The auto industry is significantly exposed to deforestation risks in the supply chains of the many materials that go into making a car – from the steel for iron ore, bauxite for aluminum, rubber for tires, leather for car seats, and increasingly the minerals that go into electric vehicle batteries. Deforestation and other land use changes are responsible for roughly the same amount of climate impact as the transportation sector globally.
2025 is a pivotal year. The UN has called for eliminating deforestation in supply chains by 2025. Many private sector companies also cite 2025 as the year they will meet their deforestation-free commitments. As of December 2025, in line with the European Union Deforestation Regulation (EUDR), companies that are found to have deforestation in their leather, rubber, timber and palm oil supply chains, will not be able to import these products into the EU. Additionally, the EU will implement the CSDDD on due diligence on environment and human rights over the course of the next few years.
This year’s Leaderboard results show that some automakers have begun to take proactive steps to address deforestation in their supply chains. However, these actions are patchy and not nearly enough to meet the UN’s 2025 deadline. Other industries, including those with complex multi commodity supply chains, are much further along in this process. The auto sector must learn from these examples.
Palm oil
For years, deforestation for palm oil was out of control, causing over 3 million hectares of deforestation in Indonesia alone in the past 20 years.
Starting in late 2013, palm oil traders began to adopt No Deforestation, No Peat, No Exploitation commitments (NDPE policies). These policies allowed palm oil production to expand, but only on degraded land. Industry and civil society worked together to adopt the High Carbon Stock Approach (HCS) and the High Conservation Value toolkit (HCV) to determine which land was acceptable to convert into oil palm and which was not. These policies left intact forest landscapes untouched and protected ecosystem values and biodiversity, while also safeguarding the needs of communities living in these landscapes and making sure their sacred sites were off limits.
Today, 83% of companies in the palm oil industry have put in place NDPEs and have transparent supply chains. These changes have led to a dramatic decline in deforestation related to palm oil throughout SE Asia.
Rubber
Rubber is responsible for up to 4 million hectares of deforestation across the tropics since 1993. Learning from the palm sector, rubber producers, processors, tire makers, auto companies, and civil society joined together in 2018 to form the Global Platform for Sustainable Natural Rubber (GPSNR). With members like Goodyear, Firestone, Bridgestone, Michelin and Continental, the Platform covers 60% of the global tire industry.
GPSNR members must commit to producing and sourcing natural rubber in a way that does not contribute to deforestation or degrade High Conservation Values (HCVs). They also have committed to supporting the restoration of deforested and degraded rubber landscapes and to respect human rights and support community livelihoods. GPSNR members are also required to report on their actions, including disclosing the steps they have taken to assess and mitigate the risks of deforestation, HCS assessments carried out by suppliers, and measures to support suppliers to mitigate deforestation risks. GPSNR is developing an assurance model that will provide increased accountability for members.
Cocoa
The cocoa industry is another forest-risk commodity that has committed to ending deforestation. According to the 2024 Chocolate Scorecard, 34 large cocoa and chocolate companies and 13 retailers have a no-deforestation and conversion policy in place for cocoa. Many have implemented traceability and deforestation monitoring systems, and are quickly preparing to become compliant with the upcoming EU deforestation regulations. This is an industry that is smallholder dominated and therefore more complex to trace, yet these global companies have committed to end deforestation in their cocoa supply chain, with time-bound targets.
Retailers
Similar to automakers, global food retailers also face the difficulty of addressing deforestation risks across many commodities, as they sell almost every kind of forest-derived product. While there is still a long way for the industry to go, global retailers have taken steps to implement deforestation and conversion free policies in parts of their complex, diverse, global supply chains.
For example, Aldi Sud has a time-bound commodity specific policy for palm oil, timber and paper products, soy, beef, cocoa, and coffee. Sainsbury’s has committed to have deforestation and conversion free own-brand products by the end of 2025. Global retail brands such as Unilever, Hershey and Danone, meanwhile, have applied their no deforestation policies across multiple commodities. Some brands have also made great strides in supply chain transparency, with frequent, public updates about their progress toward zero-deforestation goals for a range of commodities. For example, Nestle has disclosed that 93.4% of their primary supply chains for forest risk commodities are deforestation free.
Challenges for automotive supply chains
Auto supply chains are also complex and deforestation risks are hidden throughout a vehicle. Approximately half of the leather exported from Brazil is used by the automotive sector for car seats and interiors. Cattle ranching is the main direct driver of deforestation in the Amazon; Brazil has the biggest bovine herd in the world and all imports of Brazilian leather entail environmental risks such as deforestation and land-grabbing.
Similarly, mining iron ore for primary steel, bauxite for aluminum, and other minerals for car batteries have adverse impacts on forests, communities, and biodiversity across the globe. The nickel mining industry, for example, risks causing another 500,000 hectares of deforestation in Indonesia.
However, companies in these industries, as well automakers themselves, have made far less progress than other sectors when it comes to addressing deforestation risks and impacts. Automakers and their suppliers within these industries must step up their efforts.
Stakeholders in the palm oil supply chain initially struggled to establish monitoring and traceability systems, but with sustained effort, they made it possible. If this could be achieved for palm oil, then there is no reason the same cannot be achieved for automotive supply chains. Standards such as the Initiative for Responsible Mining Assurance (IRMA) are beginning to address some of these concerns and can provide a pathway for auto and mining companies to address environmental and social risks in their supply chains. Learnings from the palm, cocoa, rubber and retail sectors provide a foundation for automakers to work from and begin taking greater responsibility for the impact of their supply chains on forests.