Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
October 16, 2019 07:00 AM

Volvo aims to be climate neutral by 2040

Douglas A. Bolduc
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    LOS ANGELES -- Volvo Cars aims to be climate neutral by 2040 and to get there it will slash its life cycle carbon footprint by 40 percent to 31.8 tons of CO2 per car by 2025 from 53 tons in 2018, the company said Wednesday.

    Crucial to achieving the goals is a lineup of full-electric cars led by the XC40 P8 AWD Recharge, which debuts here today. Volvo’s first battery-driven model is also the automaker’s first car to carry the word Recharge in its name. The name will be attached to all Volvos that have either a full-electric or a plug-in hybrid powertrain.

    "Instead of making symbolic, long-term pledges we asked: What can we do now? We will start by presenting the full-electric XC40 Recharge. Another full-electric car will follow every year so that by 2025 every model in our lineup will be available as a battery-electric vehicle," Volvo CEO Hakan Samuelsson told Automotive News Europe. "That means within the next five years a Volvo car will have a total carbon footprint including everything -- supply chain, logistics, usage -- that is 40 percent lower than a Volvo we build today."

    Starting with the XC40 EV, Volvo will disclose the average life cycle carbon footprint for each new model it offers. The data will be available in the second half of 2020 after the compact SUV goes into production.

    The intensified focus on sustainability is part of Volvo’s effort to honor the 2015 Paris Climate Agreement, which seeks to limit global warming to 1.5 degrees Celsius above pre-industrial levels. To stay in line with that target Volvo has committed to doing the following by 2025.

    • Increase full-electric car sales to half its global volume from 0 percent now while mild and plug-in hybrids will account for the other half of its worldwide sales, up from less than 20 percent now. These steps are expected to account for the majority of the targeted reduction, halving CO2 per car to 15.6 tons by 2025 from from 31.3 tons last year (see table, right).
    Tough target

    Volvo’s 2025 carbon reduction goals per business area; resulting emissions in tons per car
    Products/usage: -50%; 15.6
    Supply chain: -25%; 14.4
    Operations: -25%; 1.8
    Total: -40%; 31.8
    Source: Company


    • Cut CO2 emissions related to the global supply chain by 25 percent to 14.4 tons per car from 19.2 tons last year. This will be achieved by increasing sourcing of sustainable materials in future cars, for instance the use of recycled plastics will rise to 25 percent by the deadline from about 5 percent now. Volvo will also require that its direct suppliers use renewable energy in their production.
    • Reduce carbon emissions generated by the company’s overall operations, including manufacturing and logistics by 25 percent to 1.8 tons per car from 2.5 tons last year. Volvo has already made progress in this area as 80 percent of the electricity used at its plants globally comes from renewable energy. In addition, Volvo’s engine plant in Skovde, Sweden, became carbon neutral in January 2018. To continue making gains in this part of the business Volvo will also look to reduce emissions at its retailers.

    Volvo plans to help cover the high cost of reducing its carbon footprint by carving out its engine unit and combining it with the powertrain arm of parent Zhejiang Geely Holding Group. This will allow Volvo to invest more in the development of full-electric drivetrains.

    "That's one way that we can afford the investments we are making to become climate neutral, by prioritizing," Samuelsson said. "We have to keep the investment into r&d at around 5 percent or 6 percent of revenue."

    Carbon free

    Volvo’s climate neutral target year is a decade ahead of the European Union, which wants to become the first major economy to go climate neutral by 2050, but 20 years behind supplier giant Robert Bosch, which plans to eliminate all net new carbon emissions at its 400-plus global sites starting next year.

    To do this Bosch will buy more green electricity in the near term and compensate for unavoidable CO2 emissions with carbon offsets.

    Roughly three quarters of all industry CO2 emissions are generated during a car's operation over its lifetime, but 18 percent still comes from the supply chain, according to investor research and autos specialist at Carbon Disclosure Project.

    "As sales of battery-powered vehicles displace their combustion engine rivals, that share will steadily become more important over time," CDP senior analyst Luke Fletcher said.

    Emissions breakdown

    How Volvo’s 34 million tons of CO2 were distributed in 2018 (metric tons million)
    Products/usage: 59% (20.1)
    Supply chain: 36.4% (12.3)
    Operations: 4.6% (1.6)
    Source: Company

    Financial impact

    Another reason Volvo, Bosch and other companies are taking steps to cut their carbon emissions is because lenders and asset managers are being warned to take action to reduce their portfolio exposure to high-carbon clients. They are doing this because they are worried about significant effects on the economy from climate change.

    "Investors are now realizing that climate risks aren't at some distant point in the future but are affecting us now," said Georg Kell, who advises Volkswagen as head of its independent sustainability council. The former founding director of the world's largest voluntary corporate sustainability initiative, the UN Global Compact, argues that financial markets have woken up to the hidden costs inherent in the fossil fuel economy.

    "They want to know whether companies are fit for the future and whether they have a plan to deal with the constraints of a low-carbon world," Kell said.

    Fletcher's CDP estimates $4 trillion worth of assets are at risk from climate change by 2030.

    Added Samuelsson: "We are doing this because we think it's right and we think it will make Volvo better."

    RECOMMENDED FOR YOU
    Why are electric car names so bad?
    Recommended for You
    Toyota bZ4X driving down steep incline 2022
    Why are electric car names so bad?
    London taxi coventry factory 2023
    London black cab owner Geely explores raising fresh funds
    China electric car sales
    China set to extend EV tax incentives as sales growth slows
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us