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SMMT report highlights automotive sector’s role in driving green growth

Posted on by darion

The UK car sector is calling on the new Labour government to build on the industry’s success in decarbonising to the benefit of the UK economy, with a new report showing that direct carbon emissions from vehicle factories have halved over the past 25 years.

The Society of Motor Manufacturers and Traders (SMMT) says it could help position the country as an ideal location for producing the next generation of zero-emission vehicles.

25t The Society of Motor Manufacturers and Traders (SMMT) Sustainability Report, published today, shows the amount of CO2 Direct emissions from vehicle production have more than halved (-54%) compared with 1999 levels – a major milestone achieved thanks to massive investment by the industry. At the same time, the amount of energy and water used per vehicle was reduced by -18.0% and -17.7% respectively last year, and consumption is now -33% and -42% below 1999 levels.

UK manufacturers are also helping to reduce road emissions, with record numbers of electric vehicles coming off production lines in 2023, with production increasing by almost half (48.0%). Recent independent analysis suggests that with the right investment conditions, more than one million ZEVs could be coming off UK production lines per year by 2035 – exported around the world and driving billions of pounds of domestic economic growth2

With the new government committed to an industrial strategy and the Automotive Sector Plan already published, a new SMMT report shows the potential for green growth in the UK – with automotive as its driving force. Collaboration will be key, making the UK even more competitive globally, attracting investment not only in finished vehicle production but also in supply chains and related sectors. Providing more sustainable and affordable energy is key, as are free and fair trade agreements that promote UK-made products around the world, while ensuring access to key raw materials. A mass UK market for ZEVs is also needed, as manufacturers seek to locate their products close to where they are sold. Meanwhile, a diverse and skilled workforce that can design, build, manufacture, maintain and repair ZEVs is essential for a successful transformation.

Mike Hawes, CEO of SMMThe said:

“The UK automotive sector has been reducing carbon emissions for decades and this new milestone is significant not only for the industry but also for the country’s transition to net zero emissions. We look forward to working with the new Government to deliver its green growth agenda, which puts the UK at the front of the queue for global investment and leadership in sustainability. Automotive can be a driving force in this strategy, further reducing carbon emissions while growing the economy, improving air quality and providing new jobs and skills for people across the country.”

The automotive industry is key to the wider UK economy, with automotive-related manufacturing worth £93 billion and contributing £22 billion to value added, while typically investing around £4 billion a year in research and development. The sector includes over 25 manufacturers building over 70 vehicle models, as well as specialist small-volume manufacturers, supported by around 2,500 supply chain companies. As a result, the industry’s contribution to employment is significant, with over 198,000 jobs directly in manufacturing and 813,000 in total across the automotive industry. Many of these are outside London and the South East, and wages there are around 13% higher than the UK average. Automotive also supports jobs in key sectors such as steel, chemicals, plastics, rubber, advertising, finance and logistics.

7 MEASURES TO MAKE SUSTAINABLE DEVELOPMENT A COMPETITIVE ADVANTAGE IN THE UK:

  1. Publishing the Green Motoring Transformation Strategy, which sets out a holistic, coherent approach and provides a path towards the UK automotive industry’s ultimate sustainability and circular economy goals
  2. Introduction of a package of fiscal, tax and regulatory support measures that will attract new investments and ensure domestic vehicle manufacturers’ competitiveness in the global market
  3. Providing support and guidance to ensure a sustainable and transparent UK supply chain
  4. Mobilising a skilled, diverse and motivated workforce across the UK
  5. Developing a UK regulatory ecosystem in partnership with business that is ambitious, achievable and aligned with global regulatory requirements and international sustainability goals
  6. Ensuring that the UK’s sustainability data requirements match the high ambitions of automotive companies operating in global markets
  7. Maintaining and further supporting access to critical raw materials and cross-border trade, building supply chain resilience to attract investment in zero-emission and sustainable technologies

Photo courtesy of SMMT.