Governments around the world are rapidly establishing commitments that seek to phase out the sale of petrol and diesel vehicles, in favour of models that are electrically powered. In the UK, as part of the Green Plan, the commitment was accelerated in 2020, with the goal to complete this transition now set at 2030. Other countries are setting similar goals, with Norway leading the way with a similar target set for 2025. Last year it became the first country where electric vehicle (EV) sales outstripped those of conventionally fuelled vehicles, with electric making up 54% of new car sales in 2020. Innovation is not limited to the vehicles themselves, with technology that allows EVs to act as a form of distributed energy storage network currently under development too.
The driving force behind these commitments are the carbon reduction targets set by the Paris Agreement in 2016, and more recently the move to setting ‘Net Zero’ emissions goals at both country and corporate level. The automotive sector, like many others, are following suit.
In a recent benchmark of the automotive sector, Challenge Sustainability found a broad range in the level of disclosure amongst the largest manufactures. VW and Daimler, for example, have committed to net zero emissions by 2050 and 2040, respectively. Their science-based targets do include scope 3 emissions, but only consider the vehicle use phase. BMW have committed to "cutting the emissions associated with the supply chain by 20% on a per vehicle basis", yet the details of the scope of their science-based target are not currently disclosed. Groupe Renault commit to "reach zero CO2e impact by 2050 in Europe", without disclosing further details.
As Jon Woodhead and Lucy Connell wrote in their Insights article, Closing the net on Net Zero, calculating Scope 3 emissions to any degree of accuracy is a huge challenge for many companies. Figuring out the level of influence and a pragmatic approach across Scope 3 emissions is unlikely to be a ‘one size fits all’ approach and will take time to develop.
Various studies have shown that EVs emit much less CO2 during use and in total, than internal combustion engines (ICE). There are also life-time cost advantages to consider – as illustrated by a new tool by the Carboncounter project, from the MIT Trancik Lab. Carbon emissions associated with EVs are intrinsically linked to the source of electricity generation, which must be further decarbonised. Generation capacity also needs to increase, as demand will surely grow.
So whilst it may be logical to assume that the most significant scope 3 emissions of a vehicle are from the use phase, what about the wider impacts of material manufacturing, including batteries? The mining of minerals used in the manufacture of the batteries, such as cobalt, graphite, lithium, and nickel, have significant environmental and social impacts. This gives rise to a potential unintended consequence of the transition to electric; the risk is that we replace a dependency on fossil fuels with a dependency on minerals. Tesla has been working on this issue for nearly a decade now, and recently announced it could design batteries without using cobalt. Nevertheless, it also announced it was moving into lithium mining in USA, a move which surprised many.
As we move towards a future where EV sales rise, so the pressure will increase on automotive manufacturers to clearly explain the full life cycle impacts of their EV models, ensuring the key environmental and social risks are identified and considered at each stage. While the focus of ‘Net Zero’ targets is on carbon emissions across the supply chain, automotive companies should not lose sight of the wider impacts and the role that they can play in developing more sustainable supply chains, electricity generation networks, and sustainable mobility planning.
Automotive is a great example of a sector where the full life cycle impacts are a critical part of sustainability communications. Presenting ‘Net Zero’ targets, without demonstrating the true impact of your organisations upstream and downstream activities risks presenting a very limited picture. It only takes one significant impact being overlooked to become a focal point for critical stakeholders, undermining the entire message and ultimately lowering credibility of a sustainability strategy and supporting communications.
Talk to us if you want support in setting Net Zero targets, understanding your full value chain impacts or developing credible sustainability communications.