A modern car has 30,000 parts, so tracking the carbon footprint of a single part is no small feat. However, automakers have the most sophisticated and comprehensive accounting systems in the world. Their ERP systems track every penny and twist, organizing a myriad of details to maximize quality and revenue, as well as minimize costs.
Although these systems are not specifically designed to allow for net zero production. , the automotive industry will need every single horsepower – and much more – to achieve this goal, ”wrote Hagen Heubach, vice president of SAP SE’s automotive business, in an article published in IndustryWeek.
According to Heubach, achieving carbon neutrality by the middle of the century is a goal derived from the Paris Agreement in places such as France, Sweden and the United Kingdom, where it has been enshrined in law. It is also already in the plans of OEMs such as Volkswagen, GM and Ford. Further development of current automotive ERP systems is already underway to include new ledgers that can accurately track the carbon emissions and inputs associated with a myriad of components and processes. Carbon tracking is integrated into existing logistics, parts tracking and other functions. But this is just the beginning.
No company alone can hope to achieve the level and accuracy of carbon offsets required for net zero. If we think only of the simplest component, such as a copper battery wire, its carbon dioxide emissions depend on whims, where the copper was mined, where and how it was smelted, where and how it was made of wire, and how much copper is in the wire, what materials consists of insulation and cladding, how and where they were manufactured and shipped, and so on. To understand the contribution of wire to the energy embodied in the finished vehicle (and thus to the carbon footprint), all of this needs to be established and taken into account. Almost all of this is well outside of OEMs such as Volkswagen, GM or Ford, the expert pointed out.
Multiplying all this by the roughly 30,000 parts of a modern car – many of which consists of much more complex components than a copper wire – then we can already sense the magnitude of the task ahead. Addressing the challenge requires open, interconnected, cross-industry networks for all actors in the supply chain, not a few of whom are fierce competitors. This is a daunting prospect, but the German car industry is already fighting together through the Catena-X Automotive Network.
Catena-X’s partners include many of the biggest names in German business: BMW, Deutsche Telekom, Bosch, Siemens, ZF Friedrichshafen, Mercedes Benz, Volkswagen, SAP SE and many others. The alliance was set up to promote uniform standards for the secure but transparent exchange of data and information between European car manufacturers, suppliers, dealers and software and equipment providers. It is based on the open, scalable European cloud data infrastructure, Gaia-X.
The pilot phase of Catena-X will focus on improving transparency, speed of interaction and increased trust in quality management, logistics, maintenance, supply chain management and sustainability
In the future, carbon monitoring will be well integrated into the emerging functions of sustainability throughout the value chain. The aim is to support accurate mapping of CO2 emissions throughout the supply chain, including traceability of individual components such as battery lines. Catena-X thus lays the foundations for a European net zero value supply chain. Heubach hopes that the global car industry will follow the then German example.
However, endless data sharing alone cannot reduce CO2 emissions. This requires huge amounts of renewable energy and the relocation of energy-intensive processes in such a way that there is an abundance of renewable energy sources, less carbon-intensive materials can be used, components can be recycled and reused, production efficiency can be increased, and so on. But without recognizing that collaboration on data-sharing platforms is essential for carbon neutrality, the automotive industry cannot expect to achieve the net zero production target, just as no company can expect to survive without increasing its revenues or expenses.
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