ICE SUSTAINABLE FINANCE

Avoided Emissions~Analysis of GPIF Portfolio~
July 2023

Table of Contents
1

EXECUTIVE SUMMARY ...................................................................................................... 3

2

INTRODUCTION............................................................................................................... 4
2.1
THE PROJECT BRIEF ....................................................................................................... 4
2.2
THE AVOIDED EMISSIONS CONCEPT ...................................................................................... 5
2.2.1 What Are Avoided Emissions?................................................................................................................ 5
2.2.2 Identifying Avoided Emissions................................................................................................................ 5
2.3
OUR APPROACH TO AVOIDED EMISSIONS ................................................................................ 5

3

THE IMPORTANCE OF AVOIDED EMISSIONS ........................................................................... 9
3.1
A FOCUS ON POSITIVE IMPACTS .......................................................................................... 9
3.1.1 Emphasis on the enabling aspect .......................................................................................................... 9
3.2
BEYOND THE CARBON FOOTPRINT.......................................................................................10
3.2.1 Sustainable finance regulation and Avoided Emissions. .................................................................... 10
3.3
ROLE OF AVOIDED EMISSIONS IN I NVESTMENT DECISION MAKING.....................................................10

4

SECTOR AND COMPANY SELECTION ....................................................................................12
4.1
4.2

5

SECTOR SELECTION .......................................................................................................12
COMPANY SELECTION ....................................................................................................14

SECTOR ANALYSIS...........................................................................................................15
5.1
OVERVIEW................................................................................................................15
5.2
ZERO EMISSION VEHICLES................................................................................................15
5.2.1 Approach and Methodology ................................................................................................................ 15
5.2.2 Avoided Emissions by Country of Sales................................................................................................ 17
5.2.3 Avoided Emissions by Country (Company HQ) .................................................................................... 18
5.2.4 Zero Emission Vehicles - Key Themes and Results .............................................................................. 19
5.2.5 Zero Emission Vehicles - Conclusions................................................................................................... 20
5.2.6 LCA Factors - Assumptions ................................................................................................................... 20
5.2.7 Company Sales - Assumptions.............................................................................................................. 21
5.3
U TILITIES .................................................................................................................225.3.1 Approach and Methodology ................................................................................................................ 22
5.3.2 Utilities - Key Themes and Results ....................................................................................................... 28
5.3.3 Utilities - Broader Social and Environmental Considerations ............................................................ 29
5.3.4 Utilities - Conclusions............................................................................................................................ 29
5.3.5 Electricity Source - Assumptions .......................................................................................................... 29
5.3.6 Grid Breakdown - Data Assumptions................................................................................................... 30
5.3.7 Company Renewable Power Generation - Assumptions.................................................................... 30
5.4
MINED MINERALS........................................................................................................32
5.4.1 Approach and Methodology ................................................................................................................ 32
5.4.2 Mined Minerals - Key Themes and Results.......................................................................................... 36
5.4.3 Broader Social and Environmental Considerations............................................................................. 37
5.4.4 Broader Applications of Mined Minerals............................................................................................. 37
5.4.5 Global Overall Mineral Production - Assumptions.............................................................................. 38

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5.4.6

Mined Minerals - Conclusion................................................................................................................ 39

6

CONCLUSIONS ...............................................................................................................40

7

APPENDIX.....................................................................................................................41
7.1
ZEV SECTOR DATA SOURCES ............................................................................................41
7.1.1 ZEV Sector - LCA Factors....................................................................................................................... 41
7.1.2 ZEV Sector - Company Sales ................................................................................................................. 41
7.2
U TILITIES SECTOR DATA SOURCES .......................................................................................427.2.1 Utilities Sector - Electricity Source ....................................................................................................... 42
7.2.2 Utilities Sector - Grid Breakdown ......................................................................................................... 42
7.2.3 Utilities Sector - Company Renewable Power Generation ................................................................. 42
7.3
MINED MINERALS SECTOR DATA SOURCES .............................................................................427.3.1 Global Overall Mineral Production ...................................................................................................... 42
7.3.2 Mineral requirements in ZEV batteries: Weight distribution ............................................................. 42
7.3.3 Global Mineral output for ZEV application projection (2030)............................................................ 42
7.4
GHG EMISSIONS SCOPES ................................................................................................44

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1 Executive Summary
The ability to analyze Avoided Emissions can be a powerf ul tool for sustainable investing, helping
to identif y opportunities with a positive impact and quantif y the real-world impacts such investments
can generate.
Avoided Emissions can be incorporated in investment decision making. Indeed, Avoided
Emissions can provide more insight to climate analysis, enabling t he assessment of the positive
impact contribution of individual companies to the transition towards a low-carbon economy.
Using Intercontinental Exchange’s, Inc. (ICE) extensive carbon emissions database and avoided
emissions methodology, ICE has constructed models in an attempt to estimate Avoided Emissions,building the analytical f rameworks to try to better understand the broader climate impact ofinvestments.
The ICE f ramework f or Avoided Emissions analysis consists of three elements - data analysis,modelling, and comparative scenario analysis. This f ramework incorporates five key concepts that
underpin ICE’s approach to methodology construction: lif ecycle assessment approach, materiality,
apportionment, f orward-looking capabilities, and geographical granularity.
Overall, this approach to Avoided Emissions helps to provide a more holistic view of the climate
impact of individual companies and/or investment, also having the potential to channel capital
towards solutions providing positive climate imp act.
In this report ICE details the process used to identify, analyze and report the impact of the Avoided
Emissions across the companies in three sectors within the GPIF portf olio. The sectors examined
are Zero Emission Vehicles, Utilities and Mined Minerals.

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2 Introduction
Globally, governments and regulators are implementing climate policy with an emphasis oncompanies setting their own Net Zero targets. This tends to encourage companies to reduce
emissions across not only their own direct operations b ut also their value chains (Scope 3
emissions).
However, the need f or companies to also develop innovative low or zero emissions solutions is
becoming increasingly important f or global decarbonization. There is also a need to measure theextent to which a company contributes to the broader global goal of Net Zero with decarbonizing
solutions.
Avoided Emissions is one concept which aims to identif y opportunities with a positive impact andquantif y the real-world dif f erence such investments can generate.
While the concept of Avoided Emissions is currently not as clearly def ined as other climate metrics,
the underlying intention is clear: to help stakeholders understand a company’s role in the transition
towards a low carbon economy.
An understanding of a company’s or product’s role in the transition allows the identif ication of low
emission and carbon reducing solutions, helping to drive investment towards these opportunities.

2.1

The Project Brief

ICE is supporting the Government Pension Investment Fund of Japan (GPIF) to improve theanalysis and disclosure of the f inancial impact related to climate change-related opportunities.
Specif ically, this report summarizes ICE’s identif ication, analysis, and quantif ication of GHG
reduction contributions in the GPIF portf olio in the f orm of Avoided Emissions.
To achieve this, ICE has utilized its extensive, granular company -level emissions database andAvoided Emissions methodology to assess the potential Avoided Emissions in the GPIF port f olio
across selected companies within the Zero Emission Vehicles, Utilities and Mined Minerals
sectors.
Detailed analysis and results are presented to assist GPIF in the reporting of the broader climate
impact of its investments, and specif ically the inv estment in solutions which have the potential tocontribute to the broader transition to a low-carbon economy.

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Exhibit 1: Illustration of Potential Avoided Emissions at Industry Level

2.2

The Avoided Emissions Concept

2.2.1

What Are Avoided Emissions?

“Avoided emissions are emission reductions that occur outside of a product’s life cycle or value
chain, but as a result of the use of that product.” 1
2.2.2

Identif ying Avoided Emissions

The concept of Avoided Emissions is applicable to many sectors providing climate solutions.
Analysis across a broad range of sectors can identif y sources of potential positive impact on thetransition to a low carbon economy, even in the depths of complex supply chains.
Hence, the identif ication and quantif ication require signif icant research, knowledge andunderstanding of the subject and of the companies being assessed. Indeed, it is not uncommon
f or companies in sectors with large Avoided Emissions potential not to report this inf ormation.

2.3

Our Approach to Avoided Emissions

ICE has utilized its extensive carbon emissions database to construct a methodological f ramework
to help identif y and estimate potential Avoided Emissions in portf olios and develop a better
understanding of investors’ overall climate pos ition.
For this report we have used this methodology and approach to Avoided Emissions to analyze
selected companies within three sectors (Zero Emission Vehicles, Utilities and Mined Minerals) of
the GPIF portf olio.
The structure of this approach to Avoided Emissions analysis consists of three main elements:

1

Def inition of Avoided Emissions provided in article by the World Resources Institute (Do We Need aStandard to Calculate “Avoided Emissions”?).

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Exhibit 2: Three Stage Process to Avoided Emissions Analysis

Data

Modelling

Scenario
Analysis

The f irst element is the collection, assessment, and analysis of emissions data and inf ormation ofindividual companies to identif y the various Avoided Emissions mechanisms, which each company
may contribute to. Here we draw on ICE’s comprehensive climate database, together with theexpertise and experience of our climate analysts, to collect and analyze specif ic company
inf ormation.
The second element is the modelling, where we explain the various methods, metrics and systems
used as part of the overall process. Both bespoke company level bottom -up models and sectorspecif ic inputs are used, including concepts such as Materiality Assessment and Lif e Cycle
Assessment (LCA) modelling.
The third element of the approach is our comparative scenario analysis, including “what -if ”
scenarios and f orward-looking analysis to help put the results of the process into context. Here,various climate scenarios (including NGFS - Network f or Greening the Financial System) are used
to better understand how the results depend on the various input variables under dif ferent
scenarios.
The output f rom this process is a detailed set of results f or each Avoided Emissions mechanism
f or individual companies, both current 2 and/or f orward-looking, representing Avoided Emissions
already achieved and potential f uture Avoided Emissions.
In the results, we outline dif f erent limitations of the models, calculations, underlying data points
and comparative scenario analysis. The sophistication of the methodologies and understanding of
the market are still evolving, hence our work is also constantly being updated considering the
publication of new f rameworks and research on how to best quantif y Avoided Emissions.

“Current” ref ers to the latest company level data available as of 31st March 2023. This is company
reported data from 2020 to 2022, depending on their annual sustainability reports or peer-reviewed
research.
2

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Exhibit 3: Analysis Workflow

Data

•
•
•

Collection
Assessment
Analysis

Modelling••

Company Bottom Up
Life Cycle Assessment

Scenario••

Forward-Looking
Climate Scenarios (NGFS)

Results•••

Individual Company
Each Avoided Emissions Mechanism
Current and Forward-Looking

The analysis process f ollows the below steps:
•
•
•
•
•

Research and identif y avoided emissions mechanisms
Data review
Lif e Cycle Assessment Modelling
Comparative scenarios
Results

Avoided Emissions Identification and Data Review
This involves reviewing available public documents, including annual reports, analyst
presentations, sustainability reports, websites, and other relevant documents. This process helps
to identif y the various avoided emissions mechanisms which each company may contribute to.
This also involves understanding what company -specific preliminary data is available, including
sales f igures, reported avoided emissions, and other f undamental inf ormation. A review ofliterature and published Lif e Cycle Assessment data is also conducted, to understand whatcomparative studies are available to f eed into the bespoke models.
Modelling approach
For the companies identif ied, the modelling is carried out both on a bespoke basis from the bottom
up. We input company-specific parameters and ensure the methodology is f ully aligned to the
product or service. The models are developed to maximize the impact of any existing data and toensure f lexibility. The output is a base methodology which can serve as the f oundation f or f uture
development through better quality data.

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Comparative Scenarios
Where appropriate, NGFS scenarios are used to better unders tand how the outputs depend on
input variables, particularly where the data input is estimated, and to provide a range of impact.
Results
For each avoided emissions mechanism, ICE generates results which are presented in annual
tCO2e avoided, f or both current and f orward-looking avoided emissions. Current f igures relate to
the achieved avoided emissions of the company, based on our models and data collected.
Forward-looking f igures are based on various projections of company variables, emissions f actors,
sales/revenue proportions, and other f actors.
For transparency, the results are accompanied by an explanation of the limitations of the models
and data, as well as the assumptions and comparative scenario used. This means the results arepresented with the applicable context to provide an understanding of the appropriate use cases.
Please ref er to the Appendix f or the f ull list of sources used as part of this analysis.

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3 The importance of Avoided Emissions
The identif ication of Avoided Emissions within individual companies, and more broadly within
investment portf olios, is an imp ortant indicator of the decarbonization potential and ability toachieve climate (net zero) goals f or both the individual companies and the investment strategy ofthe portf olio.
Avoided Emissions analysis allows for a positive narrative to be developed regarding a company’senvironmental impact, shif ting the f ocus to Climate Opportunity.

3.1

A Focus on Positive Impacts

A f ocus on Avoided Emissions and their positive environmental impact by investors within theirdecision-making f ramework should encourage more companies to develop a robust Avoided
Emissions methodology to quantif y the climate impact from the use of their products and services.
Exhibit 4: Investor Focus on Positive Environmental Impact

An ef f ective Avoided Emissions strategy at corporate level should be f ully integrated into a
company’s overall processes f rom product design, manuf acture and through to distribution. Being
integral to a company’s overall climate strategy, Avoided Emissions considerations can then be a
guiding f actor f or companies in their business decision making.
Implementing such an approach to Avoided Emissions at the corporate level is not always easy.
Companies can f ind themselves f acing dilemmas, such as a rise in t heir own carbon f ootprint
because of the development and growth of products and services designed to enhance broader
Avoided Emissions.
Avoided Emissions strategies should not be considered a trade of f against the reduction of anindividual company’s own carbon emissions (Scope 1,2 and 3). Companies acting as climate
champions aim to reduce not only their own carbon f ootprint, but at the same time provide products
and services to help their clients transition towards a lower carbon economy. These two goals
should not be mutually exclusive.
3.1.1

Emphasis on the enabling aspect

Climate champions with a f ocus on products and services that have the potential to reduce
emissions f or the whole economy can have a signif icant role to play in leading sustainability
practices and showing how individual companies can help the wider society decarbonize.
The role of climate champions also extends to attracting capital towards investment, products andservices that can provide the opportunity to help decarbonize not just the value chain, but the wider
economy.

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In this regard, Avoided Emissions can provide usef ul tools to help investors identify opportunities
with a wider climate impact. The development of Avoided Emissions metrics can enable investors
to take a more comprehensive view of climate related opportunities within portf olios, allowing
comparisons across industries and companies. In the transition to a lower carbon economy,
companies that provide signif icant Avoided Emissions f or the entire economy are potentially
exposed to additional growth opportunities.
The addition of Avoided Emissions analysis to traditional climate risk analysis can provide investors
with a greater understanding of the ef fects of climate change and impact at company and portfolio
level.

3.2

Beyond the Carbon Footprint

In addition to the conventional carbon emissions metrics of Scope 1, 2 and 3, ICE believes there
is now a need f or more innovative and quantitative methodologies and tool kits to conduct a morethorough analysis across a broader range of perspectives to gain a holistic view of individualcompanies’ wider climate impact.
The concept of Avoided Emissions has a signif icant role to play in such new perspective, especiallywhen it comes to providing investors with a better understanding of the overall ef f ects ofdecarbonization. So f ar there has been little research on Avoided Emissions, contributing to theconcept being widely unrecognized, or even misunderstood.
3.2.1

Sustainable f inance regulation and Avoided Emissions.

While global f inancial market regulators have been at the f oref ront with regards to implementing
climate related guidelines and regulations, these have tended to f ocus on the risk side of theequation. Namely the identif ication and reporting of emissions at investment/portfolio level, climatealignment (net zero) analysis, and temperature target setting.
There is now an opportunity for policy makers and international organizations to also consider
encouraging the development and use of metrics aimed at measuring and promoting positive
climate impact, helping to direct capital to climate solutions and innovation rather than justdiscouraging investment in high-emitting industries. The disclosure of additional key climate
inf ormation, such as Avoided Emissions, could go a long way in supporting these advancements
in climate reporting.

3.3

Role of Avoided Emissions in Investment Decision Making

Understanding and identif ying Avoided Emissions can be usef ul and even important f or investment
managers. It can inf orm the creation of a product or service that enables wider decarbonizationand can create a business opportunity with potential f or growth.
Companies identif ying and reporting Avoided Emissions activities in their revenue and/or capex(f uture revenues), may assist investors in f inding companies with meaningf ul secular growth
opportunities in sustainability.

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This is dif ferent to identif ying companies with large carbon f ootprints and purely f ocusing on any
opportunities from the reduction of those emissions. An example could be a ref inery company thatis introducing renewable natural gas or green hydrogen to their products. This could lead to Scope
1 and 2 reductions, which many investors view positively f rom a sustainability perspective.

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4 Sector and Company Selection
ICE f ollowed a multi-tiered approach trying to identif y the sectors and companies within the GPIF
portf olio that should be assessed f or Avoided Emissions potential. The GPIF portf olio wasscreened f or potential sources of Avoided Emissions at sector level taking various f actors andvariables into consideration, including potential size of Avoided Emissions at sector and company
level and, signif icance of the investment holdings within the GPIF portf olio (both f rom an
investment value and number of holdings perspective). Data quality and availability were also
taken into consideration, especially with regards to data granularity and accuracy at the
product/business segment level.
The key criteria used to select the sectors f or Avoided Emissions Analysis included:
•
•
•
•

4.1

Importance within GPIF universe (Investment Value, Number of Securities)
How well methodologies are established f or quantif ying Avoided Emissions within the
sectorData availability - company-specific variables, industry-level research, country-specificf actors such as grid emission f actors
Data quality - reputable sources as well as granularity
Sector Selection

Based on these criteria the f ollowing three sectors were identif ied for Avoided Emissions analysis:•••

Zero Emission Vehicles (ZEVs)
Utilities
Mined Minerals

These sectors were selected not only f or their signif icant potential for Avoided Emissions, but also
f rom a data quality and data availability perspective, taking into consideration data granularity andaccuracy f or the dif f erent products of companies.
The ZEV and Utilities (via renewable energy) sectors are commonly associated with Avoided
Emissions potential and are also consistent with the other criteria including data quality and data
availability as well as being important within the GPIF portf olio.
The Mined Minerals sector may at f irst glance seem a surprising choice, but it meets the criteria
given the application of mined minerals in Electric Vehicle batteries. While minerals ha veapplications in other segments of the energy transition with avoided emissions potentials, as
highlighted in Exhibits 5 and 6, ICE has specif ically f ocused on the application of minerals in EV
batteries, as there are relatively good quality data inputs available including f orward-looking data
regarding how battery use could evolve. Additionally, EVs are projected to be the primary sourceof demand f or minerals in 2030 as illustrated below (Exhibit 6).

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Exhibit 5: Mined Minerals – Areas of Potential Avoided Emissions
Battery Storage

Solar Energy

Carbon Capture &Storage
Mined Minerals – Areas withavoided emissions potential

Light Emitting
DiodesZero Emission
VehiclesWind Energy

Exhibit 6: Mined Minerals – Total Mineral demand for select sectors with avoided emissions
potential 3
Exhibit 6A. Total Mineral Demand for
Sectors with Avoided Emissions Potential(2020)

Exhibit 6B. Total Mineral Demand for
Sectors with Avoided Emissions Potential(2030 - Stated Policies Scenario)

Solar PV

20%
35%
15%

Wind
Other low-carbon
power generation

30%

Solar PV

17%

Wind
17%

51%

ZEVs and Battery
storage

15%

Other low-carbon
power generation

ZEVs and Battery
storage3

Exhibit 6 includes minerals beyond the scope of this project as well, as mineral requirements for solar
and wind are dif ferent f rom ZEV batteries. “ZEVs and Battery storage” includes electricity storage on
grid or residential level, though the majority of new demand is expected to derive from Electric Vehicles.
Steel and aluminum are not included in the data f or the charts above, but aluminum has been
considered in the project. The charts are based on data from IEA report – ‘The Role of Critical Minerals
in Clean Energy Transitions’. We have only included sectors deemed to have avoided emissions
potential.

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4.2

Company Selection

Several f actors were considered f or the company selection process in each of the sectors, theseincluded:••••

Leaders by way of revenue or market share
GPIF portf olio representation
Balance of regions
Data availability

Using these criteria, the f ollowing number of companies were selected f or Avoided Emissions
analysis within the three chosen sectors.
•••

Zero Emission Vehicles - 16 Companies
Utilities - 12 Companies
Mined Minerals - 8 Companies

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5 Sector Analysis
5.1

Overview

For the three sectors selected (ZEVs, Utilities, Mined Minerals) within the GPIF portf olio for
Avoided Emissions analysis, an array of methodologies and approaches were used to take into
account the specif ic characteristics of each of the sectors, including Attribution analysis, Scenario
analysis and Lif e Cycle Assessment (LCA) analysis, where Avoided Emissions are calculated ateach of the phases within the LCA, depending o n company, region of operation and corresponding
data availability.
For every avoided emissions calculation, the latest available company reported data has been
def ined as the “current” year. This ranges between 2020-2022 depending on the latest peerreviewed research and company sustainability reports.

5.2

Zero Emission Vehicles

Based on the analysis and assumptions detailed below, the results of the Avoided Emissions
analysis f or ZEVs conducted on 16 companies f rom the Automotive Sector within the GPIF portf olio
estimate that the total Avoided Emissions are equivalent to the carbon sequestered by circa 1 11
million acres (45 million hectares) (2022 Estimation) of f orests in one year4.
5.2.1

Approach and Methodology

The criteria used to select the companies f or analysis were based on the ZEV related companies
identif ied within the GPIF portf olio. These ZEV companies identified within the GPIF portf olio werethen ranked by size according to their market capitalization. Then, an assessment of data
availability was carried out to ensure the companies selected make the necessary data available
to carry out the analysis. The location of the individual companies and, country of headquarters
was then taken into consideration.
For the assessment of Avoided Emissions within the ZEV sector the Lif e Cycle Assessment (LCA)
methodology was used. Using this approach, Avoided Emissions are calculated at each of thephases within the LCA, as per the corresponding data availability. Fuel-Cell Electric Vehicles(FCVs or FCEVs) are not included in our analysis due to the small number of vehicles produced
and thus small number of emissions avoided, as well as a lack of data on expected production in
2030.

4

1 acre of aff orestation is 0.85 of tCO 2e avoided, https://www.epa.gov/energy/greenhouse-gasequivalencies-calculator

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Exhibit 7: ZEV Life Cycle Assessment

2. Manufacturing

1. Battery Mining &Refining

5. Recycling /Disposal

3. Distribution

4. ZEV Transportation

The initial step in this approach is a calculation of the f ull lif e-cycle emissions of a ZEV sold in aparticular region of a particular vehicle size.
For an individual vehicle, the lif e-cycle assessment would cover the emissions f rom cradle-to-grave(Exhibit 7), encompassing all stages of the product life until disposal. Note that f or both materialityand data availability purposes, we have excluded both the emissions f rom distribution of vehicles,
and f rom their end-of -lif e (Recycling/Disposal) in both ZEVs and the baseline vehicles we assess.
We then multiply the emissions of a given ZEV by the total number of EVs sold in that region to
get the emissions f or ZEVs.
Then the Baseline Emissions are calculated. The Baseline Emissions are composed of emissions
f rom Internal Combustion Engine Vehicles (ICEV) and Plug -in Hybrid Electric Vehicles(PHEV)/Hybrid Electric Vehicles (HEV) in the same region. This is then multipl ied by the numberof ZEVs sold in that region by the company being analyzed. The dif f erence between baseline
emissions and ZEVs emissions represents the total avoided emissions f rom the ZEVs sold in theregion.
This is f ollowed by an aggregation of these values, either aggregated across the companies to get
values f or the country of sales or aggregated across regions and assigned to the country of thecompany’s headquarters.
For estimating the 2030 sales in each region, we used credib le company claims where available,
but where it was not available we instead looked at the relative market share of the company
currently against the total number of ZEVs sold according to the International Energy Agency (IEA).
We assumed these regional market shares that a company has remain the same in the f uture(meaning the company remains as competitive as it currently is) and then scale by the regional
projected number of ZEVs in 2030. The projections were calculated with a baseline assuming the
IEA’s “Stated Policies Scenario“ or “STEPS”.

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Exhibit 8: Selected Companies as % of GPIF Automotive Sector Exposure (Value)

Selected Companies

Other

The above chart shows the 16 companies selected f or the ZEV Avoided Emissions analysis
represent 91% of GPIFs total investment value in the Automotive Sector by value, based on thedomestic and f oreign equity portf olios.
5.2.2

Avoided Emissions by Country of Sales

Exhibit 9: ZEV Avoided Emissions by County of Sales
180,000,000
150,000,000

tCO2e

120,000,000
90,000,000
60,000,000
30,000,000
-

Japan

EuropeAvoided Emissions (Current) [tCO2e]

US

China

India

Other

Avoided Emissions (2030) [tCO2e]

The above chart shows the total Avoided Emissions (tCO2e) of the analyzed companies, attributed
to the Country/Region of Sale (the country/region where the ZEV was sold by the analyzed
companies). Both current and 2030 projected avoided emissions are depicted.

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Exhibit 10: ZEV Avoided Emissions Per Vehicle by County of Sales
30

tCO2e per Vehicle

25
20

15
10
5

0
Japan
EuropeUS
Avoided Emissions (Current) [tCO2e/vehicle]

China
India
Other
Avoided Emissions (2030) [tCO2e/vehicle]

The Avoided Emissions per vehicle sold (tCO 2e/Vehicle), attributed to the Country/Region of Salesby the analyzed companies are shown in the above chart. Both current and 2030 projected Avoided
Emissions intensities are depicted.
5.2.3

Avoided Emissions by Country (Company HQ)

Exhibit 11: ZEV Avoided Emissions by Company HQ
200,000,000

tCO2e

150,000,000

100,000,000
50,000,000
-

Japan

EuropeAvoided Emissions (Current) [tCO2e]

China

US

Avoided Emissions (2030) [tCO2e]

The total Avoided Emissions (tCO2e) of the analyzed companies, attributed to the Country/Region
headquartered by the analyzed companies are shown in the chart above. Both current and 2030
projected Avoided Emissions are depicted.

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Exhibit 12: ZEV Total Avoided Emissions per Vehicle by Company HQ30

tCO2e per Vehicle

25
20
15

10
5
0

Japan
EuropeAvoided Emissions (Current) [tCO2e/vehicle]

China
US
Avoided Emissions (2030) [tCO2e/vehicle]

The Avoided Emissions per vehicle sold (tCO2e/Vehicle) of the analyzed companies, attributed to
the Country/Region headquartered by the analyzed companies are shown in the above chart. Bothcurrent and 2030 projected Avoided Emissions intensities are depicted.
5.2.4

Zero Emission Vehicles - Key Themes and Results

Sixteen dif ferent automotive companies in f our countries / regions were analyzed f or Avoided
Emissions. In terms of sales of vehicles, global sales were grouped into the f ollowing regions:Japan, China, India, US, Europe and Other.
In terms of global sales of vehicles in 2022, according to the IEA, China has the largest proportion(circa 52%) of ZEV sales, while Japan and India have the lowest share of ZEV sales (circa 1%).
Europe (circa 24%) and US (circa 18%) f ollow China in terms of global ZEV sales.
Under the methodology used f or this report, the absolute number of Avoided Emissions is driven
by three key f actors:•••

The number of cars sold (this determines the number of traditional vehicles displaced by
the ZEVs);
LCA-based emissions f or a ZEV;LCA-based emissions f or an ICEV (the dif f erence between the LCA emissions of
traditional ICEVs and ZEVs def ines the degree of Avoided Emissions per car sold).

Based on the location of the automotive manuf acturers analyzed in this report, US manuf acturers
produce the largest numbers of ZEVs, while the ICEV LCA emissions of their vehicles is also higher(US manuf acturers produce a higher proportion of larger vehicles, which tend to be less f uel
ef f icient and have higher ICEV LCA) compared to other regions. Hence, US manuf acturers tend
to have the greatest total Avoided Emissions.
The same analysis based of f the region of sales leads to the greatest Avoided Emi ssions being
f ound in China. This is primarily driven by the f act that the highest volume of ZEV sales is in China(even f or US and European automotive manuf acturers, China is the biggest market outside of theirhome countries).

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19

On a per-vehicle basis, however, it is European automotive manuf acturers who have the greatest
Avoided Emissions intensity, due primarily to selling in regions with the least carbon -intensive
power grids, which is the predominant driver in changes across regions in a ZEV’s ef f ectiveness.
Examining the Avoided Emissions per vehicle projections for 2030, Europe and US are expected
to lead due to a better power grid mix, leading to lower use-phase emissions f rom ZEV vehicles.
Also counterintuitively, the LCA emissions f rom ICEV in China are expected to be lower than thosef rom the US and Europe in 2030, driven by the targets set by Chinese manuf acturers to improvef uel ef f iciency of their ICEV.
Overall, the global ZEV market is expected to grow from the current total of circa 8 million vehicles
to 31 million vehicles by 2030. China is expected to remain the largest market by sales but is
expected to experience a decline in global share f rom 52% to 40%; while the US and Japan are
expected to increase their relative global shares.
Whilst the absolute sales of ZEVs by Chinese automobile manuf acturers currently outstrip their
Japanese counterparts, per-vehicle the Chinese car industry underperf orms compared to Japan.
This is because Chinese companies primarily sell domestically, and whilst the Chinese domestic
ZEV market is the largest in the world, the more f ossil-fuel dependent grid of China both current
and in 2030 means the Japanese automotive industry is likely to lead Asia in Avoided Emissions
per vehicle.
The Japanese companies assessed also benefit from more diversified global sales to regions withless carbon-intensive power grids, improving their per-vehicle assessment f urther.
5.2.5

Zero Emission Vehicles - Conclusions

While currently, Japanese automotive manuf acturers may lag their global counterparts in terms of
total absolute avoided emissions, given some of the commitments made by largest Japanesemanuf acturers to increase the production of ZEVs signif icantly by 2030, we estimate the overall
total absolute avoided emissions of Japanese companies to be more than Chinese manuf acturers
and that they will get much closer to their US and European counterparts.
Using per-vehicle avoided emissions metrics, including avoided emissions intensity, Japanese
automotive manuf acturers are in a regional leadership position, with the potential to make f urther
improvements to their global standing.
5.2.6

LCA Factors - Assumptions

We assumed the regional average vehicles f or all lif e-cycle emissions, per vehicle size. We
incorporated the grid of country of sales, separate f rom the regional manuf acture emissions of thevehicle. This is true f or both the ZEVs and the baseline vehicles (ICEVs, PHEVs, and HEVs) for
both current year and 2030. Where possible we incorporated vehicle size into the lif e-cycle
assessment.

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20

We assumed a lif etime distance travelled by each vehicle of 150,000Km, that we utilized globallywhen estimating the vehicle LCAs. This was applied to all vehicles equally and is used to determine
the use-phase emissions of the vehicles in their respective regions of sale.
Whilst discussions on projected improvements in battery end of lif e exist, there is currently nostrong evidence f or a quantitative estimate on how this will af f ect 2030 emissions f actors f or Evs.
As such we have assumed the emissions associated with battery recycling in 2030 are as current.
Qualitative assessments suggest the inclusion of mainstream battery recycling to further decrease
the LCA emissions of a ZEV with respect to their ICEV counterparts. This would mean that thepotential 2030 avoided emissions could be even greater than we have calculated here 5.
5.2.7

Company Sales - Assumptions

If a credible company projection exists f or the number of ZEVs sold in 2030, this value was used.
If it was not available, ICE instead estimated the regional ZEV sales of a company by assuming
the market share a company has in a given region is constant between now and 2030, so company
sales in a region grow at the same rate that ZEV sales in the region as a whole grow.
If possible, we attributed sales by vehicle size as well as region. However, if this was not possible,
we assigned either car size C or car size D (mid -sized vehicle and large-sized vehicle/SUV
respectively), based of f an assessment of the vehicles discussed under company reporting.
Total EV sales are determined f rom IEA f igures, whilst the regional breakdown is determined using
the IEA STEPS scenario. To have EV sales by car size, we use the regional ratio o f available cars
by classif ication to apportion sales by region and vehicle size.

5

According to the International Coalition on Clean Transportation (ICCT) - See Appendix

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5.3

Utilities

Based on the analysis and assumptions detailed below, for 12 companies within the GPIF portfolio
f or the Utilities sector, the total avoided emissions f rom low-carbon energy generation are
estimated to be equivalent to the carbon sequestered by circa 377 million acres (150 million
hectares) (2022 Estimation) of f orests in one year6.
Def initions:
Renewables: Renewable energy comes f rom natural sources or processes that are constantly
replenished and are thus not f inite. This includes wind energy, photovoltaic (solar PV), geothermal,
biomass, and hydropower.
Nuclear: The energy source that relies on nuclear f ission to generate electricity. This uses
Uranium as a f uel source, which is a f inite resource. As such nuclear is non-renewable. It is
however a low-carbon source of energy, and thus is included in assessments of “Low-Carbon”
energy.
Low-Carbon: Any energy source that has very low or no use-phase emissions. This includes both
the renewable energy sources listed above and nuclear energy.
5.3.1

Approach and Methodology

The initial step used f or the Avoided Emissions analysis of the Utilities sector is the calculation of
the f ull lif e-cycle emissions of the renewables or low-carbon generation per company and per
source. This is then multiplied by the energy generated by each source.
The next step is to then aggregate up to the company level across sources . These results are thencompared against the baseline emissions.
The baseline is calculated by using the LCA emissions by source and the power grid proportion ofeach country under the NGFS’ “Current Policies” scenario and multiplying this by the total
renewable energy generated by the company. The “Current Policies” scenario is the assumptionthat only those national policies and regulations that have been ratif ied and already implemented
are carried on f orward. This would globally lead to emissions lev eling of f circa. 2080, with >3°C
warming by 2100.
The dif f erence is the Avoided Emissions by the company (which is then aggregated based on thelocation of the company headquarters).
Forward-looking Avoided Emissions are also calculated by looking at the company-specific plansf or renewable energy capacity in 2030 and 2050 and comparing this to the f uture LCA emissionsof every energy source and also the country grid composition in 2030 and 2050, as per the NGFS
“Current Policies” scenario.

6

1 acre of aff orestation is 0.85 of tCO 2e avoided, https://www.epa.gov/energy/greenhouse-gasequivalencies-calculator

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22

Exhibit 13: Utilities Life Cycle Assessment
2. Transportation

1. Fuel Extraction /Equipment
Manufacturing

3. Plant
Construction

4. Plant
Operations

5. End of LifeManagement

Exhibit 14: Selected Companies as % of GPIF Utilities Sector Exposure (Value)

Selected companies

Other

The above chart shows the 12 companies selected f or the Utilities analysis represent 32% of GPIFs
total investment value in the Utilities sector, based on their domestic and f oreign equity portfolios.

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23

tCO2eMillionExhibit 15: LowCarbon Avoided Emissions by Country (Company HQ)
180
160
140
120
100
80
60
40
20
Japan

EuropeUS

China

Avoided Emissions (Current) [tCO2e]
Avoided Emissions (2030) [tCO2e]
Avoided Emissions (2050) [tCO2e]

The above chart shows the total Avoided Emissions (tCO2e) f rom Low-Carbon energy generation
per Country/Region, based on the headquarters of the analyzed companies. This includes any
Avoided Emissions f rom the use of nuclear power.
Exhibit 16: Total Avoided Emissions Per Low-Carbon Energy by Country

tCO2e per kWh of
Low -Carbon Energy

500
400
300
200
100
0
Japan

EuropeUS

China

Avoided Emissions Intensity (Current) [tCO2e/KWh]
Avoided Emissions Intensity (2030) [tCO2e/KWh]
Avoided Emissions Intensity (2050) [tCO2e/KWh]

The above chart shows the total Avoided Emissions per KWh of Low-Carbon energy generated(tCO2e per KWh) per Country. This is normalized as per the co untry power grid mix and the unitof low-carbon energy to enable a comparison of countries of different sizes. This includes any
Avoided Emissions f rom the use of nuclear power.

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tCO2eMillionExhibit 17: Low Carbon Current Avoided Emissions by Country (Company HQ)
180
160
140
120
100
80
60
40
20
0
Japan

EuropeRenewables

US

China

NucleartCO2eMillionExhibit 18: Low-Carbon 2030 Avoided Emissions by Country (Company HQ)
200
180
160
140
120
100
80
60
40
20
0
Japan

EuropeRenewables

US

China

NucleartCO2eMillionExhibit 19: Low-Carbon 2050 Avoided Emissions (by Country (Company HQ)
200
180
160
140
120
100
80
60
40
20
0
Japan

EuropeRenewables

US

China

Nuclear

The above charts show the total Avoided Emissions (tCO2e) f rom Low-Carbon energy generation
per Country/Region, based on the headquarters of the analyzed companies f or the current year,
2030 and 2050 (Exhibits 17-19, respectively). This includes any Avoided Emissions f rom the useof Nuclear Power.

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JapanEuropeRenewable

US

2050

2030

Current

2050

2030

Current

2050

2030

Current

2050

2030

180
160
140
120
100
80
60
40
20
0

CurrenttCO2eMillionExhibit 20: Low-Carbon Avoided Emissions (Current, 2030, 2050) by Country (Company HQ)

China

Nuclear

The above chart shows the Avoided Emissions by Country (Company HQ). This is the total Avoided
Emissions (tCO2e) f rom Low-Carbon energy generation per Country/Region, based on theheadquarters of the analyzed companies f or current year, 2030 and 2050. It is a summary of theprevious three charts.

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Exhibit 21: Current Total Avoided Emissions per Low-Carbon Energy per Company
tCO2e per kWh of
Low -Carbon Energy

600
500

400
300

200
100
0

China
A

China China Japan Japan Japan US A
C
B
A
B
C
Renewable

US C

US B Europe Europe Europe
C
B
A

NuclearExhibit 22: 2030 Total Avoided Emissions per Low-Carbon Energy per Company

tCO2e per kWh of
Low -Carbon Energy

600
500
400

300
200

100
0
China
A

China China Japan Japan Japan US A
C
B
B
C
A

Renewable

US C

US B Europe Europe Europe
C
B
A

NuclearExhibit 23: 2050 Total Avoided Emissions per Low-Carbon Energy per Company

tCO2e per kWh of
Low -Carbon Energy

600

500
400
300
200
100
0
China
A

China Japan Japan China Japan Europe Europe Europe US A
C
B
C
B
A
C
A
B
Renewable

US C

US B

Nuclear

The charts above show the total Avoided Emissions per KWh of Low-Carbon energy generated(tCO2e per KWh) per Company f or the current year, 2030 and 2050 (Exhibits 21-23, respectively).
This is normalized as per the country grid mix and the unit of Low-Carbon energy to enable a
comparison of countries of dif ferent sizes. This includes any avoided emissions f rom the use of
nuclear power.

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27

5.3.2

Utilities - Key Themes and Results

Twelve companies across 4 regions (Japan, China, USA, and Europe) were analyzed f or the
Avoided Emissions assessment of the Utilities sector.
Japan – Japan is a region with strong Avoided Emissions potential, as the addition of each KWhof low-carbon electricity avoids more emissions than in Europe and the US (Exhibit 16). This isdriven by the more f ossil-fuel heavy grid of Japan, where roughly 65% of the grid is powered bycoal, oil, or natural gas. On an absolute scale, whilst the current low-carbon energy generated issmall, there are ambitious plans to increase low-carbon output (Exhibit 17-20). This is proposed to
be done primarily by the resumption and expansion of nuclear power generation. This region is thef astest growing of those assessed in Avoided Emissions.
Europe – Our analysis shows that the European companies assessed are leaders in absolute
Avoided Emissions from low-carbon across the timef rames assessed (Exhibit 10-13). The growthof avoided emissions is relatively stagnant f or this region, despite the signif icant addition of lowcarbon energy capacity across the companies. This is due to the relatively ambitious
decarbonization of the European grid, even under the Current Policies scenario. This
decarbonization of the grid results in the rapidly diminishing returns of Avoided Emissions per KWhof low-carbon energy over time f or Europe (Exhibit 16). This leads to a small dip in 2050 f or theassessed companies’ total Avoided Emissions.
USA – The US companies assessed have great ambition f or their nearer-term targets, with a very
rapid expansion of absolute Avoided Emissions (Exhibit 17-20) despite operating in an increasingly
decarbonizing grid (Exhibit 16). This means that despite the sharp decarbonization of the US g rid,
the companies assessed have ambitions that overcome this and lead to increases in Avoided
Emissions. In 2050 however, this increase is diminished. If we exclude nuclear the overall Avoided
Emissions decline. This demonstrates that the longer-term ambitions of the US companies
assessed rely on nuclear power to maintain decarbonization momentum.
China – Most of the Chinese companies assessed have published very ambitious near-termtargets f or additional renewable capacity within the next 5 years. This outpaces the expected
perf ormance of the Chinese grid under the Current Policies scenario, and that leads to signif icant
Avoided Emissions for China as a whole. If we exclude nuclear the Chinese companies assessedcurrently have the second largest total Avoided Emissions (Exhibit 17). None of the Chinesecompanies assessed as part of this report are exposed to nuclear energy generation or have statedintentions to enter the nuclear energy business 7, so excluding nuclear is a f airer assessment tocompare China against other regions. The Chinese companies assessed also have not publishedquantitative longer-term goals that would build upon the momentum developed up to 2025. This
especially limits our assessment of 2050, where the Chinese grid decarbonization leads to adecrease in total Avoided Emissions. If the companies do successf ully match the ambition thatthey have shown near-term, then their projected perf ormance would improve signif icantly. Per
KWh, China is the region with the highest Avoided Emissions potential, making it a key target
market f or increasing low-carbon electricity f rom a decarbonization potential perspective (Exhibit
16).
7

Some of the state-owned parent companies of those companies assessed do have nuclear
operations, however these are outside the scope of this report.

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5.3.3 Utilities - Broader Social and Environmental Considerations
Whilst our analysis covers the avoided emissions potential of certain low-carbon technologies, it isworth noting that there are other social and environmental concerns with power generation thatdemand attention and diligence f rom Utilities companies and their stakeholders.
With regards to nuclear power, there are wider social and sustainability concerns such as
management of long-term radioactive waste in relation to soil and groundwater preservation, as
well as risks of accidental or mismanaged situations at power-plants which can lead to health andenvironmental accidents.
Hydroelectric power can also lead to some social and environmental concerns such as disruptionof riverways, displacement of settlements to create reservoirs as well as large-scale f looding which
can cause habitat decay and lead to signif icant methane emissions. The scale of these impacts
are very unique to the project at hand and depend on the several f actors such as the location andscale of the site. Thus, to minimize risks and mitigate potential negative impacts, strong
implementation of ef f ective Environmental Impact Assessments, adaptive management,
transparency, and inclusion of af f ected stakeholder groups in project planning and thedevelopment of new technologies with po tential to mitigate risks is vital.
5.3.4

Utilities - Conclusions

While our analysis shows Europe as the region with the greatest increase in Avoided Emissions
through to 2030 and beyond in absolute terms, looking at the Avoided Emissions intensity analysis
suggests that renewables generation in Europe will have diminishing returns, and the magnitudeof Avoided Emissions will decrease between 2030 and 2050. This is a f unction of regionalvariations in existing grid intensities, with the European grid already relatively decarbonized,
suggesting less Avoided Emissions potential f rom new sources of renewable energy.
For Japan, our analysis points to signif icant potential f or Avoided Emissions improvement, fromboth the expansion and mix of low-carbon energy sources. Hydroelectric and nuclear power could
make signif icant positive contributions to the Japanese Avoided Emissions intensity. Whilst bothhave many social and environmental concerns to overcome beyond their emissions, it is worth
noting all the Japanese companies assessed have stated plans to utilize nuclear as a principal
source of low-emissions energy, alongside their current hydropower resources.
China and Japan show Avoided Emissions potential f or renewable energy in 2030 and beyond andare ideal target markets f or longer-term renewable ambitions f rom a decarbonization perspective.
5.3.5

Electricity Source - Assumptions

If regional LCA emissions f or power generation by a source were not available, we used global
average values. This af f ects the lif e-cycle emissions of Biomass and Geothermal power weassess, alongside Oil f or regions excluding Japan (where we used region-specif ic data).
For Solar PV, we have used the average f or utilities scale solar, as opposed to selecting a particularmaterial makeup. Similarly, the LCA values f or Solar CSP in a region is the average of “trough”

ICE Avoided Emissions ~Analysis of GPIF Portfolio~ | July 2023

29and “tower” technologies, and “Wind - Of f shore” is the average between designs utilizing concrete
f oundations and steel f oundations.
2030 LCAs are interpolated f rom the 2020 and 2050 data. This method is validated by testing withotherwise outdated literature and successf ully replicating their 2030 estimates.
Where estimates f or the LCA emissions of a source in 2050 are not given, we have conservatively
assumed the lif e-cycle emissions f or that source are static across time.
2050 estimates f or LCA emissions assume no technological improvement f or the power so urces
themselves, only changes in background grid mixes. This is a conservative approach. Testing
using more aggressive estimates that f actor in technological improvements does not materiallyaf f ect results.

5.3.6

Grid Breakdown - Data Assumptions

The “Current Policies” scenario has been utilized to give the most realistic examination of avoided
emissions. This scenario assumes that only the currently implemented national laws and policies
are carried out. This leads to emissions growing until circa. 2080, and a >3°C warming by 2100.
This is in contrast to other scenarios available within NGFS’ REMIND model, such as the“Nationally Determined Contributions” Scenario (the implementation of all stated intents or pledged
policies, even if they have not been implemented or ratif ied into national laws) or “Net-Zero 2050”
scenario.
An important assumption is that to def ine our baseline, we utilized the entire grid makeup of thecountry of importance, as opposed to the non-renewable contribution to the grid. This is d one toassess the companies relative to their host nations’ decarbonization plans. This reduces the
avoided emissions awarded to the companies, especially over time, as the amount of f ossil -fuelgeneration being displaced diminishes over time.
To calculate the grid emissions intensity, the % breakdown by source is taken and multiplied by
the LCA emissions f actor f or that source in that year and region. For Wind, the average in LCAs
between onshore and of fshore is used as the NGFS grid breakdown does not sp ecif y the type ofwind energy.
5.3.7

Company Renewable Power Generation - Assumptions

Analysis is done both including and excluding Nuclear.
For estimating energy generation in 2030 by a source owned by a given company, the companyreported plans are examined to increase installed power capacity and estimate generation using
the current year’s Power Generated to Capacity Installed ratio. In circumstances where this is notpossible, we use either company targets f or generation breakdown of certain sources, or p hysicalestimates based of f the installed capacity.
Where possible, we incorporate the same methodology f or 2050, utilizing the net zero targets. If
no additional capacity is discussed then if discussion is made on the generation makeup, theICE Avoided Emissions ~Analysis of GPIF Portfolio~ | July 2023

30

displacement of existing f ossil-fuel energy generation is assumed to estimate the additional
capacity of renewables or low-carbon installed.
If no quantitative statements have been made f or planned generation changes or capacity
installations f or either 2030 or 2050, it is assumed, conservatively, that generation has notincreased since the prior assessment. This primarily af f ects the 2050 results of the Chinesecompanies assessed where no quantitative plans have been stated beyond the government
mandated 14th 5-year plan (which ends in 2025).
For calculating the dif ference in emissions between the company’s renewables or low-carbon
generation and the grid equivalent, the grid of the country of the company HQ is used.

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5.4

Mined Minerals

Based on the analysis and assumptions detailed below, for 8 companies within the GPIF portf olio
f or the Mined Minerals sector, the current total avoided emissions estimated are equivalent to thecarbon sequestered by circa 1 million acres (400 thousand hectares) (2022 Estimation) of forests
in one year. 8
The selected companies f or Mined Minerals represent the 8 largest mining companies in terms ofmarket share globally 9.
5.4.1

Approach and Methodology

For the calculation of Avoided emissions within the Mined Minerals sector an Attribution
Methodology was used. The assessment of Avoided Emissions within the sector f ocused on theapplication of specific mined minerals used in batteries f or ZEVs, depending on company-level
mineral output data, global mineral o utput (based on IEA 2020 data f rom “The Role of Critical
Minerals in Clean Energy Transitions”) 10 , mineral requirement breakdown per EV battery andglobal estimates of mineral output solely used for EV batteries (based on IEA 2020 data f rom “TheRole of Critical Minerals in Clean Energy Transitions”)11. This approach is also applied to forwardlooking estimates. As before with ZEVs, we exclude the contribution to Fuel-Cell Electric Vehicles
due to lack of data availability (a dif ferent range of mineral requirements) and the signif icantly
smaller production volumes and thus avoided emissions potential.
The proportion of emissions f or a ZEV that is attributed specif ically to the ‘Battery: Minerals’ as asegment, is used as an estimation f or the proportion of avoided emissions that can be attributed
to the minerals, with the baseline of ICEVs (Global average estimates on ZEVs and ICEVs were
utilized).
The weight of minerals required per EV battery is utilized to calculate the proportion of Avoided
Emissions that can be attributed to each required mineral (the NMC 622 battery composition isconsidered here – the most commonly used battery type, globally across 2020).
Global and company-level data on overall mineral output along with estimations of mineral output
used towards EV batteries is then utilized to calculate avoided emissions per company andmineral.

8

1 acre of afforestation is 0.85 of tCO2e avoided , https://www.epa.gov/energy/greenhouse-gasequivalencies-calculator
9
These companies do not engage in mining Graphite, with the Graphite market being dominated bycompanies that specialize or predominantly f ocus on Graphite only.
10
We acknowledge the release of the IEA Critical Minerals Data Tracker and Report 2023 - which
provides updated 2022 data points. However, as the report was released publicly close to our reportpublication date on July 11, 2023, data and information from the study were not incorporated within thisproject.
11
Same as above

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32

Exhibit 24: Mined Minerals Life Cycle Assessment
2. Manuf acturing

1. Battery Mining& Refining
3. Distribution

1. Batteries Minerals

2. Batteries –Assembly & others

5. Recycling /Disposal

4. ZEV
Transportation

The Mined Minerals methodology specifically looks at the application and use of minerals in ZEVbatteries, f ocusing only on the Battery Mining and Ref ining stage of the LCA f or EVs.
Assessing the emissions and Avoided Emissions f or the ‘Battery Mining & Ref ining’ segment canbe broken down to two f urther segments:••

Sourcing and ref ining the range of minerals required across the battery cathode, anode,cell and other components
Assembly and manuf acturing of the battery and related components.

The methodology used f ocuses on the sourcing and ref ining, specif ically looking at the range of
relevant minerals mined by the companies that are used in the ZEV battery components. The
emissions associated with mining and ref ining the minerals are included in the “Batteries –Minerals” segment, whereas the 2nd segment f ocuses on emissions arising f rom manuf acturing
and assembling of the battery. As a result, we have f ocused on the “Batteries – Minerals” subsegment f or the calculation of avoided emissions.

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Exhibit 25: Battery Composition by Mineral Weight
Mineral weight requirement (kgs) per EV for NMC 622
battery composition (Average estimates)
Lithium

6

Cobalt11

Nickel32

Manganese

10Graphite

50

Aluminum

33

Copper19

The above minerals and their respective weight proportions in NMC-622 cathode batteries areused as inputs f or the calculation of avoided emissions.
NMC-622 batteries were the most commonly used composition across 2020.
Based on ICCT and Transport & Environment research estimates, it is projected that the NMC 622 battery composition will continue to be a major battery chemistry in 2030. The methodology
f or f orward-looking projections considers the same battery chemistry and mineral split but utilizes
IEA projections of mineral use f or ZEV batteries in 2030 as well as overall projected mineral output
in 2030 (based on their 2020 report). Market share estimates f or companies f rom the current model
are then applied to 2030 projected global mineral output data to calculate the estimated mineral
output f or individual companies in 2030.
The same methodology used to calculate the current attribution of avoided emissions per mineral
required in an EV battery is applied to calculate the potential avoided emissions f or minerals in
2030. The share of avoided emissions attributable to “Batteries: Minerals” segment is projected toincrease in 2030, based on the expected reduction in LCA f ootprints of both ZEVs and ICEVs in
2030.

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Exhibit 26: Selected Companies as % of GPIF Mined Minerals Sector Exposure (Value)

Selected companies

Other

The above chart shows the 8 companies selected f or the Mined Minerals analysis represent 28%
of GPIF’s total investment value in Mined Minerals, based on their domestic and f oreign equity
portf olios.

tCO2e

Exhibit 27: Mined Minerals Avoided Emissions (Global)
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
Avoided Emissions (Current) [tCO2e]
Avoided Emissions (Current) [tCO2e]

Avoided Emissions (2030) [tCO2e]

Avoided Emissions (2030) [tCO2e]

The above chart shows the total avoided emissions (tCO2e) f or minerals used in the application of
ZEV batteries, at a global level. Both current and projected avoided emissions are depicted.

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35

Exhibit 28: Mined Minerals Avoided Emissions per Tonne of Overall Mineral Output (Global)
14
12

tCO2e

10

8
6

4
2

0
CopperCobaltNickelTonne of Mineral Output (Current)

Aluminium

Manganese

Tonne of Mineral Output (2030)

The above chart shows the avoided emissions per mined mineral per output (tCO2e per metrictonne) at a global level. Both current and projected Avoided Emissions are depict ed. The chart
displays the contribution of each mineral to Avoided Emissions.
5.4.2

Mined Minerals - Key Themes and Results

Eight Mined Minerals companies (globally) f rom within the GPIF portf olio were selected f or Avoided
Emissions analysis.
A signif icant increase in avoided emissions is expected f rom mined minerals by 2030, primarily
driven by the substantial, projected increase in mineral output dedicated towards ZEVs by 2030
compared to 2021.
At the individual minerals level, Cobalt and Nickel in particular, are projected to generate more
avoided emissions per metric tonne of overall output than the other minerals assessed, based on
the selected companies in this analysis. This is driven by the relatively higher weight requirementof these minerals per ZEV battery/vehicle as well as a higher share of the overall mineral output
used exclusively f or ZEVs, compared to Aluminum.
Despite a considerable requirement of aluminum in ZEV batteries (33kg per battery), thepercentage of global, overall output used f or ZEV batteries is lower compared to the other minerals
assessed in this analysis.
Graphite exclusion: As none of the selected companies are engaged in Graphite production, there
are no modelled avoided emissions data f or Graphite. However, as Graphite represents the largest
share of an ZEV battery by weight and the projected increase in output by 2030, it is evident that
Graphite will generate substantial avoided emissions per tonne of global output.
Currently the dominating battery chemistry is NMC 622 and this is expected to continue being oneof the major battery types until 2030, with NMC 811 and NMC 955 expected to increase inprominence.

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NMC 811 and NMC 955 require a larger share of Nickel than NMC 622, but require a relatively
lower proportion of Cobalt and Manganese compared to NMC 622. As a result, the relative demandf or Nickel f rom ZEV and battery manuf acturers could increase at a higher rate in the f uture,depending on which battery chemistries dominate.
Solid-state batteries, which are an emerging battery technology have also been noted to solve
potential ZEV battery charging and capacity issues. As this technology continues to develop andachieves commercial scalability, it may impact the ZEV battery landscape and have implications
on the need f or dif f erent minerals f or battery development.

5.4.3

Broader Social and Environmental Considerations

In addition to GHG emissions arising from energy-intensive mining and processing activities, there
are wider environmental considerations that can be associated with mining activities, including riskof biodiversity loss and social disruption due to land use change, water depletion and pollution,
waste related contamination and air pollution. Social impacts including potential human rights
issues have also been under scrutiny.
For companies involved particularly in the mining of minerals such as Lithium, Nickel, Rare Earths,
Copper and Cobalt, there will need to be an increasing f ocus on sustainable water and waste
management (including managing concerns around f reshwater eutrophication, f reshwater
ecotoxicity levels and waste rock generation).
According to the IEA, conducting comprehensive Environmental and Social Impact Assessments(ESIA) is vital to ensure a more holistic assessment of a mining project's wider impact. At aninternational level, there are increasing f rameworks by organizations such as OECD and WorldBank to set standards f or sustainable sourcing of minerals and supply chain practices. There arealso organizations such as the Intergovernmental Forum on Mining, Minerals, Metals andSustainable Development (IGF) which f ocus on advancing sustainable development initiatives andpractices within the mining sector.
There are also initiatives by companies themselves - such as the International Council on Mining
and Metals (ICCM) which brings together approximately one third of the global metals and mining
sector, f ocusing on environmental resilience, social perf ormance, governance & transparency, andsustainability.
5.4.4

Broader Applications of Mined Minerals

Within this report, we have f ocused on the potential, current and f orward -looking Avoided
Emissions arising f rom minerals, solely f rom their application in ZEV batteries. Minerals, arehowever f undamental to the clean energy transition - a key requirement f or of fshore and onshore
wind and solar energy generation as well as energy storage. Of f shore wind, in particular issignif icantly mineral-reliant, requiring, on average of more than twice the minerals (by weight)
compared to solar energy (source: IEA, 2021).
From a weight-based perspective, while Graphite, Nickel and Copper are particularly crucial for
ZEV batteries, Zinc and Copper are important f or wind energy whereas Silicon and Copper are

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especially vital f or solar energy. Rare earth minerals also play an important role f or energy -ef f icientmagnets in wind turbines as well as f or solar panel modules (Source: IEA, 2021).
It is also important to note that with demand f or minerals expected to exponentially increase in the
coming decades, there are wider concerns around availability and reliab ility of the supply of theseminerals. Developing viable alternatives and contingency measures is of equal importance given
the scale and pace of the global energy transition.
5.4.5

Global Overall Mineral Production - Assumptions

Company-level Assumptions
The projected breakdown of mineral production/output in 2030 is not reported by the individualcompanies so 2021 market share estimates are applied to 2030 global mineral output to calculate
the projected company-level mineral output f or 2030.
The projected sales breakdown by end -use sector and region is not reported by the individualcompanies so the 2021 market share estimates of global use of mineral ZEV battery applications
are applied f or 2030.
For the projected mineral output f or ZEV battery application in 2030 the IEA Stated Policies
scenario is used as an approximate representative of BAU projection scenarios. For aluminum
projection, BNEF estimates are utilized due to no IEA coverage of aluminum projection f or ZEV
application.
Global Assumptions
For the project global total mineral output in 2030 the IEA Stated Policies and Announced Pledges
scenarios are used which are considered to be approximate representatives of BAU scenarios.
For Manganese and Aluminum, industry association projections are utilized due to IEA notproviding f orward-looking projections.
For the Mineral requirements breakdown f or ZEV (by weight) the mid-sized ZEV global average
was used with a f ocus on the main minerals in ZEV batteries.
The intensities f or an electric car are based on NMC (nickel manganese cobalt) 622 cathode andgraphite-based anode, which represent the dominant battery composition in 2020/2021.
Values f or the current model (2020) are also used f or the projections due to lack of robust estim ateson mineral requirement and projected battery composition in 2030.
The Avoided Emissions attributed to 'Battery: Minerals' segments in ZEVs are based on the IEA
model. For the projected LCA ICEV emissions the ICEV global average f or 2021 is used.
Projected emissions specif ically attributed to ‘Battery: Minerals’ segment in ZEVs in 2030 is notavailable via IEA, hence the same LCA values f or current (2020) ZEVs will be utilized. However,projected grid emissions f or 2030 will be f actored in d ue to good availability of data.

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Double Counting
We would also like to acknowledge/recognize that by using the attribution-based methodology forcalculating potential avoided emissions for mined minerals in ZEV batteries, there is the possibilityof double counting as the total avoided emissions f or ZEVs have been calculated f or the entire
vehicle using the LCA approach, where the companies selling the ZEVs are given the total shareof avoided emissions.
5.4.6

Mined Minerals - Conclusion

Of the three sectors assessed f or this report, our analysis suggests the mined minerals industry
has the potential to increase avoided emissions at the greatest relative pace (% increase) throughto 2030. This is driven by the demand f or minerals in ZEV batteries. However, relative trends of
avoided emissions within the sector and among various companies could well be impacted by thechanging mix of minerals resulting f rom advancing battery technology. Nickel is one example which
could see increased relative demand f rom ZEV battery manuf actures as a result of changing
battery chemistry.
Indeed, current ZEV lithium-ion batteries are based on liquid electrolytes, however solid -statebatteries, which are an emerging battery technology have been noted to solve potential ZEV
battery charging and capacity issues. One of the largest automobile manuf acturing comp anies
recently announced plans to leverage a breakthrough in solid -state battery technology, aimed athalving the size, cost and weight of batteries f or its electric vehicles. Such developments andimprovements in technologies may shif t the ZEV battery landscape and subsequently have
implications on the mineral requirements as well.

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6 Conclusions
The importance of identif ying and quantif ying Avoided Emissions within portf olios is being
increasingly recognized as a mechanism and metric f or gaining a more holistic view of the broader
climate impact of investments.
Using Avoided Emissions analysis alongside more traditional emissions analysis allows f or theassessment of both Climate Risk and Climate Opportunity.
The analysis described in this report shows that Avoided Emissions can be located in various
sectors and companies, even beyond the direct industries which have already established climate
solutions on of f er (ZEVs, renewable energy).

All the sectors examined in this analysis suggest growth of Avoided Emissions through to 2030.
This growth in avoided emissions, is driven by the expected increase in demand f or products,
services and solutions that f orm the policy and transition plans f or many countries where a climate
target has been set.
The identif ication of companies and business that provide or are developing low carbon solutions
have the potential to of f er greater opportunities as these technologies are adopted. The analysis
made in this report also suggests that these opportunities are not restricted to the f inishedproducts, but can be f ound upstream within the depths of the supply chains f or these low-carbon
solution providers.

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7

Appendix

7.1

ZEV Sector Data Sources

7.1.1

ZEV Sector - LCA Factors

ICCT, “A Global Comparison Of The Lif e-cycle Greenhouse Gas Emissions Of Combustion Engine
And
Electric
Passenger
Cars”,(2021),Whitepaper,
Availableat:https://theicct.org/sites/def ault/f iles/publications/Global-LCA-passenger-cars-jul2021_0.pdf
IEA, “Comparative lif e-cycle greenhouse gas emissions of a mid -size ZEV and ICE vehicle”, IEA,
Paris
https://www.iea.org/data-and-statistics/charts/comparative-life-cycle-greenhouse-gasemissions-of -a-mid-size-ZEV-and-ice-vehicle, IEA. Licence: CC BY 4.0
Ember Climate, "Global Electricity Review 2023 - Supplementary Material", (2023), Available at:https://ember-climate.org/insights/research/global-electricity-review-2023/#supporting-material
European Commission, “Passenger Car Classif ication - ACEA Classif ication”, (Online), Accessed
2023, available at: https://alternative-f uels-observatory.ec.europa.eu/general-inf ormation/vehicletypes
7.1.2

ZEV Sector - Company Sales

Company Reports
IEA (2023), “Global EV Outlook 2023”, IEA, Paris https://www.iea.org/reports/global-ev-outlook2023, License: CC BY 4.0
IEA, “Electric vehicle stock by mode in the Stated Policies Scenario, 2022-2030”, IEA, Paris
https://www.iea.org/data-and-statistics/charts/electric-vehicle-stock-by-mode-in-the-statedpolicies-scenario-2022-2030, IEA. Licence: CC BY 4.0
IEA, “Electric vehicle sales by region, 2022-2030”, IEA, Paris https://www.iea.org/data-andstatistics/charts/electric-vehicle-sales-by-region-2022-2030, IEA. Licence: CC BY 4.0
IEA, "Breakdown of available cars by powertrain and segment, 2022", IEA, Paris
https://www.iea.org/data-and-statistics/charts/breakdown-of-available-cars-by-powertrain-andsegment-2022
K. Wada & M. Inoue, "Japan and the Global Transition to Zero Emission Vehicles", (2022), Climate
Group, Whitepaper, available at: https://www.theclimategroup.org/sites/default/files/202205/Japan%20and%20The%20Global%20Transition%20To%20Zero%20Emission%20Vehicles%
20Report%20English%20language.pdf
IEA, "Electric vehicle share of vehicle sales by mode and scenario in Japan, 2030", IEA, Paris,
Available at: https://www.iea.org/data-and-statistics/charts/electric-vehicle-share-of -vehicle-salesby-mode-and-scenario-in-japan-2030
EEA, "New Registrations of Electric Vehicles in Europe",
https://www.eea.europa.eu/ims/new-registrations-of -electric-vehicles

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(2022),

available

at:

41

7.2

Utilities Sector Data Sources

7.2.1

Utilities Sector - Electricity Source

T. Gibon, A.H. Menacho & M. Guiton. “Lif e cycle assessment of electricity generation options”.
(2021). Whitepaper. UN ECE.

E. Imamura, M. Iuchi, and S. Bando, “Comprehensive Assessment of Lif e Cycle CO2 Emissions
f rom Power Generation Technologies in Japan”, (2016), CRIEPI, Socio-economic ResearchCenter Rep.No.Y06
International Resource Panel, “Green Energy Choices: The Benef its, Risks, and Trade-Of fs of
Low-Carbon Technologies f or Electricity Production”, (2016), Whitepaper, United Nations
Environment Programme
NREL, "Lif e Cycle Greenhouse Gas Emissions f rom Electricity Generation: Update", (2021 original document f rom 2013), US Department of Energy
7.2.2

Utilities Sector - Grid Breakdown

NGFS, “NGFS REMIND Model", (2021), Database, Year Accessed: 2023
7.2.3

Utilities Sector - Company Renewable Power Generation

Company Reports

7.3

Mined Minerals Sector Data Sources

7.3.1

Global Overall Mineral Production

USGS Mineral Commodities Summary Report - Mineral commodity summaries 2023 | U.S.
Geological Survey (usgs.gov)
IEA – The role of critical minerals in clean energy transition: https://www.iea.org/reports/the-roleof -critical-minerals-in-clean-energy-transitions
IEA – Critical Minerals Policy Tracker: https://www.iea.org/reports/critical-minerals-policy-tracker
International Aluminium Institute – 2023 Report
7.3.2

Mineral requirements in ZEV batteries: Weight distribution

Transport&
Environment(2021),
From
dirty
oil
to
clean
2021_02_Battery_raw_materials_report_f inal.pdf (transportenvironment.org)
7.3.3

batteries:

Global Mineral output f or ZEV application projection (2030)

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IEA – The role of critical minerals in clean energy transition: https://www.iea.org/reports/the-roleof -critical-minerals-in-clean-energy-transitions;• Total mineral demand f rom new EV sales by scenario, 2020-2040 – Charts – Data &Statistics – IEA• Comparative lif e-cycle greenhouse gas emissions of a mid -size ZEV and ICE vehicle– Charts – Data & Statistics - IEA
Aluminum EV Battery use projection - BNEF
Global ZEV and ICEV – LCA Emissions by segment (Used f or Batteries: Minerals avoided
emissions attribution)

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7.4

GHG Emissions Scopes

The GHG Protocol Corporate Standard classif ies a company’s GHG emissions into three‘Scopes’.
oScope 1 emissions are direct emissions f rom owned or controlled sources. Mobile emissions,process emissions and f ugitive emissions are counted as Scope 1 if the company owns orcontrols the activities or equipment associated with the emissions.

oScope 2 emissions are indirect emissions f rom the generation of purchased energy. The
emissions resulting f rom the production of grid electricity are accounted f or under Scope 2.

oScope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value
chain of the reporting company, including both upstream and downstream emissions.

Source: ICE, Greenhouse Gas Protocol

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