Deciphering the role of EVs in today’s brands’ journey towards net zero

Even though Covid-19 has come across as a speed-breaker in our lives, trust me, climate change will be the end of the road. Which is why, today the words like climate action and sustainability are not just CSR jargons, but a core business imperative. The recent times have witnessed most of the leading Indian and global brands declaring their commitments towards turning “Net-Zero”, “Carbon-Neutral”, “Zero-Emissions” and so on, which testifies for why and how sustainability needs to co-exist with business. 

With the sustainability goals being cemented, the next big question is “How to achieve them?” In the journey towards Net-Zero, every brand must look at reducing its carbon footprint with utmost gravitas. Of the overall emissions, carbon emissions hold responsibility for over 80 per cent, making it the most critical action area in this context. For a brand, there are umpteen avenues that contribute to its carbon footprint, and so, let’s understand them better. 

Notably, a brand’s GHG emissions may be classified under 3 key Scope areas: 

1. Scope 1 – Direct emissions arising from a company’s owned, operated, and controlled resources
2. Scope 2 – Indirect emissions from the generation of purchased energy (steam, heat, cooling and electricity)
3. Scope 3 – Emissions arising from indirect resources not owned by the company arising in the company’s value chain (upstream and downstream activities). 

While most organizations focus on their owned operations and resources to reduce overall emissions, a significant portion of the emissions, approximately 75 per cent, usually come from the upstream and downstream activities of the company’s value chain, posing a critical opportunity to make a positive difference to the company’s carbon emissions, i.e. Scope 3 emissions. Some of the 15 Scope 3 emissions include “transportation and distribution” along the upstream and downstream value chain, business travel, outsourced employee commute infrastructure, and personal commute by employees, and in some cases, by “use of sold products” such as internal combustion engines.

From FMCG brands to manufacturing conglomerates, consumer durables to e-commerce companies, majority of organizations’ transportation and distribution, both upstream and downstream the value chain, has majorly been outsourced to external fleet and logistics solution providers, bringing them under the Scope 3 emissions and making gCo2/km an important parameter to track and monitor.

Now, from M&HCVs plying between the hub-and-spokes to L&SCVs plying till the last mile, ICE vehicles pose a grave threat to organizations’ overall carbon footprint. What if EVs replace these ICE vehicles? Given current grid emission factors, an EV can decrease the carbon footprint by over 30 per cent when compared to its ICE equivalent, but it can further reduce the footprint by more than 90 per cent when powered by renewables. On an average, assuming an annual runtime of >40,000 km, a 2W EV can help reduce the absolute annual emissions by 2 tonnes, a 3W EV by 5 tonnes and a 4W EV by 7.3 tonnes, should the electric vehicles be powered through renewable sources.

Is there more to the promise of EVs than what meets the eye? There is, indeed. Assume that the typical life of an EV is 5 to 6 years. However, thanks to today’s cutting-edge EV batteries, they can endure for more than 15 years, making them a viable energy alternative after the life of an EV. Such batteries can be used for secondary EV applications before being decoupled and refurbished for stationary storage applications to augment the potential of renewable energy sources, such as windmills or solar panels while increasing grid flexibility, stability, and operating economics.

Conclusion 

While captive solar and wind technologies are increasingly becoming more lucrative to today’s companies, transitioning totally to a distributed captive energy solution is difficult due to RE technologies’ intermittent generation patterns. However, by utilising erstwhile EV batteries, brands may enable their Net Zero transition while being economically viable and reducing their reliance on the traditional grid. Taking it a step further, when combined with captive RE sources, these batteries shall be able to power EV charging stations, making EVs truly green.

With the present grid evolving and fleets shifting to electric solutions, the growing relevance of EVs cannot be overlooked as it plays a critical role in every brand’s decarbonisation strategy toward Net-Zero targets. Beyond that, with carbon accounting on the rise, there needs to be a co-owned responsibility among OEMs manufacturing the vehicle and the batteries, brands employing the service and the logistics solution providers delivering the service, with data on carbon emissions forming the foundation. Further, brands must embrace a multi-pronged approach where the potential of EV batteries is nurtured beyond the primary application, and thus, impact Scope 1 and 3 emissions in multiple ways to accelerate and augment their efforts to achieve Net Zero goals. 

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