Decarbonizing practices
in the global automotive
industrysiemens.com/smart-infrastructureIndexForeword3
Executive Summary3
Facing the energy transition4
Solutions and services that support decarbonization14
Conclusion and the way forward 17

2

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

1

Foreword
This whitepaper examines the current state and trajectory of
decarbonization within the global automotive industry. By
examining and establishing a baseline on industry action,
early- mid- and long-term initiatives can be highlighted tohelp inform manufacturers and producers how they can
engage and push themselves further towards fulldecarbonization. This effort also highlights the challenges
and complexities in the path towards decarbonization, whichis complex and layered. Industrial producers should be
looking outwards to determine how to take best steps
from within.
The white paper is a joint effort of Siemens AG and Frostand Sullivan.

2

Executive Summary
The global automotive industry has taken leading steps incommitments to decarbonize. Early initiatives have brought
great benefit in reducing energy consumption, optimizing
plant operations, and boosting the use of renewable energy.
There remains, however, a great capacity and need for theseorganizations to do more in order to meet their aggressive
targets. Through the development of a decarbonization
roadmap, the global automotive industry can takecomprehensive steps in energy consumption optimization,energy infrastructure and supply modernization, and pushing
forward service-based business models that will help eachfacility to deliver on its mandate to deliver a global mandate
for a sustainable future.

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

3

Facing the energy transition

3

Facing the energy transition
The world faces an ever-widening gap between current levels of greenhouse gas emissions and the
reduction in levels that must be met in order to mitigate the worst impacts of global climate change. As
documented by the United Nation’s Emissions Gap Report 2021, the world is currently on track to reachan average temperature rise of 2.7°C, well over the target of 1.5°C. In a globalized, predominantly
capitalist economy, the incentives for sustainable growth and profit are often at odds withenvironmental sustainability.
Fundamentally, however, it is increasingly seen that sustainable economies are reliant on a sustainable
environment; industries require raw materials, customers, workers, and transportation and logistics
infrastructure that require sustainable and reliable physical and natural environments. The importance ofindustrial decarbonization to long-term sustainability is well established and leading organizations aretaking bold approaches to improving and reimagining business practices.
Sustainabiity, digitalization, health & wellness and business models are the four underlying factors for
future transformation. Influencing the four models will be the need to build resilience and lower thefinancial risk for customers.

What
What

Sustainability
Sustainability

Why
Why

• • Emphasis
Emphasisononclean
cleanandandefficientefficientmodelsmodelsofofenergy
energyusage
usage

Industrial Transformation
Figure 1: Key market forces of changes• • Emphasis
Emphasisononreuse,
reuse,repurpose,
repurpose,andandrecycling
recyclingofof
materials
materials

Digitalization++ Digitalization

HealthandandWellness
Wellness +BusinessModels
Models++ Health+ Business• • Unlock
Unlockvalue
valuefromfromsiloedsiloedinformation
information• • Better
Betterperformance,
performance,
betterbetteroutcomes,
outcomes,
reducedreduceddowntime
downtime• • Integration
Integration
ofofhealthhealthandandwellnesswellnesswith
with
smart
smartbuildingbuilding
solutionssolutions• • Better
Betterways
waysofofrealizing
realizingoutcomesoutcomes• • Improve
Improveoccupant's
occupant'ssafety
safetyandandproductivity
productivity• • Transform
Transform
current
currentmodels
modelsofof
operation
operation• • Explore
Exploreadded
added
capabilities
capabilities

How
How

Decarbonization
Decarbonization

AIAIandandML
ML

HealthHealthbuildingbuilding
certifications
certifications

XaaS
XaaS
(Anything-as-a-Service)(Anything-as-a-Service)

EnergyEnergyefficiency
efficiency

Cloud
Cloudandandcybersecurity
cybersecurity

Facility
Facility
management
management

Outcome-linked
Outcome-linked
modelsmodelsCircular
Circulareconomy
economyRobotics
Roboticsand
anddrones
dronesCompliance
Compliancemonitoring
monitoring

SharedSharedeconomy
economyInfluencers
Influencers

Market Policies
Market Policies

4Competition
Competition

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Collaboration
Collaboration

Innovation
Innovation

Risk mitigation
Risk mitigation

Introduction

Current status of decarbonization
strategies
Decarbonization strategies within the global automotive

Vehicle manufacturing process – What are theenergy intensive areas?
Energy (MJ)

industry remains at an early stage, overall. Much needs to bedone in order to fully achieve decarbonization in regards to
Scope 1, 2, and 3 emissions. The global automotive industry
is the most advanced in decarbonization among otherindustrial verticals. A greater rate of adoption of renewable

19,340energy, IIoT and factory modernization, and the creation of982

circular economies has helped drive manufacturing facilities,

4,167

especially those in North America and Europe, towards

3,335

decarbonization. The industry benefits from greater levels of

3,110

consolidation in the market, which can centralize efforts and690

deliver critical mass.

920
1380

Key energy intensive areas in the vehicle manufacturing
process: material transformation activities such as stamping,casting, and forging (among others) are the most energy
intensive steps of vehicle manufacturing, followed bypainting. In addition, facility related HVAC, lighting andheating are also significant energy consumers during

C02 (Kg)

manufacturing.
Actions to further and achieve industrial decarbonization canbe summarized through four key initiatives:
•

•

1,065

Decarbonization Roadmap: foundational assessments

56

and action

368
225

Resource Efficiency: improve energy consumption

195

efficiency and develop circular economies••

46

Infrastructure Enhancement: improve assets and62

infrastructure

93

Innovative Business Models: advanced performance
contracting

Every organization will need to adopt a range of measures
within each initiative to deliver an effective, holistic means toachieve decarbonization. The specific set of activities,
timeline of implementation, and means of verification will be
unique; in many cases industrial organizations and facilities
will benefit from third party assistance to ensure strategies
are comprehensive and achievable.
This whitepaper is a step towards understanding the current
landscape of decarbonization to help speed understanding

Material Transformation

Machining

Painting

HVAC and Lighting

Heating

Material Handling

Welding

Compressed Air

Estimated Energy Consumption (MJ) and CO2 Emissions(Kg) per Major Manufacturing Process for a Generic 1532Kg
ICE Vehicle

and action for all stakeholders.

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

5

Developyour decarbonization strategy
Introduction

Decarbonization
StrategyInternal net-zeroambitions and goals

Support from a
specialist ESCO

Consulting andimplementation

Resource efficiency

Infrastructureenhancement

Innovative businessmodelsDeveloping the rightdecarbonization road map

Supporting the circular
economyFuture proof yourinfrastructure

Agnostic program
implementation

Developing the right action plan
Align to organizationcommitments

Understand hot spots
and prioritize activity

Plot to long-term plan

Execute strategies•

Materiality assessment•

Portfolio energy and•

Identify levers to success•

Implemenation planning•

Goals and targets

carbon analysis•

Forecast emissions•

Assess financial impact and•Commitments to establish

Identity opportunities•

Align opportunities•

frameworks

and risks•

Maximize impact

Assess and re-evaluate

6

define funding mechanisms

with targets

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Digitalization

Measure performanceDecarbonization actions in the global
automotive industry
The global transport sector is responsible for 14%, or 7 billion
tons, of greenhouse gas emissions (Intergovernmental Panelon Climate Change, IPCC). As the world’s governments,societies, and economies push towards decarbonization to
mitigate the worst effects of climate change, the automotive
industry must engage with this global mandate. Keys to thisindustry’s current response are:•Power Purchase Agreements (PPAs) – automobile
manufacturers ensure the use of renewable energy
through PPAs with their utilities.

•

Energy Reduction and Reuse – industrial internet ofthings (IIoT) technologies help optimize operations to
reduce energy use and loss and reduce downtime.

Leading global automotive manufacturers, including GM,
Honda, Volkswagen, Ford, Toyota, and Nissan, have taken
important steps towards PPAs and energy reduction andreuse. Successfully deploying initiatives towards
decarbonization, however, requires an acknowledgement andembrace of complexities and challenges within the current
state of the industry.

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

7

Automotive megatrends and challenges requiring transformative change

Alternative
financing"Rightshoring"

Digitalrevolution
Economic
globalization

Changingbalance of power

Industry 4.0

AutonomousvehiclesDigital sales"Hassle-free"

Evolving
consumption"Sharing
economy"Agingsocieties
Rise of Asian
middleclass

Artificial
intelligence

Smart homeand city

Globalizationof services

Demographic
asymmetries"Health andwellness""Knowledge
society"Innovation
acceleration

Electrification
Hyperurbanization

Resource
constraints"War" fortalents

Life sciences
boom

Naturalcatastrophes

Growing
global risks

Energyrevolution

Cyberattacks

Decline offree trade

Automotive – A Major Actor in Global GHG Emissions
Today, according to IPCC, the transport

The implementation of sustainability in the automotive industry

sector accounts for approximately 14%

receives significant attention but initiatives are still fragmented(=7 Billion tons) of global greenhousegas emissions, of which an estimated
45% comes from passenger vehicles,
and nearly 30% from road freight.
As the use phase of Electric Vehicles(EV) significantly reduces carbon
emissions, OEMs have significantly
increased EV development programs
and set sales targets to transition from80%

of automotive respondents said that theircompany plans to transition to carbon-neutral
operations.

56%

Out of 74% of automotive OEMs who have anInternal Combustion Engine (ICE) to EV.

electric vehicle strategy only 56% have it as partof their sustainability strategy.

OEMs are also increasingly turning3%

toward digital solutions to improveenergy usage and condition monitoringof their facilities, adopting renewableenergy, and turning toward new

Yet only 3% of automotive executives andsustainability experts claim that they invest
sufficiently above required needs.

innovations during manufacturing
stages.

8

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

52%

Some initiatives receive significant attention,

but there is no consistent focus on the entire
value chain. The most deployed is supporting acircular economy by 52% of the companies
surveyed.

8%

In contrast, sustainability in IT is only being
adopted by 8% of the organizations.
Sustainable power procurement is also fallingshort.

45%

The KPIs required to establish accountability
and measure progress are also lacking in several
areas. For example, only 45% of automotive
organizations have dedicated sustain-ability
targets for key executivt

Facing the energy transition

The Manufacturing Challenge
The world’s 10 largest automobile manufacturers emitted•

cutting strategy for OEMs is the use of renewable energy

35.5 million ton of CO2 through production activities in 2020.

sources at vehicle production facilities. In addition to

The millions of tons of CO2 generated sets up the challenge

installing wind turbines and solar panels at facilities,of delivering on upcoming 100% renewable energy use

OEMs are also purchasing large amounts of renewabletargets: GM (2025), Volkswagen (2030), Ford (2035), andenergy from providers directly to power their plants, orToyota (2050). Achieving 100% renewable energy use as early

to sell back to the grid to offset emissions from vehicle

as 2025 sets up some of the most ambitious targets
compared to any industrial sector and nation state. Indeed,
the global corporate mandates adopted by the automotive

Growing Adoption of Renewable Energy: A key carbon-

production.
•

Impact of Digital Transformation: Due to long lifetimes,
upgrading / replacing equipment & facilities to lower

industry are set to outpace similar targets from the European

emissions requires long term planning & investment.

Union (35% by 2030) and Canada, Mexico, and United Statesagreement through NAFTA (50% by 2025).

Digital technologies & IIoT solutions have increasingly

The rise of EV is leading to new challenges for Zero Carbon

providing necessary solutions to monitor and control

enabled the implementation of green services for OEMs,

emission manufacturing facilities. The reason being thatsustainability related initiatives with relatively lower costbattery EVs possess a significantly larger carbon footprint
during their manufacturing stage compared to Internal
Combustion Engine (ICE) Vehicles, raising new sets ofand faster implementations.
•

EV Production to Overtake ICE by 2040: EV Sales are
expected to surpass ICE sales by 2030. With the rise ofchallenges to the carbon footprint of manufacturingEVs, vehicle production facilities around the world will

facilities.

have to adapt and modernize in order to accommodate

Primary reasons include the Li-ion battery, additional

the greater volumes of EV production. In addition, thecomponents such as traction motor and electronic controller,

shift to EV production will lead to higher carbon

along with different vehicle material composition (e.g. more

emissions during vehicle production stage, resulting insteel & aluminum used).

increasing needs for facility decarbonization initiatives.

Key industry drivers for sustainability in automotive
manufacturing, 2021
Most companies in the automotive industry are treating"sustainability" as the key objective in both their productstrategy and operations in order to increase their global
competitiveness.
•

Global Emission Reduction Targets: The automotive•

Influence of Gen Y & Z: Sustainability has become a key
strategy to meet increasing stakeholders’ environmental
commitment, strengthening corporate image, andincreasing customer satisfaction. A new type of
automobile consumer with a stronger interest in
sustainability is appearing, and is willing to actively
criticize unsustainable manufacturing practices.

industry has experienced stringent environmentalpressures through stringent regulations to reduce
emissions and waste throughout vehicle production.
Along with this increasing global awareness, OEMs mustcomplying with new environmental standards, while
ensuring successful long-term performance.

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

9

Develop markets forrecycled material

Design better
products

Invest in
infrastructure

Collection
andprocessing

Encourage recycling

Circular
EconomyProduction
andpurchasing
Reduce process
waste

Consumption
and useOptimize life cycle throughalternative consumption

Improve Collection

Promote reuse
Source: Sustainable Global Resources ltd. Recycling council of Ontario

The Rise of Circular Economy inautomotive manufacturing
To reduce their carbon footprint, automotive OEMs and ecosystem players are
increasingly turning toward decarbonizing energy use, creating circular material
flows, extending product lifetime, and improving capacity utilization during usage:
1.

Leveraging low-carbon resources, materials, and assembly, along withintegration with the energy grid to achieve net-zero carbon emissions acrossthe whole vehicle lifecycle2.

End-of-life disassembly, reverse logistics, battery and other materials recycling
to enable resource recovery and close material loops3.

Adopting subscription based ownership, re-use and remanufacturing toincrease the lifetime of the vehicles and components

4.

Ensure efficient vehicle use over time and occupancy

Within the automotive sector players are increasingly adopting enhanced reuse,sharing, repair, remanufacturing and recycling practices across the entire value
chains.
By investing more in design and improving end-of-life management, industry
players are able to increase profits, while reducing environmental impact.
10

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY75%

Circular economy can help the automotive
industry reduce the lifecycle carbon emissions
per passenger km by up to 75% by 2030.

55%

As a result of circular economy initiatives, theMega Tons of Oil Equivalent (MTOE) in theTransportation sector is expected to reduce by
as much as 55%.

7M

End-of-life vehicles (ELVs) generate 7–8 million
tons of waste every year, contributing toenvironmental pollution.

80%

Circular Economy strategies can reduce
non-circular resource consumption by up to
80% per passenger kilometer for a battery
electric vehicle by 2030.

Facing the energy transition

Global CO2 Emissions reduction targets impact on
automotive manufacturing
The automotive industry has experienced strict environmental pressuresthrough stringent regulations to reduce emissions and waste throughout
vehicle production.
Along with this increasing global awareness, OEMs must complying with newenvironmental standards, while ensuring successful long-term performance.
Electrification is to be prioritized in the short and medium tern to meet GHG
emission reduction targets. Evolution regarding CO2 regulation has been a key
driver for change in the automotive industry, notably in vehicle technology(transition to EV). While the need for GHG neutral powertrains is and has been
the key priority in the short to medium term, a change throughout the wholevehicle lifecycle will be necessary to achieve long term net zero commitment.
OEMs are committed to reduce GHG emissions from vehicle production.
Multiple OEMs have pledged to reach net zero emissions for their operations by
2050.
Key initiatives include increased renewable energy uptake in their operations,shift to EV vehicles, implementation of innovative technologies throughout
vehicle production steps, improved water usage and end-of-life material
recycling strategy among others.

One-Stop-Shop
Digitalization

EnergyManagement
Systems

Power
Applications

Total
Integrated
Automation(TIA)

Planning andsimulation

Big Data and AssetManagement

Totally Integrated Power - End-to-End balanced power supply - Smart, reliable. safe, efficient

AutomationOpencommunication
standards

Energyautomation

Smart
Electrification

66 - 230 kV

WindPower automation
for industries andbuildings

Opencommunication
standards

6.6 - 34.5kV

Total Building
Solution (TBS)400 - 690 V

Solar
FossilPower generation

Services

Consulting,planning,
financingEngineering,
network design

High Voltage
Projectmanagement

Medium-voltage
Ordering,
deliveryTransformers Low-Voltage
Installation,commissioning

Distribution

Operation andaftersales
services

Figure 6: Integration of smart electrification to address the specific needs of automotive industry

Services,modemization

Decarbonization in the automotive
industry

Critical processes and footprint todecarbonize
The global automotive industry has significant processes that deliver
benefits through decarbonization. In product development, automotive
manufacturers that incorporate lightweight materials, fuel efficiency,
electrification, and material reductions in designs will reduce emissions
and carbon footprint. In manufacturing buildings and facilities
themselves, green power through the use of landfill gas, wind, and solar
energy can displace conventional reliance on fossil fuels. Organizations
can improve manufacturing operations through high efficiency
equipment and processes that reduce waste and save energy, and focus
on water conservation, emissions reduction, waste management, andProduct Development

Vehicle design has been a key activity to addressenvironmental concerns as it affects the entire
product lifecycle. Initiatives vary fromlightweight material, fuel efficiency,
electrification, and reduction of materials ofconcerns for the environment.

Building & Facilities

recycling. Manufacturers are also increasingly proactive in designingvehicles with end of life disassembly with circular economies formaterials and components. A much broader approach todecarbonization in supply chains can also be taken by manufacturers:
the selection of suppliers, the transfer of technology and more efficientlogistics systems to further decarbonize its footprint.

Usage of green power with landfill gas, windand solar energy to reduce dependency on
traditional energy resources in automotive
plants. Also includes building management
systems to optimize buildings and facilitates
energy consumption.

The four key initiative areas outlined in the previous section –Manufacturing Operations

decarbonization towards a carbon neutral and net zero carbon future.

Environmental impacts of manufacturing are
addressed through technology solutions. Energy
and water conservation, greenhouse gas
emissions reduction, waste management, andrecycling are the main initiatives of focus inproduction.

decarbonization roadmapping, energy consumption optimization,energy infrastructure and supply modernization, and service-based
business models – present a range of specific actions automotive
manufacturers can employ to advance them from a current state in•energy audits, building performance optimization, EED complianceand ISO 50001 services, energy procurement and supply services.
•

Supply Chain

Supply chain management has included
environmental initiatives with three basic
approaches: selection of suppliers, transfer oftechnology and more efficient logistics systems(e.g. packaging, reduction of empty container
traveling, etc).

12

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Energy consumption optimization: energy management andefficiency consulting, renewables and energy consulting, CO2

End of Life

Following stricter End of Life Vehicle directives,
manufacturers are increasingly focusing on
design for recycling and dismantling, creating
the path for an Automotive Circular Economy.

Decarbonization roadmapping: risk management and hedging,emissions monitoring, energy transparency and forecasting.
•

Energy infrastructure and supply modernization: grid consulting,microgrid storage integration, cogeneration optimization, smart
campus supply design, efficient peak load management.

•

Service-based business models: energy efficiency as a service,energy saving performance contracting, PPA green energy supply,
positive cash flow energy transformation projects.

Facing the energy transition

Global renewable power generation capacity to overtake non-renewable by 2030
As renewable power generation installations rapidly expand globally, the automotive manufacturing industry will
increasingly adopt renewables as a way to offset C02 emissions from energy consumers at their facilities.
12,000

Renewables
Non-Renewables

Global Installed power generation capacity(GW) by fuel group, 2018 – 2040

10,0008,000

70% growth of

6,000

renewables (2020 - 2030)
38%

4,000

2,000

62%

52%

60%

48%

40%

0
2018

2020

2025

2030

2035

2040

Case studies and regional initiatives
The ambitious targets of the global automotive•

in predictive maintenance, usage forecasting,industry are therefore vital goals that must be met

and components inspection to optimize

to inspire the action of others, as opposed tooperations, Toyota worked with Internet

serving as evidence that decarbonization is an

Initiative Japan to deploy an IoT platform for

intractable challenge. The gravity of the situation

data visualization and analysis. The platform

requires automobile manufacturers to craft robust,

monitors roughly 370 production line

strategic roadmaps that outline actionable andverifiable steps to achieve their goals. Automobile
manufacturers must ensure the most effective

Toyota and IIJ (Japan) – to obtain capabilities

machines, delivering 30,000 data points.
•

BMW and Spirax Sarco (UK) – BMW’s Plant
Oxford steam-to-hot-water heating systemstrategy is deployed at the corporate andfacility level.

was upgraded to gain efficiency and reduce

Snapshot examples presented below outline key

technology was installed with a PLC Energy

costs. Spirax’s EasiHeat™ heat exchange

steps organizations in Japan, the UK, and the US

Management System to permit more

have taken to optimize operations and reduceenergy consumption alongside PPAs to boost theuse of renewable energy.

intelligent temperature control.
•

GM – as early as 2017, GM set up a PPA topurchase 200MW from wind farms in Ohioand Illinois, followed by another 50MW in
2018, and the company continues to branchout into renewables through solar: by 2023 a
total of 180MW will be developed in Arkansas
and a further PPA agreement signed in Ohio
100MW of power was agreed in 2020.

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

13

Solutions and services that support decarbonization

4

Solutions and services that support
decarbonization
The global automotive industry reviewed in this white paper has established important initiatives
to reduce energy consumption, increase the use of renewable energy, and adopt greater ratesof electrification.
Energy solutions and services delivering decarbonization are based on a strategic approach, utilizing
value-stacking to exploit the full potential rather than execute isolated activities to optimize energy
generation and sourcing, energy efficiency, supply security and reliability, or business and asset
performance. This ensures the delivery of a positive impact right from the start and in the long-term forthe entire organization.

Energy solutions and services for decarbonization
Delivering energy intelligence across the energy value chain
Demand side efficiencynd delivery m
ess a
od
sin
els
u
B

On-site energy supply

Energy audit
and monitoring

Energygeneration

Energy solutions andStoragesolutionsservices for
decarbonization

D

at

ad

Turnkey energy
efficiency
solutionsinEnergy mgmt.
and griad control(Microgrid)
Advisory
Services

Advisory
servicesri v

ens e r vi c e s a n d d ig

Virtual Power
Plant

l
it a

tw

Asset performance
management

e-charging

Demand side efficiency
Demand side efficiency is based on a thorough energy audit and performance data monitoring forcomplete transparency of the energy utilization and asset performance. In a first step energy efficiency
solutions reduce the overall energy consumption and optimized energy efficiency of the entire facility.
In addition, asset performance management ensures the reliable and efficient performance of all
business assets and advisory services support with the selection of the best suitable solution design andbusiness model.

14

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Solutions and services that support decarbonization

On-site energy supply
Local energy solutions are based on sustainablegeneration of power, heat and cooling with amaximized share of renewable energy sources.
In combination with powerful energy storage
solutions, e.g. electrical storage or hydrogenstorage, an on-site solution provides flexibility andallows for a maximum share of renewable energy.
Energy management and grid control tools ensurea reliable and efficient control of energy supply,
usage and storage – and new profit streams byconnecting the local energy solution to the energy
market or managing it as part of a virtual power

These are critical components in moving towards

plant.

decarbonization. Power purchase agreements that

All the solutions are supported by advisory andconsulting services from initial assessment andconcept & design, to engineering, procurement
and construction to operation, services andmaintenance of the running system.

deliver green, renewable energy support m
activity and provide industrial customers with afaster-to-implement method of reducing carbon
footprints. Additional efforts in capturing andusing waste heat and the creation of circular
economies are also core components ofmany strategies.

Comprehensive offerings to support our customer transferring to sustainable and digital enterprise

Smart grids

Smart buildings

Grid edge

General

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

15

Solutions and services that support decarbonization

Business models and digital services
The technical implementation of solutions and services•

X-as-a-Service models allow organizations to profit fromdelivering decarbonization is supported by data-driven

project benefits regarding energy supply, equipment andservices and digital twin technologies.

facility maintenance for a service fee. They offer agreater value through their holistic nature and

Depending on the customer situation and goals the bestsignificantly reduce the time to profit from a system

suitable business model is selected:•

optimization – without capital investments and without

Customer financing of a project is based on milestonetaking over responsibility for new assets or systems.

payments during the implementation and therefore cash
negative. It requires capital investment and leaves theenergy supply and business performance.

ownership of the asset and the performance•

These solutions enable our customers to take control of their

responsibility with the customer.

Global manufacturers also look towards advanced equipment

A deferred payment agreement is a performanceand process efficiencies to reduce carbon footprints offacilities. This includes LED lighting and new equipment with

contract, which optimizes CAPEX efficiency. It is based

lower energy consumption. These actions should become aon a payment plan with positive cash-flow financed outof the project savings and requires no initial investment.
The ownership of the asset remains with the customer,

global standard in industrial facilities to deliver quick carbon
reduction gains. These early successes should be reinforced
and replicated among industry peers.

who can shift the responsibility for operation &maintenance and the solution performance to thesolution provider with a respective agreement.

Power supply

Fire Safety
Energy Perform
Services

Building Automation

Electrification
Security

Instrumemtation &Analytics

Cleanrooms forBattery Manufacturing

Asset Management
Workplace Solutions

Siemens offerings across the entire automotive campus

Regional and local challenges in implementing the solutions andservices for decarbonization
At a local level, however, there are regions that experience

Regions and localities may require structural assistance andrenewable energy supply challenges and higher economic

incentives in order to help drive decarbonization activity.

costs in these initiatives. This is further complicated by aExternal third party support can also help manufacturers infragmented competitive landscape that is more greatly

these locations navigate these complexities to identify

influenced by local conditions. As a result, regional and local

near-term opportunities as well as long-term initiatives thatlandscapes can be highly variable.

reflect changing local conditions to keep decarbonization
initiatives running.

16

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Conclusion and the way forward

5

Conclusion and the way forward
Achieving economic change at the speed and completeness required to successfully respond to theworld’s decarbonization mandate requires focus and investment at a scale never seen before; thisreinforces the need to act as a community and leverage partners to ensure critical success. The successes
stemming from current initiative by global manufacturers need to be replicated globally. Increasingenergy efficiency, driving renewable energy consumption, greater electrification, and facility
improvements in efficient LED technology and energy efficient process equipment are all actions thatmust be embraced throughout industries.

1. Focus on Scope 3 emissions in addition to Scope 1
and Scope 2 emissions
In order to meet ambitious global targets, and to

Pushing into Scope 3 emissions reductions willachieve sustainable industrial activity throughrequire greater engagement with upstream anddecarbonization, a greater and deeper effort mustdownstream partners, which is complex, but

be made in order to reach these goals. This

necessary in order to deliver sustainable industrial

requires industrial manufacturers to go deeper on

economies.

Scope 1 and Scope 2 decarbonization initiatives
while pushing into strategic Scope 3 emissions
reductions.

Tracking one of the most important KPI's: CO2 emissions with Greenhouse Gas(GHG) Protocol Methodology
SCOPE 3: INDIRECT EMISSIONS
Upstream Activities

SCOPE 3: DIRECT EMISSIONS
in facilities

SCOPE 3: INDIRECT EMISSIONS
Downstream Activities•

Purchased Good and Services•

Energy / Heat Generation at•

Use of Sold Products•

Transport and Distribution

Company Facilities•

Transport and Distribution•

Business Travel•

Company Vehicles•

End of Life for Products•

Employee commuting•

Fugitive Emissions•

Processing of Sold products•

Leased Facilities•

Investments•

Operational Waste

SCOPE 3: INDIRECT EMISSIONS
in facilities•

Supply Chain

Purchased electricity, stream, Heatand Cooling

Use Phase

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

17

Conclusion and the way forward

2. Focus and invest on technology developments
Thanks to available technologies such as renewable energy

A holistic approach to sustainability measures ensures thatsources, energy storage, forecasting, data analytics, andmeasures are not implemented based only on individual

building management services, it’s possible to optimize

payback time and ROI, but also based on their cross-operations, decrease energy usage and to create significant

synergies, allowing positive impacts to start earlier and alsoenergy and resource savings. Energy management solutions

slower and less effective measures to be implemented, so

incorporate this to deliver on the sustainability goals of thethat the highest total effectiveness can be achieved.

organization and at the same time support the financial sideof the business and foster growth.

Technology developments around renewable systems

4. Hydrogen
Producing hydrogen using excess electrificationfrom renewable energy resources is gaining
increasingly more support in the
decarbonization agenda

1. Storage
Reducing costs of battery storage

2. Digitalization
Digitalization increasing the viability of using
green and distribution technologies, giving
more control over customer energy use, andenabling the emergence of new businessmodels and energy services

5. Demand flexibility
The emergence of grid interactive smart
buildings that interact with smart grids to
1. Reduce overall consumption from fossil fuels
2. Provide grid stability through changing theirenergy loads via new technology
3. Generate revenue for selling energy demandof generation onsite that is flexible

3. Electrification
The move towards electrification of heat andtransport, adds further flexible electrical loads
in the system

6. Virtual power plant
Virtual power plants are platforms that act asintermediaries between consumers, who haveflexible energy loads and network operators

3. Engage in the automotive community
Engaged automotive organizations exist throughout the

Further, looking outside of the automotive community forworld; their activities help form a blueprint for others tofurther strategy and innovation success is key; this includes

follow and from which to expand decarbonization activities.

bringing in third party partners to help evaluate facilities andEngaging in the automotive community is critical toorganizations, to develop actionable strategies to push

delivering success.

organizations towards decarbonization, and to monitor andconfirm success.

18

DECARBONIZING PRACTICES IN THE GLOBAL AUTOMOTIVE INDUSTRY

Smart Infrastructure combines the real and digital worlds across energy systems, buildings andindustries, enhancing the way people live and work and significantly improving efficiency andsustainability.
We work together with customers and partners to create
an ecosystem that both intuitively responds to the needs of people and helps customers
achieve their business goals.
It helps our customers to thrive, communities to progressand supports sustainable development to protect our planet for the next generation.

siemens.com/smart-infrastructure
About Frost & Sullivan

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Article no. SI_0210_EN (Status 05/2022)
Subject to changes and errors. The information given in this document only contains
general descriptions and/or performance features which may not always specificallyreflect those described, or which may undergo modification in the course of further
development of the products. The requested performance features are binding only
when they are expressly agreed upon in the concluded contract.
© Siemens 2022