Truckmakers Face Investor Pressure as Carbon Emissions Exceed Oil and Steel

A new study reveals truckmakers are more carbon intensive per euro of revenue than oil, steel, and cars, with only coal mining being worse. The EU has implemented stringent CO2 emissions standards for heavy-duty vehicles, aiming to reduce carbon emissions by 45% by 2030.

author-image
Bijay Laxmi
New Update
Truckmakers Face Investor Pressure as Carbon Emissions Exceed Oil and Steel

Truckmakers Face Investor Pressure as Carbon Emissions Exceed Oil and Steel

A new study by Transport & Environment (T&E) reveals that truckmakers are more carbon intensive per euro of revenue than oil, steel, and cars, with only coal mining being worse. This finding may lead to investors withdrawing their support when truckmakers are forced to report scope 3 emissions next year.

Why this matters: The trucking industry's high carbon emissions have significant implications for the environment and the economy, as it contributes to climate change and air pollution. As investors become more environmentally conscious, truckmakers that fail to reduce their carbon footprint risk losing financial support and facing reputational damage.

The study highlights the significant carbon impact of trucks over their lifetime. The average truck burns through 450,000 liters of fuel, accounting for 99.8% of a truckmaker's total carbon footprint. European truckmakers' emissions are 50% higher than what they currently report to investors.

Xavier Sol, Director of Sustainable Finance at T&E, warns of the potential consequences: "Truckmakers have had an easy ride so far on the financial markets as their true climate impact has been hidden from investors. This is changing. As the true extent of truckmakers' Scope 3 emissions becomes clear, the industry could be in for a serious shock."

The European Union has taken steps to address the issue by implementing stringent CO2 emissions standards for heavy-duty vehicles. The revised standards aim to reduce carbon emissions from large trucks and buses by 45% by 2030, 65% by 2035, and 90% by 2040. New urban buses will need to become zero-emission vehicles by 2035.

The industry has welcomed the EU's move, with businesses urging the EU Council to commit to the standards. Jayson Dong, Senior Manager Public Policy EU DACH and Italy at ChargePoint, said: "This piece of legislation will help create long-term regulatory and investment certainty in heavy-duty fleet electrification." Sita Holtslag, Europe Director of CALSTART's Drive to Zero program, added: "The EU has taken a major leap forward today in combating the climate crisis by ensuring new heavy-duty vehicles will increasingly be zero-emission."

The revised CO2 standards are a crucial step towards reducing greenhouse gas emissions from the heavy-duty vehicle sector, which is essential for achieving the EU's climate neutrality target by 2050. Trucks and buses comprise only 2% of the vehicles on the road in Europe but are responsible for 28% of CO2 emissions from the European road transport sector.

As mandatory Scope 3 emissions reporting looms on the horizon, truckmakers face mounting pressure to take immediate action to reduce their carbon intensity. The T&E study serves as a wake-up call for the industry, highlighting the need for a swift transition to zero-emission models to avoid losing investor support and becoming portfolio carbon bombs.

Key Takeaways

  • Truckmakers are more carbon intensive per euro of revenue than oil, steel, and cars.
  • Trucks' high carbon emissions contribute to climate change and air pollution.
  • European truckmakers' emissions are 50% higher than what they report to investors.
  • EU's revised CO2 standards aim to reduce truck emissions by 45% by 2030 and 90% by 2040.
  • Mandatory Scope 3 emissions reporting may lead to investors withdrawing support from truckmakers.