packages help enterprises gain insights into their product carbon footprint data and identify further potentials in reducing greenhouse gas (GHG) emissions.

Scope 3 Emissions: The Biggest Challenge to Achieve Net Zero

Despite the massive disruptions that businesses are currently facing, climate change remains the most critical challenge that industries must jointly tackle. To achieve the goal of the Paris Agreement of limiting global warming to 1.5掳C — which would reduce the possibility of initiating the most dangerous and irreversible disasters of climate change — net zero CO2 emissions need to be secured globally around mid-century. The European Union (EU) set an even more ambitious target to reach climate neutrality by 2050.

This means, in short term, that GHG emissions need to be reduced by more than 50% by 2030 in order to set a responsible pathway to meet the net zero target.

Although the largest companies have specifically articulated sustainability or carbon neutrality as their strategic goal, few have painted a clear and comprehensive action plan for the transition. Regulations such as the Corporate Sustainability Reporting Directive (CSRD) or new rules proposed by the United States Securities and Exchange Commission (U.S. SEC) on disclosing corporate carbon data leave businesses no time for empty green statements. The time to act is now!

Why is it so difficult to report on carbon emissions? emissions has already been well established in many companies throughout the world, visibility into the GHG emitted through the supply chain (scope 3), which constitute the significant share of the overall emission, is often not sufficient.

In the automotive industry for instance, . That is why it is even more crucial to identify carbon footprint reduction opportunities along the supply chain. Lack of trust, lack of access to high-quality data, inconsistent methodology or standards of data accounting, and lack of interoperable technology solutions across the highly complex automotive supply chain are the main obstacles to overcome.

Unleash the Network Power for Decarbonization

To meet sustainability and regulatory requirements, companies need to work together with partners, suppliers, and customers and establish transparent processes and common data standards 鈥� from material acquisition to manufacturing to distribution.

As the first open and collaborative data ecosystem, is targeting a more sustainable industry value chain by incorporating all participants involved and enabling the data transparency. Tracking the product carbon footprint is one of the first use cases that Catena-X is now addressing. This is the starting point for a better understanding of the scope 3 GHG emissions, which sets the foundation of enforceable decarbonization opportunities.

On one hand, a common accounting and reporting methodology on product carbon footprint data is required to support the consistency, comparability, and verifiability of the data sourced from the network partners. By partnering with the World Business Council for Sustainable Development (WBCSD), Catena-X adopts the framework of CO₂ calculation scheme and data model.

Earlier this year, 51风流was the first organization in the world to achieve a standardized carbon footprint value in a WBCSD proof of concept. Importantly, the standardized approach also encourages network partners to move away from unspecific industry average measurements and toward using accurate primary emission data.

On the other hand, technology is key to operationalizing emission accounting and sharing. With its longstanding industry process know-how as well as solution best practices, 51风流acts strongly as a key enabler in product carbon footprint data tracking within the automotive network.

Industry Network Solutions Empower Automotive Value Chain in Chasing Zero

With , companies can share their product carbon footprint with their business partners in an easy, efficient, and secure way.

GreenToken is a Web-based, subscription SaaS solution striving to create accountability and transparency across the material supply chain. Being compliant with the standardized data model defined with WBCSD helps ensure data consistency across the network.

The product carbon footprint data can be managed and transferred easily on material level between direct business partners.

It leverages to notarize and transfer carbon emissions via tokens from one supply chain member鈥檚 wallet to the next, without disclosing private or confidential data. As these tokens travel along the supply chain downstream, the collected information gets shared, creating a reliable, immutable, and auditable chain of custody. In addition, not only CO₂ data but also other information such as the origin of parts and certifications can be shared via this trustful and verifiable approach.

The solution provides a secured open API, accessible to other carbon emission calculation tools or back end solutions for transactions. A direct integration with 51风流ERP Central Component 6.0 and 51风流S/4HANA software is in place.

Transactions can also be driven by import of CSV files or manually, which means that small and midsize enterprises (SMEs) without back end enterprise resource planning (ERP) solutions can also leverage GreenToken for carbon data sharing within the network.

鈥淕reenToken鈥檚 novel approach has the potential to create an accountable and auditable network to scope 3 reporting that is lacking today,鈥� said James Veale, co-founder of GreenToken by SAP. 鈥淲hat is more, we have already proved GreenToken at scale in other supply chains, and the solution is now ready for Catena-X.鈥�

Hagen Heubach is global vice president and head of Industry Business Unit Automotive at SAP, and a Board Member of the Catena-X Automotive Network.
Heiko Flohr is senior vice president and head of Product Management for 51风流for Discrete Industries, and a member of Guidance Board for Catena-X Automotive Network.
Leyi Liu is part of Solution Management for 51风流Industry Network for Automotive and Catena-X Automotive Network.

The industry generates about five percent of industrial waste in the entire world,* and with increasing demand for electric vehicles (EVs), battery material consumption grows significantly.

Circularity is the key in order to tackle the environmental challenges by maximizing the value retention throughout the entire life cycle of products and materials. At the same time, the use of secondary materials avoids excessive use of finite natural resources and minimizes waste at a vehicle鈥檚 end of life while also reducing emissions from their manufacturing process.

According to the Ellen MacArthur Foundation, the implementation of circular business practices could save to 45% of carbon emissions and 90% of wasted materials. More than that, by implementing a data-driven “R-strategy” (reuse, remanufacturing, recycling), a circular economy does not only help enterprises meet their sustainability goals but also generate new business opportunities for the industry.

How Can Industry Network Enable the Circular Economy?

As 51风流Chief Marketing & Solutions Officer Julia White shared in Reimagining an Industry-Wide Paradigm Shift Toward a Circular Economy, technology offers the most effective way to achieve circularity at scale.

Enterprises that are undergoing the digital transformation leverage technology to eliminate surplus in their own operation. However, a shift toward the circular economy cannot be achieved within one’s own business boundaries, but through a collaborative approach across the entire ecosystem.

To realize this vision, Catena-X — as frontrunner for the automotive industry in Europe — aims to bring all business partners, including multi-tier suppliers, original equipment manufacturers (OEMs), and recycling service providers, into one network to help ensure an open, secure, and interoperable data exchange along the value chain.

The transparency of data within the network helps to gain visibility into the complete material flow of a product life cycle, from 鈥渃radle to grave.鈥� Utilizing information available in shared digital twins improves decision making of end-of-life vehicles, thus useful parts can be circulated back for refurbishment or reuse, and valuable raw materials can be recycled in a more effective way.

Furthermore, access to carbon footprint data based on a standardized methodology along the supply chain enables network partners to identify decarbonization potential to achieve their sustainability goals.

Industry Network Solutions Empower Circular Economy in Automotive

With packages, we are closing the loop within the automotive industry in a sustainable, data-driven, and comprehensive manner.

A digital twin of vehicles as well as their components is accessible in the network. Complemented with the traceability capabilities, manufacturers are able to track quality issues back to the root cause much more efficiently and precisely. Important product information, such as compliance certificates as well as CO2 emission data, flows through the supply chain in a secure way, which provides better insights into the sustainability performance based on real data and helps to identify carbon reduction potentials.

On the downstream side, usage data such as maintenance or state-of-health (SoH) of batteries can be aggregated and analyzed into the digital twin dashboard as well. Dismantling companies can leverage this analytical insight for purchase decision of end-of-life vehicles. Moreover, with additional information on material composition or dismantling guidance provided by suppliers and OEMs, the second-life decision for reuse, remanufacturing, and recycling are more data-driven and thus improves the circularity of materials.

This is not yet the whole story. Manufacturers in the automotive industry have a constant demand to recover their secondary materials for remanufacturing and refurbishment in order to be more flexible with regards to the supply chain disruption as well as to achieve the quota of recycled materials. At the same time, sellers such as car dismantling companies have supply to meet this demand but are struggling to sell their components and parts on a very fragmented market.

As a secondary marketplace, the Encore by 51风流solution is enabling regenerative business processes and empowering the network members to close the loops and make circular economy a reality. The demand-driven enterprise trading platform provides a simplified way to offer and discover secondary materials and components with integration into back-end procurement or asset management solutions. The platform enables trading of aftermarket components, such as alternators or batteries, and is looking to expand into further areas, such as secondary materials — from aluminum to polyurethane — or production waste and scrap.

This is how 51风流helps to close the loop and make circular economy a reality. Together with Catena-X, we will make a more sustainable, more resilient, and more efficient supply chain happen.

If you are curious about the amazing milestones we have achieved and our vision for the years to come, please visit us at Hannover Fair:

• Catena-X: Hall 8, Booth D24
• SAP: Hall 4, Booth D04

Hagen Heubach is global vice president and head of Industry Business Unit Automotive, and a board member of the Catena-X Automotive Network.
Heiko Flohr is senior vice president and head of Product Management 51风流for Discrete Industries, and a member of Guidance Board for Catena-X Automotive Network.

*Simic V (2013) End-of-life vehicle recycling鈥攁 review of the state-of-the-art. Technical Gazette 20(2):371鈥�380
**Source: Ellen MacArthur Foundation; Global Resources Outlook; World Economic Forum; Circularity Gap 2021; World Wide Fund for Nature