Automotive Engineering - December 2022 - 8

SUPPLIER EYE
Are you prepared for Scope 3?
S
uppliers' heads keep spinning. If the
challenges of inflation, energy costs,
logistics and labor scarcity weren't
enough chaos, here comes another hurdle:
The ongoing push for de-carbonization -
reducing your company's emissions footprint
and that of its products - is wrapped into a new
set of protocols called Scope.
Before we get too far into the weeds, it is important
to understand key definitions used by
government and industry to underscore emissions
commitments. Carbon neutrality is the balancing
out of emitting versus absorbing carbon
over a timeframe. Several governments and
companies have offered this as an early pledge,
or low bar, to get all parties onboard.
A growing list of industry players are moving
to renewable energy sources and the elimination
of all waste during the manufacturing process,
both in-house and across their supply chains.
The aim is to achieve carbon net zero - no carbon
emissions whatsoever, from raw material
mining to end-of-use recycling. It's a high bar
indeed, and it's aligned with the regulatory and
corporate deadlines for the end of combustionvehicle
sales, replaced by 100% EV sales.
Amid these dynamics comes the Greenhouse
Gas Protocol, a global greenhouse-gas (GHG)
accounting standard. The GHG Protocol's mission
is to establish comprehensive guidance for
measuring and managing GHG emissions from
private and public sector operations up and
down the value chain. The protocol is not just
another eco-assertive NGO. It's aligned with
the World Business Council for Sustainable
Development and counts a growing number of
Fortune 500 companies that are implementing
it in some way. Investors have taken notice.
Regional and local governments are also jumping
on board.
To help organizations to understand their full
value-chain emissions and to focus their efforts
on the greatest reduction opportunities, the
GHG Protocol developed a full GHG emissions
Michael Robinet
Executive Director,
Consulting,
S&P Global Mobility
SAE Foundation
Trustee
michael.robinet
@spglobal.com
Suppliers will
be asked to
improve their
processes,
optimize
material
choice and
other energy
consumption
factors.
inventory that it calls Scope 1, Scope 2 and
Scope 3. Scope 1 covers emissions from sources
that an organization owns or controls directly,
such as tailpipe emissions of non-EV corporate
fleet vehicles. Scope 2 are a company's indirect
emissions from the energy it purchases and
uses. An example would be grid electricity generated
by coal that is used to power an EV fleet.
Currently, these account for ~2% on average of
total emissions over the vehicle life cycle, according
to S&P Global Mobility research.
Scope 3 emissions are " a consequence of the
activities of the company but occur from sources
not owned or controlled by it, " according to the
GHG Protocol. Scope 3 thus encompasses every
link of the supply chain, as well as the tank-towheel
emissions related to moving the vehicle
and even vehicle recycling. Scope 3 accounts for
roughly 80% of total vehicle lifecycle emissions.
Why is this so important to the supply base?
Suppliers will be asked to improve their processes,
optimize material choice and other energy
consumption factors to reduce their own
carbon footprints as well as those of their customers.
They will also be tasked to offer technologies
to reduce Scope 3 use-phase emissions
- especially in the tank- to-wheel area.
Shifting to BEV propulsion technologies and
structures will be a key enabler here. Scope 3's
impact on smaller, lower-tier suppliers will vary
depending upon their CO2 footprint. In some
cases, shifting to different upstream supply
sources will be necessary. Some of these shifts
could be onerous, especially if decisions are not
applied consistently between customers.
Driven by government and societal goals,
OEMs are orchestrating the shift to BEV propulsion
with suppliers being required to do their
share towards an ultimate net-zero carbon future.
OEMs will not be able to achieve these
gains alone. Smart, forward-looking suppliers
should outline how they are part of the solution.
Checking this box has critical implications for
long-term success.
8 December 2022
AUTOMOTIVE ENGINEERING
Automotive Engineering - December 2022

Table of Contents for the Digital Edition of Automotive Engineering - December 2022
