Green Power, Low-Carbon Steel Can Cut Auto Industry Emissions by 87 Percent : CEEW Report

India’s automobile manufacturing sector could slash its carbon emissions by a staggering 87 percent by 2050, if it embraces green electricity and low-carbon steel, according to a new study by the Council on Energy, Environment and Water (CEEW).

The report, 'How Can India’s Automobile Manufacturing Sector Go Net Zero?', models the industry’s emissions using a customised Global Change Analysis Model and lays out clear decarbonisation pathways. If original equipment manufacturers (OEMs) and suppliers shift to renewable electricity and hydrogen-based steelmaking, annual emissions could drop from 64 million tonnes of CO₂ today to just 9 million tonnes by mid-century.

India, the world’s third-largest vehicle manufacturer, is already seeing major players like Tata Motors, Mahindra & Mahindra, TVS Motors, Ford, BMW, and Toyota commit to net-zero goals. CEEW says the next leap will be decarbonising how those vehicles are made. This move, the study suggests, would not just help the planet, but also make Indian automakers more globally competitive.

“India’s auto industry stands at a turning point,” said Dr. Arunabha Ghosh, CEO of CEEW. “To lead in a low-carbon global economy, we must decarbonise not just the vehicles we drive, but the processes that build them," he noted.

Even though emissions per vehicle have declined, rising production volumes could cause total emissions to double by 2050 if current trends continue. India’s vehicle production is expected to balloon nearly four times, from 25 million units in 2020 to 96 million units by 2050. Steel, heavily dependent on coal, remains the sector’s biggest emissions culprit.

CEEW estimates that sourcing low-carbon steel could alone avoid 38 million tonnes of CO₂ emissions by 2050. The net-zero pathway would require 100 percent renewable electricity across all OEM operations, significant hydrogen use in steelmaking (up to 56 percent of energy mix), and ramping up scrap-based steel to 48 percent of total production. Rubber suppliers, too, would need to shift to green electricity to address Scope 2 emissions.

“We must go beyond electrifying vehicles and decarbonise manufacturing itself,” said Dr Vaibhav Chaturvedi, Senior Fellow, CEEW. “OEMs are already taking steps to clean up their supply chains. The next frontier is to make strong procurement commitments,especially for green steel, to stay globally competitive," he added.

The study also casts doubt on hybrids as a long-term fix. While a high-hybrid scenario could reduce energy use by 7 percent for component makers, it still locks in higher emissions because of ongoing combustion engine use. Hybrids may act as a short-term bridge but will need to be phased out in favor of zero-emission vehicles, the study concludes.

Ultimately, CEEW recommends a dual focus: speed up electric vehicle adoption and simultaneously clean up manufacturing. While EVs help cut tailpipe emissions, 65 to 80 percent of a vehicle’s lifetime emissions stem from its usage, making it crucial to green the entire production value chain.

The report calls for coordinated action between OEMs and suppliers, long-term green procurement commitments, and strong policy signals to unlock investments in clean manufacturing technologies.