Carbon intensity of automakers rivals oil majors

Emissions accounting reveals automakers’ full climate footprint

A new analysis from Carbon Tracker has thrown fresh light on how carbon accounting methods can obscure the true climate impact of major manufacturers. The research suggests that when vehicle emissions are measured across their full driving life, several leading automakers appear nearly as carbon intensive as traditional oil and gas companies. However, current reporting standards make these comparisons difficult to draw.

The findings matter for UK businesses watching supply chain disclosure rules tighten. As regulators demand more transparent carbon accounting, the gap between what companies report and what their products actually emit becomes harder to defend. For manufacturers, fleet operators, and businesses with large vehicle inventories, understanding this reporting divide is increasingly important.

Carbon Tracker’s report highlights a fundamental mismatch in how different industries account for their carbon footprint. Meanwhile, investors and procurement teams are starting to ask tougher questions about product emissions, not just factory emissions. Consequently, the pressure to report consistently across sectors continues to grow.

How vehicle emissions reporting currently works

Automakers typically report emissions from manufacturing plants, corporate offices, and direct operations. These figures appear in annual reports and sustainability disclosures. Nevertheless, the majority of a vehicle’s lifetime emissions occur later, when drivers burn fuel on public roads.

Carbon Tracker argues this split creates a significant blind spot. The organisation adjusted reported figures to include real-world driving emissions over the typical life of vehicles sold. As a result, several major car manufacturers ranked alongside established oil and gas firms for carbon intensity.

The methodology differs from standard corporate reporting, which separates company operations from customer use. Essentially, traditional accounting treats vehicle emissions as someone else’s problem once the car leaves the dealership. Therefore, two companies with vastly different product impacts can appear similar in official disclosures.

Oil, gas, and coal producers already face this scrutiny. Large emissions databases such as Carbon Majors track their output across the full value chain. The 2023 update to that database traces emissions to 169 active entities. Notably, it identifies ExxonMobil, Chevron, Shell, TotalEnergies, and BP as the top five investor-owned emitters that year.

By contrast, automotive emissions remain fragmented across different reporting categories. Manufacturers report direct emissions under Scope 1 and purchased energy under Scope 2. Customer vehicle use falls under Scope 3, which remains optional in many disclosure frameworks. Thus, the full picture rarely appears in one place.

Carbon Majors database provides scale context

Carbon Majors attributed 33.9 gigatonnes of CO2 equivalent emissions to its 169 tracked entities in 2023. The top five investor-owned fossil fuel companies alone accounted for 2.2 gigatonnes. That represents roughly 5.1% of global fossil CO2 emissions in a single year.

These figures come from tracing emissions through the entire supply chain. For oil companies, that includes extraction, refining, and eventual combustion by customers. Similarly, Carbon Tracker applies the same principle to vehicles, counting emissions throughout their operational life.

The US Environmental Protection Agency estimates a typical passenger vehicle emits about 4.6 metric tons of CO2 per year. That figure varies with fuel economy and annual mileage. However, it illustrates the scale of emissions tied to a single vehicle over time.

When manufacturers sell millions of vehicles annually, those individual totals compound quickly. Furthermore, many of those vehicles remain on the road for 10 to 15 years. Therefore, the cumulative emissions tied to a single model year can rival the annual output of large industrial facilities.

Real world adjustments change the comparison

Carbon Tracker’s analysis adjusts for real-world driving conditions rather than laboratory test results. Official fuel economy figures often underestimate actual consumption. Consequently, reported emissions can look lower than what occurs on the road.

This adjustment matters because it reflects genuine climate impact. A vehicle rated at 50 miles per gallon in testing might achieve only 40 in daily use. That difference multiplies across millions of vehicles and thousands of miles per year.

The report does not claim automakers operate identically to oil majors. Instead, it argues their product-related carbon intensity can reach similar levels when measured consistently. Thus, the comparison highlights a reporting gap rather than operational equivalence.

For businesses, this distinction affects how climate risk appears in supply chains. A logistics company buying a fleet sees direct emissions from its depots and warehouses. Nevertheless, the vehicles it operates may generate far more carbon over their working lives. Current reporting often obscures that balance.

Why reporting gaps matter for UK businesses

UK firms increasingly face requirements to report Scope 3 emissions. These include emissions from purchased goods, services, and downstream use of products. However, standards remain inconsistent across sectors and jurisdictions.

Public sector suppliers already encounter carbon disclosure demands in tender processes. PPN 06/21 requires bidders for central government contracts above £5 million to publish carbon reduction plans. Those plans must address all three scopes of emissions where relevant.

Manufacturers and suppliers further down the chain face indirect pressure as larger customers audit their supply chains. A vehicle component supplier might report minimal direct emissions. Nevertheless, its customer’s products contribute significantly to downstream carbon output. Therefore, understanding how those emissions are counted becomes commercially important.

The Carbon Tracker analysis suggests current methods allow significant emissions to remain outside direct corporate accountability. For procurement teams, that raises questions about which suppliers truly carry lower climate risk. Similarly, investors assessing transition plans need consistent data to compare sectors meaningfully.

Financial regulators are tightening disclosure rules in response. The Financial Conduct Authority’s Sustainability Disclosure Requirements came into effect for asset managers in 2023. Companies making sustainability claims about products or services must substantiate them with clear evidence. Consequently, vague or incomplete emissions reporting faces greater scrutiny.

Key details from the Carbon Tracker analysis

• Carbon Tracker adjusted automaker emissions data to include real-world vehicle use over typical driving lifespans, rather than relying solely on manufacturing and operational figures.
• The analysis found that several leading car manufacturers ranked as carbon intensive as traditional oil and gas companies when product-related emissions were included.
• Current corporate reporting often separates manufacturing emissions from downstream product use, making direct comparisons between sectors difficult.
• The Carbon Majors database tracks 169 active fossil fuel and cement entities, attributing 33.9 gigatonnes of CO2 equivalent emissions to them in 2023.
• The top five investor-owned fossil fuel companies accounted for 2.2 gigatonnes of emissions in 2023, representing approximately 5.1% of global fossil CO2 output that year.

What this means for climate risk assessment

The reframing of automakers as combustion-linked businesses affects how investors and regulators view their transition plans. A company planning to phase out internal combustion engines over 15 years carries different risk than one committed to electrification within five. However, that risk only becomes visible when product emissions are counted properly.

For UK businesses, the shift matters in several ways. Fleet managers procuring vehicles need to understand the full carbon cost of their choices. Finance teams assessing climate-related financial risk require consistent data across suppliers and sectors. Moreover, businesses preparing for scope 3 reporting must trace emissions through complex supply chains.

The insurance sector is already adjusting how it prices climate risk. Vehicles with higher lifetime emissions may attract different terms as underwriters factor in regulatory risk and stranded asset concerns. Therefore, the accounting methods used to measure those emissions directly affect commercial decisions.

Manufacturers selling into the automotive supply chain face particular challenges. Component suppliers must understand how their products contribute to downstream emissions. As vehicle makers face pressure to decarbonise, those requirements cascade through the supply chain. Consequently, a consistent accounting framework becomes essential for setting reduction targets.

Pension funds and institutional investors increasingly screen portfolios for climate risk. When automakers appear less carbon intensive than their product use suggests, capital allocation decisions can misfire. Thus, the demand for adjusted emissions data reflects a broader push for transparency in climate reporting.

Comparing sectors requires consistent methodology

The fundamental challenge is that different industries report emissions using different boundaries. Oil companies include downstream combustion because their products are fuels. Automakers have traditionally excluded downstream use because their products are vehicles. Nevertheless, both business models depend on burning hydrocarbons.

This inconsistency complicates regulatory design. If emissions targets apply unevenly across sectors, the result can be carbon leakage rather than genuine reduction. Businesses shift production or investment to sectors with looser accounting, while overall emissions remain unchanged.

Carbon Tracker’s approach applies a consistent boundary across both sectors. By including product use emissions for automakers, it creates a like-for-like comparison with fossil fuel producers. That methodology aligns with growing calls for full value chain accounting in climate disclosures.

For businesses navigating these requirements, the lesson is clear. Reporting direct emissions alone no longer satisfies stakeholders. Investors, customers, and regulators want to see the full carbon footprint tied to your products and services. Furthermore, they expect that data to be comparable across sectors.

The UK government’s Green Finance Strategy emphasises the importance of consistent, decision-useful climate data. As disclosure frameworks converge internationally, companies that adopt comprehensive accounting early gain an advantage. They can demonstrate genuine transition progress rather than reporting gaps.

Implications for net zero planning

Businesses setting net zero targets must decide which emissions to include. Science-based targets typically require addressing all material scope 3 categories. For vehicle manufacturers and fleet operators, use-phase emissions often represent the largest category.

A logistics company might reduce warehouse energy use and switch to renewable electricity. Those measures cut scope 1 and 2 emissions significantly. However, if its delivery fleet continues burning diesel for another decade, overall climate impact remains high. Therefore, vehicle emissions demand attention in any credible net zero plan.

The Carbon Tracker analysis reinforces this point by quantifying the scale of product-related emissions. It demonstrates that manufacturing efficiency alone cannot deliver the reductions needed. Instead, businesses must address the carbon intensity of the products they make or use.

For suppliers to the automotive sector, this creates both risk and opportunity. Component manufacturers that enable vehicle electrification will see growing demand. Conversely, those tied to internal combustion engines face a narrowing market. Therefore, understanding how emissions are counted helps businesses position themselves strategically.

Our net zero program for carbon reporting compliance helps businesses measure scope 3 emissions accurately and build reduction plans that satisfy regulatory requirements. We work with manufacturers, logistics firms, and fleet operators to trace emissions through complex supply chains. Additionally, we support businesses preparing for PPN 06/21 and similar procurement standards.

The shift toward comprehensive emissions accounting is not optional for UK businesses with sustainability commitments. As reporting standards tighten and stakeholder expectations rise, the gap between partial and full disclosure becomes commercially significant. Consequently, investing in accurate measurement now reduces compliance risk later.

Where to find authoritative guidance

The UK government publishes detailed guidance on carbon reporting through the Department for Energy Security and Net Zero. Their greenhouse gas conversion factors provide standardised methodology for calculating emissions across different sources. These factors are updated annually to reflect current data.

The Greenhouse Gas Protocol remains the international standard for corporate emissions accounting. Their Corporate Accounting and Reporting Standard defines scope 1, 2, and 3 boundaries. Businesses reporting under UK regulations should follow this framework for consistency.

For sector-specific guidance, the Society of Motor Manufacturers and Traders publishes data on UK automotive emissions. Their reports cover fleet composition, fuel efficiency trends, and regulatory developments. However, they focus on industry aggregates rather than individual company comparisons.

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 set out UK mandatory climate reporting requirements for quoted companies. These regulations continue to evolve as the government strengthens disclosure obligations.

Businesses looking for practical support with scope 3 measurement and reporting can explore resources through our compliance services for carbon reporting. We help SMEs navigate complex reporting requirements and build systems that scale with regulatory change.