Major automakers under-report emissions by 33%, study finds

Independent assessments show major carmakers undercounting Scope 3 emissions

New research suggests that major automotive manufacturers may be understating their total climate impact by roughly one-third when independently measured. For some manufacturers, full life-cycle emissions now rival or exceed those of major oil and gas companies, according to recent analysis.

The issue centres on Scope 3 emissions, particularly those from vehicles after they leave the factory. These emissions make up the vast majority of a carmaker’s footprint. However, they remain the hardest category to measure and verify accurately.

A 2022 transport-sector report shows that approximately 98% of a carmaker’s total emissions only appear when Scope 3 is included. Despite this, reporting methods vary widely between manufacturers. Consequently, investors and regulators may be working from incomplete climate data.

For UK businesses that supply the automotive sector or compete in public tenders, this matters. Meanwhile, companies setting science-based targets need reliable industry benchmarks. The research raises questions about how emissions are counted across supply chains.

How vehicle emissions reporting creates a 27% carbon gap

Carbon Tracker’s analysis identifies an average 27% gap between company-declared emissions and independently estimated totals. Other research points to an even larger underestimation for some leading manufacturers. More than 90% of automakers’ greenhouse-gas emissions come from Scope 3, largely vehicle use over their lifetime.

Toyota emitted 576 million tonnes of CO2 in 2022, with 99% from Scope 3. This total exceeded BP’s 340 million tonnes across all scopes that same year. Therefore, the automotive sector’s climate impact can dwarf that of fossil-fuel producers when measured consistently.

Not all manufacturers show the same reporting gap. Ford and Stellantis came closer to independent estimates. However, Honda’s independently estimated emissions were 172% of what the company declared. These variations suggest inconsistent methodology rather than uniform industry practice.

The challenge lies in estimating emissions from millions of vehicles over their entire operational life. Companies must make assumptions about fuel efficiency, mileage, and fuel type. Small changes in these assumptions produce large differences in reported totals. As a result, two manufacturers with similar vehicle sales can report vastly different Scope 3 figures.

Why broader corporate disclosure problems affect automotive climate data

Separate Harvard Business School research found that 74% of S&P 500 firms revised emissions data at least once between 2010 and 2020. In that sample, 135 million tons of emissions were underreported. This finding applies across sectors, not just automotive. Nevertheless, it reinforces concerns about voluntary reporting systems.

Companies can publish incomplete Scope 3 figures without standardized, independently verified methodologies. This creates a policy problem. Investors comparing manufacturers rely on consistent data. Regulators setting reduction targets need accurate baselines. Consumers choosing vehicles increasingly consider climate impact.

The automotive sector accounts for over 20% of global greenhouse-gas emissions, according to the New Climate Institute. Therefore, transparency in this sector matters for national and international climate goals. UK businesses supplying automotive manufacturers need to understand these reporting issues. Furthermore, companies bidding for public sector contracts face increasing scrutiny of their supply chain emissions.

For example, PPN 06/21 requires suppliers bidding for central government contracts above certain thresholds to report their carbon footprint. If automotive clients underreport their emissions, suppliers may struggle to calculate their own downstream impacts accurately. Similarly, businesses setting net-zero targets must account for emissions from the vehicles they operate or sell.

The automotive sector’s emissions compared with fossil-fuel producers

The research suggests current disclosures may make some manufacturers look cleaner than they are. This matters especially when comparing them with fossil-fuel firms or assessing progress toward net-zero targets. Toyota’s 2022 emissions exceeded those of BP when measured on a like-for-like basis including Scope 3.

This comparison is not intended to diminish the oil and gas sector’s climate impact. Rather, it illustrates that product-use emissions can dominate a company’s footprint regardless of sector. For automotive manufacturers, almost all climate impact occurs after the vehicle leaves the production line. In addition, electric vehicle sales affect future Scope 3 totals, but most manufacturers still sell predominantly petrol and diesel models.

The automotive sector faces a unique challenge. Manufacturers cannot directly control how customers use their products. However, they remain responsible for reporting those emissions under most climate disclosure frameworks. Estimating lifetime vehicle emissions requires assumptions about average mileage, fuel consumption, and vehicle lifespan. Each assumption introduces uncertainty.

Some manufacturers use conservative assumptions that understate likely emissions. Others apply more comprehensive methodologies that capture real-world driving conditions. Without mandatory standards, reported figures vary dramatically. Investors cannot reliably compare manufacturers’ climate performance. Regulators cannot assess whether the sector is decarbonizing fast enough.

Five facts UK businesses should know about automotive emissions reporting

• More than 90% of automotive manufacturers’ greenhouse-gas emissions come from Scope 3, largely from vehicles during their operational life rather than production.
• Independent analysis identifies a 27% average gap between company-declared emissions and estimated totals, with some manufacturers showing much larger discrepancies.
• Toyota’s 2022 Scope 3 emissions totaled 576 million tonnes of CO2, exceeding BP’s 340 million tonnes across all three scopes that year.
• Research covering S&P 500 companies found that 74% revised their emissions data at least once between 2010 and 2020, with 135 million tons underreported in the sample.
• The automotive sector accounts for over 20% of global greenhouse-gas emissions, making accurate reporting essential for credible climate strategies.

What inconsistent automotive emissions data means for UK suppliers

UK businesses that supply automotive manufacturers or operate vehicle fleets need to understand these reporting inconsistencies. Supply chain emissions calculations depend on accurate data from customers and suppliers. If automotive clients underreport their footprint, downstream calculations become unreliable.

Companies bidding for public sector contracts face specific challenges. PPN 06/21 compliance requires carbon reporting that includes supply chain emissions where material. Automotive suppliers must estimate their share of vehicle lifecycle emissions. However, if manufacturers use inconsistent methodologies, suppliers cannot benchmark their performance reliably.

Furthermore, businesses setting science-based targets need industry data to contextualize their own emissions. The Science Based Targets initiative requires companies to align reductions with climate science. This means understanding whether your sector is decarbonizing at the necessary pace. Inconsistent reporting makes that assessment difficult.

Vehicle fleet operators face similar issues. Companies reporting their Scope 3 emissions must account for business travel and logistics. If vehicle manufacturers understate fuel consumption or lifecycle emissions, fleet operators will underreport their own footprint. This affects their credibility with investors and customers.

The research also matters for businesses considering electric vehicle transitions. Comparing the total climate impact of electric versus petrol vehicles requires accurate lifecycle data. Manufacturers may present optimistic figures that understate real-world emissions from electricity generation or battery production. Therefore, procurement decisions should consider independently verified data where available.

How UK businesses can respond to automotive reporting gaps

Businesses cannot wait for perfect data before acting on climate commitments. However, they can take practical steps to improve the accuracy of their own reporting. First, request detailed methodologies from automotive suppliers and customers. Ask how they calculate Scope 3 emissions and what assumptions they use.

Second, consider using independently verified data sources where available. Organizations like the Department for Energy Security and Net Zero publish emissions factors for different vehicle types and fuels. These factors can supplement or verify manufacturer data. Similarly, industry bodies provide benchmarking data that helps contextualize reported figures.

Third, document your own assumptions and methods clearly. If you must estimate supply chain emissions using incomplete data, explain your approach transparently. Carbon reporting services can help establish robust methodologies that withstand scrutiny from auditors and procurement teams. Transparency about data limitations is better than presenting uncertain figures as definitive.

Fourth, engage with suppliers about their reporting practices. Ask automotive suppliers how they account for vehicle-use emissions. Request information about their transition plans and how these affect future emissions profiles. This dialogue can improve data quality over time. In addition, it demonstrates due diligence to your own stakeholders.

Finally, consider scenario planning that accounts for reporting uncertainty. If your supply chain emissions might be understated by 27%, model what your footprint would look like with more accurate data. This helps stress-test your net-zero strategy. Moreover, it prepares you for potential future restatements if reporting standards tighten.

Where to find authoritative information on emissions reporting standards

The UK government publishes annual greenhouse gas reporting conversion factors that provide standardized emissions factors for transport and other activities. These factors help businesses calculate their footprint consistently. The guidance includes specific factors for different vehicle types and fuels.

The Greenhouse Gas Protocol provides the international standard for corporate emissions accounting. Their guidance on Scope 3 emissions explains how to calculate supply chain impacts, including product-use emissions. The protocol forms the basis for most corporate climate reporting, including PPN 06/21 requirements.

For businesses in automotive supply chains, the Society of Motor Manufacturers and Traders publishes industry data and guidance on sustainability reporting. They provide context on sector-wide emissions trends and emerging standards. This information helps suppliers benchmark their performance against industry averages.

Companies seeking support with carbon measurement and reporting can access training on emissions accounting methodologies that cover Scope 3 challenges. Understanding these methodologies helps businesses identify gaps in their own data and engage more effectively with supply chain partners about reporting practices.