Nature Positive Role of the Automotive Sector

2.5 GHG emissions The automotive sector releases GHG emissions across the entire value chain, from the production of key materials such as steel and aluminium to the manufacturing of automotive parts and vehicles to the transport of finished goods and end use. Road transport was responsible for 45% of global oil demand131 and 16% of global GHG emissions in 2022, with cars and vans alone accounting for 10% of emissions.132 Scope 1 and 2 emissions are primarily generated by energy-intensive manufacturing processes, such as material transformation (smelting, stamping, casting and forging) and handling, heating and cooling.133 Scope 3 emissions, however, typically make up over 80% of total GHG emissions in the automotive sector, and for some individual manufacturers, this can be as high as 99%.134 The distribution of GHG emissions across the value chain differs between ICE vehicles and BEVs (and other alternative solutions).135 In particular, ICE vehicles currently generate 65-80% of their lifetime emissions from exhaust emissions as the car burns fuel and another 18-22% of emissions from the production of materials (primarily from steel and aluminium). With a mass-market transition to BEVs, however, more than 60% of automotive life cycle emissions are expected to come from materials by 2040136 (primarily from the batteries, then steel and aluminium).137 Many companies in the sector have set emissions reduction targets for direct operations (Scope 1 and 2) and across the value chain (Scope 3) and are starting to take action. In particular, efforts to date have focussed on direct emissions reduction. Emissions reduction targets range across companies, for example: –Volkswagen Group aims to reduce average CO2 emissions by 30% per vehicle over the entire life cycle by 2030 against a 2018 baseline.138 –Mahindra aims to reduce Scope 1 and 2 emissions by 47% per equivalent product unit and reduce Scope 3 emissions by 30% per sold product unit by 2033 against a 2018 baseline.139 –Volvo Cars aims to reduce CO2 emissions by 65-75% per car by 2030 against a 2018 baseline.140,141 Road transport was responsible for 45% of global oil demand and 16% of global GHG emissions in 2022, with cars and vans alone accounting for 10% of emissions. Nature Positive: Role of the Automotive Sector 24