Can we trust carmakers behind the wheel on climate targets?

Volvo will ‘fine’ itself for carbon emissions, but the wider motor industry needs to act

On the fringes of the Cop26 climate conference, Volvo made a somewhat extraordinary promise: that it will start fining itself €100 (1,000 Swedish Kroner) for every tonne of carbon emissions throughout each of its cars’ lifecycles.

That's a cost-per-tonne way higher than that recommended by organisations such as the International Energy Agency. It's a slightly odd concept: Volvo isn't going to start paying fines to itself, or to have the carbon equivalent of a swear jar on the factory floor. Rather, the idea is that at the planning stage for each new model, its total lifetime carbon emissions will be calculated, and the cost-per-tonne worked into the project's budget.

That will do two things: it will ensure that Volvo can turn a profit on the cars it sells even as the regulatory environment surrounding vehicle sales tightens; more importantly, it will also serve as a spur to ensure that right from the drawing board on upwards, each new car is designed to emit as little carbon as possible across the phases of its design, construction and use.

"Our plan to be a pure electric car-maker by 2030 is one of the most ambitious in the industry, but we can't realise zero-emission transport by ourselves," said Håkan Samuelsson, Volvo's chief executive. "So I am pleased to stand side by side here in Glasgow with industry colleagues and government representatives in signing the declaration. The time for climate action is now."


Volvo is planning that, by 2025, half of all of its global sales will be fully electric models. So far, the brand has only one all-battery car – the Volvo XC40 P8 Recharge – on sale, but it does also have its Polestar spinoff brand, which currently sells the Polestar 2 all-electric saloon, and which will shortly be launching a Polestar 3 SUV. By 2030, Volvo wants all of its cars to be fully electric, and starting next year it’s going to report in public on the separate financial performance of both its electric and its combustion-engined models.


“A global and fair price on CO2 is critical for the world to meet its climate ambitions, and we all need to do more,” said Björn Annwall, Volvo’s chief financial officer. “We strongly believe progressive companies should take the lead by setting an internal carbon price. By evaluating future cars on their CO2-adjusted profitability, we expect to accelerate actions that will help us identify and reduce carbon emissions already today.”

Volvo’s promises are all well and good – and the Swedes have a solid history of following through on such things – but for the wider car industry, there are worries that Cop26 promises are little more than extra hot air.

A so-called "progressive coalition" that includes the UK, Norway, Poland, New Zealand, Ireland, Austria, Canada and others has promised that, by 2035, only electric vehicles will be sold (with an extra five years given to emerging markets and economies).

Some car-makers have rowed in with the promise, including Ford, General Motors, Jaguar Land Rover, Mercedes and of course Volvo. Some major US cities, including New York, Los Angeles, San Francisco, Dallas and Atlanta, have also joined in with the pledge, but environmental think tank Transport & Environment (T&E) has said that the promise doesn't mean much if it's not backed up by legislation.

Julia Poliscanova, senior director for vehicles and e-mobility at T&E, told The Irish Times: "The car industry's electrification plans place it ahead of regulators on climate action. But these won't materialise without actual targets to end car emissions by 2035 at the latest. The US and Europe, especially Germany and France, need to lead."


Notably, Germany, France and China were all absent from the group, which leaves some fairly large carbon-related holes in the plan. "Without those leading markets, it will take more than a nonbinding declaration to clean up the largest source of transport pollution," said Poliscanova.

Ford, though, says that the promises being made are both meaningful and real. "We are moving now to deliver breakthrough electric vehicles for the many rather than the few and achieving goals once thought mutually exclusive: protect our planet, build the green economy and create value for our customers and shareholders," said Cynthia Williams, global director sustainability, homologation and compliance at Ford. "It will take everyone working together to be successful. Partnerships like RouteZero can build momentum and deliver real solutions."

"Electrification represents the most transformative change of our industry in over 100 years and at Ford of Europe, we are leading the way in our ambition to create a sustainably profitable all-electric future," said Stuart Rowley, president of Ford of Europe. "We're doing this with both passenger vehicles and commercial vehicles, providing customer choice while delivering CO2 performance."

Meanwhile, new data shows that while electric vehicles (EVs) are a powerful weapon in the world’s battle to beat global warming, their impact varies hugely from nation to nation, and in some places they pollute more than traditional combustion-engined models.

EVs in Poland and Kosovo actually generate more carbon emissions because grids are so coal-reliant, according to the data compiled by research consultancy Radiant Energy Group (REG).

Charging an EV in Ireland, which sources 46 per cent of its energy from renewables, saves roughly the same proportion of carbon as in Moldova, which sources 94 per cent of energy from gas, the study found, because Ireland's backup fossil fuels are more carbon-intensive.

"Ireland produces a higher amount of zero-carbon electricity than Moldova – but it also gets about 13 per cent of its electricity from oil (1.8 times dirtier than gas), 9 per cent from coal (2.3 times dirtier than gas), and 3 per cent from peat (2.6 times dirtier than gas)," researcher Sid Bagga said.

Carbon savings

Elsewhere around Europe, however, the picture is better, though the relative carbon savings depend on what supplies grids and the time of day vehicles are charged. Best performers are nuclear and hydroelectric-powered Switzerland at 100 per cent carbon savings compared to petrol vehicles, Norway at 98 per cent, France at 96 per cent, Sweden at 95 per cent and Austria at 93 per cent, according to the study. Laggards are Cyprus at 4 per cent, Serbia at 15 per cent, Estonia at 35 per cent and the Netherlands at 37 per cent.

An EV driver in Europe’s biggest car manufacturer Germany, which relies on a mix of renewables and coal, makes a 55 per cent greenhouse gas saving, the data also showed.

In countries like Germany or Spain, with big investment in solar and wind, lack of renewable energy storage means the amount of carbon saved by driving an EV depends heavily on the time of day you recharge.

The analysis was based on public data from Europe's transmission system operator transparency platform ENTSO-E and the European Environment Agency.

– (Additional reporting: Reuters)