Automotive Purchasing and Supply Chain — 2023-11-30
Automotive Industry
As world leaders prepare for the COP28 climate summit in Dubai, it is more important than ever that business goes further than before in terms of climate action. Volvo Cars announced that it is doubling down on its action plan – already one of the most ambitious in the automotive industry – by aiming to reduce Carbon Dioxide emissions per car by 75% by 2030, compared to a 2018 baseline.
This is in addition to its ambition to become climate neutral by 2040, and to reduce Carbon Dioxide emissions per car by 40% between 2018 and 2025. During the first nine months of 2023, overall Carbon Dioxide emissions per car were 19% lower compared with the 2018 benchmark.
Achieving such an ambitious 75% reduction target for 2030 demands that the carmaker continues working towards its existing ambition to only sell fully electric cars by 2030, thereby eliminating tailpipe emissions from our model line-up. To assist it in achieving these ambitions, Volvo Cars announced that it is now a member of the World Economic Forum’s First Movers Coalition (FMC) and is putting its purchasing power behind emerging clean technologies that will support the shift to near-zero emission aluminium.
Volvo Cars is also taking action in the steel industry, through its collaboration with Swedish steel producer SSAB. It is the first car maker to team up with SSAB to explore near-zero emission, high-quality steel for the automotive industry. Now, Volvo Cars has secured access to near-zero emission primary and recycled sheet steel from SSAB that we plan to use in one of our car programmes by 2026.
“COP28 is a historic accountability moment for climate action,” said Javier Varela, Chief Operating Officer and Deputy CEO, Volvo Cars. “The world urgently needs to come together and act, to avoid the worst effects of climate change. We’re committed to doing our part and we call on corporate and political leaders around the globe to also do theirs.”
Earlier this year, Volvo Cars revealed the fully electric EX30 small SUV, designed to have the lowest carbon footprint of any Volvo car to-date. The EX30 is one of several new, fully electric Volvo models that it has launched and will launch in coming years, on the way towards becoming a fully electric car maker by 2030. And it is making good progress – during the first nine months of 2023, fully electric cars made up 16% of the overall sales.
Volvo Cars is also rapidly moving away from the internal combustion engine. It will produce its last ever diesel-powered car in early 2024 and has stopped R&D investments in new internal combustion engines. Instead of focusing on the technologies of the past, it has its eyes on the future.
At the same time, meeting the latest target will require the carmaker to tackle Carbon Dioxide emissions throughout the supply chain and operations (including logistics), aiming to reduce them by 30% each by 2030, compared to a 2018 baseline.
The carmaker is already doing a lot. As much as 69% of its own operations were powered by climate-neutral energy in 2022. And since then, it has recently achieved 100% climate neutral electricity across each of its plants globally.
This summer, Volvo Cars also became the first global car maker to announce the switch from fossil fuel to biofuel for 86% of its intercontinental ocean freight. This reduces the ocean freight Carbon Dioxide emissions by 84% and supports its ambition to reduce operational emissions.
“We have previously used the COP summits to push collective climate action and COP28 will be no different,” said Jonas Otterheim, Head of Climate Action, Volvo Cars. “What we and other like-minded companies are trying to do is develop and scale up transformational technologies to decarbonise sometimes ancient industrial processes. By joining the FMC and showing tangible progress in our partnership with SSAB, we hope to demonstrate that this vital shift is not just possible but is already underway.”
COP28 takes place against the backdrop of the United Nations’ Global Climate Stocktake Report, which was released in September. The sobering conclusion of the report is that despite some areas of progress, the world is still far off track to keep global warming limited to 1.5 degrees against pre-industrial levels.
The report also includes recommendations for specific sectors, including the transport sector. It states that for the automotive industry, “phasing out internal combustion engines and using electric vehicles offer the greatest mitigation potential in the sector.” That conclusion closely aligns with Volvo Cars actions in electrifying its fleet and moving away from fossil-fuel powered cars.