Greenhouse gas emission coverage and reduction potentials of scope 3 emissions in car manufacturing

Abstract

In the car sector, total greenhouse gas emissions are dominated by indirect emission sources across complicated car supply chains. All indirect emissions fall under scope 3 of the GHG Protocol reporting standards and can be divided over upstream and downstream activities. Corporate reporting of these scope 3 emissions, however, is generally low, complicating possible estimations ofreduction potentials for this emission category. Therefore, this Master’s thesis assesses the current ambition of major car companies on reducing scope 3 emissions and the current state of their announced reduction targets. We investigated the current target landscape until mid-2022 and the total emission coverage of these targets in car supply chains. In addition, we conducted an in-depth analysis of upstream reduction strategies from the car companies’ sustainability reporting and calculated potential emission reductions based on electric vehicle (EV) targets in five of the leading global car markets until target year 2030. Quantification of reduction potentials from upstream steel and EV battery strategies was limited because of data availability and the lack of upstream targets from car companies. The low coverage of upstream scope 3 emissions further resulted in a maximum of 15% of potential uncovered emissions in car manufacturing. In contrast, downstream scope 3 emissions were covered more extensively through multiple reduction targets and the continuous updates of company EV sales targets. Under most recent EV targets, we found significantly higher targeted EV shares in comparison to national policies defined under the Stated Policy Scenario (STEPS). Integrating increased EV uptake in the calculation model resulted in reductions of 64, 77 and 90 Mt of CO2 for China, the US and the EU respectively, whereas Japan and India achieved low reductions of 3 and 1 MtCO2. In conclusion, more upstream reduction targets and overall transparency of supply chain innovations are required for an optimal coverage of scope 3 emissions and quantification of reduction potentials. Furthermore, we recommend better uptake of corporate EV targets in national policies to align with the rapid EV development. Although car companies showed limited upstream coverage, we argue that their downstream targets can provide an example of better national policies towards decarbonization of the car sector in this decade.