Sustainable Transport and Climate Transition: ESG BROADCAST shares key takeaways.
The Science Based Targets initiative (SBTi) launched its second public consultation for the updated Automotive Net-Zero Standard on February 3, 2026. This revised draft provides a science-aligned framework specifically for automakers and auto parts manufacturers to establish credible net-zero targets. The development comes as the automotive sector remains a primary source of global man-made greenhouse gas emissions, with approximately 20% of total emissions linked to road transport. This consultation phase serves as a critical step before the final standard is published, which is expected no earlier than the third quarter of 2026.
Central to the updated draft is a heightened focus on Scope 3 category 11 emissions, which represent the “use of sold products.” For most automakers, these emissions account for 70% to 80% of their total carbon footprint. The revised standard mandates that companies address these emissions with greater specificity, aligning with the overarching Corporate Net-Zero Standard V2. By targeting the use phase of vehicles, the SBTi ensures that the most significant portion of the value chain is covered by science-based reduction targets.
A significant shift in the latest draft is the redefinition of “low-emission vehicles” to “zero-emission vehicles” (ZEVs). This change reflects stakeholder feedback and aims to provide clearer boundaries for decarbonization planning. Furthermore, the standard introduces new optionality for automakers in their target-setting journey. Companies may now choose to set targets based on either Scope 3 category 11 emissions intensity or a specific ZEV sales-share metric. This flexibility allows businesses to adapt their climate strategies to their unique operational contexts while maintaining long-term alignment with a 1.5°C pathway.
The roadmap for implementation includes a commitment to phase out new internal combustion engine cars and vans by 2035 in leading markets and globally by 2040. To support the practical application of these rules, the SBTi is conducting pilot testing concurrently with the public consultation. This testing involves real-world data from selected companies to identify potential implementation challenges. The consultation period is scheduled to remain open until March 22, 2026, allowing a broad range of stakeholders to contribute to the finalization of these rigorous environmental criteria.
Strategic significance lies in the formalization of zero-emission sales and use-phase accountability as the baseline for market competitiveness. For the automotive industry, this transition necessitates a rapid reallocation of capital toward electrification and sustainable supply chain management to meet the 2035 phase-out mandates. Investors can expect improved transparency and comparability between global manufacturers as standardized metrics replace disparate reporting methods. Ultimately, this framework provides the regulatory readiness required for an industry facing complex global decarbonization pressures and shifting consumer demands.
Image Credit: SBTi
