Manufacturers of Electric Vehicles Yet to Achieve Complete Eco-friendliness
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The Chinese automotive industry is faced with significant challenges and opportunities to reduce emissions in its value chain, particularly in raw materials production like steel and aluminium.
Challenges
The energy-intensive nature of steel and aluminium manufacturing results in substantial greenhouse gas (GHG) emissions, heavily impacting the automotive supply chain’s carbon footprint. Emissions occur at multiple stages—raw materials procurement, production, transportation, use, and recycling—requiring comprehensive, lifecycle-wide decarbonization efforts.
Measuring and disclosing emissions accurately across thousands of materials and parts remains difficult due to carbon accounting and transparency gaps. Moreover, while China’s carbon market and policies are evolving, many manufacturers must accelerate integration of green technologies and low-carbon innovation.
Opportunities & Policy Support
The Chinese government is taking steps to address these challenges. The Ministry of Ecology and Environment expanded the national carbon trading scheme to include steel and aluminium producers, incentivizing emission cuts upstream. Efforts are also underway to build unified green-product certification and lifecycle assessment databases, boosting transparency and enabling better carbon accounting by carmakers and suppliers.
Increased use of renewables in metal production offers a significant pathway for decarbonization. The government is also promoting the use of renewable energy, especially in metal production, as a means to achieve its carbon reduction goals.
How Chinese and Foreign Carmakers Address Steel and Aluminium Supply Chains
Leading carmakers are engaged in supply chain integration, encouraged by the Chinese government to lead low-carbon innovation across the entire automotive supply chain, including raw materials procurement and production. An automotive industry carbon disclosure platform already collects data for over 8,000 passenger vehicle models, linked to steel industry platforms providing environmental declarations for suppliers.
Carmakers are increasingly working with steel and aluminium makers to adopt energy-saving measures and emissions reductions, prompted by policies and market mechanisms. Global automakers selling in China are also adapting to local regulations and incentives, often aligning with Chinese carbon accounting standards and certification efforts.
Summary
China’s automotive industry is under growing pressure to reduce emissions not only from vehicle operation but throughout the value chain, especially in raw materials like steel and aluminium. Both Chinese and foreign carmakers are responding by enhancing supply chain transparency, pursuing low-carbon innovation, collaborating with suppliers, and leveraging China’s expanding renewable energy sector to decarbonize raw materials production.
The comprehensive approach addresses both the scale of emissions embedded in raw materials and the evolving regulatory and market environment. While detailed data on particular companies’ steel and aluminium sourcing strategies was not found, government-driven platforms and policy incentives form the backbone of current industry actions in China.
References: 1. Source 1 2. Source 2 3. Source 3 4. Source 4 5. Source 5
- The carbon footprint of the Chinese automotive industry is significantly impacted by the high emissions produced during the manufacturing of steel and aluminium.
- Decarbonization efforts in the Chinese automotive supply chain must address emissions at various stages, from raw materials procurement to recycling.
- Accurate emissions measurement and disclosure across thousands of materials and parts remain challenging due to carbon accounting and transparency gaps.
- China's government is encouraging the integration of green technologies and low-carbon innovation among manufacturers to address emissions.
- The Ministry of Ecology and Environment's expansion of the national carbon trading scheme includes steel and aluminium producers, incentivizing emission cuts upstream.
- Unified green-product certification and lifecycle assessment databases are being developed to boost transparency and enable better carbon accounting by carmakers and suppliers.
- Renewable energy use in metal production offers a significant pathway for decarbonization, a goal the Chinese government is actively promoting.
- Global automakers selling in China are adapting to local regulations, often aligning with Chinese carbon accounting standards and certification efforts, and collaborating with suppliers to adopt energy-saving measures and emissions reductions.
