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Automotive electrification and decarbonization: Shifting toward net-zero

21 July 2021 Vijay Subramanian Xi Wang
  • A 55% EU economy-wide carbon dioxide (CO2) emission reduction from the 1990 level is targeted by 2030.
  • Mainland China, currently the world's leading CO2 emitting country, also pledged in 2020 to achieve carbon neutrality by 2060. As an interim target, mainland China pledged a 20% reduction from carbon peak level by 2035.
  • And, in February 2021, the United States rejoined the Paris Agreement; achieving carbon net-zero by 2050 is in the Biden administration's climate plan.

The transportation sector is one major source of CO2 in economy entities, for example, about 29% in the European Union, more than one-third in the United States, and nearly 10% and climbing in mainland China. Among all transport sub-sectors, road transportation accounts for about 70% of CO2 emissions and will face significant challenges on the way toward net-zero.

To achieve carbon neutrality, each market has its unique position and regulatory pathway. Mainland China is expected to reach the CO2 emission peak between 2025 and 2030, optimistically around 2025, before the emissions start to drop. The EU market has been moving progressively on increasing stringencies of regulatory requirements, from the review of tightened 2030 fleet tailpipe target to the possibility of implementing Life Cycle Assessment (LCA) in compliance accounting. The United States is facing significant challenges, especially in the upcoming decade, to set consistent policy directions and catch up with pledged milestones.

Vehicle electrification is considered to be one of the most effective ways to reduce CO2 emissions from the transportation sector. Take EU market as an example, with more stringent CO2 standards being recently propose, battery electric vehicle (BEV) sales share is projected to be around 55% in 2030, along with a slight increase of plug-in hybrid electric vehicles (PHEVs) by 10%, to replace conventional internal combustion engine (ICE) vehicles. Currently, the legislations regulate CO2 or greenhouse gas emissions (GHGs) based on traditional tailpipe emissions directly from fuel combustion during vehicle operations. The regulatory framework gives battery electric vehicles (BEVs) credits as an incentive and considers them as zero emissions.

From the societal perspective, the debate is often that BEV operation is not emission-free as it consumes electricity, the supply of which often emits CO2. Whether BEVs are beneficial to climate or as beneficial as claimed needs holistic and systematic evaluations. LCA is a methodology developed to assess environmental impacts associated with all the phases of a product, process, or service's life cycle from cradle to grave.

A complete LCA could count emissions from raw material extraction and processing, components manufacturing, transportation and distribution, product assembly, product use, and end-of-life. Life-cycle CO2 emission assessment on vehicles, with careful handling of accounting guidelines, will provide a more objective way to quantify the influence and realistic carbon-reduction effects of electrification toward an economy-wide carbon neutrality target.

LCA accounting to be integrated into current fuel and emission regulations is under review. Aside from the possibility of tightening 2030 cars and vans CO2 target, the European Commission's 2030 Climate Target Plan and its current cars and vans emission legislation require the review of LCA integration by 2023. China Automobile Low Carbon Action Plan (CALCP) Research Report 2020 , supported by the United Nations Environment Programme, World Resource Institute, Energy Foundation, China Ministry of Economy and Environment, China Ministry of Transport, and other governmental agencies, organizations, and research institutes, has developed life-cycle-based CO2 accounting guidelines for passenger vehicles and car manufacturers to be further used in automotive industrial policy development, especially with electrification movements. LCA-based measurements will also promote integration of regulatory framework (for example, car and van CO2 targets, Renewable Energy Directive II, Emissions Trading System) and benefit from collaborative planning under the pathways toward carbon net-zero by the middle of the 21st century.

Download our latest whitepaper

Our Automotive Electrification and Decarbonization whitepaper provides a life-cycle perspective for on-road transport electrification and decarbonization, including:

  • An integrated way to evaluate vehicle electrification toward carbon neutrality
  • Car manufacturers commitment to science-based targets initiative to reduce scope 1, 2, 3, CO2 emissions
  • In-depth data recources to lead life-cycle accounting in the automotive sector
  • What the realistic CO2 savings are from passenger vehicle electrification
  • Life-cycle baed CO2 emisssions reduction based on the cleanness of electricity grid
  • Ability for car manufacturers to achieve decarbonization targets
  • Well-designed economy-wide LCA guidelines key to promoting feasible and efficient CO2 reductions under Europe's integrated 'Fit for 55' climate package


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