India’s automobile industry can reduce its manufacturing-related carbon emissions by as much as 87 per cent by 2050 through a shift to green electricity and low-carbon steel, according to a study released by the Council on EnergyEnvironment and Water (CEEW). The study tracks the emissions profile of the world’s third-largest auto industry across the full value chain and highlights the role of cleaner inputs in aligning the sector with India’s net-zero targets.
Using a custom version of the Global Change Analysis Model, the CEEW study projects that annual vehicle production in India could grow from 25 million in 2020 to 96 million by 2050 under a business-as-usual (BAU) trajectory. In this scenario, annual emissions from manufacturing are expected to double, reaching 64 million tonnes of CO₂, even as emissions intensity per vehicle declines.
The study notes that Scope 3 emissions, which include upstream supply chain emissions from materials such as steel and rubber, currently account for more than 83 per cent of the sector’s overall emissions. Scope 1 and 2 emissions, which come from direct factory operations and electricity use respectively, contribute the remaining share.
Dr Arunabha ghoshCEO, CEEW, said, “India’s auto industry stands at a turning point. To lead in a low-carbon global economy, we must decarbonise not just the vehicles we drive but the industrial processes that build them. Automakers must clean up how their vehicles are made, what powers their factories, and how their suppliers produce critical inputs like steel and rubber.”
If original equipment manufacturers (OEMs) and their suppliers were to align with net-zero by 2050, emissions from the sector could be reduced to just 9 million tonnes of CO₂ annually, down from the projected 64 MtCO₂ under BAU—a reduction of 87 per cent. This would require a shift to 100 per cent green electricity and increasing the share of hydrogen-based energy in steel production to 56 per cent. Coal’s share in steelmaking would have to fall below 10 per cent, while scrap-based steel production would need to rise to 48 per cent.
Dr Vaibhav ChaturvediSenior Fellow, CEEW, said, “To align India’s automobile sector—central to GDP, jobs, and industrial growth—with a net-zero future, we must go beyond electrifying vehicles. We must decarbonise manufacturing itself. Leading OEMs are already making corporate decisions to stay ahead by decarbonising their operations and supply chains.”
The study also examines a high-hybrid scenario, where hybrid vehicles dominate initially before EVs take off. While this reduces component suppliers’ energy demand by 7 per cent, overall emissions remain slightly higher than in a direct shift to EVs due to continued use of combustion engines.
The study recommends a dual approach to achieve net-zero alignment by 2050: accelerate EV adoption and decarbonise the entire manufacturing chain. Since 65–80 per cent of a vehicle’s lifetime emissions stem from its use phase, electrification remains the most effective lever to cut total emissions, provided it is coupled with clean manufacturing practices.
