The Circular Cars Initiative (CCI) is a private/public sector collaboration focused on leveraging new technologies and business models to align the automotive industry with a 1.5C climate scenario. Through an integrated systems approach, CCI will provide a platform for actors in the value chain to eliminate gaps between economic incentives and social outcomes. A core goal of CCI is to leverage sectoral knowledge, partnerships, funding and creativity to help community members develop technologies and business models to eliminate emissions from automotive utilization and manufacturing.
The global automotive industry confronts a profound moment of transition. Today the automotive ecosystem is an engine for prosperity, but it’s also a major driver for environmental degradation. On an annualized basis, the industry produces more greenhouse gas emissions than the entire European Union and roughly 20% of these emissions are directly attributable to manufacturing. While the shift towards battery electric vehicles will decrease use-phase emissions substantially, in the short term it will also increase manufacturing emissions. This is due to the large carbon footprint of EV batteries. Under a business as usual scenario, by 2040 McKInsey & Co analysis for the Circular Cars Initiative estimates roughly 60% of total automotive lifecycle emissions will be directly attributable to materials – with just 40% coming from other sources including logistics, end of life disposal and utilization. Any clear path toward a 1.5C climate scenario will require significant and aggressive decarbonization of these non-use phase emissions.
The Circular Cars Initiative (CCI) is a partnership between stakeholders from the automobility ecosystem (e.g. industry, policymakers and fleet purchasers) to eliminate or minimize total lifecycle emissions with a special emphasis on manufacturing emissions. The initiative’s overarching goal is to achieve an automobility system that is convenient, affordable and firmly grounded within a 1.5°C climate scenario by 2030.
The term “circular car” refers to a theoretical vehicle that has maximized materials efficiency. This notional vehicle would produce zero materials waste and zero pollution during manufacture, utilization and disposal – which differentiates it from today’s zero emission vehicles. While cars may never be fully “circular,” the automotive industry can significantly increase its degree of circularity. Doing so has the potential to deliver economic, societal and ecological dividends.
Today, roughly half the cost of producing a new vehicle comes from manufactured materials. At end of life, little of this value is recoverable due to non-circular design practices and the lack of circularity-focused business models. Just as vehicles consume non-renewable fuel, producing atmospheric pollution and GHG emissions as atmospheric waste, they also consume vast quantities of currently non-renewable materials that result in massive quantities of liquid and solid waste. These are generally landfilled, processed or downcycled at end of life.
Inefficient utilization of cars is also a problem. Privately-owned vehicles are only in use about 5% of the time, and even then, they tend to operate at low passenger capacity.
All this points toward significant opportunities for innovation and improved materials efficiency – both in manufacturing and utilization. Over the coming decade, to remain competitive, global automotive companies must embrace change and the imperatives of sustainability and climate change. The pathway toward mobility with both zero emissions and zero environmental waste will inevitably include increased reliance on circular cars and economics.
CCI aims to virtually eliminate automobility emissions by targeting what we call “materials efficiency.” This key measurement of “materials efficiency” is still in the process of formalized definition. But one simple formula is the quantity of raw materials used to build a vehicle divided by the number of passenger miles provided by that vehicle. Other quantifiable metrics, such as recycled content, or GHG emissions/passenger km may also be included.
One early goal of CCI will be to define “materials efficiency” with respect to key metrics and end goals (e.g. GHG emissions, rare earth elements utilization, etc.) in collaboration with industry stakeholders and regulators. CCI aims to develop appropriate frameworks for measuring materials efficiency and drastically improve the industry’s performance with regard to these metrics – thus reducing the automobile’s lifecycle environmental footprint and at the same time significantly increasing the vehicle’s full life-cycle value. CCI will also generate industry transition tools that point toward the most effective and economic decarbonization pathways.
Some of the strategies for increasing the materials efficiency of automobiles under examination include: implementing new business models like pooled mobility as a service (MaaS); closed loop recycling of aluminum and steel; and life extension of vehicles and key components such as batteries.
CCI’s key deliverables for 2020 will include:
· A series of high-fidelity roadmaps for industry and policymakers that explain key milestones for circularity (focused on materials and business models)
· A new framework for measuring materials efficiency and circularity in the automobility space
· A discrete industry transition tool to map potential pathways toward decarbonization
CCI will also incubate circularity-focused pilots with members of the CCI community and collaborate to catalyse the development of new markets and materials networks necessary to achieve circularity.
The Circular Cars Initiative has three primary workstreams: Materials, led by McKinsey and Co; Business Models, led by Accenture Strategy; and Policy which is co-led by World Economic Forum staff together with SYSTEMIQ. The initiative’s work will be coordinated by the CCI Secretariat which resides within the World Economic Forum and includes CCI’s major partners.