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With growing movement toward carbon neutrality worldwide, carmakers are making efforts to reduce emissions in their manufacturing process and so are their suppliers.

Tokai Rika Co., a primary auto parts supplier to Toyota Motor Corp., has started supporting its small and medium-sized subsuppliers to boost their energy saving efforts, so as to achieve decarbonization throughout the manufacturing process.

In a room at Tokai Rika headquarters in the town of Oguchi, Aichi Prefecture, with a signboard saying “energy-saving dojo” strung from the ceiling, employees of the firm who are certified energy managers offer lectures to officials from small and medium-sized suppliers on ways to avoid wasting electricity.

In Japan — which is heavily dependent on electricity generated using fossil fuels, such as thermal power generation — the first step to reducing carbon emissions is to decrease electricity consumption through energy-saving efforts.

“In the beginning, we didn’t even know what carbon neutrality meant, but we were taught what to do in detail,” said Yuki Matsuda, director of Matsuda Denki Co., a parts maker in the city of Komaki in the prefecture, after the lecture.

When Tokai Rika first presented to its suppliers a specific target to reduce carbon emissions this spring, many of them didn’t have a clue where to start. So, this year, the firm started inviting them to the lectures, which it had already been conducting for its own staff.

Tokai Rika is a first-tier supplier that provides components directly to Toyota. It has set a target of cutting carbon emissions at its factories by more than 60% by fiscal 2030 compared to fiscal 2013 levels.

The firm is trying to involve its suppliers as well because subsuppliers’ efforts to decarbonize are unavoidable to achieve carbon neutrality in the overall process of manufacturing its products.

Among the total volume of carbon dioxide emitted by Tokai Rika and its manufacturing process for its products — mainly switches for vehicles — only about half comes from itself. The rest is released by other firms, including 33% from production of raw materials such as resins and 13% from parts subsuppliers.

Tokai Rika asked its suppliers to set the target of achieving a 20% cut in carbon emissions by fiscal 2030 compared to fiscal 2020 levels. But for the mostly small firms, with 100 to 200 employees, it would be difficult to work on the goal on their own due to limitations in their technology and human resources.

Thinking that the larger firm needed to take the initiative, Tokai Rika began supporting its suppliers by holding lectures and sharing energy-saving tips, such as cutting off standby power when machines are turned off.

It also set up an inquiry counter to offer advice on energy saving, including information on subsidies the companies can apply for if they have difficulties financially.

“The smaller the second- and third-tier suppliers are, the more they must be caught in a dilemma between reducing carbon emissions and cutting costs,” said Katsuyuki Imaeda, Tokai Rika’s corporate officer in charge of carbon neutrality.

“We want to know about as many issues as possible so that we can work on achieving carbon neutrality (together with the suppliers), instead of conducting one-way communication (of only presenting a target),” Imaeda said.

This spring, Toyota asked its first-tier suppliers to reduce carbon emissions this year by around 3% compared with the previous year.

Toyota procures some 70% of auto parts from outside the company, and needs to work with suppliers to make the manufacturing process as a whole carbon neutral.

Major companies within the Toyota group have sufficient strength to set carbon emissions reduction targets, but key to achieving carbon neutrality throughout the supply chain is how well they can support small and medium-size subsuppliers at the opposite end of their supply chain in the auto industry, which includes a wide range of sectors.

“Small and medium-size firms have little money to spend on capital investment related to carbon neutrality,” said an official at the Japan Auto Parts Industries Association, which represents 427 auto parts makers, half of them small and medium-size companies.

But the official added, “In the future, there is a possibility that automakers will refrain from purchasing components from companies not working to achieve carbon neutrality.”

Mindful of such concerns, the association launched a working group in April on carbon neutrality and is trying to grasp the current situation by sending questionnaires to its members.

“Basically, such efforts should be supported by the entire supply chain, such as major companies sharing information with second- and third-tier suppliers,” the official said.

This section features topics and issues from the Chubu region covered by the Chunichi Shimbun. The original article was published July 26.

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