SMMT: The UK Automotive Sector is Driving Green Growth

SMMT’s first UK Automotive Sustainability Report was released in 2000, sharing automotive sector data for 1999.

While more companies have joined as signatories over the years, leading automotive manufacturers like BMW, Nissan, Bentley, Toyota, Unipart, Vauxhall (Stellantis) and Ford have been providing data since the start.

From the inception of SMMT’s sustainability reports, the automotive sector has displayed clear industry commitment to making yearly and long-term progress towards greater sustainability.

In 2024, these challenges have dramatically changed. Today sustainability is one of the biggest global business concerns and the automotive sector has a significant role to play in advancing it. 

Automotive manufacturers juggle business objectives with regulatory ESG commitments, navigating challenges such as decarbonisation, EV adoption and the need to mitigate Scope 3 emissions.

The report highlights the progress made in 2023 addressing these challenges, progress made despite the industry navigating the fallout of the turbulent geopolitical and economic landscape of the last five years. 

"The 25th edition of this report shows a significant milestone has been reached, with direct CO₂ emissions per vehicle manufactured down by more than half since 1999,” says Mike Hawes Chief Executive The Society of Motor Manufacturers and Traders (SMMT).

“It is an achievement that comes through long-term dedication and grit and against a backdrop of challenges – the financial crash, Brexit, Covid-19 and the major global supply chain disruption that followed.”

Milestones highlighted in the report include substantial decreases in emissions, water and energy usage in addition to major investments in zero-emission vehicles. 

The UK automotive sector exhibited promising economic growth as it sought to advance green and social initiatives to enhance sustainability and diversify the workforce.

The report indicates this success is driven in part due to the distinctive strengths of the UK automotive industry. 

The report highlights two key areas of growth for UK automotive sustainability- growth overall in green manufacturing and growth in EVs.

By evaluating the accomplishments made in these areas so far, automotive manufacturers can help establish a possible trajectory for the future. 

Planning ahead is how this exciting industry can enhance it's positive results further and prepare for the unexpected.

The growth of green manufacturing

Over the last 35 years, the UK automotive sector has made major strides to manufacture vehicles in more sustainable ways. 

The report highlights how vehicles today are coated with paint that produces less than half the volume of volatile organic compounds per square metre and manufactured using 23% less water. 

In 2003, the UK adopted the EU’s End-of-Life Vehicle Directive to ensure recycling or reuse. In 2015 targets rose to 85% for reuse and recycling and 95% for reuse and energy recovery and the UK sector has risen to meet this challenge. 

We’ve seen across manufacturing the growing importance of data to sustainability - to track progress, comply with regulations, reflect on metrics and share quantifiable results with customers and industry. 

Data played a critical role in the decline in CO₂ emissions, energy and water usage in Britain’s factories last year- despite one million vehicles being produced, the highest volume in five years. Here are the three core strategies that led to this result

Huge investments were also secured in the sector’s net zero transition, with billions in investment announced for a new generation of electric batteries, components and zero emission vehicles.

One automotive manufacturer involved in the report who embodies this successful net zero transition is Caterpillar.

Their new Pathways to Sustainability programme is a four-year multi-pronged experience that helps participants devise successful energy transition projects and learn holistically about sustainability. 

This programme builds off the company’s Early Learner programme, established in 2021, which includes electrification agreements with customers involved in testing and validating Caterpillar’s new battery electric machines.

“To make a step-change, it will take the industry coming together,” says Caterpillar Senior Vice President Marc Cameron.

"That is what our Early Learner programme and now the Pathways to Sustainability programme are all about – learning and working together toward a brighter future. 

“We are proud to support our customers every step of the way as they design their own unique paths and goals, now and through the energy transition.”

The growth of EV vehicles 

In 2023 vehicle production increased overall in the UK, rising by 17% to more than 1 million units. 

Last year was the first time output exceeded this threshold since 2019, driven by a surge in electrified model production and the softening of challenges relating to the pandemic. 

The UK automotive sector reported a £93bn (US$119bn) turnover in 2023, with billions in public and private investment made to drive the EV transition.

Like Caterpillar, the Ford Motor Company - which also contributed data to the report - is strongly committed to sustainability and electrification. In 2023 its profits were high at US$176bn, a growth in revenue of nearly 11.5% year-on-year. 

In 2022 Ford was the number two EV brand in the US, thanks to the electrification of its most iconic vehicles - the F-150, Transit and Mustang. Delivering on performance, capability, productivity and sustainability, the company announced a 2024 seven-strong EV lineup. 

The company also announce earlier in June the mass production of its all-electric Ford Explorer at its first dedicated EV facility in Europe. This followed a US$2.2bn investment to transform the historic plant, located in Cologne, Germany, into a designated factory of the future.

“To see the Cologne factory founded by Ford in 1930 being transformed into a state-of-the-art electric vehicle production facility is nothing short of amazing,” says Kieran Cahill, Vice President, Manufacturing, Ford in Europe and International Markets Group.

“The start of mass production of electric vehicles, with the new all-electric Explorer, marks the beginning of a new era for Ford in Europe.”

The sustainable path forward for 2024

So, with such uplifting results, what should UK automotive manufacturers do next to pursue sustainability? 

The report indicates it's a combination of staying the course and preparing to make bold leaps to invest in digital innovation. 

Manufacturers should continue to focus on sustainability, enhancing efforts to reduce Scope 3 emissions, improve life cycle assessments, address environmental impacts and ensure compliance with regulatory frameworks.

But they should also holistically invest in sustainable technologies and industry 4.0, boldly embracing automation, electrification and digitalisation to drive broader efficiency and sustainability.

While the sector can't rest on its laurels, it also should continue to pursue sustainability with steady, well-planned intentionality and responsibility.

Despite the urgency of this mission, manufacturers must strike the right balance between being measured and decisive to deliver on long term sustainability plans.

Collaboration across the value chain, between manufacturers, government, adjacent industries and vital stakeholders will be critical to building industrial strategies that ensure long-term success. 

“Automotive can be the driving force behind Britain’s green growth agenda but we need a suitably ambitious industrial strategy, one that delivers our long-term sustainability goals.” says Mike.

“This includes clean and affordable energy, strong free trade agreements which provide access to critical raw materials, enhancing our zero emission supply chains, and a skilled up workforce that’s fit for a greener future. 

“Implement these measures and a million EVs will be rolling off our production lines every year by 2035, bringing massive environmental, economic and social benefits with them. This year’s report is a waymark, therefore, shedding light on how our industry has transformed over the past 25 years and signposting the road to future success. 

“We look forward to working with the new government and its fresh policy agenda which will be pivotal to the next 25 years of success.” 

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