GREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

05/10/2012 www.renault-trucks.com

AlternConsult 266, Place Ernest Granier

34 000 Montpellier – France http://www.alternconsult.fr/

Reporting year: 2012 Reference year: 2011

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 2 05/10/2012

Table of contents:

1. Legal context ................................................................................................................ 3

2. Identification of the Legal Entity ................................................................................. 3

3. Key stages .................................................................................................................... 6

4. Definition of the selected greenhouse gas emission headings ................................ 7

5. Consolidated results of the GHG audit for Renault Trucks SAS ............................. 11

6. Action plan .................................................................................................................. 13

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 3 05/10/2012

GREENHOUSE GAS EMISSIONS REPORT In accordance with article 75 of law No. 2010-788 dated 12 July 2010 on the French commitment to the environment (ENE)

1. Legal context

Article 75 of law No. 2010-788 dated 12 July 2010 on the French commitment to the environment (ENE) creates a new section in Chapter IX of Title II of Part II of the Environmental code under the title "Greenhouse gas emissions report and territorial climate-energy plan" (Bilan des émissions de gaz à effet de serre et plan climat-énergie territorial). Article 75 is a reflection of the two commitments based on the Grenelle Law on the environment:

• On the one hand, Commitment No. 51 lays down the principle of the widespread use of greenhouse gas emission audits. Greenhouse gas emission audits are intended to diagnose the greenhouse gas emissions of public and private parties, in view of identifying and deploying means of reducing these emissions.

• On the other hand, Commitment No. 50 lays down the principle of the widespread use of territorial climate-energy plans. The widespread use of these plans is implemented in parallel with the creation of the regional climate, air and energy schemes defined in Article 68 of the law of 12 July 2010, and which will serve as a strategic framework and assistance tool for the preparation of territorial climate-energy plans.

The greenhouse gas emissions report is made public and updated every 3 years. This report is mandatory for legal entities operating under private law and employing over 500 people in mainland France or over 250 people in overseas regions and départements. The initial report must be drafted before 31 December 2012 and transmitted electronically to the prefect for the region within whose scope the legal entity has its registered office or its main site before this date. The report will focus on the activities of the legal entity subject to tax in the French territory.

2. Identification of the Legal Entity

The legal entity is RENAULT TRUCKS.

Company name: RENAULT TRUCKS SAS

NAF code: 2910Z

SIREN code: 954 506 077

Chairperson: Mr LÖW Heinz-Jürgen

Person in charge of follow-up work: Sandrine THOMAS, Environment & Quality management

The following SIRET numbers are associated with the legal entity:

BOURG-EN-BRESSE, siret 954 506 077 00377 BLAINVILLE SUR ORNE, siret 954 506 077 00559 LIMOGES VPRL, siret 954 506.077.01201 SAINT-PRIEST, siret 954 506 077 00120 AXLES plant, Saint Priest, siret 954 506 077 01029

Address: 99 route de Lyon, 69806 Saint-Priest Cedex Address of the website where the greenhouse gas emissions report can be accessed: http://corporate.renault-trucks.com/en/environment/

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 4 05/10/2012

RENAULT TRUCKS is a French company which develops, assembles and sells industrial and utility vehicles, specifically, a range of distribution vehicles (MIDLUM; PREMIUM Distribution), long distance vehicles (PREMIUM Long distance; MAGNUM) and construction vehicles (PREMIUM Lander; KERAX). The company also provides services relating to vehicles and transport (assistance, maintenance, fleet management tools, etc.). The company has been part of the AB Volvo group since 2001. The company operates 5 sites located in France:

• Lyon site - 6,4501 people – partially run from Vénissieux, an industrial assembly site for engines (9 and 11 litres) metal stamping facilities and a spare parts store, and partially run from Saint-Priest, an administrative site shared by central management, sales divisions, design, R&D and the training centre. The site is broken down into two main sub-sites: the sub-site in Vénissieux, constructed in 1915, and the sub-site in Saint-Priest, which dates back to the 70s. The total surface area of the site represents approximately 140 hectares, with approximately 100 buildings. Detailed breakdown:

o Support divisions – 3,558 people - Support divisions consist of tertiary premises distributed across Saint Priest and Vénissieux (i.e. all those Divisions and Services required for the operation of the site, including technical, catering, medical, human relations, accounting, IT and maintenance services, etc.) and research and development activities. The Support division also includes the site at Valbonne (vehicle test tracks)

o Volvo Parts Logistic Lyon (VPLL) - 671 people - Acceptance, storage, order

preparation and dispatch of spare parts and consumables for the maintenance of commercial vehicles: stores and offices.

o Engine plant (UM) - 716 people - Machining and assembly of engines for commercial vehicles, industrial applications, marine applications, public construction works and the preparation of gearboxes (hub).

o PWT PD (Product Development, Purchasing, etc.) - 755 people - Research and development for the commercial vehicle drive trains: Test workshops + Offices with Purchasing departments and after-sales support

o Stamping plant - 212 people - this centre develops and produces stamped metal parts for the cabs and chassis assembled in the CV bodywork assembly plants. The centre also produces sub-assemblies and paints parts and sub-assemblies.

• Axles plant (AP) at Saint Priest - 538 people - Assembly of axle components. Painting of these components prior to dispatch to CV assembly plants.

• Bourg en Bresse site (BG) – 2,009 people - The Bourg en Bresse site is an assembly and finishing site for civilian commercial vehicles (Magnum, Premium and Kerax trucks)

• Volvo Parts Reman Limoges site (VPRL) - 123 people - VPRL renovates civilian and military sub-assemblies, gearboxes and engines.

1 Personnel include permanent, fixed-term and interim contracts

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 5 05/10/2012

• Blainville sur Orne site (BLV) – 2,356 people - The Renault Trucks site at Blainville sur Orne produces cabs for commercial vehicles, vehicles in the Midlum range, mechanical components and wiring harnesses. This site is located across the municipalities of Blainville sur Orne, Colombelles and Hérouville Saint Clair.

The regulatory greenhouse gas emissions report (BEGES) therefore covers all RENAULT TRUCKS activities over one reference year. The reporting year and reference year have been defined as 2011, i.e. the BEGES therefore exclusively covers flows for the year 2011. It was decided to draft the BEGES for each individual entity in order to obtain the BEGES for RENAULT TRUCKS. Therefore, the BEGES for RENAULT TRUCKS is a compilation of the BEGESs for the various entities within RENAULT TRUCKS company. Greenhouse gas emissions were quantified using the software application V7 incorporating the Base Carbone® of ADEME (French environment and energy management agency), using the method for the drafting of greenhouse gas emissions reports version 2 (2012) issued by the Ministry of Ecology, Sustainable Development, Transport and Housing. The environmental manager of Renault Trucks SAS organised and approved the different phases of the project for this purpose. When launching the project, those assigned to the greenhouse gas emissions report for each entity were appointed. Compilations have been produced in addition to the BEGES for each entity. These compilations coincide with the organisation when this document was drafted. The initial compilation refers to the "Cab & Assembly" industrial units including the Blainville-sur-Orne site (BLV), the Bourg-en-Bresse site (BG), the Axles plant (AP) and Stamping entities at the Lyon site. The second compilation has the title "Lyon site" (Etablissement de Lyon) and consists of the Support division, PWT PD, Engine plant (EP), Stamping Plant and Volvo Parts Logistic Lyon (VPLL) entities. The final compilation is associated with RENAULT TRUCKS. The following figure illustrates the different BEGES (blue box and different compilations.

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 6 05/10/2012

A shared area has been dedicated in a Team Place2 to ensure the long-term existence of the BEGES. This area contains a set of documents such as the different CO2 reports or regulations and access to the various spreadsheets used to calculate greenhouse gas emissions and action plans.

3. Key stages

In view of the regulatory context, RENAULT TRUCKS SAS decided to draft a Greenhouse gas emissions report (BEGES). The company mandated a service provider to diagnose greenhouse gas emissions, but also to lead brainstorming sessions in order to identify operational actions to be integrated into the action plan for submission to the prefecture in accordance with legal requirements. The main key stages for the drafting of a BEGES and the associated action plan are shown in the following diagram.

1. Site management was made aware of the situation and defined the context of the study, targets and the role of each player.

2. Data collection led to the finalisation of the scope of the study, i.e. all fluxes taken into

account to produce a BEGES meeting regulatory requirements. 2 https://teamplace.volvo.com/sites/rt-Environment/GHGassessment (internal tool with access authorisation)

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 7 05/10/2012

3. The Use and assessment phase involves the conversion of activity data into CO2 equivalents

(hereafter CO2e.).

4. After greenhouse gas diagnostics, working sessions were organised in view of proposing Potential actions to reduce the CO2 footprint of activities per topic. The entities decided on priorities and costed actions with the support of the service provider.

5. Finally, in the last stage, the action plan was presented to and approved by the Executive or Plant board. The reporting phase led to the drafting of the action plan to be submitted to the Prefecture and an internal action plan based on the proposals made in the previous phase.

4. Definition of the selected greenhouse gas emission headings

As highlighted in the method description, the legal entity must specify if the selected auditing method is "financial3" or "operational4". Renault Trucks decided to opt for an operational auditing method due to the fact that the company prefers to use all means of reducing CO2 in line with current environmental management systems existing on sites with ISO 14001 certification. In order to identify greenhouse gas emissions, sources must be identified. The method used to perform greenhouse gas emission audits in accordance with article 75 of law No. 2010-788 of 12 July 2010 on the French commitment to the environment (ENE) separates:

– Direct emissions, produced by the fixed and mobile sources required for the activities of the legal person;

– Indirect emissions from the use of electricity, heat or vapour, as required for the activities of the legal person;

– One third category of emissions exists, i.e. all other indirect emissions produced in the activities of the legal person. This latter category is not subject to regulatory requirements, however application is recommended.

To illustrate, the following diagram shows these different scopes5: 3 the organisation consolidates 100% of the emissions of sites which it controls financially 4 the organisation consolidates 100% of the emissions of sites which it controls operationally (i.e. which it operates) 5 This diagram is based on ISO-TR 14069: Application guide for standard ISO 14064-1 WD3, March 2011.

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 8 05/10/2012

The work carried out relates to SCOPE 1 and SCOPE 2, i.e. the mandatory scope for all sites with the exception of VPLL where transport and waste have been included in the analysis. However, the document presented to the Prefecture will only cover regulatory scope, i.e. SCOPE 1 and SCOPE 2 only. The following table lists the sources of emissions according to the headings mentioned in the regulatory Greenhouse gas emissions report: Category Heading Sources

Direct GHG emissions (Scope 1)

1 Direct emissions from fixed sources of combustion

Natural gas for the heating of industrial and tertiary buildings Natural gas for industrial tools Fuel oil for mobile heating devices

2 Direct emissions from mobile sources with a combustion engine

Petrol/Diesel for company cars (service, sales and incentive vehicles) or owned trucks Diesel or natural gas for testing industrial vehicles and engines LPG for handling machinery (forklifts) Fuel oil and petrol for various combustion engines

3 Direct emissions from non-energy processes

Burnt VOC Acetylene burned by welding stations and other sources generating CO2 in their processes (e.g. argon/CO2 shielding gas)

4 Direct fugitive emissions SF6 for High-voltage electric substations Coolant gas leaks for HVAC systems for occupant comfort

5 Biomass emissions (soils and forests) None Indirect energy emissions (Scope 2)

6 Indirect emissions from the use of electricity Electricity for various specific uses

7 Indirect emissions from the use of vapour, heat or cold None

The following table summarises the sources of data with their units. Category Sources Source of the data/unit

Direct GHG emissions

1

Natural gas for the heating of industrial and tertiary buildings Fluid meter / kW·h

Natural gas for industrial tools Fluid meter / kW·h Fuel oil for mobile heating devices Fluid purchasing / litres

2

Petrol /Diesel for company cars Fluid purchasing / litres Diesel for testing industrial vehicles Fluid purchasing / litres LPG for handling machinery (forklifts) Fluid purchasing / litres Fuel oil and petrol for various combustion engines

Fluid purchasing / litres

3 Burnt VOC / kg Acetylene burnt by welding stations Purchasing of bottles of acetylene6 / m3

4 SF6 for High-voltage electric substations Maintenance and Surveillance plan / kg Coolant gas leaks for HVAC systems for Maintenance and Surveillance plan / kg

6 The acetylene is supplied in bottles and measured in m3. We use the value of 1.1 kg/m3 to convert bottle volumes into mass.

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 9 05/10/2012

occupant comfort 5 None /

Indirect energy emissions

6 Electricity for various specific uses Fluid meter / kW·h 7 None /

In most cases, greenhouse gas emissions from any given action cannot be measured directly. These emissions must therefore be calculated on the basis of physical data for the activity: energy consumption in kWh, road traffic data with number of vehicles and distances driven, number of tons of materials purchased, etc. The software application V7 was developed specifically to convert existing data in various units (kW.h, km, t, m2, etc.) into estimated greenhouse gas emissions using emission factors. Emission factors, prepared using various scientific and technical sources, can therefore be used to determine the total quantity of greenhouse gases emitted by human and physical flows. Their GWP (Global Warming Potential) can be used to identify their CO2 equivalent. For this reason, it is important to remember that the BEGES will provide approximate values of greenhouse gas emissions in view of reaching practical conclusions. Uncertainty must therefore be taken into consideration for the emission factor, but also for the data itself. We reiterate that the impact on global warming of one kilogram of greenhouse gas in the atmosphere depends on the type of gas, the temperature, the period of presence in the atmosphere and/or the concentration. All these factors will affect the impact of any given greenhouse gas on the climate. By convention, and in order to ensure consistent results, the impact on the climate of one kilogram of GHG is compared with that of one kilogram of CO2 over a period of 100 years, hence defining the Global Warming Potential (or GWP). The GWP of CO2 is therefore equal to 1, and the higher the GWP of a GHG, the greater the additional greenhouse effect caused by the release of one kilogram of this gas into the atmosphere. This approach enables GHG to be compared and the use of a common unit, the CO2 equivalent (CO2e). This unit will be used throughout the document.

Gas Formula GWP versus the GWP of CO2 (over 100 years)

Carbon dioxide CO2 1 Methane CH4 25 Nitrous oxide N2O 298 Perfluorocarbons PFC 7,400 to 12,200 Hydrofluorocarbons HFC 120 to 14,800 Sulphur hexafluoride SF6 22,800

In the specific case of this study, the following emission factors and the associated uncertainties were taken from the Base Carbone®:

Data Data uncertainty7 Base Carbone® emission factor EF uncertainty Natural gas 5% 198 g eq. CO2/KW·h NCV 5% Fuel oil 5% 272 g eq. CO2/KW·h NCV 10% Electricity 5% 84 g eq. CO2/KW·h 10% Diesel 5% 255 g eq. CO2/KW·h 10% Petrol 5% 231 g eq. CO2/KW·h 10% LPG 5% 233 g eq. CO2/KW·h 5%

7 We have decided on a default uncertainty of 5% for the quantities read on the meter

Activity data (kWh, etc.) X Emission factor = GHG emission (tCO2e)

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 10 05/10/2012

R410 A 5% 1,975 g eq. CO2/kg 30% R404 A 5% 3,784 g eq. CO2/kg 30% R407 C 5% 1,653 g eq. CO2/kg 30% R134 A 5% 1,430 g eq. CO2/kg 30% SF6 5% 22,800 g eq. CO2/kg 30%

Some of the used emission factors (EF) differ from the Base Carbone®. An additional study was carried out. The additional EFs are shown in the table below:

EF modifications

Modified EF Documentary source or calculation method Acetylene 3.38 kg CO2e / kg

When acetylene is used, the following chemical reaction occurs: C2H2 + 5/2 O2 -> H2O + 2 CO2 When converting a mass of acetylene into CO2 equivalent, we assume total combustion. According to the stoichiometric ratios of the chemical reaction, we conclude that 1 kg of acetylene is equivalent to the emission of 3.38 kg CO2e.

VOC 4.5 kg CO2e / kg

Specific work on GHG emissions was ordered and carried out at the Blainville site with the assistance of CITEPA. The DREAL confirmed the following figures: 10 t of non-metal VOC or 45 tCO2e. We therefore conclude that 1 kg of VOC is equivalent to the emission of 4.5 kg CO2e.

Shielding gas 1.87 kg CO2e / m3

RENAULT TRUCKS uses mixtures to protect welding. According to the manufacturer, the CO2 content per m3 of this mixture is equal to 1.87 kg CO2e. This value has been used to calculate the greenhouse gas emissions of this source.

Uncertainty for these emission factors has been arbitrarily set as 30%.

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 11 05/10/2012

5. Consolidated results of the GHG audit for Renault Trucks SAS

Over the year 2011, the activities at RT sites (Blainville, Bourg-en-Bresse, Limoges and Lyon) led to the emission of a total of approximately 56,690 tons of CO2 equivalent (or 56,690 tCO2e) distributed per heading as shown in the bar chart below.

This value of 56,690 tCO2e could be compared with the emissions caused by the use of trucks produced in 2011 over their entire life-cycles. This phase represents 3,260,000 tCO2e. The greenhouse gas emissions of Renault Trucks SAS "only" represent 2% of the greenhouse gas emissions caused by the use of all trucks produced in 2011. The main contributing headings are fixed sources of combustion (natural gas and fuel oil for heating buildings and for industrial processes), mobile sources with combustion engines (fuels for product and engine tests, the vehicle pool and forklifts) and the use of electricity (used for lighting and specific uses, such as HVAC systems). These three types of headings represent 99% of GHG emissions in the RT BEGES. According to article 75 of law No. 2010-788, when performing an audit on greenhouse emissions, direct GHG emissions and indirect GHG emissions must be assessed separately per heading and for each type of GHG, in tons and in CO2 equivalent. The following table meets this requirement.

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 12 05/10/2012

GHG emissions for Renault Trucks can be broken down per entity. The following graphics show results as absolute values and percentages.

7%

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 13 05/10/2012

The compilation for the Lyon site represents 55% of the GHG emissions for the RT GHG audit with approximately 31,170 tCO2e.

6. Action plan

This section meets the legal requirement of providing a summary of the actions of the submitting parties with the report of the legal person. This project has been sequenced in order to produce an action plan after diagnosing greenhouse gas emissions for this purpose. The action plan will be drafted in a manner satisfying an internal request to combine a maximum of potential initiatives prior to quantification and approval by the site management. Actions were quantified when all data required for calculations had been collected. Should this not have been the case, it was decided to not quantify actions requiring an excessive number of hypotheses or if data was incomplete. Finally, study type operations lead to no reduction in GHG emissions, but do however require investment. Therefore 32 out of the 108 actions listed were not costed. The action plans were approved by the management of each Renault Trucks SAS entity. These action plans have been integrated in the environmental management system for the entities and a periodic review is organised. They mainly relate to the following fields: - Controlling and reducing heat loss for buildings - Controlling and reducing energy requirements for heating / air conditioning / processes - Reducing and optimising lighting requirements - Controlling energy demands for IT hardware - Reducing CO2 emissions for on-site travel (internal transport) - Controlling and optimising settings via effective maintenance - Designing and using sustainable buildings - Using heat loss for other purposes - Reducing CO2 emissions for product tests - Ensuring the awareness of and involving employees in energy savings The following table combines the reduction in GHG emissions, investment and the expected economic savings over the coming 3-year period, based on the type of emissions in the mandatory regulatory scope:

Type of emissions Gains GHG reduction Investment Economic

savings Direct GHG emissions from fixed sources 21,715,204 kWh 4,269 tCO2e k€ 22,924 k€ 977 Direct GHG emissions from mobile sources 309,900 L 774 tCO2e k€ 112 k€ 2,665 Direct fugitive GHG emissions 443,483 kWh 237 tCO2e k€ 54 k€ 25 Indirect GHG emissions from fixed sources 2,002,107 kWh 172 tCO2e k€ 1,845 k€ 169 Overall total 5,451 tCO2e k€ 24,935 k€ 3,836

0BGREENHOUSE GAS EMISSIONS REPORT Environment & Quality management Sandrine THOMAS

PAGE 14 05/10/2012

Understanding the above table: the "Economic savings" column shows the costing of annual savings after investment, gained vs. the reference year. the "GHG reduction" column shows the total annual reduction in GHG after investment, vs. the initial situation. For Renault Trucks SAS, the launched initiative could lead to a reduction in GHG emissions of approximately 10% over the coming three years. In absolute terms, this represents 5,451 tCO2e for a gross amount (investment and expenses) of approximately 25 million euros. Details of action plan not communicated on internet