Automotive Industry Encountering New Zero-Emission Guidelines through SBTi's Draft Proposal
The Science Based Targets Initiative (SBTi) has launched a consultation for its new Automotive Sector Net-Zero Standard, a move that is expected to help the automotive industry transition towards a more sustainable future.
The standard, which aligns with the V2 version, includes sector-specific criteria for emissions reductions across the automotive value chain. According to Karl Downey, Head of Sector Standards at the SBTi, the standard will enable automakers and auto parts manufacturers to make ambitious and practical greenhouse gas (GHG) reductions, build resilience, greater efficiency, and maintain competitiveness in a rapidly transforming market.
The key requirements for automakers and auto parts manufacturers in setting science-based net zero targets include a commitment to near-term and long-term targets, with a focus on near-term emissions reduction targets for 2030 and 2035, in addition to achieving net-zero emissions by 2050. A mandatory requirement is committing to sales share targets for zero-emission vehicles (ZEVs) aligned with science-based pathways, ensuring a transition in vehicle sales by 2030 and 2035 toward near-complete electrification or zero emissions.
Companies must also set distinct targets for direct emissions (Scope 1) and electricity-related indirect emissions (Scope 2), with the expectation to achieve 100% zero-carbon electricity supply by 2040. For larger and medium manufacturers (Category A companies), comprehensive Scope 3 targets (which include indirect emissions from the full value chain such as vehicle use) are required. Smaller manufacturers (Category B companies) may have optional Scope 3 targets to reduce barriers.
Public commitment and accountability are also essential, with companies required to publicly commit to net-zero targets by 2050 and then set science-based reduction targets within a specified timeframe (12 months for large firms). Transparency and performance tracking guidance are integral to demonstrating progress.
The standard specifically notes that to meet the 2050 net-zero goal, more than 99% of vehicle sales in advanced economies and China must be zero-emission by 2050, with near-term alignment through the 2030s.
The consultation also includes feedback on the new aggregated indicator for Scope 1, 2, and 3 emissions, as well as the new low-emission vehicle criteria. Among the requirements included in the standard for automakers setting net zero targets is the consideration of aggregated GHG emission intensity for the vehicles. For auto part suppliers, the standard introduces new criteria focused on reducing emissions from material sourcing and manufacturing.
The new automotive-focused standard forms part of a series of sector standards released and under development by the SBTi covering heavy emitting industries. The SBTi provides technical assistance to companies who set science-based targets and provides companies with independent assessment and validation of their emissions reduction targets.
The SBTi was founded in 2015 with the goal to establish science-based environmental target setting as a standard corporate practice. The consultation seeks feedback on alignment with the draft Corporate Net-Zero Standard V2. The consultation can be accessed by clicking a provided link.
The SBTi's key functions include defining and promoting best practice in emissions reductions and net-zero targets in line with climate science. The consultation includes criteria for auto parts makers and covers the new low-emission vehicle criteria. Downey believes the standard will help automakers and auto parts manufacturers seize the opportunities of electrification.
[1] Source: Science Based Targets Initiative, "Automotive Sector Net-Zero Standard: Consultation Draft," 2022. [2] Source: Science Based Targets Initiative, "Scope 3 Guidance for the Automotive Sector," 2021.
- The Science Based Targets Initiative (SBTi) has launched a consultation for its new Automotive Sector Net-Zero Standard, which aligns with the V2 version, focusing on environmental sustainability and net-zero targets for the automotive industry.
- To meet the 2050 net-zero goal, according to the standard, more than 99% of vehicle sales in advanced economies and China must be zero-emission by 2050, with near-term alignment through the 2030s, emphasizing the significance of climate-change mitigation.
- The standard introduces new criteria for automakers setting net-zero targets, such as a commitment to science-based reduction targets and near-term emissions reduction targets for 2030 and 2035, as well as achieving net-zero emissions by 2050.
- For auto part suppliers, the standard includes new criteria focused on reducing emissions from material sourcing and manufacturing, demonstrating the role of industry and environmental-science in achieving net-zero emissions targets, and the potential impact of finance and energy in supporting the transformation.
