How will the EV supply chain decarbonization be more consumer-driven?

The decarbonization of the electric vehicle (EV) supply chain will be consumer-driven, industry experts told Fastmarkets EnergyCensus on the sidelines of the Electrified conference in London on Wednesday

According to Andy Palmer, chief executive of electric vehicle (EV) manufacturer Switch Mobility, the move to decarbonize the supply chain for the production of EVs will be led by consumers, rather than policy-driven.

“If you put consumer demand behind the decarbonization of the EV supply chain rather than legislative demand – in other words that the consumer wants to buy net-zero – you’ll move much quicker than you will with legislative deadlines,” Palmer told Fastmarkets EnergyCensus.

“If the consumer says they only want to buy net-zero cars, then car makers will make those net-zero cars,” he added.

The comments come as industry experts highlighted the pressing need to reduce the emissions associated with EV manufacturing in order to achieve objectives outlined in the Paris Agreement.

“Without the correct measures in place, an EV can quite easily have twice the carbon footprint of an ICE vehicle,” BMW’s vice president of sustainability and mobility strategy Thomas Becker had told journalists earlier on Wednesday.

These sentiments were echoed by partner at PA Consulting Gus Hochschild, who told Fastmarkets EnergyCensus that as the UK moves closer to the government’s 2035 ban of new internal combustion engine (ICE) vehicle sales, the market will become better at distinguishing between practices used by different OEMs.

“The industry will get much better at [sourcing and emissions] labelling but the consumer will begin to expect it a lot more,” Hochschild said, highlighting a rising need for green steel for use in EV production and other carbon-free raw materials, “or else it makes a mockery of the actual purpose of an EV.”

Currently, the industry lacks a uniform standard to measure emissions associated with EV production – a topic which was discussed by many at this week’s Electrified event, hosted by UK automotive lobby the Society of Motor Manufacturers and Traders (SMMT).

“Everyone is striving to do it because we know the next challenge is not just the tailpipe zero emissions – it’s the whole “cradle to grave” of EV manufacturing,” SMMT chief executive Mike Hawes told Fastmarkets EnergyCensus in an interview.

“It’s challenging because the nature of manufacturing is taking a raw material and turning it into something else – to try and source that raw material from recycled sources is the next step but you’re going to burn up energy of some form in that process,” Hawes added.

According to Becker, taxation overall “can play a crucial role in bringing this about” and could apply to the ratio of various forms of energy used in the manufacturing process – a process in which the government could play an “important role in stabilizing expectations.”

The UK is expected to see its market share of EVs jump to 28.2% in 2022 from 20.4%, according to estimates from Norwegian energy analysts Rystad.

In line with rising EV sales, the amount of energy used in transport could fall by as much as 4% by 2030 with FAME-based biodiesel likely to be the biggest loser, biofuels analysis firm Greenea said earlier this year.

Greenea said that FAME would be hardest hit by Europe’s 2030 climate targets and policies, mainly due to the escalating shift to EVs, with waste-based FAME expected to be the biggest loser specifically, as the EU looks to phase down the use of combustion-engined cars as well as promote advanced biofuels and hydrogen rather than biofuels based on crops and standard wastes such as used cooking oil.

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