Progress and Goals

Progress

In 2010, Ford made significant progress on the environmental aspects of our products and operations. For example:

In 2009, we committed that every all-new or redesigned vehicle we introduce will be the best in class or among the best in class for fuel economy in its segment. Since then, we have followed through on this commitment with vehicles introduced in both the U.S. and Europe, and we will continue to do so with future product launches. In 2010, we developed carbon dioxide (CO₂) reduction targets for all of our facilities, following the same science-based process used to develop our CO₂ reduction targets for vehicles. These targets are based on the CO₂ reductions that will help stabilize atmospheric carbon dioxide at 450 ppm.
For the 2010 model year, our fleet CO₂ emissions increased slightly by about 1 percent relative to the 2009 model year, but improved 11 percent compared to the 2006 model year. Preliminary data for the 2011 model year project that the Corporate Average Fuel Economy (CAFE) values for the car and truck fleets will be about the same as the car and truck fleet averages for the 2010 model year. On an overall fleet basis, preliminary estimates indicate a 2011 CAFE improvement of 2.9 percent compared to 2010.
We are continuing to expand corporate standards and requirements for sustainable materials and in-vehicle air quality. We are developing in-vehicle air-quality specifications, which we plan to roll out to all of our operating regions over the next few years. We are expanding the use of recycled and renewable materials across vehicle lines. And, we are continuing to develop new applications for sustainable materials. As of 2011, all of our vehicles produced in North America use soy foam seating.
In 2010 we developed and adopted a global water strategy. This strategy includes a strong focus on understanding and reducing water risks in the water-scarce regions in which we operate. It also addresses water use throughout our supply chain. We began implementing this strategy in 2011.
In 2010, we completed the global implementation of our Environmental Operating System – including metrics, data collection and reporting – in all of our plants in all regions. Also in 2010, our Powertrain Operations (PTO) completed the global implementation of the Sustainability Tracking and Rating system to encourage the implementation of environmental manufacturing best practices in all new PTO programs.
For the sixth consecutive year, we received the Energy Star Sustained Excellence Award from the U.S. Environmental Protection Agency and the U.S. Department of Energy. This award recognizes Ford’s continued leadership in and commitment to protecting the environment through energy efficiency.
From 2000 to 2010, we reduced CO₂ emissions from our facilities by a total of approximately 49 percent and on a per-vehicle basis by 30 percent.
We continued our leadership in facility greenhouse gas reporting in 2010. Voluntary GHG reports were developed for all four Ford manufacturing sites in China.
We continued to reduce water use and waste sent to landfill on a per-vehicle basis in 2010. We reduced global water use per vehicle by 8 percent and landfill waste per vehicle by 12.4 percent, relative to 2009.
We introduced packaging guidelines for the transport of parts and materials used in Ford vehicles. These guidelines require supplier-provided packaging to support corporate sustainability goals by seeking a neutral or positive environmental footprint through zero waste to landfill and the use of 100 percent recycled, renewable or recyclable materials.

2010 Year-Over-Year Environmental Performance Metrics and Goals

Products

Goal	2010 Accomplishments
Product Sustainability Index (PSI)
Expand use of the PSI and Design for Sustainability principles in product development	All-new Ford Fiesta, introduced in North America in 2011, designed using PSI All new 2012 Ford Focus, to be introduced in North America in 2011, designed using PSI
Sustainable Materials
Increase the use of recycled, renewable and lightweight materials	Expanded use of soy foam seating; from 2011 on, all vehicles produced in North America have soy foam seating Introduced soy foam headliner Introduced wheat-straw-reinforced plastics Expanded use of recycled-content fabrics for seats and headliners Continued to develop strategy requiring recycled plastics and textile materials for many applications in North America
Increase the use of and certification for allergen-free and air-quality-friendly interior materials	Established global design guidelines for allergen-free materials and in-vehicle air filtration that are being migrated across product lines
Eliminate mercury and lead content in vehicles	As of 2009, all Ford, Lincoln and Mercury vehicles in the U.S. are mercury-free, with the exception of the Lincoln Town Car, which uses mercury in its high-intensity discharge headlamps Have eliminated use of lead wheel weights in North America and Europe
Product Fuel Economy and Greenhouse Gas Emissions
Do our share to stabilize carbon dioxide (CO₂) concentrations in the atmosphere at 450 ppm, the level generally accepted to avoid the most serious effects of climate change.	Expanded the climate stabilization analysis that we had undertaken previously for the U.S. and Europe to the other regions in which we operate. This analysis defines the emission reductions needed to meet our stabilization commitment. Further developed our electrification strategy and launched our first electric vehicle. Reduced fleet-average CO₂ emissions from our 2010 model year U.S. and European new vehicles by 10.5 percent and 8.1 percent, respectively, compared to the 2006 model year.1 Announced three more engines with our patented EcoBoost™ fuel-saving technology. By 2013, we expect to be producing approximately 1.5 million EcoBoost engines globally, about 200,000 more than originally expected. Offered four models in North America that provide 40 miles per gallon or better – compared to 2009, when our most fuel-efficient vehicle achieved 35 miles per gallon. Offered 18 models in Europe that achieve a CO₂ emission level of 130 grams per kilometer, and two that achieve less than 100 grams per kilometer.
Have every all-new or redesigned vehicle we introduce be the best in class or among the best in class for fuel economy in its segment	Since 2009, have followed through on this commitment with vehicles introduced in both the U.S. and Europe, and we will continue to do so in future product launches

Facilities

Metric	2010 Target	2010 Actual	2011 Target
Energy Use
Facility energy efficiency (global)	3% improvement	5.6% improvement2	3% improvement
Facility energy efficiency (U.S.)	3% improvement	4.6% improvement3	3% improvement
Energy use	No specific goal; continue use reductions	44% improvement compared to 2000 levels	No specific goal; continue use reductions
Emissions
VOC emissions from painting at North American assembly plants	Maintain 24 g/sq meter or less	21.6 g/sq meter	Maintain 23 g/sq meter or less
Water Use
Water use (global)	6% per unit reduction from 20094	8% reduction	5% per unit reduction from 2010
Waste Production
Landfill waste (global)	10% per unit reduction from 20095	12.4% reduction	10% per unit reduction from 2010

Please see Sue Cischke’s letter for a discussion of our CO₂-reduction goal for North America and Europe.
Energy efficiency is calculated in million BTUs per unit. For our global efficiency calculation, energy use is not adjusted for variances in production or weather.
The North American Energy Efficiency Index is a normalized indicator based on a calculation that adjusts for typical variances in weather and vehicle production. The Index was set at 100 for the baseline year 2006 to simplify tracking against our annual 3 percent energy efficiency target. A year 2000 baseline was used through 2006; the baseline will be reset to year 2010 starting in 2011. The year 2010 improvement indexed against the year 2006 baseline was 14.4, indicating a 14.4 percent improvement in energy efficiency since 2006.
Starting in 2010, our main water reduction target was set and tracked on a per-vehicle basis as opposed to a total global reduction, as has been done in previous years.
Starting in 2010, our main waste reduction target was set and tracked on a per-vehicle basis as opposed to a total global reduction, as has been done in previous years.