Climate Change

In early 2008, Ford announced a goal to reduce carbon dioxide (CO2) emissions1 from its U.S. and European new vehicles by 30 percent by 2020, relative to a 2006 model year baseline. We also set out a technology migration plan – embodied in our blueprint for sustainability – that details our near-, mid- and long-term plans to meet this goal. Despite challenging economic conditions, we are making significant progress in implementing the plan and are on track to exceed the goal.

• We announced an ongoing commitment, beginning with the 2010 model year, that all new vehicles will be best in class or among the best in class for fuel economy in their segment. All of the 2010 model year vehicles released in North America as of May 2009, as well as many 2009 model year vehicles, meet this commitment.
• We introduced the EcoBoost™ engine on the 2010 Ford Flex, Lincoln MKS and Lincoln MKT. It will also be available in several additional 2010 model year vehicles. EcoBoost is a gasoline turbocharged direct-injection technology, which delivers up to 20 percent better fuel economy, 15 percent fewer CO2 emissions and superior driving performance, compared to larger displacement engines.2 EcoBoost engines are among the many new technologies that are improving fuel economy across our vehicle lines.
• We have announced plans to introduce six small vehicles from the Company's acclaimed European line-up to North America by 2012, including the new Fiesta in early 2010 and the new Focus later in 2010.
• We have accelerated elements of the technology migration plan, particularly the introduction of all-electric vehicles. We announced that the Transit Connect, developed in collaboration with Smith Electric Vehicles, will be the first of Ford's battery electric vehicles (BEVs), with models available in 2010 in North America for low-volume fleet sales. By 2011, Ford will bring a battery electric Focus to North America, followed by next-generation hybrid and plug-in hybrid vehicles in 2012.

These actions demonstrate that our blueprint for sustainability was not the first step in reorienting our product line to the realities of global climate change. Rather, it was the culmination of years of work that included developing a sophisticated model to test scenarios for reducing carbon emissions (see "A Look Inside the "Black Box") and planning our product portfolio to align with the needed reductions.

Our climate change strategy is based on delivering products that our customers want while doing our share to stabilize greenhouse gas (GHG) concentrations in the atmosphere at levels generally accepted to minimize the effects of climate change.3 This can only be achieved by significantly and continuously reducing GHG emissions over a period of decades. Reducing emissions by the amount required calls for an integrated approach – a partnership of all stakeholders, including the automotive industry, the fuel industry, government and consumers. It will require considerable increases in vehicle fuel economy globally, as well as the development of lower-carbon fuels.

We are committed to advocating for effective and appropriate climate change policy in the United States and around the world. We are an active member of the U.S. Climate Action Partnership (USCAP), a coalition of diverse stakeholders that released its Blueprint for Legislative Action in January 2009, setting out consensus recommendations for U.S. climate protection legislation. The USCAP blueprint includes an aggressive emission-reduction schedule, a proposed scope of coverage for a cap-and-trade program, and recommendations for how to include as much of the U.S. economy under the cap as administratively and politically feasible.

Our CO2 product goal is aligned with the USCAP recommendations and with the broad goal of climate stabilization.4 It also aligns our product plans to meet or exceed new fuel economy requirements in the U.S. and Europe. We recognize that future developments in technologies, markets, policy actions and even the natural manifestations of climate change are all uncertain. Accordingly, we will continue to monitor and adjust the goal based on changing conditions.

In this section of our Sustainability Report, we provide an overview of GHG emissions, including data on the contribution of light vehicles, life-cycle CO2 emissions from a typical vehicle, Ford's own climate "footprint" and stabilization pathways. We also discuss the risks and opportunities the climate change issue poses for Ford, our climate change strategy – including our blueprint for sustainability – and how we are addressing climate change public policy issues.