to a minimum, we look at every aspect of their life cycle. We analyse the development and evolution of new vehicles, components and materials in detail, from the first ideas and design sketches, through the manufacturing and service life phases to final disposal. Recycling Reduced emissions and fuel-saving measures are good as far as they go, but in today s world sustainable mobility demands a much broader approach. After all, environmental impacts are not just produced while driving. Long before the vehicle ever hits the road, raw materials must first be extracted, and components must be manufactured. Intelligent production Raw materials production, vehicle manufacturing and end-oflife disposal all have impacts on society and the environment. Because in all these phases, energy and resources are consumed and emissions are released into the atmosphere, the soil and water. This is why, when we develop a new product, one of the first things Volkswagen thinks about is how the materials can be recycled and reutilised at the end of the product s useful life for example as a secondary raw material for use in new products. Just how important it is to look at the full story when assessing a vehicle s environmental impacts becomes clear when we consider that emissions are produced at every stage in the product s life cycle, be it manufacturing, the service life or recycling. Of course, the impacts of the different phases vary widely. For example, while the bulk of carbon dioxide emissions almost three quarters of total life cycle CO2 emissions, to be precise are generated during the vehicle s service life, emissions of this greenhouse gas at the recycling stage are negligible. 12 Environmental Commendations The life of a car begins long before it first takes to the road. The first step in the cycle is the development stage, when the engineers decide which innovative technologies such as intelligent materials or fuel-efficient powertrains to fit in the future vehicle. The manufacturing phase, too, starts long before the marriage of the engine and body on the assembly line. In a Volkswagen Life Cycle Assessment, the manufacturing phase takes into account not only in-house vehicle manufacturing operations but also all those operations which take place upstream of Volkswagen s own factories. Because before a car can be built, raw materials such as iron ore, sand and petroleum must first be extracted from the earth. Some of these materials are then processed into the steel and aluminium from which the vehicle bodywork and engine components will be made; others are processed into plastics, glass and rubber. At all these stages energy is consumed, which also results in emissions. Further energy transport energy is then consumed when these raw materials and components are shipped by road and rail to Volkswagen from our many suppliers. All these journeys consume fuel and electricity, and produce emissions.

Vehicle manufacturing Service life How much fuel a new car consumes will depend above all on its weight, and on external resistances such as aerodynamic drag. These are factors that Volkswagen can influence by appropriate styling, choice of materials and construction methods. Aerodynamically designed bodywork for example can do a lot to cut drag. The same goes for the use of new joining techniques, or underbody trays specially designed to smooth under-car airflow. Lightweight design, too, has an influence on environmental performance throughout the product life cycle. To take one example, many body components are produced using a hot stamping process specially developed by Volkswagen. Although this technique consumes more energy than conventional processes, thereby increasing CO2 emissions per vehicle at the manufacturing stage, across the life cycle as a whole it actually has net environmental benefits (see box). The reason is because hot-stamped components are stronger than conventional ones, and so less steel is needed to produce them. This, in turn, means that less energy is consumed at the steel manufacturing stage. What s more, these components are lighter than their conventional counterparts, which reduces the weight of the vehicle body and thus saves fuel on every trip. Improved environmental footprint: with hot stamping Hot stamping of sheet metal components for the Passat uses more energy than conventional stamping processes, increasing CO2 emissions by approximately 22 kilograms per vehicle produced. However, due to the greater strength of hot-stamped components, less steel is needed to produce them, resulting in a weight saving per vehicle of approximately 20 kilograms which automatically cuts fuel consumption. Using hot-stamped steel reduces the total lifecycle CO 2 emissions of every Passat by an average of 174 kilograms compared with the predecessor model. Environmental Commendations 13

It s down to the driver, too The biggest contributor to the total life cycle environmental impact of a vehicle is its service life while it s out on the road. For a mid-sized vehicle, this phase accounts for almost three quarters of total life cycle CO2 emissions. That s over three times more than the manufacturing phase. Volkswagen cars normally show a big reduction in driving emissions between current and predecessor models. The biggest improvements over outgoing models are achieved by our vehicles with Blue MotionTechnologies. Volkswagen assumes an average lifetime mileage for its vehicles of 150,000 kilometres. Since this service life accounts for the largest single fraction of the vehicle s total life cycle carbon dioxide emissions, it follows that any technological improvements affecting this phase will have a correspondingly significant impact. To put it another way, the most effective way to reduce total life cycle emissions is to reduce driving emissions. When we reduce drag and improve engine efficiency, for example, we also ensure that the vehicle consumes less fuel and produces lower emissions. So it s during the vehicle s service life that the success of our Design for Environment measures is most apparent. But that s not all, because this is the phase where drivers themselves have an opportunity to influence the environmental impact of their vehicle, for example by adopting a proactive and defensive style of driving. Anybody can learn to drive in a more eco-friendly way, simply by taking one of our fuel-saver courses. Under the motto Drive differently the easy way to save fuel, Volkswagen stages these courses all over Germany in cooperation with the German Society for Nature Conservation (NABU). Or you can check out our fuel-saving tips on the Internet, at www.mobility-and-sustainability.com Whenever Volkswagen succeeds in reducing the fuel consumption of its vehicles, it also automatically reduces the environmental impacts upstream, at the fuel production and supply stage. Because if a vehicle consumes more fuel, then more crude oil has to be extracted and transported to the refineries, processed into fuel and then transported by truck to the filling stations. The more fuel the refineries have to supply to the filling stations, the more energy they consume and the more waste products they generate. So if we all do our bit to reduce vehicle fuel consumption, we will also be helping to reduce energy consumption and emissions at the fuel production and supply stage too. 14 Environmental Commendations

Much too good to scrap Looking ahead and planning for the future is second nature to Volkswagen. Our responsibilities for vehicle-related environmental protection don t stop when our cars come to the end of their useful lives. Most components of an end-of-life vehicle can now be recovered. The VW Si-Con process, co-developed by Volkswagen, is a particularly impressive example of the resource savings that can be achieved in this way. Thanks to this technique, shredder residues which were previously sent to landfill can now be turned into new raw materials. In 2006, this process won us the European Business Award for the Environment and the Environmental Award of the Federation of German Industry (BDI). So what exactly is the VW SiCon process and how does it work? For a start, this process enables us to recycle a full 95 percent of a vehicle by weight. The end-of-life vehicle is first drained of fluids, then a range of components which are capable of being recycled and used in new products, as so-called secondary raw materials, are removed. Any parts not subject to statutory endof-life dismantling requirements, or which cannot be cost-effectively remanufactured into replacement parts, are put through the shredder. Unlike conventional recycling systems, the VW SiCon recycling process is also capable of obtaining secondary raw materials from non-metallic shredder residues. A life cycle assessment has shown that the VW SiCon technique is always preferable from an environmental point of view to an approach based on separate removal of plastic components. Incidentally, an environmental impact comparison between the different life cycle phases shows that the recycling phase generates lower emissions than any other phase. CO 2 emissions for this phase are negligible compared with total life cycle emissions, or with emissions for the service life and manufacturing phases. The VW SiCon process achieves an average reduction in environmental impacts in the different impact categories of between six and 29 percent over comparable recycling processes. Also, the use of secondary raw materials in new components is a further step towards minimising the overall life cycle environmental impact of Volkswagen s vehicles and components. Of course, it goes without saying that components made from these materials must fulfil the same high Volkswagen quality standards as those made from primary raw materials. Thanks to our advances in this field, in the sixth-generation Golf such secondary raw materials now make up around 40 percent of the vehicle by weight. 95 per cent of these materials are obtained from recycled metals alone. Environmental Commendations 15

Four Steps for the Environment As we ve seen, cars have an impact on the environment no matter whether they are out on the road or not. So we never stop working to improve that environmental impact. To help measure our progress, we formulated the Environmental Goals of the Technical Development department at Volkswagen. In a word, every new model should have less impact on the environment than its predecessor. With this in mind, we are boosting the efficiency of our engines and developing advanced production processes. And to check that we do indeed meet the environmental goals we set ourselves, we draw up complex Life Cycle Assessments. The purpose of a Life Cycle Assessment not just at Volkswagen is to explain in detail all the data on energy consumption, emissions and the other environmental impacts generated during the production of vehicles or technologies and/or during related processes. It is only when we draw up an assessment of all the individual phases i.e. manufacturing, service life and recycling that we can arrive at an evaluation and compare different vehicles and technologies. Our Life Cycle Assessments describe the environmental impacts associated with a product precisely and quantifiably and thereby enable the more exact description of its environmental profile based on comparable data. In each case, Volkswagen obtains a certificate of validity from an independent certification body (e.g. TÜV) to confirm that our Life Cycle Assessments are based on reliable data and that the methods used to draw them up comply with the requirements of the DIN EN ISO 14040 and 14044 standards. 1 Life Cycle Inventory 2 Environmental impacts 3 Comparison of environmental profiles 4 Certification There are four parts to each Life Cycle Assessment We define the goal and the framework for the LCA. Which product or process is to be assessed? Which individual aspects are to be studied? 1 This is followed by a data collection process called a Life Cycle Inventory. Which raw materials, energy forms and materials are consumed for the product or process? What volume of emissions and waste are generated during the entire product lifetime? What do the prevailing background conditions look like? 2 3 4 We decide for which categories of environmental impact the influences of the emissions and waste are to be analysed. What are the consequences for the environment and where are they particularly intensive? And from this we derive an environmental profile. We compare the environmental profiles in terms of the five environmental impact categories: global warming, photochemical ozone creation, ozone depletion, acidification and eutrophication potential. The data generated are used to create the Life Cycle Assessment with findings that are verified by independent experts. 16 Environmental Commendations

1 Life Cycle Inventory Every last bolt is analysed Life Cycle Assessments can be drawn up for just about any product or process. When we ve decided, for example, which vehicle we want to assess, the first step is to prepare a Life Cycle Inventory. In other words we set about collecting all kinds of data on every last component and process step. As the word inventory suggests, a Life Cycle Inventory is all about facts and figures. So we collect all the important facts over the entire life cycle of the vehicle and back them up with figures. For each step in the process we determine the volume of raw materials and energy that goes into its production and the production of the fuel it requires. And we carry this process over into the 150,000 kilometres that make up the vehicle s assumed service life. The fuel consumption and the resultant emissions of carbon dioxide during this phase are worked out based on the legally prescribed New European Driving Cycle (NEDC). In addition, we calculate the amount of energy consumed during the dismantling and/or recycling of the vehicle parts. Together, all these calculations enable us to compute all airborne and water-borne emissions, soil pollutants, waste and wastewater generated during the entire life cycle of the vehicle. The data collection process is based on the vehicle parts lists, material and weight information stored in the company s own Material Information System (MISS), technical datasheets and drawings, as well as the threshold values for regulated emissions in line with the current EU regulations. These are joined by processing-related data taken from the GaBi computer database or drawn up in conjunction with the production plants, suppliers or industrial partners. Environmental Commendations 17

2 Environmental impacts Making the impact on the climate visible All emissions, waste and wastewater generated during the lifetime of a car impact on different aspects of the environment. The greenhouse gas carbon dioxide (CO 2), for example, affects the climate. Greenhouse gases promote the warming of the Earth s atmosphere by the sun s rays, leading to a worldwide increase in average temperatures and to climate change. This is what s known as global warming. So the amount of CO 2 generated by a car, and not just while it s out on the road, has a global warming potential that can be precisely calculated. That s why global warming potential is one of the environmental impact categories we consider. To arrive at a conclusion about the potential environmental impacts of a particular vehicle, in the second part of a Life Cycle Assessment Life Cycle Impact Assessment the various material flows from the manufacturing, service life and recycling phases are assigned to the relevant environmental impact categories. This involves defining an indicator substance for each of these categories. Carbon dioxide (CO 2), for example, is the indicator substance for global warming potential. Then all the other substances that also contribute to global warming are converted to CO 2 equivalents using what are called equivalence factors (see box). What exactly are CO2 equivalents? The indicator substance for the greenhouse effect is carbon dioxide (CO 2). All substances that contribute to the greenhouse effect are converted into CO 2 equivalents through an equivalence factor. Methane (CH 4), for example, has a greenhouse potential 25 times higher than CO 2. In concrete terms this means that the emission of 1 kg of CO2 and 1 kg of CH4 leads to a net greenhouse effect of 26 kg of CO2 equivalents. All emissions that contribute to the greenhouse effect are measured in this way. Along with global warming potential, we analyse four other environmental impact categories in our Life Cycle Assessments: photochemical ozone creation potential (which impacts on local air quality, not least in the form of summer smog), ozone depletion potential (concerning depletion of ozone in the Earth s atmosphere), and the acidification and eutrophication of water and soil. Photochemical ozone creation potential describes the formation of what are known as photooxidants, such as ozone, which are formed from a variety of pollutants (e.g. HC, CO, NO x) in conjunction with direct sunlight and can act as an irritant gas for plants, animals and humans alike. Acidification potential describes the impact of acidifying substances (e.g. SO 2, NO x,) on soil and water that can cause acid rain, for example, or fish mortality. Each of these four environmental impact categories also has its own indicator substance. 18 Environmental Commendations

The goal simply must be attained 3 Comparison of environmental profiles Once we have taken the entire life cycle of a car, component or process into account, there can be only one outcome: the current version is better than its predecessor. If that is not the case, we continue to improve and refine until we reach that goal in the interests of the environment. The results of the Life Cycle Assessment are depicted in the shape of a material composition analysis, a Life Cycle Inventory and a Life Cycle Impact Assessment for the product or process concerned. The material composition analysis shows the materials of which the car being studied is made up. The results of the Life Cycle Inventory show which amounts of which emissions e.g. carbon dioxide (CO 2), carbon monoxide (CO), sulphur dioxide (SO 2), nitrogen oxides (NO x), hydrocarbons (NMVOC) and methane (CH 4) are generated over the life cycle of the car. They also reveal how much primary energy was consumed. These data are presented for each of the models compared and broken down by the three life cycle phases: manufacturing, service life and recycling. In addition, for the service life of the vehicle we distinguish between the environmental impact of the fuel production and supply process and the direct driving emissions. The Life Cycle Inventory data enables us to depict the potential impacts on the environment, comparing the environmental profiles of the respective vehicles for the five environmental impact categories: global warming potential, photochemical ozone creation potential, acidification potential, ozone depletion potential and eutrophication potential. We also compare the environmental impacts over the entire life cycle and for each individual phase. Comparison of impacts on global warming potential CO2 equivalents in t 35 Manufacture Service life [150,000 km] Recycling 30 25 20 15 10 5 0 Diesel models Predecessor Current model A Current model B Petrol models Predecessor Current model A Current model B Environmental Commendations 19

A Lifetime Achievement Award When a Life Cycle Assessment confirms that the vehicle, technology or process analysed has met the defined environmental goals, then they qualify for an Environmental Commendation. Through the Environmental Commendation, Volkswagen documents ecological progress in a vehicle or technology compared to its predecessor. Environmental Commendations provide our customers, shareholders and other stakeholders inside and outside the company with detailed information about how we are making our vehicles, components and processes more environmentally compatible and what we have achieved in this respect. Along with facts and figures on the models and technologies assessed, Environmental Commendations also include information about key environmental activities at Volkswagen, such as BlueMotionTechnologies, fuel-saver courses or new recycling processes, as well as about our Environmental Management System or the Volkswagen Fuel and Powertrain Strategy. Each Environmental Commendation is based on a Life Cycle Assessment (LCA) in line with the detailed description set out on the preceding pages. Naturally enough, Volkswagen considers it important that the results achieved in the LCA should not only meet the environmental goals we set ourselves but should also be verified and confirmed by independent experts. Because in addition to being transparent, readily comparable and verifiable, the findings and evaluations in the LCAs have to match up to internationally recognised quality standards. Procedures for a critical review of comparative LCAs are laid down in the ISO 14040 standard. This involves commissioning external experts who need to be familiar with the requirements of an LCA and must command the appropriate scientific and 20 Environmental Commendations

4 Certification technical competence. They are tasked with determining whether or not the LCA meets the requirements in terms of methodology, data collection, evaluation and reporting, and complies with the prescribed principles. As a rule, the Life Cycle Assessments of our vehicles and processes are verified by external experts from the German technical inspectorate TÜV, an organisation that stands for independent critical reviews, competence and respectability, as well as enjoying broad-based acceptance in the fields of politics and business, and in society at large. In addition, the auditors from TÜV conduct such verifications of LCAs not only for Volkswagen but also for other companies, mainlyfrom the chemical, motor vehicle and automotive supplier sectors, as well as companies from energy-intensive branches of industry. Environmental Commendations 21

Every One of Us Can Help As the Life Cycle Assessments we ve drawn up for our vehicles clearly prove, a car makes its biggest impact on the environment when it s out on the road. While Volkswagen continues to invest heavily in making its cars even more fuel-efficient, every single driver can reduce his or her environmental footprint by relatively simple means. Because one third of the fuel consumption of a car can be influenced by an intelligent approach to driving simply by changing your style of driving and treating your car right. To find out how that works, take a look at the Think Blue. pages on the Internet. That s where you ll find our fuel-saver tips, among other things. But there s more to Think Blue. than that: it stands for the core values of the Volkswagen brand innovative, providing enduring value and responsible. Think Blue. is also about involving our customers in our activities themed around an ecologically sustainable approach. Because every one of us can help, without having to do without in any way, and not just when we re in the car. To that extent, Think Blue. is the company s overarching mindset that shapes not only our existing product communications effort but also a wealth of 22 Environmental Commendations

Volkswagen Environmental Commendations The New Transporter Environmental Commendation This space is reserved for the Environmental Commendations from Volkswagen. You can obtain a copy of these six-page brochures from The Golf your Volkswagen dealer. Environmental Commendation The Caddy Environmental Commendation The Golf Environmental Commendation www.volkswagen.com Reduced photochemical ozone creation potential (improvement of local air quality)* Diesel models: -7% (TDI*), -8% (BlueMotion Technology*), -9% (BlueMotion*) Petrol models: -25% (BiFuel*), -18% (TSI*), -19% (BlueMotion Technology*) Global warming potential less CO2 emissions overall* Diesel model: -15% Petrol models: -5% or -8% (BlueMotion Technology) Reduced photochemical ozone creation potential (improvement of local air quality)* VW_Golf_200x280_GB_RZ_261110.indd 1-3 Diesel model: -5% Petrol models: -2% or -2% (BlueMotion Technology) Reduced driving emissions (CO2)* Diesel model: 120 g/km compared with 148 g/km (predecessor) Petrol models: 149 g/km or 142 g/km (BlueMotion Technology) compared with 158 g/km (predecessor) Reduction of fuel consumption through tyres with optimised rolling resistance smart lightweight design (hot stamping, used of aluminium parts) Resource conservation through use of long-lasting components (long-life and LED lamps, maintenance-free particulate filters and catalytic converters) longer service and oil-change intervals Global warming potential less CO2 emissions overall* Delivery Van -9% (1.6 TDI**) or -18% (1.6 TDI BlueMotion Technology**) Startline -8% (1.6 TDI**) or -15% (1.6 TDI BlueMotion Technology**) Reduction of fuel consumption through new 4-cylinder TDI engines transmission ratios selected for optimised fuel consumption Reduced driving emissions (CO2)* Delivery Van 147 g/km (1.6 TDI**) or 129 g/km (1.6 TDI BlueMotion Technology**) compared to predecessor s 164 g/km Startline 149 g/km (1.6 TDI**) or 134 g/km (1.6 TDI BlueMotion Technology**) compared to predecessor s 164 g/km Ident-No. 107310 Volkswagen AG Group Research Environment Affairs Product P.O. Box 011/1774 38436 Wolfsburg Germany This brochure was printed on FSC -certified paper. FSC stands for Forest Stewardship Council and is a worldwide sign of ecological and socially responsible use of forests. This brochure was printed on FSC-certified paper. FSC stands for Forest Stewardship Council and is a worldwide sign of ecological and socially responsible use of forests. Additional savings in models with BlueMotion Tech nology through tyres with optimised rolling resistance engine with stop-start system regenerative braking (recuperation) wheel spoilers Resource conservation through Use of long-lasting components (maintenance-free particulate filters) Longer service and oil-change intervals Use of renewable raw materials (e.g. for filter materials) The Polo Environmental Commendation Other highlights Recycling type approval successfully completed Your Volkswagen Dealer * Applies to the actual vehicles assessed in this test series ** See inside for fuel consumption and emissions figures RZ_VW_Caddy_GB_200x280_RZ_100910.indd 1-3 13.09.10 13:39 December 2010 Art. No. 015.1240.04.18 Resource conservation through use of long-lasting components (maintenance-free particulate filters and catalytic converters, long-life lamps) longer servicing and oil change intervals no hydraulic fluid required as a result of electro Volkswagen AG Group Research mechanical power steering Environment Affairs Product P.O. Box 011/1774 lifetime oil fill for transmission 38436 Wolfsburg The Passat Environmental Commendation Germany Reduced driving emissions (CO2)* Eco-friendly materials October 2010 Diesel models: 119 g/km (TDI*), 107 g/km (BlueMoArt. No. 015.1240.05.18 use of renewable materials (e.g. for filters and floor tion Technology*), 99 g/km (BlueMotion*) compared www.volkswagen.com matting) with 135 g/km (predecessor) Petrol models: 149 g/km (BiFuel*), 134 g/km (TSI*), Passat Description, Environmental optimized efficiencies components withwith electricalcompared full profile over the environmental Generally improved 121 g/km (BlueMotion Technology*) * Applies to the actual vehicles assessed in this test series. See inside for fuel low-friction oils vehicle life cycle compared with the predecessor model 176 g/km (predecessor) consumption and emissions figures reduced drag and friction and reduced emissions fuel consumption due to lower www.volkswagen commercial vehicles.com Reduction of other driving emissions (CO, NOx, particulates) through Euro 5 exhaust emissions standard instead of Euro 4 The Polo Environmental Commendation Environmental Description, Golf Global warming potential less CO2 emissions overall* Diesel models: -10% (TDI*), -17% (BlueMotion Technology*), -21% (BlueMotion*) Petrol models: -18% (BiFuel*), -20% (TSI*), -27% (BlueMotion Technology*) September 2010 Art. No. 065.1192.44.18 Generally improved environmental profile over the full vehicle life cycle compared with the predecessor model due to lower fuel consumption and reduced emissions Reduced photochemical ozone creation potential (improvement of local air quality)* Delivery Van -6% (1.6 TDI**) or -8% (1.6 TDI BlueMotion Technology**) Startline -5% (1.6 TDI**) or -7% (1.6 TDI BlueMotion Technology**) December 2010 Art. No. 015.1240.03.18 Reduction of fuel consumption through tyres with optimised rolling resistance BlueMotion Technologies (start-stop system, regenerative braking) smart lightweight design (hot stamping, use of aluminium and magnesium components) electrical components with optimized efficiencies reduced drag and friction 38436 Wolfsburg Germany Environmental Description, Caddy Volkswagen AG Group Research Environment Affairs Product P.O. Box 011/1774 38436 Wolfsburg Germany Generally improved environmental profile over the full vehicle life cycle compared with the predecessor model due to lower fuel consumption and reduced emissions www.volkswagen.com Environmental Description, Polo The Passat Environmental Commendation Generally improved environmental profile over the full vehicle life cycle compared with the predecessor model due to lower fuel consumption and reduced emissions Global warming potential less CO2 emissions overall* Diesel models: -13% (1.2 TDI*), -15% (1.6 TDI BlueMotion Technology*), -20% (BlueMotion*) Petrol models: -12% (1.4 MPI) or -18% (1.2 TSI*) Reduced photochemical ozone creation potential (improvement of local air quality)* Diesel models: -6% (1.2 TDI*), -6% (1.6 TDI BlueMotion Technology*), -7% (BlueMotion*) Petrol models: -14% (1.4 MPI), -16% (1.2 TSI*) Reduced driving emissions (CO2)* Diesel models: 99 g/km (1.2 TDI*), 96 g/km (1.6 TDI BlueMotion Technology*), 87 g/km (BlueMotion*) compared with 119 g/km (predecessor 1.4 TDI*) Petrol models: 135 g/km (1.4 MPI) or 124 g/km (1.2 TSI*) compared with 159 g/km (predecessor 1.6 MPI*) Your Volkswagen Retailer This brochure was printed on FSC -certified paper. FSC stands for Forest Stewardship Council and is a worldwide sign of ecological and socially responsible use of forests. Eco-friendly materials use of renewable raw materials (e.g. for filter materials) avoidance of components containing PVC or heavy metals Reduction of fuel consumption through tyres with optimised rolling resistance smart lightweight design (use of high-strength and extremely high-strength steels, aluminium and magnesium components and composite materials) Volkswagen DSG dual-clutch transmissions (petrol models) electrical components with optimized efficiencies BlueMotion Technologies (start-stop system, regenerative braking) Ident-No. 107310 This brochure was printed on FSC -certified paper. FSC stands for Forest Stewardship Council and is a worldwide sign of ecological and socially responsible use of forests. Resource conservation through use of long-lasting components (maintenance-free particulate filters and catalytic converters, long-life lamps) lifetime oil fill for electro-hydraulic steering Eco-friendly materials use of recycled plastics (e.g. for sound deadening materials) use of renewable materials (e.g. for filters and floor matting) * Applies to the actual vehicles assessed in this test series. See inside for fuel consumption and emissions figures 29.11.10 13:11 Your Volkswagen Retailer VW_Polo_200x280_GB_RZ_261010.indd 1-3 * Applies to the actual vehicles assessed in this test series. See inside for fuel The Caddy Environmental Commendation Volkswagen AG Group Research Environment Affairs Product P.O. Box 011/1774 29.11.10 12:40 Your Volkswagen Retailer consumption and emissions figures 06.10.10 16:36 VW_Passat_200x280_GB_RZ_011010.indd 1-3 7 Well-oiled for impressive savings. Use low-viscosity oil. 8 Keep it sleek. Cut aerodynamic drag. other ecologically sustainable 2 litres brand-related activities. 5% To find out more about Think Blue. visit www.volkswagen.de/thinkblue Extra fuel consumption per 100 km Less fuel consumption The sooner the engine is well-lubricated the sooner it will produce fewer emissions. This is especially important when starting from cold and on short journeys. Good engine oil must therefore do one thing in particular: circulate quickly. A good aerodynamic shape is the key to low fuel consumption, particularly at high speeds. The body of your Volkswagen has therefore been designed to minimise the surface area exposed to the wind. However, roof attachments such as cycle racks and roof boxes nullify this advantage. Low-viscosity oils are unbeatable in this respect. They can cut fuel consumption by up to 5 % compared with conventional oils. This means the slightly higher purchase price is almost as swiftly recouped as the oil is circulated in the engine. Consequently, almost every Volkswagen leaves the factory supplied with low-viscosity oils. Now we don t wish to say anything against ski racks and suchlike in principle only against their being used unnecessarily. A 33 % rise in aerodynamic drag will increase fuel consumption by as much as 2 l/100 km at 160 km/h! All that remains for you to do is to make sure the engine always has sufficient oil, observe the oil change intervals and, when topping up, use oils approved by Volkswagen for your vehicle. Then nothing will stand in the way of eco-friendly motoring! Savings potential in city traffic 12 With figures like these, it s certainly worth thinking again: it definitely makes sense to remove the roof rack between two skiing or mountain bike weekends the car s aerodynamic qualities will then be restored for your day-to-day trips. Work it out for yourself you ll find it s worth it! Savings potential on the motorway in city traffic on the motorway 13 Environmental Commendations 23

Volkswagen AG Group Research Environment Affairs Product P.O. Box 011/1774 38436 Wolfsburg Germany December 2010 Art. No. 015.1240.07.18 www.volkswagen.com This brochure was printed on FSC -certified paper. FSC stands for Forest Stewardship Council and is a worldwide sign of ecological and socially responsible use of forests.