Decarbonization Pathways in Transportation: A Comprehensive Analysis by Accenture

Accenture, in partnership with industry partners, has conducted comprehensive analysis and research on decarbonization pathways across various industries globally. The power, transportation, industrial, and building sectors account for over 80% of total carbon emissions, with the power and industrial sectors being the main areas for emissions reduction, expected to achieve 60% of the overall reduction target. The transportation sector, as the third-largest emissions sector, can also achieve 20% of the total reduction target.

The primary contributor to carbon emissions in the transportation sector is automobiles, including passenger cars and transport vehicles, which are powered by gasoline and diesel. Therefore, the core initiatives for emissions reduction in the transportation sector include two aspects: the replacement of conventional vehicles with new energy vehicles and the extensive use of low-carbon and recyclable materials in the manufacturing process.

1. Electric vehicles (EVs) drive decarbonization in transportation

The replacement of conventional vehicles with EVs is a critical element in low-carbon development in the transportation sector, even determining the decarbonization process. From a lifecycle perspective, a pure EV can reduce about 40% of carbon dioxide emissions compared to a traditional gasoline vehicle of the same size. By the end of 2022, the number of new energy vehicles in China exceeded 13 million, with annual production and sales reaching nearly 7 million. The development of new energy vehicles is strong, and in China, the European Union, and the United States, EVs are expected to account for an average of 60% of total vehicle sales by 2030.

With such a large-scale deployment of new energy vehicles, especially EVs, the effectiveness of decarbonization will be concentrated. The development of power batteries is the primary value creator for decarbonization in the transportation sector. However, the recycling, regeneration, and harmless disposal of batteries will be important links in the development of the EV industry. Therefore, EV regulators and practitioners need to provide end-to-end solutions for the entire lifecycle of power batteries for vehicles to ensure the effectiveness and completeness of achieving decarbonization goals.

2. Continuing decarbonization initiatives in the automobile industry

Decarbonization in the automobile industry includes decarbonization in the manufacturing process and the low-carbonization of vehicle components. Unlike the power industry, where about 90% of carbon emissions come from the production process, the production process of the automobile industry accounts for less than 40% of its overall carbon emissions. Due to the unique nature of the automobile industry, decarbonization actions require carbon audits throughout the entire lifecycle, focusing on the five key stages of the automobile industry, including procurement (raw materials, parts, and third-party services), production, sales, use, and recycling and scrapping. The construction of a green industry chain and the search for the best decarbonization measures are essential. For instance, the amount of steel used in car materials is gradually decreasing, while the use of plastic, rubber, and other chemical materials is increasing. The innovation, low-carbonization, recyclability, and non-hazardous disposal of these materials also have significant value contributions to the comprehensive decarbonization and emissions reduction in the automotive industry.

3. Digital platforms support decarbonization in the transportation sector

Decarbonization in the transportation sector can have a significant impact on vehicle production and the replacement of traditional vehicles with new energy vehicles. However, the efficiency of the transportation process cannot be ignored, such as the efficiency of freight logistics, idle rates, and travel efficiency. Digital platforms, especially the application of intelligent transportation systems, provide significant support for improving transportation efficiency. Digital platforms also play a huge role in supply chain planning and efficiency, creating low-carbon value for transportation operations. Moreover, this part will also be continuously iterated and improved through the application of AI technology, providing efficient services for transportation and feasible decarbonization initiatives.