COMING CLEAN. HOW THE BMW GROUP IS REDUCING EMISSIONS. Plant Steyr

COMING CLEAN. HOW THE BMW GROUP IS REDUCING EMISSIONS. Plant Steyr

CLEAN AIR. IMPORTANCE OF DIESEL TO THE AUSTRIAN ECONOMY AND THE ENVIRONMENT. UPPER AUSTRIA IS DIESEL COUNTRY The diesel engine holds a special significance for Austria, and Upper Austria in particular. Companies like BMW Group Plant Steyr and the industry s many suppliers create jobs and invest heavily in the region as a location for business. Wrongly condemning diesel to the 'unwanted' list would be harmful to the environment and could massively damage our position as an industrial location! CHRISTOPH SCHRÖDER Managing Director of BMW Group Plant Steyr Diesel Petrol CLEAN AIR Six out of ten cars on Austria s roads are currently powered by diesel. This adds up to more than 2.7 million registered diesel cars. Diesel accounts for 17.2 billion euros in gross value added in Austria and therefore contributes roughly the same amount to the economy as the tourist industry, namely six per cent of gross domestic product. A total of 230,000 jobs across the country, i.e. one in 19, are directly or indirectly related to diesel engines. These jobs generate four billion euros in wage-related taxes and duties. ALTERNATIVE DRIVE TRAINS Alternative drive technologies do not yet measure up to conventional drive trains in a number of areas, including purchase price and availability of infrastructure. Banning diesel would lead to more petrol vehicles and, therefore, more CO 2. Consequently, diesel will remain an important drive technology for quite some time.

5 REASONS, WHY WE NEED DIESEL. CO 2 EMISSIONS 41 PER CENT LOWER DUE TO DIESEL: We have reduced the CO 2 emissions of our European fleet by over 41 % since 1995, by using more 1modern diesel vehicles. DIESEL IS ECONOMICAL AND SAVES RESOURCES: 2No combustion engine is more efficient! 3DIESEL PROTECTS THE CLIMATE: A diesel built to the Euro 6 standard emits around 15 % less CO 2 than a comparable petrol vehicle. 4EU CLIMATE GOALS UNREALISTIC WITHOUT DIESEL: Without diesel, it would be virtually impossible to meet the European Union s fuel consumption and emissions targets for 2020 and beyond. 5OUR DIESELS ARE NOT DIRTY: Our diesel vehicles have been fitted with particle filters for more than ten years now, so engines barely generate particulate emissions any more. We have also installed highly-efficient exhaust gas treatment systems for nitrogen oxide. Our diesels are state-of-the-art!

CARBON DIOXIDE (CO ² ) Diesel engines play an important part in CO 2 reduction. The CO 2 emissions of new vehicles registered in the European Union have been reduced by a third since 1995. This progress is primarily due to diesel technology based on the fact that a diesel engine emits an average of around 15 % less CO 2 than a petrol engine. There are no emissions limits for the greenhouse gas carbon dioxide for individual vehicles; however, there are restrictions on fleet consumption. The current EU limit for all vehicles sold by a manu- facturer, depending on the average weight of vehicles in the fleet, ensuring that manufacturers of mostly small vehicles are not favoured. The weight factor compensates for this to a certain extent. The BMW Group has reduced the CO 2 emissions of its European fleet by more than 41 per cent since 1995 by expanding its range of modern diesel vehicles. The BMW EU fleet average currently stands at around 120 g/km. The next EU fleet consumption target has already been defined: a limit of 95 g/km from 2020. This is equivalent to a fuel consumption of 4.1 litres of petrol or 3.6 litres of diesel per 100 km. This target will not be attainable without diesel engines! CLEAN AIR EURO STANDARD The legal limits for emissions of pollutants and greenhouse gases from passenger cars in the EU are being tightened with each Euro standard. The figures for diesel passenger cars in g/km: EURO 6d-temp since September 2017 Text bench figures same at Euro 6 with WLTC (instead of NEDC), plus additional RDE figures EURO 6 from 2014 CO 0.5 NOx 0.08 HC + NOx 0.17 PM 0.0045 PN 6x1011/km EURO 5b from 2011 CO 0.5 NOx 0.18 HC + NOx 0.23 PM 0.0045 PN 6x1011/km EURO 5a from 2009 CO 0.5 NOx 0.18 HC + NOx 0.23 PM 0.005 EURO 4 from 2005 CO 0.5 NOx 0.25 HC + NOx 0.3 PM 0.025

1,000,000,000 t LESS CO 2 DIESEL PASSENGER CARS HAVE SAVED A BILLION TONS OF CO 2 OVER THE PAST 20 YEARS IN EUROPE. EG-STUFE 1 from 1992 EURO 3 from 2000 CO 0.64 NOx 0.5 HC + NOx 0.56 PM 0.05 EG-STUFE 2 from 1996 CO 1.0 HC + NOx 0.7 (0.9 DI) PM 0.08 (0.1 DI) CO 2.72 PM 0.196 NITROGEN OXIDES (NOx) The diesel engine combustion process generates higher NOx emissions than petrol engines in certain operating ranges and therefore requires more complex treatment of exhaust gases. However, considerable progress has been made in reducing NOx emissions from private cars in recent years. Key to abbreviations: CO carbon monoxide NOx nitrogen oxides HC hydrocarbons PARTICULATE MATTER PM PN particulate mass particle number Private cars are not the main source of fine particulate pollution. The percentage generated by diesel engines in vehicles is barely relevant any more, thanks to the filter built into all BMW vehicles as standard since 2006. In 1980, 29.2 % of total nitrogen oxide emissions in Austria came from private cars; today, that figure is around 12.8 %. On nitrogen oxide emissions, the fleet average for BMW Group diesel models is around 40 % lower than the national average published in April 2017 by the German Federal Environmental Agency. These excellent figures apply to both Euro 5 and Euro 6 vehicles. In addition, the strict limits defined by the Euro 6 standard will reduce emissions by 91.5 % by 2030, ensuring compliance with all transport emissions requirements.

COMING CLEAN. REAL EMISSIONS ALLOWED TO DEVIATE FROM TEST VALUES. Up until now, exhaust gas measurements in the European Union were conducted exclusively under predefined conditions on exhaust gas roller test benches under the prescribed NEDC (New European Driving Cycle). This produced different measurements than in real conditions because, in everyday reality, vehicles are driven in rain and snow, in the city or over mountain passes. These varying conditions have a direct impact on emissions. Since September 2017, to close the gap between real and cycle emissions, additional road tests have been conducted in the European Union under different driving conditions. The RDE (Real Driving Emissions) test procedure will be introduced alongside the new standard WLTP (Worldwide Harmonized Light-Duty Vehicles Test Procedure) for roller tests. NEW LEGAL REQUIREMENTS IN EUROPE up to August 2017: Driving speed NEFZ COMING CLEAN since September 2017: Basic T: 20-30 C Driving speed WLTP RDE* *RDE driving profile, driven during diesel engine development in Steyr on the road. Basic T: 14-23 C altitude dynamic driving temperature weight road

RDE TEST PROCEDURE Unlike in roller test cycles, environmental conditions (for example, mountain driving, low outside temperatures, etc...) may vary significantly in the new RDE road test procedure. The two test procedures will therefore produce different emissions figures. The maximum deviation for road measurements has been limited by new RDE legislation since 2017 and will gradually be brought closer in line with roller cycle figures

CLEAN SWEEP. THE BMW GROUP MEETS LEGAL REQUIREMENTS IN EVERY COUNTRY. There is no manipulation of BMW Group vehicles. We naturally comply with legal requirements in each country and meet all local test requirements. This is also confirmed by corresponding investigations conducted by national and international authorities. Great strides can still be made in diesel technology and we have plenty more tricks up our sleeve for the future! The BMW Group has always tried to do what is technically possible to make our engines more efficient and lower emissions, and will continue to do so in the future. FRITZ STEINPARZER Head of Diesel Engine Development CLEAN SWEEP

A new leader has emerged. The BMW 520d is number one among the cleanest diesels ever tested by auto motor und sport, with NOx emissions of only 28 mg/km [ ]. www.auto-motor-sport.de 2 August 2017 In the heated debate, it often seems like the possibilities of diesel technology have been exhausted, as if getting it clean were quite impossible. But that is wrong. BMW, for example, installs a urea system and a nitrogen oxide storage system in parallel in many vehicles, achieving good results even in road tests. Mit Abgas in den Abgrund, www.spiegel.de, 3 August 2017 BMW is putting a lot of effort into the new 5 Series, using the best diesel exhaust gas treatment currently available: a combination of NOx storage catalyst, plus SCR system with urea injection (AdBlue). www.auto-motor-sport.de 2 August 2017 The aim is for BMW diesel engines to remain the world s cleanest and most efficient in the future with major investment in development to back this claim. www.bimmertoday.de 20 February 2017 Against all odds, internal combustion technology will remain the leading drive technology for some time to come. BMW Steyr gibt Gas beim Diesel [ ], www.trend.at, 5 January 2017 The engine [of a BMW] is among the best in its performance class. Because, in case of doubt, BMW puts more money into engine development than its competitors. Warum BMW Diesel sauberer sind, www.sueddeutsche.de, 22 April 2016 BMW is the only major carmaker not to have an exhaust gas problem. Warum nur BMW kein Dieselproblem hat, www.welt.de, 4 May 2016

CLEAN FUTURE CLEAN FUTURE. USING TECHNICAL INNOVATIONS TO REDUCE EMISSIONS. For more than 15 years, EfficientDynamics has defined development of new models for all BMW Group brands. Our engineers develop every new model with the aim of bringing the most efficient overall vehicle with the most dynamic powertrain and most intelligent energy management onto the market. A focal point is reducing the harmful emissions that result from internal combustion in the engine. Particulate emissions can easily be controlled using the diesel particle filters fitted in all BMW diesel vehicles as standard since 2006. EMISSIONS REDUCTION INSIDE THE ENGINE In diesel engine development, the technologies used in the engine are constantly being refined to make drive trains even more powerful and, at the same time, more efficient. To reduce pollutant emissions, engineers are refining combustion and high-pressure injection procedures and, at the same time, optimising exhaust gas recirculation and charging. Turbocharging enables some of the exhaust energy to be recovered. The exhaust turbocharger comprises an exhaust gas turbine and a compressor wheel mounted on a common shaft. Exhaust gas drives the turbine,

while the compressor wheel draws in fresh air and pumps it through a charge air cooler into the cylinder under pressure. Following single, bi- and tri-turbochargers, the BMW Group has now developed the first diesel engine with four turbochargers the BMW TwinPower Turbo inline six-cylinder diesel engine in the BMW 750d xdrive and the BMW M550d xdrive. EXHAUST GAS RECIRCULATION (EGR) During exhaust gas recirculation, exhaust gas from the exhaust manifold is extracted and fed back into the engine on the fresh air side under clearly defined operating conditions, reducing the percentage of oxygen in the combustion air. On the one hand, this reduces the amount of oxygen available for the formation of NOx. At the same time, it also slows down combustion, which lowers peak temperatures. The exhaust gas recirculation is therefore a very effective method for lowering nitrogen oxide. In our ultramodern diesel engines, which are optimised for low emissions, Digital Diesel Electronics (DDE) enables precise regulation and monitoring of exhaust gas recirculation. Uncooled exhaust gas Cooled exhaust gas Fresh air Fresh air/exhaust gas mix

CLEAN FUTURE EXHAUST GAS TREATMENT In addition to measures inside the engine, NOx emissions also require complex exhaust gas treatment. With the introduction of RDE legislation in September 2017, all new BMW brand diesels will gradually be fitted, as standard, with a combined NOx exhaust after-treatment system consisting of an under-hood NSC (Nitrogen Oxide Storage Catalytic Converter) and an SCR (Selective Catalytic Reduction) system. The SCR system uses the NOx reducing agent Ad- Blue, carried in the vehicle in a separate tank. The SCR catalytic convertor uses ammonia from the AdBlue to convert harmful nitrogen oxides into their component parts of water and nitrogen. CSF NSC SCR AdBlue tank AdBlue filling nozzle AdBlue line (heated) AdBlue dosing module

EFFICIENCY OF OUR EXHAUST AFTER-TREATMENT SYSTEMS Full throttle System efficiency low high Engine load and exhaust gas temperature increase Optimum operating range for NOx storage catalytic convertor (NSC) Optimum operating range for SCR catalytic convertor (with AdBlue) Very wide operating range for combined NSC+SCR catalytic convertor system Engine idle NSC SCR NSC + SCR combination (BMW Group exhaust after-treatment) NSC and SCR systems complement each other perfectly in real driving conditions. The NSC is extremely efficient at storing nitrogen oxides at low engine loads and vehicle speeds. The engine control unit calculates the NOx level of the catalytic converter and initiates regeneration at defined intervals a process lasting only about 30 seconds. Then the storage process restarts and the NSC begins storing the accumulated nitrogen oxides again. The system is best suited for driving on city and rural roads. If the engine load increases, which usually occurs at higher vehicle speeds, the exhaust gas temperature also increases. While this decreases the efficiency of the NSC, it makes the SCR system operate more efficiently. In this system, the engine control unit calculates the required amount of AdBlue from the NOx mass flow before and after the catalyst, taking into account further parameters (such as exhaust gas temperature), and doses it accordingly for effective functioning. The BMW Group was the first manufacturer to introduce the combination of NOx storage catalytic convertor and SCR system as standard.

INVESTMENT IN THE FUTURE CLEAN FUTURE Around 700 employees at the BMW Group s only diesel engine development centre worldwide, in Steyr, are researching how to further reduce emissions from diesel engines in the future. The continued development of EfficientDynamics technologies will play a decisive role in fulfilling future legal requirements. For that reason, BMW Group will continue to invest in diesel engines. The development centre will complete a 100-million-euro expansion by the end of 2017, with 30 engine test benches using state-of-the-art technology. COMPLEX TESTING METHODS In addition to dynamic engine test benches for application validation, there are also several specialised test benches: Altitude/climate test benches for testing under realistic conditions from - 40 C to + 50 C as well as high-altitude applications from sea level to 5,000 metres Swivel test bench with up to 50 incline Acoustics test benches to optimise noise levels

In this way, BMW Group diesel engine testing technology is ready to face all future challenges (emissions, electrification possibilities, dynamic performance, acoustics) and able to implement additional applications, as needed, swiftly and flexibly. Sustainability is a further priority for the Diesel Engine Development Centre: Energy from all test fields (approximately five gigawatt hours) is fed back into production. The continued development of diesel technology will be a decisive factor in the future success of our company. For this reason, we are continuing to make major investments in our Steyr location. This is where the BMW Group s combined diesel know-how is concentrated, with expertise built up over more than 35 years that is much in demand worldwide. CHRISTOPH SCHRÖDER Managing Director of BMW Group Plant Steyr

KEY INFORMATION AT A GLANCE. CLEAN FACTS CLEAN FACTS. The BMW Group believes in the future of diesel engines and continues to invest in the Steyr location. Six out of ten passenger cars on Austrian roads are currently diesels. The BMW Group fulfils the legal requirements in every country. This has also been confirmed by corresponding inspections conducted by national and international authorities. C Diesel vehicles make a significant contribution towards fulfilment of CO2 fleet targets. 2 Real driving emissions are allowed to deviate from the figures achieved in the prescribed roller cycle tests, depending on the route and driving style. RDE legislation from 2017 will expand these requirements and emission limit values will also apply to normal road driving. The issue of particulate emissions from BMW diesel vehicles has already been resolved through the introduction of standard diesel particle filters in 2006. Imprint: BMW Motoren GmbH, Plant Communications Hinterbergerstraße 2, A-4400 Steyr No reproduction, in whole or in part, without express permission. BMW Motoren GmbH. For employee and customer information. 1st edition.