Automakers in India to speed up decarbonization drive

Automobile manufacturers are taking several steps like increasing use of renewable energy and pushing suppliers to cut their emissions in a bid to reduce carbon footprint, but the biggest challenge for them will be tackling the tailpipe emissions from the vehicles they sell.

Leveraging their vast manufacturing sites, automakers are deploying solar panels to generate captive renewable energy. They are also signing power purchase pacts with third-party renewable energy providers to ensure electricity is carbon-free.

Suzuki has scaled up captive solar power generation from 1 MW four years ago to 26 MW now. The company was also increasing use of railways to reduce logistics-related emissions.

M&M has taken it a step further by fixing an internal carbon price when making business decisions. Mahindra Group. While assessing a new project, the company will consider a price of $10 per ton of CO2 that is estimated to be generated. This ensures that less expensive but more polluting options do not trump those that are cleaner but more expensive.

However, these measures do not tackle the elephant in the room.

As per Greenhouse Gas (GHG) Protocol – an internationally recognised framework to measure emissions – any company’s carbon footprint includes direct emissions that it causes as well as the indirect emissions from the energy it uses, its supply chain and the life cycle of the products that it sells.

Essentially, the emissions caused by vehicles add to the manufacturer’s balance sheet.

As per Volkswagen AG’s sustainability report 2021, three-quarters of the group’s GHG emissions come from the tailpipe of vehicles they sell. Daimler reported that about 80% of its emissions in 2020 came from the use phase of vehicles it sold.

Tata Motors presently is the market leader in electric cars in India, with about 5% of its sales coming from EVs. Suzuki Motor in March announced its plan to invest over ₹10,000 crore in Gujarat. The funds will be used to set up local capacity to make EVs, batteries as well as a vehicle recycling unit.