Reducing greenhouse gas emissions in China’s automobile manufacturing with circular economy strategies

Abstract

Circular economy strategies encompass a wide range of approaches and initiatives designed to foster sustainable resource utilization and minimize waste, particularly in the context of complex products such as automobiles. These strategies encompass, among others, material recycling and reuse, energy recovery, efficiency enhancements, and circular-focused product design. To evaluate the potential of different circular economy strategies to reduce greenhouse gas emissions in China’s automobile manufacturing, this research employs the input-output subsystems approach to analyze three distinct scenarios based on the interconnections between various components: the low-carbon transition of the energy structure, closed-loop material recycling, and the transition to shared mobility. The findings reveal that spillover component emissions account for over 98% of the total emissions of the automobile manufacturing sector. The circular economy model, through material recycling, can significantly cut down emissions from these spillover components, thereby aiding the automobile manufacturing industry in meeting its emission reduction targets. Notably, compared to relying solely on the low-carbon transition of the energy structure, the closed-loop material recycling scenario can reduce greenhouse gas emissions by approximately 10% through the recycling of steel and plastics alone. Moreover, the transition to shared mobility has the potential to achieve an additional 4%-18% reduction in greenhouse gas emissions by diminishing the final demand for automotive products.

Keywords

Circular economy / greenhouse gas emissions (GHG) / input-output subsystem analysis / scenario analysis / automobile manufacturing

References

[1] IEA. Outlook for emissions reductions; 2024. Available from: https://www.iea.org/reports/global-ev-outlook-2024/outlook-for-emissions-reductions [Last accessed on 26 Dec 2024]

[2] Montemayor HM, Chanda RH. Automotive industry's circularity applications and industry 4.0.Environ Chall2023;12:100725

[3] Shahzad K.Low-carbon technologies in automotive industry and decarbonizing transport.J Power Sources2024;591:233888

[4] Zhong S,Jiang Y.Energy and environmental impacts of shared autonomous vehicles under different pricing strategies.NPJ Urban Sustain2023;3:92

[5] Geissdoerfer M,Bocken NMP.The circular economy - a new sustainability paradigm?.J Clean Prod2017;143:757-68

[6] Intergovernmental Panel on Climate Change (IPCC). Climate change 2022 - mitigation of climate change: working group III contribution to the sixth assessment report of the Intergovernmental panel on climate change. Cambridge University Press; 2022.

[7] He Z,Hijioka Y,Fujii M.Systematic review of circular economy strategy outcomes in the automobile industry.Resour Conserv Recycl2023;198:107203

[8] Ellen MacArthur Foundation. The circular economy opportunity for urban and industrial innovation in China; 2018. Available from: https://www.ellenmacarthurfoundation.org/urban-and-industrial-innovation-in-china [Last accessed on 26 Dec 2024]

[9] da Costa VBF, Bitencourt L, Dias BH, Soares T, de Andrade JVB, Bonatto BD. Life cycle assessment comparison of electric and internal combustion vehicles: a review on the main challenges and opportunities.Renew Sustain Energy Rev2025;208:114988

[10] Ajanovic A.Renewable energy systems implementation in road transport: prospects and impediments.Renew Energy Environ Sustain2021;6:39

[11] Yuan M,Lund H.The electrification of transportation in energy transition.Energy2021;236:121564

[12] Buberger J,Kuder M,Weyh T.Total CO2-equivalent life-cycle emissions from commercially available passenger cars.Renew Sustain Energy Rev2022;159:112158

[13] Shen J,Tian S.Decarbonization pathways analysis and recommendations in the green steel supply chain of a typical steel end user-automotive industry.Appl Energy2025;377:124711

[14] Billy RG.Aluminium use in passenger cars poses systemic challenges for recycling and GHG emissions.Resour Conserv Recycl2023;190:106827

[15] Ravina M,Ruffino B,Panepinto D.Hard-to-recycle plastics in the automotive sector: economic, environmental and technical analyses of possible actions.J Clean Prod2023;394:136227

[16] Baars J,Bleischwitz R,Heidrich O.Circular economy strategies for electric vehicle batteries reduce reliance on raw materials.Nat Sustain2021;4:71-9

[17] Gao Z,Yang X.Electric vehicle lifecycle carbon emission reduction: a review.Carbon Neutral2023;2:528-50

[18] Automotive Data of China (Tianjin) Co., L. For carbon neutrality low carbon development strategies and transformation pathways of automobile industry. Beijing: China Machine Press; 2022. Available from: https://www.dedao.cn/ebook/detail?id=rEQKv6PKN7rEo2Gxg96ZjApyMvQVlw5jb9r0Xb14PJzDkYaReqd8n5LOmB8d7egB [Last accessed on 26 Dec 2024]

[19] de Blas I, Mediavilla M, Capellán-Pérez I, Duce C. The limits of transport decarbonization under the current growth paradigm.Energy Strategy Rev2020;32:100543

[20] Elassy M,Takruri M.Intelligent transportation systems for sustainable smart cities.Transp Eng2024;16:100252

[21] Cao Y,Le Pira M.Advanced transport systems: the future is sustainable and technology-enabled.Sci Rep2024;14:9429 PMCID:PMC11043446

[22] Aderibigbe OO.Smart cities and their impact on urban transportation systems and development. In: Emerging technologies for smart cities. Cham: Springer; 2024, pp. 105-29.

[23] Narayanan S,Antoniou C.Shared autonomous vehicle services: a comprehensive review.Transp Res Part C2020;111:255-93

[24] Kagawa S,Kondo Y.Role of motor vehicle lifetime extension in climate change policy.Environ Sci Technol2011;45:1184-91

[25] Santos AS, de Abreu VHS, de Assis TF, Ribeiro SK, Ribeiro GM. An overview on costs of shifting to sustainable road transport: a challenge for cities worldwide. In: Environmental footprints and eco-design of products and processes. Singapore: Springer; 2021. pp. 93-121.

[26] Nieuwenhuijsen MJ.Urban and transport planning pathways to carbon neutral, liveable and healthy cities; A review of the current evidence.Environ Int2020;140:105661

[27] Moslem S,Al-Rashid MA,Esztergár-Kiss D.Greening urban mobility: assessing environmental and functional characteristics of bicycle infrastructure in the post-pandemic Era.Habitat Int2024;153:103200

[28] Mahajan S.Global comparison of urban bike-sharing accessibility across 40 cities.Sci Rep2024;14:20493 PMCID:PMC11379918

[29] Veitch E.A cross-country comparative analysis of congestion pricing systems: lessons for decarbonizing transportation.Case Stud Transp Policy2024;15:101128

[30] Gonzalez JN,Vassallo JM.Are low emission zones and on-street parking management effective in reducing parking demand for most polluting vehicles and promoting greener ones?.Transp Res Part A2023;176:103813

[31] Boonman H,van der Weijde AH.Macroeconomic and environmental impacts of circular economy innovation policy.Sustain Prod Consump2023;35:216-28

[32] Solaymani S.CO₂ emissions patterns in 7 top carbon emitter economies: the case of transport sector.Energy2019;168:989-1001

[33] Firlej M.Regulating human control over autonomous systems.Regul Gov2021;15:1071-91

[34] Chenavaz RY.From waste to wealth: Policies to promote the circular economy.J Clean Prod2024;443:141086

[35] Tong X,Li J.Extended producer responsibility to reconstruct the circular value chain.Circular Econ2024;3:100076

[36] Wang Z,Xue X.More government subsidies, more green innovation? The evidence from Chinese new energy vehicle enterprises.Renew Energy2022;197:11-21

[37] Xu X,Wang T,Du H.Impact of subsidies on innovations of environmental protection and circular economy in China.J Environ Manag2021;289:112385

[38] Genc TS.A circular economy with tax policy: using collection channels and returns to mitigate distortions in steel production and recycling.J Clean Prod2024;451:142120

[39] Mies A.Mapping the social dimension of the circular economy.J Clean Prod2021;321:128960

[40] Wang L,Evans S,Xia X.Automobile recycling for remanufacturing in China: a systematic review on recycling legislations, models and methods.Sustain Prod Consump2023;36:369-85

[41] Peng J,Tong X.Extended producer responsibility for low carbon transition in automobile industry.Circular Econ2023;2:100036

[42] Yu Z,Rehman SA.Adoption of technological innovation and recycling practices in automobile sector: under the Covid-19 pandemic.Oper Manag Res2022;15:298-306 PMCID:PMC9091146

[43] Liu M,Wen J.Drivers of China’s carbon dioxide emissions: based on the combination model of structural decomposition analysis and input-output subsystem method.Environ Impact Assess Rev2023;100:107043

[44] Alcántara V.Input-output subsystems and pollution: an application to the service sector and CO₂ emissions in Spain.Ecol Econ2009;68:905-14

[45] Llop M.Decomposition of sectoral greenhouse gas emissions: a subsystem input-output model for the Republic of Ireland.J Environ Plan Manag2013;56:1316-31

[46] Liang S,Qu S,Jia X.Developing the Chinese environmentally extended input-output (CEEIO) database.J Ind Ecol2017;21:953-65

[47] Tian X,Xu M,Liu Y.Chinese environmentally extended input-output database for 2017 and 2018.Sci Data2021;8:256 PMCID:PMC8484342

[48] Sun YF,Zhang YJ.How do imports change the energy consumption of China? An analysis of its role in intermediate inputs and final demands.Energy2023;270:126947

[49] Department of Energy Statistics; National Bureau of Statistics. China energy statistical yearbook 2021. Beijing: China Statistics Press; 2022. Available from: https://cnki.nbsti.net/CSYDMirror/Trade/yearbook/single/N2022060061?z=Z024https://cnki.nbsti.net/CSYDMirror/Trade/yearbook/single/N2022060061?z=Z024 [Last accessed on 26 Dec 2024]

[50] State Council of China. Action plan for carbon peak before 2030. Available from: https://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm [Last accessed on 26 Dec 2024]

[51] China Association of Automobile Manufacturers. China market medium and long term forecast report (2020-2035). Beijing: China Association of Automobile Manufacturers; 2020. Available from: https://news.qq.com/rain/a/20201215A0G5K100 [Last accessed on 26 Dec 2024]

[52] Shi D. Report on the frontiers of China's energy development (2021). Beijing: Social Sciences Academic Press; 2022. Available from: https://www.pishu.com.cn/skwx_ps/bookdetail?SiteID=14&ID=13720050 [Last accessed on 26 Dec 2024]

[53] Material Economics. The circular economy-a powerful force for climate mitigation. 2023. Available from: https://materialeconomics.com/publications/the-circular-economy-a-powerful-force-for-climate-mitigation-1 [Last accessed on 26 Dec 2024]

[54] Jiang XB,Chen DJ,Zhu B.Dynamic material flow analysis of Chinese passenger car plastics.China Environ Sci2020;40:4106-14Available from: http://www.zghjkx.com.cn/EN/abstract/abstract17142.shtml [Last accessed on 26 Dec 2024]

[55] Wang Y.The design and application of based on the input-output system RAS method.Stat Educ2008;11:16-20Available from: https://www.docin.com/p-758567425.html [Last accessed on 28 Dec 2024]

[56] Morfeldt J.Impacts of shared mobility on vehicle lifetimes and on the carbon footprint of electric vehicles.Nat Commun2022;13:6400 PMCID:PMC9613654

[57] UNEP. Resource efficiency and climate change: material efficiency strategies for a low-carbon future; 2020. Available from: https://www.unep.org/resources/report/resource-efficiency-and-climate-change-material-efficiency-strategies-low-carbon [Last accessed on 26 Dec 2024]

[58] Yao S,Zhang S,Wang H.Green steel: the future path towards sustainable automotive manufacturing.Resour Conserv Recyc2024;200:107319

[59] Vivanco D, Freire-González J, Kemp R, van der Voet E. The remarkable environmental rebound effect of electric cars: a microeconomic approach.Environ Sci Technol2014;48:12063-72

[60] Heineke K,Möller T. The future of mobility. McKinsey; 2023. Available from: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-future-of-mobility-mobility-evolves [Last accessed on 28 Dec 2024]

[61] Greenblatt JB.Automated vehicles, on-demand mobility, and environmental impacts.Curr Sustain Renew Energy Rep2015;2:74-81

[62] Onat NC,Kucukvar M.Rebound effects undermine carbon footprint reduction potential of autonomous electric vehicles.Nat Commun2023;14:6258 PMCID:PMC10558530