12th May 2026
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In February, the Science Based Targets initiative (SBTi) launched an updated draft of its Automotive Sector Net-Zero Standard for a second public consultation - a new framework for automakers and auto parts manufacturers seeking to set science-based targets aligned with reaching net-zero by 2050.
ACCR responded to the following questions in the consultation survey:
15. Rate the following statements:
ii. The Automotive Sector Net-Zero Standard is ambitious enough to meaningfully take science-based climate action
ACCR Response: Somewhat disagree
iv. The Automotive Sector Net-Zero Standard will assure the credibility of companies' climate action
ACCR Response: Somewhat disagree
26. Do you agree with the option to allow automakers to set targets on EITHER scope 3 category 11 emissions OR zero-emission vehicle sales shares?
ACCR Response: No
Please refer to ACCR’s response to question 34 for further detail on why ACCR does not support the current scope 3 category 11 methodology.
ACCR does not support allowing companies to set targets based on EITHER scope 3 category 11 emissions OR zero-emission vehicle (ZEV) sale shares. Both metrics capture different aspects of the sector’s transition and are both required to enable a credible assessment of decarbonisation progress.
Allowing companies to choose between these target types also creates a risk that companies select the metric that best aligns with their current product mix or strategy, rather than the pathway most consistent with sector-wide decarbonisation. This potentially creates a disconnect between company-level targets and industry transition trajectories.
While increasing ZEV sales are essential for reducing use-phase emissions, this metric does not account for the emissions performance or sales mix of the remaining internal combustion engine (ICE) vehicle fleet.
If the current shift to larger vehicles, such as SUVs and pickup trucks, within the non-ZEV category continues, improvements in vehicle emissions intensity may not prevent absolute emissions from increasing. Because these vehicles typically have higher emissions than smaller cars, total emissions could still rise even as the share of ZEV sales increases [1].
ACCR’s view is that both scope 3 category 11 emissions targets and ZEV sales share targets are required as they provide complementary signals about emissions performance and the pace of the vehicle fleet transition.
References:
[1] Laura Cozzi & Apostolos Petropoulos, “SUVs are setting new sales records each year – and so are their emissions”, IEA, 28 May 2024, https://www.iea.org/commentaries/suvs-are-setting-new-sales-records-each-year-and-so-are-their-emissions.
27. Do you agree with the option to allow targets set using the regional and/or vehicle-type pathways to be aggregated into a single global target, to be achieved together? This aggregation would apply to all targets for LDVs and ZEV sales-share targets for non-LDVs
ACCR Response: No
As currently drafted, ACCR does not support allowing targets to be aggregated into a single global target without clearer disclosure requirements. Aggregation risks obscuring differences in decarbonisation progress across regions and vehicle types, particularly where technology pathways and emission trajectories vary significantly.
While aggregation may simplify implementation, it should only be permitted where companies are also required to disclose and report progress against regional and vehicle-type pathways. Disaggregated reporting would also provide more decision-useful information for investors assessing transition risks across markets and technologies. The target wording requirements in Sub-chapter 1 Automotive Sector Mitigation Metrics-C6 (AMSS-C6) do not appear to include any requirement to provide this additional information.
In addition, it is unclear why aggregation is treated differently for light duty vehicles (LDVs) in comparison to non-light duty vehicles (non-LDVs), within and between target setting criteria. Aggregation by vehicle type is limited for intensity targets under ASMM-C3, yet targets can be aggregated into a single global target for sales share targets under ASMM-C4. Similarly, ASMM-C3 requires a separate regional target for each non-LDV vehicle type but allows LDV targets to be aggregated at the global level. Further explanation of these differences would be helpful, with our preference for there to be alignment between the two target types.
Greater clarity on disclosure expectations would help ensure aggregated targets do not reduce transparency or weaken accountability.
28. Do you agree that scope 1, scope 2, and other scope 3 emissions categories (other than scope 3 category 11) shall be disaggregated and addressed via criteria from the SBTi CNZS V2.0?
ACCR Response: No [disaggregated – yes, addressed vs CNZS – No]
ACCR supports the decision in the second draft to disaggregate the previously proposed aggregated metric (combining scope 1, 2 and scope 3 categories 1, 11 and 12). ACCR agrees that scope 1 and 2 emissions can reasonably be addressed through the Corporate Net-Zero Standard, given that these emissions are not unique to the automotive sector and typically represent a relatively small share of total sector emissions (<2.6%) [1]. Scope 3 category 12 emissions are also generally small and may reasonably be addressed through the Corporate Standard [1].
However, ACCR does not support addressing scope 3 category 1 emissions solely through the Corporate Net-Zero Standard. Emissions from purchased materials, particularly steel, represent a significant share of automotive manufacturing emissions. The reduction of these emissions is a critical part of decarbonising the automotive value chain.
While the Corporate Net-Zero Standard proposes target setting approaches for priority commodities such as steel, these approaches are designed at a whole-of-economy level. The automotive sector plays a particularly important role in driving early demand for near-zero emissions steel, and weak demand signals from downstream sectors are widely recognised by steel producers as a key barrier to investment in low-emissions production pathways [2]. Without stronger expectations within the Automotive Standard itself, there is a risk that this demand signal will remain insufficient.
ACCR also notes that the sequencing of the standards may pose potential risks. The Automotive Standard proposes reliance on the Corporate Net-Zero Standard, which remains in draft form. It is unclear how the Automotive Standard would operate if the Corporate Net-Zero Standard is delayed or significantly revised.
In addition, the Corporate Net-Zero Standard V2.0 allows companies to continue using V1.3 until 31 December 2027. Under V1.3, companies are not required to set additional near-term scope 3 targets where scope 3 category 11 exceeds 67% of total scope 3 emissions [3]. This threshold applies to several major automakers, including Toyota and Honda, companies that play a critical role in creating demand to decarbonise Japan’s steel sector [4].
Clarification is needed on whether automotive companies would be permitted to rely on this provision, as it could significantly weaken expectations for addressing other material supply chain emissions. Timely additional automaker scope 3 targets are also crucial as they could influence upcoming decisions on private and public investment in upstream decarbonisation.
References:
[1] Thomas Fugger, Joseph Poligkeit & Christoph Herrmann, “Decarbonization in the automotive sector: A scenario-based analysis of original equipment manufacturer pathways,” Cleaner Environmental Systems 19, December (2025): 100336 (Table 2), https://doi.org/10.1016/j.cesys.2025.100336
[2] Shuyi Li, Ting Li & Wei Li, Demand-side drivers of steel decarbonization: Automotive procurement practices, (RMI, 2025), https://rmi.org/insight/demand-side-drivers-of-steel-decarbonization-automotive-procurement-practices/
[3] SBTi, SBTi Corporate Net-Zero Standard V1.3, (Self-published, 2025), https://files.sciencebasedtargets.org/production/files/Net-Zero-Standard.pdf
[4] “Sustainability,” Toyota Australia, last accessed 16 March 2026; “Sustainability,” Honda Global, last accessed, 16 March 2025, https://global.honda/en/sustainability/
29. Does the current SBTi Corporate Net-Zero Standard V2.0 draft for second public consultation provide viable options for automakers to set scope 3 category 1 and 12, and scope 1 and 2 targets, if these emissions are disaggregated from scope 3 category 11 as proposed in the Automotive Standard?
ACCR Response: No
ACCR does not consider the current draft of the Corporate Net-Zero Standard V2.0 to provide sufficiently viable options for automakers to set targets for all emissions categories disaggregated from scope 3 category 11, particularly scope 3 category 1.
As noted in ACCR’s response to question 28, ACCR considers that scope 3 category 1 emissions should be addressed directly within the Automotive Standard, rather than relying solely on the Corporate Net-Zero Standard (CNZS) framework. Simply adopting the same target-setting approaches as the CNZS, even if applying them more aggressively, may not adequately reflect the automotive sector’s specific role in driving decarbonisation within upstream sectors such as steel.
For priority commodities, the currently proposed target-setting options appear to rely primarily on intensity-based approaches, including average emissions intensity, volume share alignment, and supplier share alignment. Supplier share alignment also appears to function as an intensity-based approach, given that suppliers are required to have intensity targets to be considered “aligned”.
ACCR is concerned that the draft does not appear to provide an option for companies to set absolute scope 3 category 1 targets. This could create a worse outcome where companies with existing absolute targets are effectively pushed towards narrower or weaker intensity-based approaches to remain aligned with the standard.
The supplier share alignment option also requires further clarification. It is not clear what qualifies a supplier as “aligned”, including whether suppliers would need to hold SBTi-recognised targets to be classified as aligned.
In addition, benchmark definitions for materials such as steel require further clarity. Emissions intensity values can vary significantly depending on methodological boundaries, including how recycled steel scrap is accounted for in emissions calculations, and it is important that any benchmark values used in the standard are comparable and meaningful.
33. Do you agree with the proposal to require companies to set targets on scope 3 category 1 emissions associated with any purchased materials that represent more than 5% of their scope 3 category 1 emissions, using the applicable criteria from the Corporate Net-Zero Standard V2.0?
ACCR Response: Yes
ACCR supports the proposal to require companies to set scope 3 category 1 targets for purchased materials that represent a material share of supply chain emissions. However, ACCR notes that there is a potential inconsistency between the threshold proposed in the Automotive Standard and the threshold used in the Corporate Net-Zero Standard V2.0. The Automotive standard refers to materials representing more than 5% of scope 3 category 1 emissions, whereas the Corporate Net-Zero Standard refers to emissions sources representing 5% of total scope 3 emissions. It is unclear whether this difference is intentional.
ACCR’s preference would be for the threshold to be applied consistently across the standards in a way that ensures major emissions sources such as steel are captured within scope 3 category 1 target-setting requirements.
Given the inconsistency, there is a risk that consultation responses may be provided based on the lower threshold while the final standard is assessed against the higher threshold, which could lead to confusion or unintended outcomes. Clarification on how these thresholds are intended to interact would improve transparency and help ensure consistent implementation across the standards.
34. Please share any additional input you have on Section 3 (Target setting) of the Standard regarding the establishment of near and long-term targets using the metrics indicated:
ACCR is of the view that relying solely on metrics directly related to emissions intensity when target-setting for near-term scope 3 emissions introduce an unacceptably high risk of absolute emissions growth for individual companies and the overall sector. Allowing such growth in the near-term would make the long-term goal of reaching a credible form of net zero by 2050 unachievable.
The SBTi clearly stipulates target-setting for absolute emissions reductions across scope 1 and 2 emissions. When companies use an emissions intensity metric for scope 1 and 2 emissions, these must be based on the Sectoral Decarbonisation Approach, whereby the emissions intensity target is directly linked to a sector-specific 1.5°C pathway, resulting in a linear reduction in absolute emissions. The rationale for this approach is that without such a link, absolute emissions reductions cannot be guaranteed.
By allowing scope 3 target-setting on an intensity basis, without an unconditional link to an absolute emissions reduction pathway, the likelihood of emissions growth is very high. Economic growth and rising incomes can lead to a reduction in emissions intensity [1], and a decoupling between GDP and emissions [2]. However, absolute emissions can continue to grow – globally and particularly in emerging markets.
The SBTi also accepts that absolute emissions may grow in the near-term, which it loosely defines as five to ten years [3]. If companies are allowed to grow their scope 3 emissions over the next decade, achieving the long-term goal of net zero by 2050 becomes implausible without an even heavier reliance on offsets. If those offsets are anything other than geologic carbon removal, they will likely be ineffective [4], and the sum of fossil fuel emissions and carbon offsets will not cancel out. This is because fossil fuel emissions remain in the atmosphere far longer than the carbon can be stored through most offset mechanisms [5].
References:
[1] Jitong Jiang, Skylar Shi & Adrian E. Raftery, “Mitigation efforts to reduce carbon dioxide emissions and meet the Paris Agreement have been offset by economic growth,” Commun Earth Environ 6, no. 823 (2025), https://doi.org/10.1038/s43247-025-02743-x
[2] Energy and Climate Intelligence Unit, 10 years post-Paris: How emissions decoupling has progressed globally, (2025), https://mcusercontent.com/8ed7ad7972fae058e8f4fb7e8/files/1ca4d953-94f3-4ec8-0dc8-348b67c45306/10YPP_How_emissions_decoupling_has_progressed.pdf
[3] Science Based Targets, “Science-based targets 101: near-term and net-zero,” Science Based Targets Blog, July 14 2025, https://sciencebasedtargets.org/blog/science-based-targets-101-near-term-and-net-zero
[4] Benedict S. Probst et al., “Systematic assessment of the achieved emission reductions of carbon crediting projects,” Nat Commun 15, no. 9562 (2024), https://www.nature.com/articles/s41467-024-53645-z
[5] ACCR, Injecting Integrity: Aligning the use of offsets in company transition plans with science, (2025), https://www.accr.org.au/research/injecting-integrity-aligning-the-use-of-offsets-in-company-transition-plans-with-science/