Emissions from manufacturing in the autos sector: discussion paper

This discussion paper examines the growing importance of manufacturing and production emissions in assessing automobile manufacturers against global climate goals, including the Paris Agreement. The paper highlights how current assessments, which focus primarily on tailpipe emissions, may not fully capture companies’ alignment with the transition to a low-carbon economy.

The discussion paper explores how the shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs) is changing emissions profiles, with a larger share of lifecycle emissions now arising from upstream activities such as materials extraction, battery production and vehicle manufacturing. It identifies significant gaps and inconsistencies in company disclosures, particularly for Scope 3 emissions related to supply chains, which limits investors’ ability to assess full carbon footprints.

To address this, the paper proposes a preliminary approach to incorporating manufacturing emissions into the Carbon Performance methodology, using modelling and company data to demonstrate how including production emissions can materially affect companies’ alignment with climate scenarios. The findings show that accounting for these emissions can worsen apparent alignment with low-carbon pathways and narrow the gap between traditional and electric vehicle manufacturers.

The report highlights the need for improved disclosure, standardised reporting and more comprehensive target-setting.