Volvo uses biogas to be first climate-neutral plant in China

Volvo Cars’ Taizhou Plant in China. Picture: Supplied

Volvo Cars’ Taizhou Plant in China. Picture: Supplied

Published Apr 16, 2024


Volvo has become the first car manufacturer in China to achieve climate-neutral status, after switching its Taizhou manufacturing plant to biogas.

In a statement, Volvo Cars chief operating officer and deputy CEO Javier Varela said the plant’s switch from natural gas will result in a reduction of more than 7 000 tons of carbon dioxide (CO2) per year.

Varela said Volvo was acting fast when viable climate-neutral energy alternatives become available.

“The switch to biogas at our Taizhou plant demonstrates how each of our manufacturing locations across the globe is developing its own climate-neutral energy mix based on what’s available in the region,” Varela said.

The company said despite being a small share of their total Scope 1-3 emissions of 43 million tons, securing climate-neutral energy for the Taizhou plant was an important step towards their goal of having climate-neutral manufacturing operations by next year and reducing emissions across their global operations.

This ambition was also said to be part of Volvo’s broader aim to reach net-zero greenhouse gas emissions by 2040.

The company said just like all their manufacturing plants worldwide, the Taizhou plant already used climate-neutral electricity, and this latest move ensured that it also has climate-neutral heating.

“It’s our second car plant globally to become climate-neutral after our Torslanda facility in Gothenburg, Sweden,” it said.

Volvo Cars Taizhou plant’s energy supply comprised of electricity and heating.

The company produced around 40% of its electricity need from on-site solar panels –a share that was set to expand in the coming years.

The remaining 60% which comes from the grid was also climate-neutral electricity from solar.

Its heating need is, with this latest switch, met by using climate-neutral biogas.

Volvo Cars said it recently expanded its sustainability strategy with new ambitious goals for the coming years.

“Our new aim to reach zero greenhouse gas emissions by 2040 builds on our previous ambition of being climate neutral by 2040,” it said.

“It clarifies that our first priority is to reduce real emissions before turning to carbon removals to mitigate any unavoidable emissions. We are also encouraging our suppliers to do the same.”

The company added that since the release of its first sustainability strategy in 2019, Volvo Cars has made good progress towards their climate action targets.

“On top of reducing CO2 emissions from our total operations by using 74% climate-neutral energy, we are also progressing well towards our overall CO2 targets.”

In a recent in-house article, PwC Global said the the urgency of the climate threat meant all companies should be considering how to transition to a sustainable business model to not only reduce carbon emissions, but because it made good business sense.

Whether it’s creating immediate cost efficiencies through reducing energy demand or investing in climate technologies for longer-term benefit, the opportunities to unlock potential value are numerous, PwC Global said.