Ford’s Science-Based CO₂ Targets

Throughout this report, we refer to Ford’s climate goals as “science-based” – specifically, based on the science of climate stabilization. An advantage of this approach is that it gives us an objective, long-term goal focused on an environmental outcome – stabilization of carbon dioxide (CO₂) in the atmosphere. A disadvantage is that the goal can be difficult to explain and communicate. In this section, we delve into our science-based goal by discussing what stabilization means, how we use “glide paths” to align our product plans with emission reductions, and how our “black box” model works and how we use it in our planning.

The stabilization-based goal had its start in 2004, when Ford’s internal Climate Change Task Force faced a dilemma. After an extensive study, it was clear to the cross-functional group of senior executives that several forces were converging to fundamentally change vehicle markets, especially in North America and Europe. Current and anticipated greenhouse gas and fuel economy regulation, rising fuel prices and growing consumer awareness of the climate change issue all pointed to a shift in sales toward cars rather than trucks and toward smaller and more fuel-efficient vehicles. We needed to rapidly reorient our product offerings.

But what should drive new product goals? As a practical matter, the Company needed to be able to meet new regulatory mandates. Beyond that imperative, we had taken to heart our responsibility to contribute to meeting the challenge of climate change. So, Task Force members decided to base product planning on the goal of climate stabilization, and they asked Ford’s in-house scientists to devise a way to test scenarios for meeting that goal.

Our Stabilization Commitment

Ford researchers have played a leading role in scientific research to understand and quantify the contribution of vehicles to climate change. We have also worked with a variety of partners to understand current and projected manmade GHG emissions and the steps that can be taken to reduce them. Many scientists, businesses and governmental agencies have concluded that stabilizing the atmospheric concentration of CO₂ at approximately 450 parts per million (ppm) may help to forestall or substantially delay the most serious consequences of climate change (see chart below).

Stabilizing Atmospheric CO2 Levels

Ford has committed to doing our share to stabilize atmospheric CO₂ at 450 ppm. Using a science-based CO₂ model (see A Look Inside the "Black Box"), we have calculated the amount of light-duty vehicle (LDV) CO₂ emissions that are consistent with stabilizing the concentration of CO₂ in the atmosphere at this level. We then calculated the long-term, sustained reductions in the CO₂ emission rate (g/km) from new LDVs that would be needed to achieve 450 ppm atmospheric CO₂, based on projections of vehicle sales and scrappage. Plotting these emission levels over time yields the “CO₂ glide paths” that drive our technology plans.

We have calculated region-specific CO₂ glide paths for North America, Europe, Brazil and China. The glide paths take into account the effects of regional differences in vehicle size and fuel consumption, government regulations and biofuel availability. Although the initial (current) CO₂ emissions rate varies considerably by region, to provide the significant emission reductions needed, all regions need to move toward similar targets. For the light-duty vehicle sector to meet the 450 ppm CO₂ emissions limits, all automakers must reduce their LDV emissions by the same proportion as prescribed by the CO₂ glide paths. We have shared our thinking behind the development of these industry average targets with interested stakeholders and have received positive feedback. We believe that a science-based approach is the right way forward. Ford’s sustainability plan is based on these science-based emissions targets. The reductions called for by the glide paths are more aggressive than our previously announced 30 percent reduction goal from 2006 to 2020.

We caution that while our product development plans are based upon delivering long-term reduction in CO₂ emissions from new vehicles similar to those shown for the industry-average glide paths, we anticipate that the year-over-year reductions will vary somewhat from the glide paths. In some years the reductions will be greater than those shown in the glide paths and in other years they will be less. That is because delivering on these targets will be dependent to some degree on market forces that we do not fully control (e.g., changes in energy prices and changes in the mix of vehicles demanded by the consumers in the markets in which we operate). Furthermore, our product strategy is based on multiple inputs, including regulatory requirements, competitive actions and technology plans.

We plan to annually review, and revise where necessary, the assumptions and input data in the CO₂ model. We anticipate that the model will evolve with better understanding over time, and we will report significant changes in future reports.

Climate change is a long-term challenge that demands long-term solutions. We believe a philosophy of continuous improvement implemented over the long term is the correct solution to this challenge. Following the CO₂ reductions called for in our glide path assessment is a significant challenge. It is a commitment that we do not undertake lightly. However, we believe that dramatic reductions in CO₂ emissions are required over the long term to forestall or substantially delay the most serious consequences of climate change, and we are committed to doing our part.

As illustrated in the table below, we have already made significant progress in improving the fuel economy, and hence reducing the CO₂ emissions, from our vehicles.

Nameplate Fuel Economy Improvement Summary

2001 MY–2011 MY	% FE Improvement (Unadjusted Combined)
Focus	13.51
Escape	12.42
Explorer	30.83
F-150	12.44

Wagon excluded.
Hybrids excluded.
Explorer Sport, Sport Trac and ethanol-fueled versions excluded.
Natural gas, alternative-fueled, bi-fueled and supercharged vehicles excluded.

In 2010, we applied the CO₂ glide path methodology to develop CO₂ targets for our commercial vehicles and facilities. We plan to review our glide path analysis, and update it as appropriate, to incorporate new developments in climate science, new forecasts for vehicle sales and future changes in the CO₂ intensity of fuels (e.g., increased use of biofuels, or oil from tar sands). Any significant changes to the glide path will be discussed in future Sustainability Reports.

To explore which vehicle and fuel technologies might be most cost-effective in the long-term stabilization of atmospheric CO₂ concentrations, we have worked with colleagues at Chalmers University in Gothenburg, Sweden. Specifically, they have assisted us in including a detailed description of light-duty vehicles in a model of global energy use for 2010 to 2100. Nine technology cost cases were considered. We found that variation in vehicle technology costs over reasonable ranges led to large differences in the vehicle technologies utilized to meet future CO₂ stabilization targets. We concluded that, given the large uncertainties in our current knowledge of future vehicle technology costs, it is too early to express any firm opinions about the future cost-effectiveness or optimality of different future fuel and vehicle powertrain technology combinations.1 This conclusion is reflected in the portfolio of fuel and vehicle technologies that are included in our sustainability strategy. We are continuing to develop the global energy model with researchers at Chalmers. We believe the model will provide valuable insights into cost-effective mobility choices in a future carbon-constrained world.

A Look Inside the “Black Box”: The Science Behind Our Scientific Approach

In 2005, Ford’s scientists began development of a carbon dioxide (CO₂) model. To create it, they modified the Sustainable Mobility Project model (developed by the International Energy Agency) and combined it with global CO₂ emission-reduction pathways for varying levels of atmospheric CO₂ stabilization (as described by the Model for the Assessment of Greenhouse-Gas-Induced Climate Change, developed by the National Center for Atmospheric Research). The scientists then calculated the CO₂ emission reductions required of new light-duty vehicles up to the year 2050 for a range of CO₂ stabilization levels and different regions of the world, using a simplifying assumption that the rates of CO₂ emission reductions should be the same across all sectors.

At the lower CO₂ stabilization levels, the required emission reductions are extremely challenging and cannot be accomplished using vehicle technology alone. Joint investigations with BP provided insight into how the best new vehicle technologies and low-carbon alternative fuels can jointly and realistically fulfill the low-CO₂ emission requirements. Ford’s CO₂ model and other modeling tools were combined to explore assumption sensitivities around vehicle technologies, baseline fuels and biofuels.

The CO₂ model is not intended to provide “the answer,” but rather a range of possible vehicle and fuel solutions that contribute to a pathway to CO₂ reductions and, eventually, climate stabilization. Our blueprint for sustainability – and the technology and product actions it spells out – is based on options developed through this modeling exercise.

The model and its results have been a centerpiece of discussions with a variety of stakeholders. Below are some of the questions that have been raised through these discussions, and the answers to them.

How does the model account for emissions growth or reduction in developing countries?

We recognize that developing countries generally have relatively low per-capita energy use but high rates of emissions growth, reflecting growing economies. The CO₂ model uses a science-based approach that allows for growth in developing countries, to derive CO₂ reduction targets for light-duty vehicles consistent with a 450 parts per million (ppm) CO₂ stabilization pathway.

Since fuel use is the dominant cause of CO₂ emissions, how does the model account for projected changes in the carbon footprint of automotive fuels?

Ford has studied multiple scenarios in which the auto industry and the energy industry work together to reduce overall well-to-wheels CO₂ emissions from the light-duty transportation sector. These joint strategy scenarios (see figure below) allow us to develop a least-cost vehicle technology roadmap. For the carbon footprint of fuels, we rely on the well-to-tank CO₂ emissions for different alternative fuels estimated by different region-based models, including the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model for North America, and the EUCAR/JRC/CONCAWE analysis for Europe.

Are you continuing to test alternative scenarios?

In the long run, the roles of consumers, governments and fuel availability will be pivotal in dictating actual CO₂ emission reductions, and Ford continues to take them into consideration in fine-tuning a truly viable and sustainable CO₂ stabilization pathway.

How does the model consider the cost of technologies and alternative fuels?

In a separate study (and as discussed above), Ford and our partner Chalmers University have developed a global energy model that looks into minimal-cost scenarios across different sectors and explores assumption sensitivities around vehicle technologies, fuel technologies, connections between the different energy sectors, and biofuels. The model provides information on the combinations of options that will yield the necessary emissions reductions at an affordable cost to consumers. We have used this model to develop scenarios to assess the global lowest-cost vehicle and fuel technology solutions consistent with CO₂ stabilization.

Ford’s Sustainability Framework and Technology Migration Development

Sustainability Framework and Technology Migration Development diagram

M. Grahn, M.I. Williander, J.E. Anderson, S.A. Mueller, T.J. Wallington, “Fuel and Vehicle Technology Choices for Passenger Vehicles in Achieving Stringent CO₂ Targets: Connections between Transportation and Other Energy Sectors,” Environ. Sci. Technol. 43, 3365 (2009).