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Driving Towards a Greener Future: The Auto Industry’s Commitment to Carbon Neutrality
Driving Towards a Greener Future: The Auto Industry’s Commitment to Carbon Neutrality

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In the wake of global climate agreements like COP26, the automotive industry is increasingly aligning with ambitious carbon neutrality goals set by various countries. World economies such as India, China, the United States, Japan, and the European Union have committed to achieve net-zero carbon emissions between 2050 and 2070. Leading automakers are responding by setting targets to reduce emissions across the entire vehicle lifecycle, including manufacturing and operations, while also pushing towards electrification of their fleets.

Strategies for a Sustainable Auto Industry

The automotive sector is embracing several strategies to reduce its carbon footprint. These include minimizing emissions in manufacturing plants and reducing the net carbon content of car parts. This holistic approach, often referred to as “cradle-to-grave” approach ensures that carbon reduction is considered throughout the entire lifecycle of a vehicle.

Many companies have embedded Environmental, Social, and Governance (ESG) issues into their core business strategies, making sustainability a key driver of both operational and financial performance. This includes advancing the adoption of electric vehicles (EVs), with aggressive goals to significantly increase EV sales by the middle of the next decade.

Circular Economy in Action

The industry is increasingly focused on promoting the circular economy by using recyclable materials and extending the life of car parts and vehicles. Modern vehicles are approximately 85% recyclable, yet only a fraction of materials are currently recycled. However, several automakers are pioneering efforts to enhance this process, from refurbishing used cars and recycling batteries to remanufacturing critical components like engines and gearboxes. Circular car factories are emerging as key players in reducing resource dependency, offering everything from vehicle repairs to battery overhauls for second-life use in energy storage.

Innovations in Car Interiors and Batteries

There is a growing trend towards using recycled and bio-materials in vehicle interiors. Car dashboards, seats, and carpets are increasingly made from recycled plastics and other sustainable materials. Additionally, thinner battery designs are enhancing interior space and vehicle performance, while advancements in battery technology—such as all-solid-state batteries (ASSB)—are poised to further reduce emissions and improve efficiency.

As EV technology evolves, the transition from lithium-ion to solid-state batteries is expected to drastically reduce the carbon emissions associated with vehicle production and use. As tailpipe emissions account for 80% of a car’s carbon footprint, advancements in alternative fuels like ethanol, compressed natural gas (CNG), and hydrogen are crucial steps towards reducing emissions.

Harnessing Deep Tech for a Sustainable Future

Deep tech solutions, like Artificial Intelligence (AI) and 5G connectivity, are transforming sustainability efforts. These technologies are optimizing logistics and reducing transport emissions. Cars are becoming “IoT on wheels,” connecting with other vehicles, the electric grid, and smart city traffic management systems. This connectivity optimizes traffic flow, saves fuel, and reduces emissions. Software-defined cars can download the latest features over the cloud, extending their lifespan and contributing to a sustainable universe.

The auto industry’s journey towards carbon neutrality is about more than cutting emissions; it’s about building a sustainable future. Advances in material science, battery technology, and fuels, complemented by a sustainable supply chain and recycling network backed by deep tech like AI, will help us sustain our green earth. By embracing circular economy principles and leveraging cutting-edge technologies, companies like Renault and Nissan are leading the way towards a greener, more sustainable future. These efforts not only protect the planet but also open new business opportunities, proving that sustainability can indeed drive business value.

 


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Debashis Neogi
Managing Director

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