Electric vehicles typically steal the show in conversations about sustainability in the automotive industry — and for good reason. Emissions from the transportation sector are estimated to account for 29% of all greenhouse gas emissions in the United States.1 From Tesla's domination in the news to Ford's record-breaking F150 Lightning, the electrification of vehicles is an exciting step in the energy transition. However, there are more sustainability concerns and opportunities when it comes to vehicles than how a car is powered. The goal of sustainability is to meet our own needs without compromising the ability of future generations to meet theirs, which includes recycling, reusing materials, and moving to processes that emit less carbon. Therefore, the sustainability of the vehicle itself — from what it is made of to how it can be recycled — should not be left out of the conversation.
I. Sustainable Chassis
The bodies of traditionally mass-produced consumer vehicles are made from steel and aluminum. Now, manufacturers are moving toward more sustainable materials as well as vehicles that are lighter overall, thereby improving fuel efficiency. A new initiative, called the Circular Cars Initiative by the World Economic Forum, is looking for opportunities to establish closed-loop recycling of aluminum and steel from vehicles.2 In particular, while new aluminum is very costly and resource-intensive to mine, it is virtually infinitely recyclable. Global demand for aluminum is projected to grow by more than 80% by 2050, and recycled aluminum uses just 5% of the energy required for primary production to produce.3 Accordingly, by increasing the use and reuse of aluminum in vehicles, automakers are shifting to a more renewable and fuel-efficient resource.
While the Circular Cars Initiative is voluntary, European Union Directive 2000/53/EC, End Life of Vehicles (the "Directive"), requires member states to implement measures aimed at the prevention of waste from vehicles.4 The Directive also aims at the reuse, recycling, and other forms of recovery of end-of life vehicles and their components. The goal of the Directive is to reduce the disposal of waste as well as improve the environmental performance of all of the economic operators involved in the life cycle of vehicles, especially the operators directly involved in the treatment of end-of life vehicles.
In addition, a lighter alternative to steel and aluminum is plastic. Automakers are looking toward ocean plastic — swirling "islands" of plastic waste in the ocean5 — as raw material for automotive parts and structures; automaker Ford has announced that the Bronco Sport's wiring harness clips will be made from discarded plastic fishing nets taken from the Indian Ocean and Arabian Sea.6 In line with the circular economy ideas outlined above, Ford also uses recycled water bottles to produce lightweight, aerodynamic-enhancing, and noise-reducing underbody shields on the 2020 Ford Escape.7 Further demonstrating its leadership in sustainability, Ford has announced plans to work with McDonald's to use dried coffee bean skins and turn them into reinforced headlamp housings, and it is also looking at using U.S. currency taken out of circulation, and agave fiber from the tequila-making process, to make other parts for its cars.8
While Ford is a standout leader in sustainability initiatives, other automakers are making notable headway in sustainable practices as well, such as GM committing to using at least 50% sustainable material content in its vehicles, measured by total vehicle weight, by 2030.9 And Toyota has established a Global 100 Dismantlers Project in order to establish systems for appropriate treatment of end-of-life vehicles through battery collection and car recycling. Toyota aims to have 15 vehicle recycling facilities by 2025.10
II. Sustainable Interiors
Inside the car, upholstery presents another opportunity for increased sustainability. The movement toward natural fibers in vehicle interiors is a growing trend.11 Even back in 2005, more than 30,000 tons of natural fibers were used in the automotive industry in Europe, and in 2015 the figure reached 50,000 tons, of which 10% to 20% were European hemp fibers.12
Recently, Ford has begun incorporating post-consumer discarded carpet and recycled tires for interior car components.13 Econyl nylon — a new material made from recycled industrial plastic, fabric offcuts from clothing manufacturers, and abandoned fishing nets recovered from the ocean — can be used for floor mats and other trim.14 Mercedes-Benz has been using Dinamica, a sueded fabric made from recycled plastic and fibers, to cover seats and Karuun, a compressed timber product, as floors and dashboard trim.15 Lenzing, an Austria-based fiber producer, also is working to bring sustainable fibers to the automotive industry.16 Using sustainably produced wood-based materials, they are able to make textiles that can become compost material after they are removed from a vehicle, rather than ending up in a landfill or in rivers and oceans.17
III. Sustainable Tires
Nearly 250 million scrap tires are generated annually in the U.S. alone, making this one of the historically least sustainable parts of a vehicle.18 The U.S. Tire Manufacturers Association is working toward eliminating historical scrap tire stockpiles while growing economically- and environmentally-friendly scrap tire markets.19 Such scrap tire markets include use as landfill covers, railroad lines, rubberized floors and asphalt, and playgrounds. The number of stockpiled scrap tires decreased from over one billion in 1990 to about 67 million in 2015 — a 93% reduction.20 However, there is still a long way to go in making the tire component of vehicles sustainable. Some tire manufacturers are developing tire products using oils from sunflowers and natural latex rubbers, such as organic waste that comes from plants, to be used to make bio butadiene, a type of synthetic rubber used in tires.21
In addition, tire manufacturers are looking at recycling polystyrene foam packaging into tires by creating a sustainable synthetic rubber.22 Importantly, polystyrene is a waste stream that is otherwise not reused, so creating a reuse market for polystyrene is particularly sustainable. Similarly, PET plastic waste from items such as water bottles can be recovered, broken down, and reformed into polymer reinforcements in tires. Tire manufacturer Michelin announced plans for recovering 90% of materials from waste tires for reuse in a variety of rubber-based products, including not only new tires but also conveyor belts and anti-vibration products for automobiles.23 With this technology, 56 million tires could be recycled each year to make new Michelin tires and other useful products.24
Tire material innovations and recycling technology can be used in support of a circular, sustainable economy for the tire industry that will enable virtually everything in an end-of-life tire to be recovered for reuse, transforming one of the least sustainable parts of a vehicle into one of the most.
IV. Legal Considerations in Sustainability
While the auto industry is evolving to address sustainability, new legal risks and opportunities accompany this change. From regulatory changes to reporting obligations to litigation risk, companies need to be mindful of legal issues surrounding sustainability issues.
First, it is important to remember that not all movements toward sustainability are entirely voluntary. Governments recognize that encouraging circular economies, where materials in products are reclaimed and reused over and over, will be the key to tackling resource shortages and hazardous materials impacts. Look for regulatory bodies to increasingly step into this space through programs like reclamation and reuse standards, and take-back mandates. Because of this, even auto industry members not actively pursuing sustainability goals should keep an eye on emerging sustainability programs around the globe.
For companies that are moving quickly to incorporate sustainable choices into the automotive industry, Environmental, Social, and Governance (ESG) reporting frameworks include opportunities to tout this progress. While ESG reporting is not currently mandated by law in the U.S., many investors and stakeholders are looking to ESG reports to identify companies that are forward looking and sustainable. In many investor's eyes, the kinds of sustainable choices mentioned in this article can demonstrate a business's adoption of forward thinking that has an impact on financial sustainability. Further, through ESG reporting, some companies will be able to demonstrate that they are mitigating significant risks like resource shortages through some of their sustainability initiatives.
However, companies should beware of overpromising and under-delivering on sustainability. Sustainability claims — including claims used in marketing and promotions as well as in ESG reporting — must be thoroughly vetted to reduce potential exposure to greenwashing litigation. Companies should avoid broad claims like "sustainable," "clean," and "conscious," and instead clarify and quantify the kinds of sustainability benefits their products achieve. Importantly, companies must develop and maintain robust documentation that supports any sustainability claims they do make.
Lastly, in many instances supply chain management will be critical to achieving sustainability goals while minimizing accompanying risk. However, sustainable sourcing contracts and processes will need to address different risks than traditional supply chain agreements. For example, contracts addressing the supply of reclaimed materials need to address sustainability — specific terms and conditions like restricted or prohibited sources and post-consumer content composition. Third-party suppliers of take-back and reclamation services will need to be vetted and audited to avoid claims of improper waste management. Contracts should obligate suppliers of sustainability-related products and services to cooperate with efforts to substantiate sustainability claims or defend against allegations of greenwashing.
Automakers today are driving toward sustainability with innovative approaches to material selection, recycling, and reuse. These exciting changes present significant opportunities for companies that stay ahead of challenges like greenwashing claims, ESG litigation, and supply chain issues.
Footnotes
1. https://www.epa.gov/greenvehicles/fast-facts-transportation-greenhouse-gas-emissions
2. https://www.weforum.org/projects/the-circular-cars-initiative
4. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32000L0053
5. https://www.biologicaldiversity.org/campaigns/ocean_plastics/
6. https://hypebeast.com/2021/12/ford-bronco-sport-recycled-ocean-plastic-sustainability
7. https://hypebeast.com/2021/12/ford-bronco-sport-recycled-ocean-plastic-sustainability
9. https://www.gmsustainability.com/_pdf/resources-and-downloads/GM_2020_SR.pdf 0
10. https://etfdb.com/esg-channel/esg-case-study-toyota/
11. As opposed to synthetic fibers that consume more material and energy to produce. However, not all "natural" fibers are an appropriate replacement. For example, while cotton is "natural," large amounts of water, pesticides, chemicals and energy are needed to prepare and dye the fabric during cotton degradation and processing. https://jcsr.springeropen.com/articles/10.1186/s40991-020-00057-z
12. https://jcsr.springeropen.com/articles/10.1186/s40991-020-00057-z
15. https://www.nytimes.com/2020/06/04/business/sustainable-materials-cars.html
16. https://www.automotiveworld.com/articles/auto-industry-turns-attention-to-sustainable-interiors/
17. https://www.automotiveworld.com/articles/auto-industry-turns-attention-to-sustainable-interiors/
18. https://www.ustires.org/sustainability-driving-force-us-tire-manufacturing-industry
19. https://www.ustires.org/sustainability-driving-force-us-tire-manufacturing-industry
20. https://www.ustires.org/sustainability-driving-force-us-tire-manufacturing-industry
21. https://www.aftermarketnews.com/the-future-of-tires-sustainable-airless-connected/
22. https://www.aftermarketnews.com/the-future-of-tires-sustainable-airless-connected/
24. https://www.michelin.com/en/innovation/vision-concept/sustainable/
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
