Steel Industry Calls on Policymakers to Lay Foundation for Life Cycle Thinking in Auto Regulations
New automotive CO2e emissions regulation in planning around the world provides a unique opportunity to align regulatory practice with the state of the art in environmental product policy, launching a new era of successful environmental legislation free of major unintended consequences.
Maintaining a tailpipe-based car emission legislation is fundamentally flawed and will result in unintended consequences. The Steel industry calls on policymakers to future-proof new CO2 emissions rules by laying the foundation for life cycle thinking in the automotive sector.
Watch as OEMs, academics and our steel members talk about steel, the environment and life cycle assessment.
While existing legislation does drive down emissions from the use phase (or tailpipe) by making cars more fuel efficient, it also shifts the environmental burden from the use phase to the production and recycling phases of the vehicle. As alternative powertrains and advanced materials gain prominence, the emissions related to manufacturing and vehicle disposal are becoming an increasingly significant part of the vehicle total life cycle emissions. As a result, the current tailpipe-based regulation captures only a shrinking share of the total vehicle emissions, with the unintended consequence that real-world emissions might even increase.
This effect will become even more pronounced as new regulation begins to take effect. Assuming a future target, as an example, that is 30% lower than the 2021 one, we find that emissions from the production and recycling phases of a conventional petrol-powered compact class car could be as high as its use phase emissions. As a result, should the tailpipe approach be continued, more and more of the total CO2 emissions associated with these future vehicles could fall outside the regulation (see Figure 1).
Adopting a Life Cycle Assessment (LCA) approach can ensure technological neutrality, as it allows for CO2-savings to occur across life cycle phases (See Figure 2) and the supply chain, while ensuring that the overall CO2 emissions are ultimately lower. Under a life cycle approach, carmakers would thus have a wider range of options, benefiting their competitiveness.
There are already existing LCA standards and databases as well as policy examples demonstrating that integrating LCA in decision making is possible. In addition, the Technical University Berlin has developed a series of voluntary policy options outlining how this could be done for vehicle emissions without requiring major changes to the proposed legislation.
The way forward
What is now needed is for policy makers to take the lead and bring forward proposals taking life cycle emissions into account in the regulation, to avoid unintended consequences and make it future-proof. There are many ways to use life cycle thinking and LCA in environmental policy. The best way to integrate them into the policy making process or the policies themselves will depend on the specifics of each regulatory issue. As a minimum, life cycle thinking and LCA should always be used during the policy process, so that unintended consequences can be identified, and their potential size can be gauged. Once it has been established that the risk of unintended consequences is substantial, and their potential size is significant, as is the case with automotive GHG emissions, life cycle thinking or LCA should be used to mitigate the trade-offs that generate the unintended consequences.
Trade-offs cannot be avoided by regulating production and use phase emissions separately. This can only be achieved by life-cycle-based policies that generate incentives to reduce emissions across all stages of a vehicle’s life.
Environmental agencies around the world support LCA. The European Commission calls it the “the best framework for assessing the potential environmental impacts of products currently available.” Life-cycle-based environmental regulation is in its infancy and not without challenges. However, LCA is a mature environmental assessment tool with global standards and close to 50 years of development and practice. It provides a rigorous methodology to account for all emissions generated during the life of a product, making it the ideal tool to identify, quantify and prevent environmental trade-offs.
Across the globe, environmental regulators and policy makers have begun to draft legislation with a life cycle perspective, such as California’s Low Carbon Fuel Standard. See the list in Figure 3 of standards that already include life cycle thinking. New automotive CO2e emissions regulation provides a unique opportunity to align regulatory practice with the state of the art in environmental product policy, launching a new era of successful environmental legislation free of major unintended consequences.