Carbon Budget Compliance: A life-cycle-based model for carbon emissions of automotive Original Equipment Manufacturers

Abstract

Automotive Original Equipment Manufacturers (OEMs) cause considerable amounts of CO2 emissions over the life cycle of their vehicles. They are thus contributing to global climate change. To stop climate change, all industries, including OEMs, must accomplish a major reduction of CO2 emissions. OEMs report past emissions and receive external support for setting Paris Agreement-compatible reduction targets. Though currently, OEMs do not have access to a methodology that facilitates modelling their future absolute emissions and the leverage of reduction measures at the company level. They are thus unable to develop holistic carbon reduction strategies. Here I demonstrate that current carbon management approaches remain conceptual. Based on the analysis of OEMs’ future emission drivers, requirements are developed to evaluate additional methods for their applicability in the subsequent method derivation. Quantifying the effect of integrating mobility services in OEMs’ fleets on the company’s absolute emissions is evaluated as especially important. For this reason, the Carbon Budget Compliance (CBC) method is developed by integrating and refining the analysed approaches. This method facilitates computing the impact of single reduction measures on fleet level over the life cycle of vehicles and mobility services regarding compliance with a carbon budget. The CBC method is exemplarily applied in a case study for the Volkswagen Group (VW). In scenario analyses the leverage of using renewable energy sources for battery production and electrified vehicles’ use phase is computed for fleets consisting of private vehicles and mobility services (car sharing, ride hailing, ride pooling). VW’s absolute emissions between 2015 and 2050 are modelled regarding the compliance with a 2 °C-compatible carbon budget. I show that immediate operationalisation of the two reduction measures for private vehicle and mobility service fleets is crucial for budget compliance. Due to higher load factors, ride hailing and pooling vehicles provide more person-km (p-km) during their lifetime than private vehicles. Fleet sizes in these scenarios are thus reduced. As heavier ride pooling vehicles need higher battery capacities than average Group vehicles, ensuring the use of renewable energy sources over their life cycle is crucial to attain absolute emission reduction. Otherwise, the reductive effect of smaller fleets is counterbalanced. The load factor of car sharing vehicles is similar or equal to private vehicles. By offering car sharing, OEMs can thus only reduce absolute emissions via an earlier onset of fleet electrification and the use of renewable energy sources. The high dependence on the energy sector’s decarbonisation efforts calls for OEMs to play an active role in the provision of sufficient amounts of renewable energy. The lowest modelled overshoot of the carbon budget is 5% facilitated by a combination of ride hailing and private vehicles as well as by operationalising the reduction measures. OEMs should therefore analyse additional measures tackling the supply chain and less CO2-intensive emission categories such as logistics within the CBC method. The method facilitates modelling such measures due to its modular approach. By using the CBC method, OEMs are now able to develop effective carbon reduction strategies to support achieving global climate targets and monitor their success. To improve the CBC method, future research should address the automation of data flows between data systems and the integration of micro-scale mobility models to quantify rebound effects caused by mobility services. Coupling internal carbon pricing with the CBC method could further promote its applicability in OEMs’ daily business operations.