A first draft of the SBTi Automotive Sector Net-Zero Standard has been released, setting the stage for automakers and parts manufacturers to adopt science-based environmental targets. As the automotive industry faces mounting pressures to reduce its carbon footprint and meet climate goals, this new guideline seeks to address the sector’s significant contribution to global emissions. Given the industry’s pivotal role, adopting sustainable practices is not just about compliance but also about securing future competitiveness.
Since the establishment of SBTi in 2015, it has gained a strong foothold among high-emitting industries. Historically, sectors like aviation, construction, and cement have been prioritized due to their substantial emissions output. Compared to these, the automotive sector now receives focused attention due to its expansive contribution to greenhouse gas emissions. With the automotive draft complementing the updated cross-sector Corporate Net-Zero Standard Version 2, the new guidelines mark a strategic expansion of SBTi’s sector-specific efforts.
What are the New Standards?
The proposed standards are designed to guide the automotive sector in setting comprehensive emissions reduction targets. Automakers are prompted to focus on aggregated greenhouse gas emission intensity, considering vehicle fuel usage and end-of-life processing. The draft also pushes companies to increase the global market share of low-emission vehicles, aiming to change the emission profile in their product lines. For parts manufacturers, criteria emphasize reducing emissions during material sourcing and manufacturing, while also requiring disclosure of parts sold for low-emission vehicles.
Why the Focus on Automotive Industry?
The automotive sector significantly affects global emissions, responsible for over 20% of man-made greenhouse gases. This concern highlights the sector’s vulnerability to climate risks like disruptions in supply chains and heightened scrutiny from investors. The SBTi underscores the automotive industry’s crucial function in the transition toward net-zero, as expressed by Karl Downey:
“Decarbonizing the road transport sector is a crucial component of meeting our global net-zero goals, and the automotive sector has a substantial role to play as providers of new vehicles. The transition to net-zero provides an abundance of opportunity for industry innovation and attractive offers for customers.”
With the draft standard now open for consultation, stakeholders are encouraged to provide input. Feedback focuses on the draft’s alignment with Version 2 of the cross-sector Corporate Net-Zero Standard and evaluates new measures like the aggregated emissions indicator and low-emission vehicle criteria.
The organization hopes that stakeholder input will refine the final standard to better help auto manufacturers make significant greenhouse gas cuts. Downey highlighted the importance of input:
“The feedback we receive from stakeholders will ensure that the final Automotive Sector Net-Zero Standard enables automakers and auto parts manufacturers to make ambitious and practical greenhouse gas reductions and helps them seize the opportunities of electrification – building resilience and greater efficiency while maintaining competitiveness in a rapidly transforming market.”
As the standard targets the vital task of reducing emissions within automotive production and interactions, stakeholder collaboration is crucial. Such collaborative efforts could drive innovations in vehicle electrification and improvements in manufacturing processes across the industry.
SBTi’s comprehensive approach to steering the automotive industry towards net-zero is notable. By addressing both automakers and parts manufacturers, the draft encourages a holistic reduction in emissions. This development not only champions environmental sustainability but also ensures the sector adapts effectively to evolving market and environmental landscapes. Future standards will likely continue this trend, recognizing that systematic changes are key to meeting global climate goals.
