Tesla wants net-zero emissions, but its pollution grew last year

Tesla’s greenhouse gas emissions grew by nearly 10 million metric tons of CO2 last year, according to the company’s latest report impact reportwhich provides the most revealing insight into how the company is thinking about climate-related risks and its own carbon footprint.

In 2023, Tesla was responsible for more than 50 million metric tons of carbon dioxide emissions, compared to just under 42 million metric tons the year before, a roughly 20% increase in pollution. Most of the additional pollution comes from Tesla’s supply chain. Purchased goods and services represent almost 80% of the company’s global carbon footprint.

The report says Tesla is working to achieve net-zero greenhouse gas emissions “as quickly as possible” and outlines the steps the company plans to take to get there. It also mentions some of the biggest risks the company faces as a result of climate change. However, it shows that the company’s supply chain has gotten dirtier over the past year.

Given that dirty supply chains often make up the majority of a company’s carbon footprint, environmental advocates are putting pressure on regulators to crack down on these emissions. It appears Tesla is already taking steps to comply new rules from the Securities and Exchange Commission demanding much more transparency regarding climate change.

The SEC’s initial 2022 proposal would have required large companies to disclose so-called indirect emissions from their supply chains and the use of their products. But this faced an immediate backlash from companies, who said these were the most difficult emissions to control. The measure was eventually removed from the climate rules that the SEC finalized in March.

Under these rules, which are already facing legal challenges, large companies will still have to disclose data on carbon pollution from their direct operations and energy use that is “material” or essential to investors’ understanding of the company’s financial situation. a company. They will also need to assess and share the risks and impacts they face as a result of climate change.

Tesla conducted a sustainability assessment in 2023 “to determine areas relevant to the business and relevant to society and the environment,” the report says. This resulted in a list of 20 “focus areas,” including climate risk management, air quality, water use, “responsible” AI, the health and safety of your workers, and more.

There’s even an entire section in the report dedicated to climate risks. Drought poses the biggest risk to Tesla’s production in the short term, he says, while heat becomes a bigger problem in the long term. After all, Tesla operates several facilities in California, Nevada and Texas – all arid western states facing rising temperatures and increasingly stressed water systems. The company says it assesses climate risks at each of its production facilities, including flooding, heavy rain, strong winds, extreme heat, wildfires and drought. These assessments will inform any plans to expand sites or design new facilities, he says.

Tesla also acknowledges in the report that it may have to change the way it does business to reduce its carbon emissions. “As regulations around the management of GHG emissions evolve, we may need to make further capital investments that are different or accelerated from existing plans, which could impact profitability. Policy changes could affect certain practices or infrastructure, potentially reducing installed capacity because the technology used – such as pressure casting or paint shop – cannot be fully decarbonized,” the report states.

The company, of course, faces a series of problems that go beyond climate change. Its sales, share price and number of employees have all fallen this year. Therefore, it will not be easy for the company to attribute the reduction in profits to efforts to comply with climate policy.

Although its carbon footprint has increased over the past year, Tesla says that doesn’t take into account the pollution avoided when consumers switch from internal combustion engines to electric vehicles. Its customers avoided 20 million metric tons of CO2 pollution in 2023, Tesla estimates. And compared to automakers that make gas-guzzling cars, Tesla’s carbon footprint is still much smaller. Ford’s carbon footprint, for comparison, is more than seven times larger in 386 million metric tons of CO2 in 2023.

Tesla says typical greenhouse gas accounting methods “were not developed for a company like Tesla,” which makes products such as electric vehicles, solar panels and batteries that replace fossil fuels. Your greenhouse gas emissions numbers are buried in the appendix of the report, without adding the line items to show a total of your carbon footprint. Above all, the company focuses on comparing the lifetime emissions of its electric vehicles with those of internal combustion engine vehicles.

At the end of the day, you can’t manage what you can’t measure. The data Tesla has begun sharing about its operations will be crucial in holding it accountable to its vision of achieving net-zero emissions. There is even more vital information the company must share if it is serious about climate change: a concrete timeline for its efforts to reduce pollution.

This appears to be the first time that Tesla has stated in a report that it “strives to achieve net-zero GHG emissions across the entire product lifecycle, from mining and production to end-of-life use and recycling.” The report also says the company plans to match 100% of electricity use in its operations with renewable energy. (It already does this with its Supercharger network.) But the company didn’t set a deadline for those goals and didn’t immediately respond to questions from On the edge.