Nature Positive Role of the Automotive Sector

Simplified value chain of the automotive sector FIGURE 5 End-of-life Dismantling, remanufacturing and recycling Aftersales* Maintenance, insurance, and other servicesB2B sales* Fleet customers, leasing and other salesUse phase B2C sales* Retail sales and logistics RecyclingRemanufacturingRe-useUpstreamMidstream (direct operations) Downstream Inorganic and organic feedstock and raw material supply – including metals and minerals, chemicals and agricultural products (e.g. leather, rubber) Energy and water supply Machinery and transport equipment supplyTier 2, 3 and n suppliers Manufacturing of materials and auto part componentsTier 1 suppliers Manufacturing of auto parts Automotive OEMs Manufacturing (fabrication, painting, thin-coating) and assembly of vehicles *Sales and aftersales may be conducted by OEMs (midstream) or by independent retailers/service providers (downstream). Globally, significant progress has been made to provide policy and regulatory support for the transition from internal combustion engine (ICE) vehicles to zero-emissions vehicles (ZEVs), and 43 governments pledged to accelerate the transition to 100% zero-emission cars and vans.73 These goals have been integrated into national policy in several key markets. For example, the EU adopted the ‘‘Fit for 55” proposal in 2023 to ban sales of ICE cars and vans by 2035, and Canada and the UK have also adopted zero-emissions vehicle regulations that aim to phase out sales of ICE vehicles by 2035. Iceland, Austria, the Netherlands, Ukraine and Israel have committed to 2030 phase-outs, while Norway is even more ambitious, aiming for 100% ZEV sales by 2025. In 2024, the US adopted new GHG emissions standards that, according to US Environmental Protection Agency (EPA) estimates, will lead to EVs representing 35-56% of new light-duty vehicle sales by 2032.In many countries, supporting ZEVs is not only seen as a key part of the energy transition, but also as a way to reduce energy imports and air pollution, improving health outcomes for citizens. This is particularly relevant for fast-growing developing countries, such as China, Indonesia, Viet Nam, Ghana, Pakistan and others, that are implementing regulations, tax benefits and strategic targets to support ZEV sales. Beyond GHG emissions, much of the focus of policy and regulation to date has been on circularity, with a view to securing critical minerals supply. As momentum following the United Nations Convention on Biodiversity’s (CBD) 15th and 16th Conference of the Parties (COP 15 and COP 16) drives countries to submit updated national biodiversity strategies and action plans (NBSAPs), society as a whole can expect to see further regulation supporting the goals of the Global Biodiversity Framework in coming years. For example, this regulation may focus on enhancing restoration 1.2 Progress is promising but needs to accelerate 43 governments pledged to accelerate the transition to 100% zero-emission cars and vans. Nature Positive: Role of the Automotive Sector 16