SBTi Drafts Net Zero Standard For Auto Industry

In a major step toward decarbonizing one of the highest-emitting sectors globally, the Science Based Targets initiative (SBTi) has launched the draft version of its Automotive Sector Net-Zero Standard. The new framework is aimed at guiding automakers and automotive parts manufacturers in setting credible, science-based net-zero emissions targets, with clear and measurable pathways aligned with global climate goals.

Founded in 2015, the SBTi has been instrumental in integrating climate science into corporate environmental action, particularly in driving widespread adoption of emissions reduction targets that align with the 1.5°C pathway under the Paris Agreement. As one of the most trusted global bodies in this area, SBTi’s mission is to promote best practices in science-based target setting, provide technical support to companies, and validate corporate climate goals through an independent process.

The release of the draft standard for the automotive sector marks a significant milestone in the organization’s ongoing effort to establish sector-specific frameworks tailored to the needs and impact of high-emitting industries. The automotive draft follows the earlier development of sector standards for other critical areas including Forest, Land and Agriculture (FLAG), cement, chemicals, air transport, and buildings. These initiatives are part of SBTi’s broader agenda to support industries in translating abstract climate commitments into clear, science-aligned action plans.

The automotive sector plays a pivotal role in global climate change mitigation, contributing more than 20% of total man-made greenhouse gas (GHG) emissions. This includes emissions generated not just during vehicle operation, but across the entire value chain—from raw material sourcing and manufacturing, to fuel use and end-of-life vehicle disposal. Recognizing this complexity, the draft standard outlines a comprehensive approach, requiring automakers and auto part suppliers to consider full value chain emissions, categorized under Scope 1, 2, and 3 emissions.

A key feature of the draft is the introduction of a new aggregated GHG emission intensity indicator for vehicles. This metric captures emissions across multiple stages of a vehicle’s lifecycle, including its usage phase (such as fuel combustion) and end-of-life processing. Companies will be required to incorporate this metric into their target-setting process to better reflect the actual climate impact of their products.

Furthermore, the standard mandates an increase in the share of low-emission vehicles sold as a necessary benchmark for aligning with net-zero pathways. This includes electric vehicles and other alternative energy-powered mobility solutions that offer reduced carbon footprints. By embedding this into the core of the standard, SBTi encourages automakers to transition their portfolios toward cleaner technologies and sustainable transport options.

Auto parts manufacturers are also given sector-specific guidelines under the new draft. The standard emphasizes the need to cut emissions associated with material sourcing and parts production, two areas traditionally overlooked in broader climate strategies. These companies will also be required to disclose the proportion of their parts that are destined for low-emission vehicles, thereby promoting supply chain transparency and reinforcing market pressure for cleaner mobility components.

The draft standard is aligned with SBTi’s upcoming Corporate Net-Zero Standard Version 2 (V2), currently under development. While maintaining consistency with this updated cross-sector framework, the automotive standard incorporates additional sector-specific nuances to address the unique emissions profiles and transition challenges of the automotive industry.

Commenting on the launch, Karl Downey, Head of Sector Standards at SBTi, emphasized the critical role the auto sector must play in achieving global net-zero goals. “Decarbonizing the road transport sector is a crucial component of meeting our global net-zero goals, and the automotive sector has a substantial role to play as providers of new vehicles. The transition to net-zero provides an abundance of opportunity for industry innovation and attractive offers for customers,” he stated.

In addition to unveiling the draft, SBTi has opened a public consultation process, inviting feedback from stakeholders across the automotive value chain, including manufacturers, suppliers, investors, policymakers, and civil society organizations. The consultation seeks views on a range of issues including the integration of the new aggregated GHG emissions indicator, the proposed low-emission vehicle sales share criteria, and emissions reduction pathways for parts manufacturers.

Downey noted that the feedback process will be essential in refining the standard and ensuring it is both ambitious and feasible for companies. “The feedback we receive from stakeholders will ensure that the final Automotive Sector Net-Zero Standard enables automakers and auto parts manufacturers to make ambitious and practical greenhouse gas reductions and helps them seize the opportunities of electrification – building resilience and greater efficiency while maintaining competitiveness in a rapidly transforming market,” he said.

The draft standard is expected to serve as a benchmark for the industry at a time when regulatory scrutiny and investor expectations around environmental performance are intensifying. With climate risks posing serious threats to supply chains, resource availability, and long-term viability, the move toward standardized, science-based net-zero targets could help the automotive sector future-proof its operations while driving systemic climate action.