July 1, 2003

DaimlerChrysler introduces “CO2 neutral” synthetic diesel fuel

Stuttgart, Germany – At the Environmental Press Conference held on Monday in Stuttgart, DaimlerChrysler AG presented the world’s first synthetic diesel fuel, which does not affect the CO2 atmospheric balance in the atmosphere during driving. This fuel is produced by the complete utilization of organic substances. The carbon dioxide originating in the engine on combustion is taken from the air as plants grow.

This eliminates the additional entry of carbon dioxide into the atmosphere by fuel produced from petroleum during driving, a situation which has existed since the time cars were first introduced. Accordingly, the Group assigns high significance to the production of the biofuel.

According to Dr. Weber, deputy Member of the Board of Management of DaimlerChrysler AG with responsibility for Research and Technology, the fuel is “the cleanest and most environmentally friendly diesel ever.” It is produced in a research project supported by the Federal Ministry for Economics and Labor jointly with the Choren company in Freiberg in Saxony, where Choren has facilities for converting the biomass from wood residue into fuel. This is the first system of its type in the world. Volkswagen also joined the research project in the fall of last year.

The new biofuel, which DaimlerChrysler has christened with the name of “Biotrol”, can be added without any difficulty to current fuels. The research work is currently in the beginning stage of clarifying if Biotrol can be used as an exclusive fuel, or whether engine modifications are necessary. The research also involves economic viability calculations, questions on sustained production and matters of the overall impact on the production of energy.

Since the fuel can be easily added to existing diesel fuel, there is a reduction in new CO2 emission from new vehicles in existing fleets as well as a potential for reduction in new CO2 emissions from all diesel vehicles, depending on the mixture ratio once the fuel is available.

In the view of the company, from today’s perspective in the next decade a considerable share of EU diesel consumption could be covered with biofuels.

Dr. Thomas Weber has offered to cooperate with the mineral oil industry. Political circles in Berlin and Brussels have encouraged Weber to support the further development with “clever decision making”, in particular differentiating in environmental discussions between CO2 emissions from bio and fossil sources.

According to the company, the production costs for Biotrol, which are currently at EUR 0.7 per liter, are still two to three times that of conventional fuels. With the further development of production techniques and optimized distribution, DaimlerChrysler expects that costs will continue to decline. Since bio fuels have been exempted from gasoline tax since last year, Biotrol can be offered at competitive prices even today.

At the opening of the first fuel pump, Professor Herbert Kohler, the Group’s Chief Environmental Officer and Research Director, said: “The new bio fuel, a colourless, clear liquid, is fundamentally different from all other fuels made from biomatter”.

Currently only small quantities of the fuel are available. The Choren production facility is a pilot project, which is soon to be supplemented by a second facility with a higher production capacity and better technology. Intensive research work still has to be done on the new fuel. DaimlerChrysler and Choren, however, are confident that the expectations of the new fuel will also be fulfilled.

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