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Trends in the automotive industry, including zero emissions vehicles and carbon neutral manufacturing, demonstrate the shift in sustainability awareness. But as we reduce vehicle emissions, material production emissions will become the main hurdle to reaching the UK’s Net Zero goal. 

The sustainable innovations in powertrain technology is at its peak and the electrification trend is accelerating and unstoppable. Electric vehicle passenger sales increased 186% in 2020 and 2022 is projected to be the year that sales overtake diesel.

Since as much as 80% of a petrol or diesel car’s lifetime emissions come out of its exhaust pipe, manufacturers initially focused on cutting emissions coming from the car once it is on. 

Now though, manufacturers are looking at the production process. Batteries are the largest cost driver of electric powertrains and European Union leaders want a 55% cut in net greenhouse gas emissions by 2030. Reducing costs and improving sustainability is becoming increasingly more difficult.

If the big brands are to reach the goals in line with the Paris Agreement, they must address their Scope 3 emissions, especially those from high up in the value chain. This means their suppliers do too.

Material world

Road transport generates 16% of global emissions, and consumer appetite for big, heavy cars is not helping; SUVs contributed more to the increase in global CO2 emissions last decade than iron, steel, cement and aluminium production combined. What’s more, they account for more than half of all new cars sold in the UK.

However, production differences between electrification and internal combustion engines bring into question just how green they are. 

An MIT study found that the battery and fuel production for an EV generates higher emissions than the manufacturing of an automobile (although those higher environmental costs are offset by EVs’ superior energy efficiency over time.)

What’s more, research suggests that electric cars are currently 45% more expensive to produce than conventional cars. 

Consulting firm McKinsey estimates that by 2040 as much as 60% of a vehicle’s emissions will come from material production – unless major progress is made before then.

Fortunately, the firm also calculates that 97% of a battery electric vehicles’ material emissions could be abated at no extra cost by 2030. Powering production processes with green electricity, recycling plastic components and using carbon-free electrolysis for aluminium extraction are some of the most cost-effective wins, McKinsey says.

About half the emissions associated with batteries could be abated by shifting production to regions with a low-carbon grid mix, according to McKinsey.

Tackling the steel sector – responsible for 8% of global CO2 emissions – will be more difficult. Some main options for the steel industry include greater use of recycled materials, electricity generation from renewables for Electric Arc Furnace route (EAF) production and for hydrolysis, and improving carbon capture & storage. 

Alongside aluminium and plastics, ‘third generation’ steels with micro-alloys of manganese, molybdenum and silicon could make battery electric vehicles lighter, enabling them to go further on smaller batteries.

Is a carbon neutral car possible?

In 2021, Volvo-owned brand Polestar announced their goal of the first carbon neutral car on the road by 2030. They recognise that making electric cars that are carbon neutral is not enough, but that it is important to consider the entire manufacturing process. They hope to do this using fossil-free steel and zero-carbon aluminium made from hydro. 

While other companies attempt to achieve carbon neutrality by offsetting emissions, experts have warned that this is not sustainable in the long-term. 

Polestar is encouraging the automotive industry to investigate and be transparent about their emissions across the supply chain which could have implications across the industry.

Other manufacturers have taken steps to reduce emissions, such as the BMW iX and i4 which are built using clean hydroelectric power; while Mercedes recently unveiled the Vision EQXX, a super lightweight all-electric concept car with cactus-fibre seats, bamboo-fibre mats and panels wrapped in mushroom root instead of leather. 

Meanwhile, Continental is making tires from natural dandelion rubber, a sustainable alternative to rubber from a rubber tree. Supply is steadier and easier to control leading to greater price stability as well. 

Additionally, Northvolt already derives 98% of its energy from renewable sources, and Germany’s Vulcan Energy plans to use geothermal energy to pioneer lithium extraction with zero mining or emissions.

Road blocks in Manufacturing

To know whether these innovative changes are working, automakers need to be able to calculate the baseline of their emissions and then track progress year on year. 

Making matters worse, material costs are soaring. To ease the headache, some car makers are cutting out links in the supply chain, following the example of Tesla, which makes its own batteries and sources raw materials direct from mining companies.

Accounting for the CO2 impact of every screw and thread in a car is an enormous task and one that neither the car makers nor their suppliers can do alone. 

A 2022 survey of automotive suppliers by McKinsey found that while 83% had defined sustainability targets, only 7% had actually started to implement carbon emissions abatement programmes. And the World Benchmarking Alliance’s 2021 benchmark report of the 30 biggest car makers found that five had no climate-focused supplier engagement. Many of the others were too vague about what they expected from companies. Renault was the only company signed up to the CDP 2021 Science-Based Targets (SBTs) Campaign, which requests supply chain members set targets aligned with the Paris Agreement to limit global warming to well-below 2°C.

Full speed ahead

Help is just around the next corner, however. Dozens of car industry stakeholders, led by BMW, Toyota Motors, Volkswagen and the World Business Council for Sustainable Development (WBCSD), have come together to launch A-PACT, the Automotive Partnership for Carbon Transparency. In August, this coalition is due to publish a methodology to help companies calculate the total greenhouse gas emissions generated by automotive parts over their life cycle.

Automated carbon management is also important for the future…

 

The Enistic Platform

Our cloud-based carbon management platform pulls together your carbon data into one, easy-to-access place. Intuitive dashboards help you to visualise key metrics, and monitor performance at a glance. The built in analytics suite enables you to create customisable reports that can be exported and shared with your organisation. Download reports and share your carbon data and progress easily.

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A Carbon Reduction Plan (CRP) is a statement from a company identifying their current Carbon Footprint and committing to help the UK achieve Net Zero emissions by 2050.

Streamlined Energy and Carbon Reporting (SECR) is a piece of legislation from the UK Government which replaced the Carbon Reduction Commitment (CRC).

The Energy Savings Opportunity Scheme (ESOS) was introduced by the UK Government to promote energy efficiency and to ensure large enterprises are regularly assessing their energy usage.

Net Zero refers to producing zero carbon dioxide emissions by balancing emissions against carbon emission reduction, and carbon offsetting strategies. 

The Procurement Policy Note (PPN 06/21) sets out how government departments need to take account of suppliers’ Net Zero Carbon Reduction Plans in the procurement of major government contracts.

Science-based targets (SBT) are targets that help companies define their journey to reduce carbon emissions, helping prevent the worst impacts of climate change and future-proof business growth.

The Task Force on Climate-Related Financial Disclosures (TCFD) was developed to create consistent climate-related financial risk disclosures for use by organisations in providing information.

The Environmental, Social and Governance report (ESG) is a statement from a company announcing its current commitment to the environment, social and governance matters. 

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Carbon reporting and management for healthcare companies and NHS suppliers. Carbon Reduction Plans and PPN 06/21 solutions for NHS providers from £95 pcm.

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Carbon reporting and management for manufacturers including Carbon Reduction Plans, SECR, ESOS, PPN 06/21, SBT, TCFD and ESG compliance.

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