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Hydrogen seeing breakthroughs at fuel pumps, Offerings in consulting and research services

Hydrogen seeing competitive fuel stations: French fuel company Air Liquide just released a new product in the US that can make hydrogen competitive with the average gasoline and diesel fuel station. Its high capacity of 1,000 kg and dual filling positions are capable of fueling 250 vehicles per day. That will make it quite competitive with gas stations that can fuel up to 1,000 cars a day. A hydrogen station with four-to-six of these new pumps can be quite competitive with gas stations. Hydrogen stations in California are already going this route, thanks in part to the new capacity credit in the state’s Low Carbon Fuel Standard. First Element/True Zero now offers a 25 percent emissions reduction at its new Oakland station compared to the company’s other stations. Of hydrogen stations opening up in the near future, three will offer two fueling positions with a dispensing capacity of 800 kg, and many will offer three or four fueling positions at 1,200 kg stations, according to California Fuel Cell Partnership. Hydrogen is continuing its trajectory as a commercially viable clean fuel — meeting stringent zero emission vehicle and LCFS in California and other states, and finding growth in Japan, South Korea, and European fueling stations.

Need some consulting and research support? For those of you interested in finding consulting and research support services, see my LinkedIn page for details on my offerings. Stakeholders in clean transportation, fuels and energy, advanced vehicle technologies, sustainability, and market intelligence, are looking forward to the chaos coming from COVID-19 and social upheaval in many of our cities starting to stabilize. They’re beginning to see signs of a the “new normal” emerging, meaning that consulting and research projects for clients in corporations, government agencies, universities, and the like, are starting to show signs of coming back. I’m putting out the word on my availability to provide services to support your team getting back on track — from a work history and skillset in editorial, market research, and business analysis and consulting.

SpaceX breakthrough and Musk’s reputation: While rioting and the Minneapolis incident that caused it, and the toll of Covid-19, have been depressing, there was one bright spot over the weekend. On Saturday, SpaceX became the first private company to send humans into space. A day later, the two NASA astronauts, Robert Behnken and Douglas Hurley, docked at the International Space Station on board SpaceX’s Dragon capsule. Good news for the company’s CEO, Elon Musk, who also runs Tesla — and can be the center of criticism coming from his fiery personality and management tactics. On the other hand, both companies can benefit from Musk’s presence — such as Tesla seeing its stock price go back up after SpaceX’s success. “Elon Musk is every bit as identified with the creation and ambition of SpaceX as he is with Tesla,” wrote Adam Jonas, an automotive analyst for Morgan Stanley, after the launch. “As such, we believe the success of SpaceX in achieving some of the most sophisticated challenges in science has a direct bearing on public, investor and government perception of his ability to lead and execute.”

Then there’s the dark side. ”Musk is very much more directly involved in the day-to-day management of the company than he is at SpaceX,” said Sam Abuelsamid, an auto analyst for consultancy Guidehouse LLP. “And I think that shows in the execution, which tends to be shoddy and half-assed.”

Nikola gets the backing it needs: VectoIQ Acquisition announced yesterday that its much-anticipated merger with hydrogen-powered heavy-duty truck maker Nikola Motor has closed, a day after its shareholders voted to approve the transaction. The deal provides Nikola with more than $700 million in new cash, much of it from a related “PIPE” (private investment in public equity) transaction where investors bought shares of the combined company at a discounted price. One part of Nikola’s appeal has has been offering buyers their choice of big rigs powered by a proprietary high-energy-density battery or a hydrogen fuel cell. Nikola reports that it has over 14,000 pre-order reservations for the trucks, representing more than $10 billion in potential sales.

Subaru takes sustainability award: Subaru of America, along with the National Parks Conservation Association (NPCA), announced they have been awarded the 2020 Silver Halo Award in the ‘Best Sustainability Initiative’ category by Engage for Good. The automaker and NPCA were recognized for the Don’t Feed the Landfills initiative, an environmentally focused campaign aimed at preserving national parks. Since 2015, Subaru of America has worked with NPCA and the National Park Foundation (NPF) toward a shared goal of reducing landfill waste in America’s national parks. That’s led to achievements such as the pilot parks nearly doubling their recycling and composting capabilities, keeping more than 16 million pounds of waste out of landfills, which is equivalent to the weight of 40,000 grizzly bears.

Sprinter van 25 year anniversary: The Mercedes-Benz Sprinter commercial van is celebrating its 25 year anniversary. The van built in Germany made its way to the US in 2001 offering a state-of-the art van built for cargo movement in increasingly congested urban markets. As part of the 1998 merger with Daimler, Chrysler began offering the Dodge Sprinter. In 2014, that platform changes with the Ram ProMaster coming from Chrysler and Daimler keeping the Mercedes-Benz Sprinter alive and well in the US and other markets. Today, both manufacturers serve commercial clients like Amazon in its 30,000 unit delivery van fleet. That will be changing in the near future when Amazon adds 100,000 Rivian electric vans.

What fleets want to see in clean transportation

So why would a company like Elio Motors with its three-wheel electric car choose fleets as its primary market instead of consumers? The company is moving through red tape for its $185 million loan through the US Dept. of Energy’s Advanced Technology Vehicle Manufacturing program. While it may sound strange that a specialty electric vehicle maker would choose the fleet market, there are reasons for it. According to a post on the Elio Motors Blog: “We have talked about ‘why Elio’ quite a bit, but to the fleet customer the economics are many times larger than for an individual. Think about it, you can save $1,500 a year on fuel which is enough to make a LOT of payments. Now multiply that times 100, or 200 or as much as 1000! That is real (huge) savings for companies. Each gallon of fuel saved is money in their pocket and helps save our environment.”

That sounds very familiar to conversations I’ve had in the past couple of years with fleet managers. There sometimes are concerns and mandates to reduce emissions and fuel consumption, but in the end, containing costs is the top priority given to fleets in corporate, government, and other sectors. For the clean transportation industry, fleets are the focal point of direct marketing. Tesla Motors is benefiting from upper income, educated individuals signing on for lease payments on the Model S, but as for the rest of the green vehicles and infrastructure, fleets make up most of the marketplace. Besides buying in volume, they bring institutional credibility to the new technology. If a municipal fleet brings in 150 compressed natural gas trash trucks; or a delivery fleet reduces its fuel consumption and emissions 20% in one year by switching over to hybrids, that truly stands out with media, stakeholders, and the general public.

Here are a few newsworthy items on what fleet managers are thinking about clean transportation……

Debunking myths emanating from common alternative fuel vehicle misconceptions was the focus of a speaker panel at Green Fleet Conference in Schaumburg, Ill., last week. Richard Battersby, manager of Equipment Services for the City of Oakland, Calif., and coordinator of the East Bay Clean Cities Coalition, chaired the panel. Battersby thinks there is a “dizzying choice” available today in fuels: CNG, LNG, renewable natural gas, dimethyl ether (DME), E85, hydrogen, battery electric, plug-in electric, biodiesel, renewable diesel, algae diesel, clean diesel; and there will be more. Read on for interesting quotes on electrified transportation, diesel, biodiesel, propane, and natural gas.
The city of Indianapolis signed up for Vision Fleet’s Clean Miles Solution, a total-cost-of-ownership plan for bringing electric vehicles (EVs) into its fleet. It bundles the process together and guarantees all the expenses of purchasing, operating, and fueling an EV. Indianapolis will utilize Clean Miles Solution to deploy 425 EVs in its non-police fleet by early 2016. That will be the largest ever EV deployment by a public fleet in the US. It comes out of an executive order made by Mayor Gregory Ballard in 2012 that pledges the city’s fleet will reach post-oil technology by 2025.
PepsiCo has removed 55,000 metric tons of carbon dioxide from the atmosphere through reducing fuel consumption in its fleet by 24% since 2010. That will continue further for its trucks and passenger vehicles, according to Green Century Capital Management, which is working with Pepsi on its climate change efforts. Pepsi’s plan includes implementing a formal request for proposal process seeking low carbon fuel alternatives from its suppliers.
Downsizing the fleet and looking for transportation alternatives has become a viable option for a few municipal fleets in large US cities. Their goals can be met several ways to reduce carbon emissions and fuel consumption. Reducing the number of vehicles in their fleet, based on their utilization rates, has been at the heart of it. Bringing in outside vendors such as Zipcar for its carsharing services is also taking care of short-term transportation needs. Fleet managers will see several of the vehicles in the fleet idling in parking lots for the majority of time. Downsizing the fleet and accessing alternative transportation is reducing costs and bringing accolades to fleet staff.

How to work effectively with environmental groups to move clean transportation forward

Clean transportation has a symbiotic relationship with environmental groups. There is a wide gap between the business side and the environmental activist side on certain issues, but the crossover in common interests does show up on a regular basis. That can show up as lobbying for government clean vehicle funding programs, public awareness and education campaigns, reducing vehicle emissions, and debating the oil industry. If you’ve attended Clean Cities meetings and alternative fuel vehicle events, you’ve probably met a few of these environmental activists – many of whom drive hybrids and electric vehicles. Some of them participate on speaker panels. They may also be serving in an executive role in cleantech businesses like solar power installers, or in management at a government agency overseeing environmental issues like air quality and waste management.

All that being said, Green Auto Market – Extended Edition is now featuring a six-point guide to getting the most out of these relationships to further the cause of clean transportation. For those interested in getting a subscription and reading this article, visit this site. Here are the six points covered in detail in this article…….

Support a moderate, deal-making approach – There may be one or two environmental issues that a clean transportation industry group or company supports, but five or six they don’t. Finding those common causes can support getting something passed through a legislature and other gains the clean transportation industry needs to see happen.
Know their advocacy issues – The article presents a list of top priority issues that you’ll see in environmental group email marketing campaigns, public protests, petition signings, celebrity statements, lawsuits, and other tactics. It’s good to stay informed on these issues as they move through the political maze.
Know the basics on leading environmental groups – A who’s who list with information to help you become familiar with these groups and to meet their leadership at events you’re attending.
Support clean energy/cleantech jobs and economic growth – Groups see clean transportation as a vital segment in their sustainability campaigns – with economic benefits a large part in gaining their support. It makes for a convincing argument to gain more support from environmental groups, companies, governments, investors, and from the public, in this day and age of several US industries dwindling and more jobs going overseas.
Understand the types of vehicles and transportation they support –Electric vehicles tend to gain the most support from environmental groups – representing freedom from oil addiction, and energy that can be produced through clean sources. Hybrids have been popular, too, with environmentalists, especially the Toyota Prius. Beyond EVs and hybrids, environmental groups tend to be supportive of, and impressed by, fleets deploying EVs and other alternative fuel vehicles. They also support a number of transportation policies in cities across the country.
Have a “fracking” policy in place –Fracking so far hasn’t yet hurt support for natural gas vehicles, but it is a growing issue of debate and political and legal battles in several states.Controlling water usage and methane mitigation have been the focus of recent studies by academic and environmental groups that have emphasized making fracking a viable and responsible technique for cleaner natural gas extraction and storage. The federal government is moving closer to having more standards in place on fracking, and companies serving transportation and energy markets would be wise to adopt sound and practical policies.

Solar power, Tesla and GM drive clean energy and transportation job growth in second quarter

Solar power and electrified transportation were key drivers of US job growth in the second quarter of 2014, according to a report from Environmental Entrepreneurs (E2). Arizona topped the list of states with the largest number of announced jobs in clean energy. Solar Wind Energy Inc. expects to hire at least 350 permanent jobs for a new project in San Luis, AZ. California came in at No. 2 on the list, driven by Tesla Motors announcing 500 new jobs and the utility-scale solar industry making its share of announcements. Michigan placed third on the ranking, with General Motors Corp. expected to add as many as 1,400 jobs producing advanced battery technologies.

E2, a nonprofit, nonpartisan business group, reported that more than 12,500 clean energy and clean transportation jobs were announced in the second quarter – more than double the number of jobs announced in the first quarter of this year. The remaining states in the top 10 for announced clean energy and clean transportation jobs in the second quarter were: Utah (4), Massachusetts (5), New York (6), Nevada (7), New Mexico (8), North Dakota (9), and North Carolina (10).

During a media conference call on Thursday, two factors were discussed driving economic growth in clean energy and transportation. One of these is more states adopting renewable portfolio standards, which are policies designed to increase generation of electricity from renewable resources. Another factor has been greater interest and support for clean energy in venture capital markets such as in Silicon Valley and San Francisco. Nancy Floyd, managing director of San Francisco-based venture capital firm Nth Power, and John Cheney, founder of San Francisco-based Silverado Power, both acknowledged that cleantech, clean transportation, and alternative fuels are gaining traction with investors; not long ago, mobile devices and social media had a lot more funding.

California’s AB 32, the Global Warming Solutions Act of 2006, is also helping drive corporate decisions. Transportation fuels will be included in AB 32 beginning in January 2015, and E2 expects to see more job announcements in the clean vehicles sector. Economic gains from AB 32 are being seen in the state.

“I’ve had companies we invest in open offices or relocate their entire companies to California, specifically due to AB 32,” Floyd said. Cheney shares that perspective: “What AB 32 and other good policies do is create certainty that there will be demand for clean energy and clean cars in the future,” he said.

Washington, DC, has seen mixed signals for support on clean energy policies from Congress. However, there has been new confidence about future clean energy growth tied to the recently announced federal Clean Power Plan that’s designed to cut carbon pollution and increase clean energy and energy efficiency, according to E2. You can review the report and see how clean energy sectors break out by state at E2’s Clean Energy Works for Us site.

Two studies show potential for reaching more consumers on green product purchases

What do consumers think about buying green products like electric vehicles (EVs), hybrids, and alternative fuel vehicles? Two studies show some of the market trends with American consumers that are worth paying attention to.

“Greener” products and corporate commitments to sustainability are desired by 70% of consumers, according to a new study by Shelton Group, a marketing and communications firm focusing on the green and sustainability industry sectors. A Harris study has found that 75% of American adults reported buying green products and services; that’s down from 78% last year, but still represents three quarters of US adults.

As for generational trends, the Harris poll reported that 27% of millennials say they’ve increased the number of green products and services they select; 18% of adults 35-to-44 years old say they’ve made this increase; for adults over 45 years old, 15% have increased their green product and service selections. What if it costs more than other products and services? Forty percent of adults said they would pay more for products if ethical and responsible manufacturing practices are guaranteed; 56% of millennials said they would pay more for such products, according to the Harris study.

What are your thoughts on successful green marketing? Please Leave a Reply below or email me at jlesage@jonlesage.com. (You’ll need to click on the link for this article in the headline to access the Leave a Reply section.)

As for my perspectives, here are some market trends with real potential for sales growth in clean transportation……..

Automakers and dealerships reporting commitment to sustainability and ethical standards from factory production, materials used in the vehicles, energy efficiency, and LEED-certified dealers.
Luxury buyers and car buffs who want to latest in high performance, disruptive vehicle technologies. The Tesla Model S has gained a legion of hardcore enthusiasts, and the BMW i3 is starting to get a lot buzz amongst car buffs.
More affordability and accessibility. Prices for EVs, hybrids, and alternative fuel vehicles have been reducing in the past couple of years – and federal and state incentives will be around for a while. Manufacturer incentives and lease deals make them more cost competitive, too. Another market trend to educate consumers and fleets about is how widespread the charging and fueling infrastructure is becoming in the US.
Test drives and rentals. Enterprise Rent-A-Car has found a lot of interest and enthusiasm from customers who rent an EV for a few days. Test drive events are making waves, as Tesla Motors has found out in recent years. Another winner has been deploying a few of these vehicles for studies with fleets.
Marketing alliances. We’re starting to see more partnerships and alliances offering incentives and benefits to car owners – such as free EV charging programs; mobile apps for smart phones and tablets mapping out charging and fueling stations; open sourcing EV charging stations to make them more accessible to EV drivers; card payment systems for charging and fueling; and adding more options to gas station pumps.
Educational events. Clean transportation experts typically call out for more educational and information resources that are needed out there. I would say that the greatest potential for reaching people would include: training programs for dealers on answering car shopper questions in less than 10 minutes; get more “butts in seats” at car show ride and drives, test drives through dealers and car rental companies, fleet vehicles, and through carsharing services; celebrities who love their green cars; and analytics on the benefits derived from clean transportation in emissions reduction, cost savings, freedom from oil dependency, and domestic economic growth.

Car rental a new market for microGreen oil filter as fleets face cost and carbon challenges

Car rental companies, like other fleet operators, face two core challenges: cost containment and carbon reduction. As experienced by the automotive and transportation industries, taking a multi-tiered approach is required to hit those targets – involving more than the vehicle acquisition process. Abrams Consulting Group, Inc. (ACG), the leading specialized consulting and research firm serving the global vehicle rental and lease industries for over three decades, and SOMS Technologies LLC (SOMS), the manufacturer of the microGreen® Extended Performance Oil Filter, are working together to bring a vehicle maintenance solution to new market segments.

The two companies have announced a collaborative effort to introduce the microGreen filter into the car rental and fleet management industry sectors. The two-in-one filter design combines a high-quality full-flow filter with a patented microfilter system to maintain oil quality over time. The difference with traditional oil filters is huge – the microGreen oil filter program allows the vehicle owner to replace engine oil every 30,000 miles as compared to a more standard 3,000-7,000 miles, depending on normal practice and manufacturer guidelines. The filter fits most light- and medium-duty vehicles, and is installed and removed like a conventional oil filter.

Car rental companies stay on top of maintenance – their vehicles are extensively used and add mileage faster than other fleets. “The car rental industry is one where…. vehicle maintenance, including oil, filters, and labor, is a significant expense, and there is mounting pressure to improve the environmental profile and reduce the carbon footprint,” said Miles Flamenbaum, president of SOMS. The microGreen filter “can significantly reduce oil and filter maintenance costs while helping to protect the environment.”

Neil Abrams, ACG founder and president, has worked with car rental companies and suppliers on cost containment – and in more recent years on environmental sustainability goals. “Over our 32 year history, it has been extremely rare that ACG would work with a product manufacturer of a mundane, after-market replacement part such as an oil filter,” Abrams said. “However, after reviewing the success already achieved by the microGreen filter with tens of millions of miles of testing and hundreds of millions of miles of usage in commercial fleets, as well as undertaking an analysis of the benefits to be derived by rental and fleet operators, the value proposition was obvious and compelling. There are potential annual savings of 10s or 100s of thousands of dollars — millions of dollars in some cases — depending on the size of the fleet.”

SOMS has been working with fleets since 2009 – police departments, limos and taxis, school buses, carsharing, and telecommunications companies, among others. “The fleet manager is looking at rising costs in vehicle acquisition and maintenance,” Flamenbaum said. “When oil prices go up, that goes into engine oil. Fleets need to keep their costs down.”

Carbon credits are being looked at more carefully these days by fleets, Flamenbaum said. But for fleets, the microGreen filter offers a more direct approach – just like LED light bulbs offer with energy efficiency. “They look at low-hanging fruit,” he said. “It’s a small piece of the puzzle, but an easy part, based on efficiency.”

Consumers and B2B demanding accurate reporting of green products

Transparent, honest, and accurate reporting is being required in the regulatory environment – and consumers and business-to-business (B2B) are expecting as much. In the case of sustainable, green products, offerings made by manufacturers and marketers are expected to meet the claims being made. Ford Motor Co. is feeling the heat right now from its second round of inaccurate MPG listings. Ford is committed to being environmentally responsible in its water conservation and manufacturing, but the MPG reporting doesn’t look very good.

GreenBiz featured a webinar last week on the topic, “Understanding the B2B Green Marketing Landscape.” B2B companies are especially demanding – requesting unprecedented amounts of information about products’ environmental and health attributes. Joel Makower, executive editor at GreenBiz Group, moderated the panel that consisted of Scot Case, director, markets development at UL Environment; Kirsten Ritchie, principal, director of sustainable design at Gensler; and Yalmaz Siddiqui, senior director of environmental strategy at Office Depot.

UL Environment is working with clients, including companies in nanotechnologies, on validating credibility of sustainable product claims through its certification, validation, and testing services. Case said that $40 billion is being spent annually on green products in the US, and B2B could be even larger in sales. Consumers expect a lot from companies these days – a recent survey found that 65% of respondents want more trust and faith in claims being made, Case said.

Richie said that manufacturers are facing two challenges with green claims. They’re typically not adequately training their sales and distribution staff; and B2Bs and consumers need to have their questions answered by staff with understanding of how the technology works. The other problem is that manufacturers are underselling what they have to offer, Richie said. The product very likely has environmentally responsible parts, components, and manufacturing processes in place – and manufacturers are missing an obvious opportunity to inform customers. Her company, Gensler, consults on architecture, design, and planning in commercial buildings and deals with a lot of “eco-policy compliance.” LEED v4 is getting a lot of interest from clients, who need to be informed on the latest green building rating system, she said.

Paper products have become a testing lab for accurate eco-labels, Siddiqui said. Rating systems similar to outdoor-wear company Timberland’s Green Index, with its 0-to-10 rating system, are becoming common in the paper industry. Environmental Paper Network’s paper calculator is a popular measuring tool for analyzing the environmental impacts of paper and discovering the best paper choices. It comes from a coalition of more than 100 non-profit organizations aiming for sustainability in pulp and paper production, consumption, and recycling.

NAFA and CALSTART launch Sustainable Fleet Standard Program

During its annual conference last week, the NAFA fleet management association launched the Sustainable Fleet Standard Program in collaboration with CALSTART. It a first-of-its-kind “best practices” program supporting fleets in increasing efficiency and reducing emissions and fuel consumption for their vehicles. “The importance of sustainable practices becomes more evident each day,” said NAFA President Claude Masters. “By becoming more energy independent and efficient, our members will extend benefits to their bottom line and their customer base.”

The Sustainable Fleet Standard Program will be complimentary to existing federal programs, but also sets a standard by which fleets can assess their progress. The program has two purposes – to encourage and make it easy for fleets to take first steps toward clean transportation; while also setting a strong framework to reward those fleets already taking real action. Member organizations will be assisted in assessing their practices to decrease fuel dependence and emissions; and to increase vehicle efficiency, improve performance, and reduce harmful pollutants. In recent years, many fleets have been learning the win-win scenario clean transportation brings in reducing emissions and operating costs.

CALSTART has been working with NAFA for several years on providing educational resources to fleets on advanced and clean vehicle technologies. The non-profit organization has more than 150 member companies and works with industry and government partners to support growth in the industry. “NAFA’s central role in the fleet industry will help this program create a tipping point for sustainable transportation,” said John Boesel, president and CEO of CALSTART. “We’re working with NAFA to make sure the standard is strong, but easy to use by any fleet, whether just starting out or far down the road on sustainable operations.”

The timing of this launch has been quite relevant. NAFA says that developing and launching this new program coincided with a speech given by President Barack Obama in February 2014 supporting a national vehicle sustainability initiative. “By applying this standard to fleets and vehicles of all sizes, NAFA is engineering a program that has the power to shift vehicle sustainability standards on a universal level,” NAFA’s press release says. You can also learn more and stay informed on the program as it approaches implementation, at NAFASustainable.org.

Navigant Research report and supply chain sustainability standards point to an evolving auto industry

The roles played by global automakers are continuing to shift in two core areas: what products and services will be delivered and how vehicles will be manufactured. A new study by Navigant Research and revised supply chain sustainability standards agreed upon by leading automakers illustrate the evolving automotive marketplace and the role clean transportation standards will play. As previously mentioned, the identity of automakers is changing from vehicle builders to transportation service providers.

Navigant Research’s new report, “Alternative Revenue Streams for Automakers,” analyzes the push toward a more sustainable transportation system that’s coming through plug-in electric vehicles (PEVs), vehicle-to-grid, vehicle-to-building, home energy management, solar energy, charging, carsharing, and smart parking services. Now that PEVs have been adopted by thousands of consumers, automakers are seeing more opportunities to play a role in home electricity networks, workplaces, and commercial locations that need integration of charging services. Automakers in North America, Europe, and Japan face stringent fuel economy and emissions reduction targets – and mature markets where new vehicle sales are starting to flatten out. Playing an expanded role in sustainability transportation meets their need for additional revenue streams and complying with government mandates.

Another factor behind these trends are growing concerns about increasing urbanization that will lead to increased traffic congestion and air pollution. Greater restrictions on vehicle use are being seen in London, New York, Beijing, Tokyo, and other major cities. Automakers such as BMW are creatively testing out new programs to address urbanization that include carsharing, smart parking, and charging locations connected to mobile devices. The main challenge automakers face is lacking the expertise and experience to move forward in new areas such as home energy management or vehicle-to-grid – so partnerships with suppliers with expertise in these new systems are being tested out.

These alternatives will not replace the manufacturing and marketing of new vehicles, but are expected to generate more than $1 billion in revenue for the auto industry by 2018, according to the report. Carsharing services will play a large part in this revenue, followed by vehicle-to-grid.

Fourteen major automakers have just agreed to the “Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain.” Two leading corporate responsibility business associations, AIAG and CSR Europe, have expanded automaker membership for suggested principles for supplier relationships based on sustainability standards that were first adopted in 2009. Now, participants include BMW, Chrysler, Daimler, Fiat, Ford, General Motors, Honda, Jaguar/Land Rover, PSA Peugeot Citroen, Scania, Toyota, Volkswagen, Volvo Cars, and Volvo Group.

This set of broad principles for suppliers addresses environmental issues, working conditions, human rights, and business ethics. The guidelines apply to first-tier suppliers as well as their subcontractors and suppliers. Affected business practices in the new standards include: reducing greenhouse gas emissions, energy, and water consumption; increasing use of renewable energies; improving waste management; and training of employees.

The list of global automaker that have signed on to these standards is missing some of the major companies such as Nissan Renault, Hyundai Kia, Subaru, and Chinese automakers. Yet, it is a significant announcement illustrating, along with the Navigant Research report, how different the auto industry is becoming compared to 10 years ago.

CTDI’s Mark Shasteen on how remanufacturing is playing a key role in automotive sustainability

LMC Automotive’s 2013 forecast for total US light-duty vehicle sales is at 15.2 million units. The analyst firm’s estimate for global sales this year is 83.5 million light vehicles, up 2.8% from 81.2 million in 2012. (Editor’s note: there’s somewhere around 200,000 new Class 4-7 commercial vehicles also sold annually in the US.) While eventually the massive Millennial generation (about 18 to 33 years old) is expected to buy less new cars, there are a lot of metals moving through vehicle production plants, along with plastic, fabric, glass, and other materials. Many people are concerned that the US and other markets with high-volume auto sales will be crossing a point of no return. What will happen to all the old light-duty passenger vehicles stored in landfills, junkyards, and your neighbor’s driveway?

There is a management discipline in automotive manufacturing and aftermarket designed upon “remanufacturing” vehicle parts and components – to reduce costs, reuse parts and components, and to assist OEMs and Tier One suppliers meet their sustainability targets. Some of this practice comes from the US Environmental Protection Agency’s Comprehensive Procurement Guideline and its 2004 update adding Rebuilt Vehicular Parts. A few years ago, the Motor & Equipment Manufacturers Association (MEMA) launched an affiliate, the Motor & Equipment Remanufacturers Association (MERA). The EPA guidelines played a part in defining what goes into remanufactured vehicle parts and components – which can include repair, refurbishing, and recycling.

Mark Shasteen served as an inaugural board member on MERA; he brings his 30 years of experience in the auto industry, including Delphi Corp., the Packard Electric Division of GM, and just recently, he became vice president of CTDI’s automotive business segment. CTDI, based in West Chester, Penn., is focused on vehicle electronics remanufacturing and logistics, and recently launched Reman 8.0, a one-stop solution for vehicle manufacturers and suppliers. Customers leverage CTDI’s 38 years of technical expertise in microelectronics and mechatronics, test engineering, and industry leading remanufacturing capabilities that comes from industries beyond automotive.

For anyone who’s bought a new car in recent years, it’s nearly astonishing to read the owner’s manual and find out about all of the electronics systems built into the dashboard and under the hood. CTDI works with automakers, dealer networks, service departments, and retail service chains to streamline the repair process and contain costs. A Tier One supplier might have a 15 year service agreement with an OEM for a car that stopped being manufactured 10 years ago. CTDI and other remanufacturing companies play a crucial role in keeping these vehicle operational; that’s getting trickier in the US market where the average age of vehicles on the streets is now 11 years old.

There are 20-to-30 electronics control modules built into new vehicles and the complexity is getting deeper with each new model year, Shasteen said. Connectivity with devices, telematics and navigation, lighting, cruise control, temperature control, radio systems, and a long list of autonomous features that will soon become integrated into driverless cars – the list gets very long.

Reman 8.0 is offering turnkey solutions including engineering, testing, logistics, and IT systems. When working with its clients, CTDI is able to salvage and remanufacture more than 90% of the vehicle’s electronics parts and components, Shasteen said. Commercial vehicle manufacturers and suppliers are also showing interest in remanufacturing, and may become CTDI clients, too. “It’s cost effective, green, and viable,” he said.