Industry Trends

The Zero Carbon Economy

Yoan Lavergne
26th Apr 2021 | 5 min read

Climate change is one of the world’s leading environmental concerns. The rising global temperatures and large-scale weather shifts are being caused by excessive Greenhouse Gas (GHG) emissions, mostly from burning fossil fuels like coal, oil and natural gas.

Governments, industry and other organizations are taking action to reduce those emissions and slow the impact on our planet. Many initiatives involve a comprehensive set of long-term goals striving to create a climate-neutral society and a zero-carbon economy. Over the coming decades, they will change the way we think about business planning, innovation and products.

For an innovative company like Lavergne, these long-term initiatives are helping to guide the way we plan our technologies, research, partnerships and products. Lavergne will continue researching, developing and producing high-quality, post-consumer recycled resins as a way of moving us towards a zero-carbon economy.

When we look at the market, these changes make the best business sense. And when we look at the planet, these changes make even better environmental sense!

Decarbonization of the Automotive Industry

The automotive industry will play a big role in decarbonizing the global economy. The US Environmental Protection Agency says 28 percent of Greenhouse Gas (GhG) emissions come from the transportation sector, and 82 percent of those emissions come from vehicles like cars, trucks and buses.

Mark Church, Lavergne’s automotive lead, explained the relevance. “More and more automakers are including sustainability as a metric for business performance, and rightfully so. Success and sustainability will be inseparable as industry leaders adopt efficient solutions to carbon reduction. The supply base must develop and implement cost effective solutions to enable the industry to grow responsibly.”

Let’s look at what those future changes could entail.

European Union (EU) and the Carbon Adjustment Mechanism (CBAM)

In many ways, Europe is emerging as a world leader of climate change action. The European Union (EU) has set an ambitious goal of being a Zero-Carbon Economy — net zero greenhouse gas emissions — by the year 2050.

The EU’s comprehensive objective is at the heart of the European Green Deal and in line with the EU’s commitment to global climate action under the Paris Agreement.

In December 2019, the EU proposed a Carbon Border Adjustment Mechanism (CBAM) as a broad set of regulations to help meet these goals.
The CBAM proposal mentions three potential policies to meet it objectives:

  1. Carbon tax on imports and domestic production
  2. Customs duty on imports, and
  3. Extension of the Emission Trading System (ETS), the EU’s cap-and-trade carbon market

The EU’s Emission Trading System (ETS) was designed to combat climate change and cost-effectively reduce greenhouse gases. It’s the worlds’ first major carbon market and remains the biggest one.

The CBAM is still in the development stages and different proposals are under discussion at the time of this writing (May 2021). But the discussions are underway. The European Commission is expected to publish an implementation proposal for a CBAM in June 2021.

Regardless of how the EU policy prescribes its carbon reducing measures, there will certainly be an impact on industry — from producers all the way through the supply chain.

Regulating Automobile Emissions

When you look across the lifecycle of an automobile, you can see how carbon emissions are generated at various stages and emitted from various sources:

  1. Production and Assembly
  2. Logistics
  3. Tailpipe and Fuel Supply
  4. Material Production
  5. End-of-Life Materials Recovery


Most automotive carbon emissions traditionally come from tailpipe emissions. A 2020 McKinsey & Company article — The Zero-Carbon Car: Abating Material Emissions is Next on the Agenda — found 65 to 80 percent of overall emissions are tailpipe emissions. Tailpipe emissions are directly related to the internal combustion engines.

As the automotive industry further develops electric powertrains, those tailpipe emissions will decrease, both the volume and as a percentage of overall emissions.

However, even significant reductions in tailpipe emissions will not reach the full potential of automotive decarbonization or allow manufacturers to build a “zero-carbon car.” Even with an electric powertrain, an automobile’s lifecycle still creates carbon emissions through the production and assembly, logistical processes, material production and end-of-life disposal.

It’s the material emissions — the carbon emitted from the car’s components — that will start comprising a greater part of its overall total emissions.

Source: McKinsey & Co. 2020

The McKinsey study shows that by year 2040 emissions from material production, including plastics, will comprise a higher share of overall emissions than tailpipe emissions.

The McKinsey report describes the shift. “We estimate that the growing market share of battery electric vehicles that have higher baseline material emissions — and the changing energy mix required to power them — will boost material emissions from 18 percent of vehicles’ life-cycle emissions today to more than 60 percent by 2040.” (McKinsey & Company, 2020)

Creating Innovative, Sustainable Materials

Innovative materials providers are taking notice of this trend. “As automobile powertrains evolve, Lavergne will bring our sustainability focus to other parts of the automotive lifecycle, including the supply chain and end-of-life disposal,” explained Mark Church. “It will take vision, innovation and collaboration.”

The graphs below show how producing Lavergne’s ABS resins use fewer resources and has smaller carbon footprints than producing virgin resins.

As the graphs illustrate, the difference is significant.

Closed Loop

Creating high value recycled plastic is a valuable initiative committed to reducing waste and conserving energy.

We work with manufacturers making automotive parts to ensure Lavergne recycled plastics are high-quality and tailored for their manufacturing needs.

Follow the Lavergne Newsroom to learn what we’re doing to create plastics for the zero-carbon global economy and help protect our planet’s environmental health.