Ford sets new shorter-term goals to reduce emissions by 2035

As the automotive industry awaits guidance from the Biden administration on key environmental regulations, Ford Motor Co. is detailing some of the targets it aims to meet in its quest to become carbon neutral by 2050.

The Dearborn automaker said it will work to reduce greenhouse gas emissions tied to its operations by 76% by 2035, from a 2017 baseline. It also hopes to reduce emissions tied to its products by 50% per vehicle by 2035, using 2019 levels as a baseline.

The targets — defined and approved by the Science Based Targets initiative, an organization that defines and helps companies achieve climate-related goals — were outlined in Ford's latest sustainability report, released Wednesday. 

These targets are in line with a framework deal the automaker reached with California, said Bob Holycross, Ford's vice president of sustainability, environment and safety engineering.

Ford was among a small group of automakers who in 2019 signed on to an agreement with the state to voluntarily increase the average fuel economy of their fleets to about 50 miles per gallon by the end of the 2026 model year.

The issue proved divisive during the Trump presidency, as another camp of automakers — including rival General Motors Co. — sided with the administration on attempts to roll back fuel economy standards and limit California's ability to set its own standards.

Ford's new targets, said Holycross, are "consistent with more reductions than where the current standards have been" and align with the company's pledge in February that it would electrify almost its entire European vehicle lineup by 2030.

"It's consistent with what we've been talking about more broadly with our electrification strategy and the migration of our most iconic nameplates and highest-volume vehicles to electrification over time," said Holycross.

The report comes as the Biden administration is reconsidering greenhouse gas emissions and miles-per-gallon standards. Both were rolled back under former President Donald Trump and are expected to be increased under the new president, who has made fighting climate change a top priority. 

How stringent those standards will become remains to be seen. Leading automaker advocacy groups are pushing for a standard between former President Barack Obama's and Trump's — approximately in line with the California levels.

Ford is in a good position given its alignment with California, Holycross said, but the sooner a new guideline is announced, the easier it will be for the industry to adjust.

"I think the challenge is going to be, how do we take care of the short-term issue for the ’21 model year through the ’26 model year timeframe?" Holycross said. "And then really start to tackle beyond 2026. That means that we need to get this shored up quickly."

However, according to the report, consumer preference continues to shift away from cars and toward trucks. The fuel economy for Ford trucks rose to 28.4 miles per gallon in 2020 from 26.8 mpg in 2019, according to the company. Combined, its car and truck fleet improved from 29 mpg in 2019 to 29.9 mpg. Ford has largely phased sedans out of its North American lineup.

The company reported that, worldwide, carbon dioxide emissions at its facilities were down to 2.96 million metric tons in 2020, from 3.74 million metric tons in 2019. The amount of water it used per vehicle produced increased slightly last year.

The automaker previously announced a goal to power all of its global facilities with renewable energy by 2035. Holycross said several plants in southeast Michigan, including those at the Rouge complex in Dearborn and Michigan Assembly Plant in Wayne, now operate entirely on renewable electricity from wind power.

And earlier this year, the company announced investments aimed at shifting operations in South Africa and Europe to renewable energy sources. 

He said the automaker continues to evaluate how it can bring about cleaner environmental practices further down the automotive supply chain, as well, by coordinating with its suppliers.

Ford announced earlier this year that it was increasing its investments in EV development to $22 billion through 2025. It rolled out its first battery-electric vehicle, the Mustang Mach-E, at the end of 2020 and has battery-electric versions of the F-150 pickup truck and Transit van coming next year.

But there are other ways the Blue Oval is looking to cut back on vehicle emissions, Holycross said, including making gas-powered and hybrid vehicles more fuel-efficient.

The company has launched hybrid versions of the F-150 and its Explorer SUV. Finding ways to reduce the weight of vehicles, such as by shifting several years ago to an aluminum-bodied F-150, is another method.

“What we’re able to do with these hybrid products, as we continue to make the transformation to fully electric, is demonstrate to customers that we’re going to be able to deliver these carbon emission improvements, while at the same time not compromising on the functionality and other attributes that customers continue to demand," said Holycross.

The company also detailed changes to its staffing and diversity practices, including making its staffing diversity data available for the first time.

A quarter of all employees are female and 34% are members of "minority groups," including 23% Black employees, 5% Asian employees, and 4% Hispanic or Latino employees. Six of the company's 37 corporate officers are women and seven identify as members of minority groups. 

The sustainability report for the first time was combined with the automaker's annual financial report, a move Holycross said reflects a push from investors for companies to show that these efforts span their entire business. Customers, too, increasingly want to know that companies are in line with them on social and environmental issues, he said.

"External stakeholders, especially within the investment community, are really looking to understand what companies are doing beyond just having aspirational goals ... to reduce emissions and address the urgency of climate change," he said.

"We’re committed to continuing to not only talk about aspirations and goals, but really tie this to actions and advocacy, and we think that’s something that will resonate with our customers as well.”