Truck Manufacturing Carbon Intensity Higher Than Previously Reported – Green NGO

A recent study by Transport & Environment (T&E) has revealed discrepancies in European truck manufacturers’ reported carbon emissions. The analysis indicates that actual emissions are approximately 50% higher than the figures disclosed to investors. This revelation comes as regulations are set to change, requiring truck manufacturers to report Scope 3 emissions—those that are indirect and occur in the company’s value chain.

The study scrutinises major European truckmakers, including Scania, MAN, Renault, Volvo, Mercedes-Benz, DAF, and Iveco. These manufacturers are found to be more carbon-intensive investments when compared to other industries such as oil, steel, and automotive, with coal mining being the only sector with a higher average carbon intensity.

Truckmakers’ Scope 3 emissions are significant, derived mainly from the vehicles’ fuel consumption over their operational lifetime. For example, an average truck is responsible for 450,000 litres of fuel burned, which constitutes 99.8% of a truckmaker’s total carbon impact. Despite this, companies like Mercedes-Benz and DAF have not reported their Scope 3 emissions, while others like IVECO, Renault, and Volvo have underreported these figures. MAN and Scania, on the other hand, have provided accurate Scope 3 emissions data.

The impending regulatory changes raise concerns for the investment community. Xavier Sol, director of sustainable finance at T&E, remarked on the potential impact of this shift in reporting standards: “As the true extent of truckmakers’ Scope 3 emissions becomes clear, the industry could be in for a serious shock.” He suggests that truck manufacturers must expedite the transition to zero-emission models to mitigate the risk of becoming unfavourable investments due to high carbon intensity.

Despite the current low sales of electric heavy-duty vehicles, which stand at less than 3% compared to 15% for cars, new EU CO2 standards for trucks and buses are expected to reduce truckmakers’ emissions by approximately 29% by 2030, as they are required to sell an increasing share of zero-emission vehicles starting from 2025.

Furthermore, the T&E study raises questions about the reliability of Environmental, Social, and Governance (ESG) ratings. The findings point to a lack of consistency across different rating agencies and suggest that current ESG ratings may not fully account for the climate impact due to the underrepresentation of Scope 3 emissions.

In light of these findings, the forthcoming integration of comprehensive emissions reporting is anticipated to provide a more accurate representation of truck manufacturers’ environmental performance, potentially influencing investment decisions and accelerating the industry’s move towards sustainability.