India's Auto Industry Could Slash Manufacturing Emissions by 87%: CEEW

India’s automobile industry could cut manufacturing-related emissions by up to 87 per cent by 2050 by shifting to renewable electricity and low-carbon steel, according to a new study released Wednesday by the Council on Energy, Environment and Water (CEEW).

The study comes amid rising pressure on global automakers to reduce emissions across supply chains. Leading Indian manufacturers, including Mahindra & Mahindra, Tata Motors, and TVS Motors, alongside global players like Ford, BMW, Mercedes-Benz, and Toyota, have increased electric and hybrid vehicle production and committed to Science Based Targets initiative (SBTi) goals. These targets align with global net-zero benchmarks requiring full value-chain decarbonisation by 2050.

While many firms focus on Scope 1 (direct) and Scope 2 (electricity-related) emissions, the report highlights that Scope 3 — upstream supply chain emissions — accounts for more than 83 per cent of the sector’s footprint. Emissions are driven largely by the use of coal-intensive steel and rubber.

“India’s auto industry stands at a turning point,” said Dr Arunabha Ghosh, CEO, CEEW. “Decarbonising vehicle production and supply chains is critical for long-term competitiveness and meeting climate goals. Automakers must now scale demand for green materials and invest in cleaner technologies.”

Steel, Electricity Hold the Key to Decarbonisation

Using the Global Change Analysis Model, CEEW projects that annual vehicle production in India could grow nearly fourfold—from 25 million units in 2020 to 96 million by 2050. While emissions per vehicle would fall, total emissions could double to 64 million tonnes of CO₂ under a business-as-usual scenario.

The largest gains, however, would come from decarbonising steel. Transitioning to hydrogen-based steelmaking and increasing scrap-based production to 48 per cent could cut sectoral emissions by nearly 38 million tonnes by 2050.

The study finds that a full switch to renewable electricity and low-carbon steel by original equipment manufacturers (OEMs) and their suppliers could reduce annual emissions to 9 million tonnes — an 87 per cent drop from the projected business-as-usual level.

Industry Urged to Treat Clean Manufacturing as Strategic Imperative

“To align with a net-zero future, electrification of vehicles is not enough,” said Dr Vaibhav Chaturvedi, Senior Fellow at CEEW. “Indian OEMs must integrate clean manufacturing into core strategy — not just for emissions but to remain globally competitive.”

The study also explores a high-hybrid scenario where hybrid vehicles dominate initially before EVs scale up. While this reduces energy demand slightly, emissions remain higher than with a direct transition to EVs, due to continued use of combustion engines.

CEEW recommends a dual strategy: accelerate electric vehicle adoption and decarbonise the manufacturing value chain through long-term procurement commitments, industry-wide collaboration, and enabling policy support.