Toyota's strategy to reduce our carbon footprint in North America contains three main elements: 1) reducing the carbon footprint of our vehicles, 2) reducing the carbon footprint of our operations, and 3) helping our stakeholders reduce their carbon footprint through outreach activities.

Carbon Highlights Highlights for this Section
  • Toyota’s first-ever production fuel cell car uses hydrogen as fuel and emits only water vapor. The Toyota Mirai will be available for sale to customers in California in late 2015.
  • We’ve sold over 2.4 million Toyota and Lexus hybrids in North America, which save approximately 500 million gallons of gasoline annually.
  • Beginning in 2015, Toyota’s Georgetown assembly plant will generate green power from local landfill gas, enough for the production of 10,000 vehicles per year.
  • We received our 10th consecutive ENERGY STAR Partner of the Year – Sustained Excellence Award from the U.S. EPA. Our 14 manufacturing plants have reduced energy use by almost 11 billion kilowatt hours in the last decade.
Figure 7


Toyota pursues multiple technology paths to reduce vehicle fuel consumption and greenhouse gas (GHG) emissions in our global markets. We try to match technologies to best meet customer needs in each specific region. This means evaluating vehicle powertrains, weight, aerodynamics and other design factors to boost vehicle efficiency while preserving the vehicle size, power, driving range and affordability that customers demand — without sacrificing world-class vehicle safety and performance.

Our efforts to improve fuel economy and reduce GHGs have become more aggressive with the adoption in the United States of new fuel economy and GHG emissions standards for passenger cars and light trucks through the 2025 model year. The new vehicle fleet must meet a GHG standard of 250 grams of CO2 per mile by 2016, equivalent to a Corporate Average Fuel Economy (CAFE) standard of 35.5 miles per gallon; by 2025 cars and light trucks are required to yield a combined 54.5 mpg. While overall compliance is based on a fleet average, each vehicle has a fuel economy/GHG target based on its footprint.

One significant challenge to meeting these standards is having technology options available that consumers are able and willing to purchase in sufficient quantities. At this point, it is nearly impossible to predict such outcomes so far into the future, since preferences will largely be determined by factors such as fuel price, economic conditions and infrastructure development — most of which are beyond an auto manufacturer's control. The National Highway Transportation Safety Administration and the U.S. Environmental Protection Agency, in cooperation with Environment Canada, have begun to monitor these factors under the "mid-term review" process, which will re-evaluate the feasibility of the 2022-2025 model year standards. A determination on feasibility will be made by 2018.

Toyota believes any evaluation should treat vehicles and fuels as a system. For example, higher octane and/or reduced sulfur can enable additional GHG emissions reductions and fuel savings from several engine technologies, while biofuels have the potential to reduce the carbon intensity of the fuel.

In Canada, Toyota supports a harmonized approach with the United States to setting emissions standards. The Canadian federal government introduced a GHG emissions regulation under the Canadian Environmental Protection Act for the 2011 through 2016 model years, and in the fall of 2014 expects to issue proposed greenhouse gas emissions regulations for the 2017-2025 model years.

In Mexico, the government has proposed GHG standards modeled after the U.S. requirements. The standards require automakers to meet a single sales-weighted fleet average over the period 2014 through 2016, and allow credits generated in 2012 and 2013 to be used toward compliance. These standards have been appropriately tailored to the unique driving conditions and product mix associated with the Mexican market, and contain similar compliance flexibilities and lead time as those offered in the United States. We will begin reporting on Toyota's performance in this program next year.

Many of our hybrid products are already capable of meeting their respective future targets for fuel economy and GHG standards in all three countries. But there is still a sense of urgency as states like California seek to accelerate the number of zero emission vehicles on the road to meet its ZEV requirements.

To achieve compliance with these regulations and to minimize the carbon footprint of our vehicle fleet, Toyota's vehicle carbon strategy has four parts: 1) improving the fuel efficiency of our gasoline vehicles, 2) advancing the technology and mass acceptance of alternative powertrains, 3) supporting development of the infrastructure needed for full-scale commercialization of advanced technology vehicles that run on alternative fuels, and 4) complying with vehicle fuel economy and GHG regulations and meeting our own internal targets.

Improving Gasoline Vehicle FE

Toyota will soon introduce vehicles globally with a series of newly-developed, highly efficient gasoline engines that achieve fuel efficiency improvements of at least 10 percent.

Two engines will form the base of the new series. The first is a 1.3-liter gasoline engine using the Atkinson cycle normally used in dedicated hybrid vehicles. The second is a 1.0-liter gasoline engine, jointly developed with Daihatsu Motor Co., Ltd.

The new engines will be used in future models, and a total of 14 engine variations will be introduced globally by 2015. These engines will help Toyota achieve its future fuel economy and CO2 vehicle targets.

Advancing Alternative Powertrains

Improving fuel economy and reducing tailpipe emissions are major drivers for our investments in advanced technology. But it takes more than technology to design and build low or zero emission vehicles that the market will accept. We understand no one size fits all; that's why we invest in researching driving trends, sociological behaviors, the changing energy and transportation landscape, and the evolution of cities. This research helps us understand which technology works in which circumstance so that we can build the vehicles that best suit the needs of the market.

Our vision for small battery electric vehicles, for example, is based on short trips originating from home, while our Plug—in Hybrid and Fuel Cell Vehicle are meant for longer driving distances. We address customers' needs for driving distance and vehicle size using different portfolio technologies. Across our portfolio, we continue to innovate for better fuel efficiency and lower emissions.

Figure 8 Figure 9


Toyota and Lexus have 13 hybrid vehicles currently on the market in North America, all using our unique series-parallel hybrid system. Hybrid technology is the foundation of Toyota's approach to minimizing the environmental impacts of gasoline-powered vehicles. Knowledge gained from hybrid development and deployment is helping Toyota accelerate the introduction of future powertrains that can utilize a wide variety of energy sources and fuels, including hydrogen, biofuel and electricity.

Figure 10

Global hybrid sales for Toyota and Lexus topped the six million mark in December 2013. The latest million-unit milestone was achieved in the fastest time yet, taking just nine months. Toyota calculates that as of the end of 2013, Toyota's global fleet of hybrid vehicles has resulted in an estimated 41 million fewer tons of CO2 emissions than those emitted by gasoline-powered vehicles.

Between January 2014 and the end of 2015, Toyota plans to introduce 15 new hybrid models worldwide and expects global sales of its hybrids to be at least one million units a year. About one third of these will be sold in North America.

Over 2.4 million Toyota and Lexus hybrids spanning 13 models — including more than 1.7 million Prius Family vehicles and 273,000 Lexus hybrids — have been sold in North America (hybrid sales data YTD as of June 2014). On Earth Day 2014, Michigan Governor Rick Snyder recognized Toyota for being a pioneer in the sale of hybrid vehicles.

In the U.S., 85 percent of luxury hybrids sold are Lexus hybrids. In Canada, two of every three hybrids sold in 2013 were Toyota and Lexus vehicles.

State of Michigan Special Tribute

In March 2014, Toyota Financial Services (TFS) issued the auto industry's first-ever Asset-Backed Green Bond in the amount of $1.75 billion. The Green Bond was the newest component of TFS' broad-ranging funding program and brings new meaning to green innovation.

Proceeds of the TFS Green Bond were used to fund 39,900 new retail finance contracts and lease contracts for Toyota and Lexus vehicles. These vehicles met high green standards as established by three criteria:

  • Gas-electric hybrid or alternative fuel powertrain
  • Minimum EPA estimated MPG (or MPG equivalent for alternative fuel vehicles) of 35 city / 35 highway
  • California Low Emission Vehicle II (LEV II) certification of super ultra-low emission vehicles (SULEVs) or higher, which would include partial zero emissions vehicles (PZEVs) and zero emissions vehicles (ZEVs)

Nine vehicles in the Toyota and Lexus portfolio of green vehicles qualified. Qualifying models from Toyota included: Prius, Prius c, Prius v, Prius Plug-in, Camry Hybrid, Avalon Hybrid, and RAV4 EV. From Lexus, qualifying vehicles were CT 200h and ES 300h.

"Investors have enthusiastically welcomed the industry's first Green Bond from Toyota Financial Services as a sign of our company's commitment to environmentally sensitive transportation," said Mike Groff, TFS CEO. "The Green Bond itself represents the innovation that TFS brings to the financial marketplace in creating asset-backed investments that reflect the values of our company. This, in turn, enables us to provide Toyota customers with attractive financing options for their vehicles."

To develop the Green Bond, TFS worked closely with Citi, which has a long-standing relationship with TFS and shares its commitment to green innovation. Citi served as the structuring lead manager of the bond, and Bank of America Merrill Lynch and Morgan Stanley acted as joint-lead managers.

Figure 11

SPOTLIGHT: If Your Hybrid is Even More Efficient in the Future, Thank This Guy

Eric Dede has always been interested in the future. Futuristic concepts such as space and astronautics have consumed Eric's attention for years. That's how he ended up as a senior engineer for the University of Michigan's Space Physics Research Laboratory. It's also why he is now a Manager of the Electronics Research Department (ERD) at Toyota Technical Center (TTC), where his main responsibility is the development of elemental technologies for future hybrid vehicle power electronic systems. TTC is Toyota's North American R&D division.

After spending considerable time working with the University of Michigan Space Physics Research Laboratory, Eric joined Toyota in 2008 to research and develop multi-physics simulation and thermal management technology for hybrid vehicle power electronic systems. While that may seem like a mouthful, it comes down to a pretty simple concept: Make Toyota's hybrid vehicles even better.

Now six years after joining Toyota, Eric's futuristic mindset has helped him invent something that has the potential to significantly improve the efficiency of hybrid vehicles: a new Micro-channel Cold Plate in electric vehicles and hybrids. It provides a 70 percent increase in heat transfer with a 50 percent reduction of pumping power. What that boils down to is the potential for a 10 percent increase in hybrid efficiency.

This invention has the potential to have such a major impact that it was recognized for an R&D 100 Award. The R&D 100 Awards, often called the "Oscars of Invention," recognize and celebrate the top 100 technology products of the year. In a highly innovative and quickly evolving field, having one of the top 100 technology products is no small feat, but it's not the first R&D 100 award Toyota engineers and scientists have won. It is, however, the first that resulted from research that was done entirely in-house at TTC. While the patent and resulting award bear Eric's name, he's certainly not one to take all the credit. "This was a great collaborative project that established useful methods for the advanced design and optimization of electromechanical systems," Eric said.

Eric the TTC Scientist

Eric and his fellow TTC scientists and engineers were recognized at a special "Innovation Dinner" held June 19, 2014 near the TTC campus in Ann Arbor, Michigan. The United States Patent and Trademark Office issued 1,355 patents to Toyota engineers and scientists in 2013. Toyota commends the awardees for their efforts in furthering Toyota's recognition not only as a leading automotive company, but also as a leading technology company.

Eric Dede stands in front of his patent composite. Eric invented a new Micro-channel Cold Plate that increases hybrid efficiency by 10 percent.


Plug—in hybrid vehicles use electricity from the power grid to partially offset the use of gasoline. As such, these vehicles typically release fewer emissions while in operation than a conventional vehicle. While the life cycle implications vary (based on the source of the electricity), Toyota views the plug—in hybrid vehicle as a way to reduce fuel consumption and tailpipe emissions (including CO2) beyond a standard gasoline-electric hybrid vehicle.

In 2012, Toyota launched the Prius Plug—in Hybrid in both the United States and Canada. Toyota's Prius Plug—in offers all the advantages and utility of a conventional hybrid vehicle. Its 4.4 kWh lithium-ion battery can be charged using a 120V outlet in about three hours (with a dedicated 15 amp circuit).

The Prius Plug—in can operate on battery power alone at speeds up to 62 miles per hour and is rated by the U.S. EPA with an EV Mode range up to 11 miles. For longer distances and at speeds above 62 miles per hour, the Plug—in automatically switches to hybrid mode and operates like a regular Prius.

The EV mode fuel economy for the Prius Plug—in is EPA-rated at 95 MPGe (miles per gallon equivalent). In hybrid mode, the Prius Plug—in has a combined EPA rating of 50 MPG. The total EPA-rated driving range is 540 miles on a single charge and single tank of gasoline. Drivers who charge the vehicle regularly and use it for street driving on frequent short trips will realize the biggest reduction in gasoline usage.

Figure 12


Battery electric vehicle (BEV) consumers embrace the technology for its smooth drive, excellent acceleration and zero tailpipe emissions, yet these vehicles represent a small percentage of the overall vehicle market. For most consumers, limited vehicle range and battery recharge time remain barriers to consideration. Toyota has active research in battery technology — both for today's lithium-ion technology and for the future "beyond lithium" — that seeks to improve range and recharge time.

Toyota engineers have been studying electric vehicles for nearly 40 years. Alongside the company's groundbreaking hybrid, plug—in hybrid and fuel cell vehicles, BEV technology represents another component of Toyota's long-term vision for future mobility. While BEVs may not be the solution for every customer, they are one option in our portfolio of advanced technologies and we are working with partners like the Department of Energy's National Renewable Energy Lab and others to determine where electric vehicles make sense and how to integrate the vehicle, the customer and the power grid.


Toyota's second-generation RAV4 EV, developed in partnership with Tesla Motors, Inc., was the first all-electric SUV on the market in North America. It is produced at our assembly plant in Woodstock, Ontario.

The RAV4 EV has an EPA-rated driving range of 103 miles and a fuel economy of 76 combined miles per gallon equivalent (MPGe) rating.1

The vehicle has a 41.8 kWh lithium-ion battery pack. When plugged into a Level 2, 40-amp, 9.6-kW output charging unit, the RAV4 EV's battery pack can be fully replenished in as little as five hours. 2 The vehicle comes equipped with a 120v charging cable for use when Level 2 charging is not available.

Our agreement with Tesla called for 2,500 battery-electric powertrains over a three-year period. We anticipate that volume will be achieved during fiscal year 2015. We have a good relationship with Tesla and will evaluate the feasibility of working together on future projects.

1 EPA-rated driving range when vehicle is fully charged. Excludes driving conditions. Actual mileage will vary. MPGe based on 2013 EPA ratings. Actual MPGe will vary based on driving habits, charging practice, battery age, weather, temperature, and road/traffic conditions. Battery capacity will decrease with time and use. For more information on MPGe and range, please see
2 Charging times when vehicle is in Normal Mode and ambient temperature is at 77 degrees F. Charging times will vary with ambient temperature.


From the same company that started a revolution with the Prius, Toyota launches its first fuel cell vehicle (FCV) in North America at the 2014 International Auto Show in Los Angeles.

Toyota's first-ever production fuel cell car — the Mirai — is a zero-emission, electric drive, four-door sedan that is expected to have a driving range of about 300 miles and is able to be refueled in three to five minutes.

The Mirai uses hydrogen instead of gasoline and emits only water vapor instead of the typical tailpipe exhaust emissions. Hydrogen can be manufactured using natural and renewable energy sources like solar, wind, landfill gas, and bio-gases.

Toyota has 10 years of real-world, on-road testing of the fuel cell technology to help ensure peace of mind for the consumer. Members of Toyota's fuel cell vehicle team have logged more than one million test miles from as far north as Yellowknife, Canada, to Death Valley, California, experiencing extreme hot and cold temperatures and varying altitudes along the way. The vehicle performed flawlessly. In fact, according to team leader Matt McClory, it was the rental car that broke down.

"We are excited to see the FCV go to market, and are very proud of the hard work our team is contributing to make the vehicle's success," said Matt.

For more information about Toyota's fuel cell vehicle, please visit

SPOTLIGHT: One Woman's Obsession With Changing the World

As an engineer at Toyota Technical Center in Ann Arbor, Michigan, Jackie Birdsall is obsessed with bringing fuel cell technology to the masses. But perhaps you need to be obsessed when you're trying to change the world. After all, revolutions don't blossom from complacency.

Leading an alternative fuel revolution is just what Birdsall and her partners on the fuel cell vehicle team are doing. Collectively, they're finding tangible ways to reduce fossil fuels in the automobile world and figuring out how hydrogen fuel cells can be useful and affordable. Individually, Birdsall's job is to test Toyota's fuel cell vehicle and ensure hydrogen stations fill tanks in a reasonable amount of time. She also represents Toyota on a variety of codes and standards committees.

In 2015, Birdsall's obsession will bear fruit when Toyota's FCV hits the markets in California, Japan and Europe.

Her passion for the auto industry started as a teen, and the California girl decided to go to Kettering University, formerly General Motors Institute, in Flint, Michigan. Flint was a major player in the auto industry's history. Some of America's greatest cars were manufactured there, and she could live on Chevrolet Avenue. What more did she need?

"They had great classes," Birdsall says. "You get to learn metallurgy and welding and the applied math and theory behind how an engine works. I got so excited about it. It blew my mind."

Kettering's unique split between classroom and work experience did its job. She stumbled upon Daimler-Chrysler's fuel cell prototype during that 2003 internship. That was a key moment in her life.

"So I can work on a car that has zero emissions, that uses fuel you can make from any domestic resource, fills up in a matter of minutes and can completely replace the internal combustion vehicle?" She says, "I became obsessed."

The path to Toyota fell into place: Move to Vancouver for a co-op with General Hydrogen, a fuel cell forklift company. Then graduate from Kettering and join the California Fuel Cell Partnership to help major car companies develop hydrogen-powered vehicles. Birdsall finally came to Toyota in 2012 because it was clear they would be one of the first companies to mass produce hydrogen fuel cell vehicles.

The highlight of her life so far? Maybe the time she saw Geoffrey Ballard at General Hydrogen. "He was a huge advocate for fuel cells," Birdsall says. "He was THE MAN!"

Turns out the late Dr. Ballard is the founder of General Hydrogen and is considered the father of the fuel cell industry. That explains Birdsall's excitement about meeting him. Imagine a movie buff seeing Walt Disney or Charlie Chaplin back in the day. That's the kind of importance we're talking about.

Ballard is part of the reason Birdsall is at Toyota. He's part of the reason Toyota is proud to be among the first to bring hydrogen-powered cars to market.

Even when that happens, Birdsall's fuel cell obsession won't stop. But it will be a pretty big moment for her and her teammates at Toyota. "Right now, I have the best job in the world for me," she says. "I'm going to lose my mind when the first vehicle rolls off the production line. To be talking about a full commercial launch, that's pretty much the biggest victory I can have in my life."

Supporting Infrastructure for Advanced Technology Vehicles

Alternative transportation fuels such as ethanol, biodiesel, natural gas, hydrogen and electricity are already in the marketplace here in North America. The availability and diversity of these alternatives to gasoline and diesel play a key role in helping countries realize their energy security and greenhouse gas emissions reduction goals.

Our vehicle portfolio approach takes into account the diversity of alternative transportation fuels currently available, as well as those on the horizon. But there are several hurdles to overcome before advanced technology vehicles can realize full-scale commercialization. Infrastructure development is one of these hurdles.

Through the California Fuel Cell Partnership (CaFCP), the Fuel Cell and Hydrogen Energy Association (FCHEA), H2USA, and the California Plug—in Electric Vehicle Collaborative, Toyota is working with government agencies (including the U.S. Department of Energy), other auto manufacturers, utilities and other key stakeholders to support the development of necessary infrastructure for advanced technology vehicles.


As states push for putting more zero emission vehicles on the road, the sale of battery electric and plug-in hybrid electric vehicles is expected to accelerate. The infrastructure for these vehicles needs to keep pace. But there is more to infrastructure than the availability of charging stations — the power grid must also be ready to handle the demand.

Toyota is supporting the development of this infrastructure by taking a two-pronged approach: We are partnering with the U.S. Department of Energy to research ways for grid operators to accommodate this new demand for power, and we are collaborating with a group of energy companies to help consumers manage the impacts of charging to their time, their wallets and the grid.


In September 2013, U.S. Energy Secretary Ernest Moniz dedicated the Energy Systems Integration Facility (ESIF) at the Department of Energy's National Renewable Energy Laboratory (NREL). This facility will be crucial to adding more renewable energy to the nation's energy system and building the reliable, clean energy infrastructure America vitally needs.

The Toyota Research Institute-North America is working with NREL and the Department of Energy to test real-world interactions between the electricity grid, plug-in vehicle charging, solar power and home electronics. A real residential electrical grid with vehicle charging infrastructure, solar power and energy storage is being constructed in a laboratory setting. Scientists and engineers at the ESIF and NREL's Vehicle Testing and Integration Facility will use 20 Prius Plug—in hybrid electric vehicles to develop and explore ways to help grid operators accommodate the fast-growing U.S. electric vehicle fleet, including how to use signals from the grid to curtail charging when the grid is at peak.

The ESIF will also allow industry decision makers to model what an increasing penetration of solar or wind energy onto the grid would look like in real time, at a level of accuracy and detail never seen before. Manufacturers can test new energy equipment at megawatt scale. Vendors can analyze the optimal equipment balance as the energy system adds storage and two-way data sharing. ESIF brings together pertinent tools to integrate technologies in ways that weren't possible before.


When is the best time to charge your Prius Plug-in or RAV4 EV? Or any electric vehicle, for that matter? As more electric vehicles need charging, our power grids will experience an increase in demand. And the cost of using that electricity varies depending on the time of day.

To help consumers manage charging (and their wallet), Toyota participated in a pilot project in 2013 with Duke Energy, Leviton, Sumitomo Electric, and Energy Systems Network (ESN). Toyota is collaborating with these companies to validate smart charging system architecture. The pilot project tested emerging SAE standards for optimal charging from both a technical and customer point of view.

Five Duke Energy employees living near Indianapolis participated during the first half of 2013; five additional customers from the same region participated in the second half of the year.

The study was focused on ease of customer use. Customers want an easy and intuitive experience. Using an iPad app, customers could choose either the default charge settings, or could change parameters such as start time, completion time, battery state of charge, and the estimated price for the charge.

Both groups of participants had a high acceptance rate of default charge settings, demonstrating that the optimum charging system works effectively. Beyond the customer experience, benefits of charge control include delaying infrastructure upgrades, peak power management, and reduced losses from overworked transformers.

Now that the first part of the study is complete, the next step will focus on validating optimal charging control service with cloud assist to minimize power grid impact and charging cost, and to accommodate customer preferences for completion time. The University of California Irvine Smart Grid Demonstration is the perfect setup for the next step. The 20 Scion iQ EVs Toyota placed with the university are being used for this project.


With each step, a hydrogen-driven future comes closer and closer. The transition from gasoline to hydrogen as the predominant fuel that powers passenger vehicles has begun to ripple across the North American landscape. And, 50 years from now, industry historians might well look back and say that the epicenter of this seismic event was the Toyota U.S.A. Automobile Museum in Torrance, California.

That's where some 160 people—representing automakers, energy suppliers, academia, and state and local governments—gathered in April 2014 for a half-day summit. Their mission: to share insights and inspire action that will give rise to a viable network of stations where customers can refuel their hydrogen fuel cell vehicles safely, conveniently and affordably.

The California Governor's Office of Business and Economic Development (known more simply as GO-Biz) organized the event. Toyota provided the venue as well as its views on this emerging technology. Honda, Hyundai, General Motors and Mercedes also participated.

"When Honda and Toyota launched hybrids, there were a lot of naysayers," said Craig Scott, National Manager of the Advanced Technologies Group at Toyota Motor Sales (TMS). "Fuel cell is different. There are five or six brands bringing vehicles to market in a near simultaneous launch. I don't think there's ever been a time when something like this happened all at once."

But even though the vehicle technology is ready, fueling stations are not. Currently, just nine public hydrogen stations exist throughout the entire state of California, including one across the street from TMS headquarters. This station is unique, because it was the first station to be fed by an active industrial hydrogen pipeline. Danny Santana, Senior Planning Associate for the City of Torrance, shared his city's experiences getting this hydrogen station up and running, assuring his fellow officials that it can be done.

"When it was first proposed, there was a lot of concern," he said. "It was sited right next to several single family homes and we didn't have the codes to address it. Also, the residents were concerned about the word ‘hydrogen.' We held a town hall meeting and were able to overcome the Hindenburg fears. Everyone came together and we were able to turn (the approval process) around in five weeks."

"We shouldn't fear this technology," said Jim Martin, Hydrogen Retail Advisor for Shell Oil Company. "The codes have been developed. When we put a station in West Los Angeles, we were required to make the tanks bullet proof. Everyone is much more aware of what's needed now."

Within three years, it's anticipated there will be 68 stations in California. And the total could top 100 a few years after that, helped along by $200 million per year in state seed money. By comparison, gasoline-powered vehicles can now refuel at approximately 10,000 stations statewide.

Due in part to the high efficiency of this new technology, California won't need nearly that many hydrogen stations to make the fuel viable. But, as Hector De La Torre, a member of the California Air Resources Board (CARB), noted, "This is not pie in the sky. People will approach you to locate hydrogen stations in your towns. We need your help to make it happen. These cars are coming."

TMS and its affiliate Toyota Motor Credit Corporation (TMCC) are doing their part by entering into a group of financial agreements with FirstElement Fuel Inc. By supplementing grant money from the state, the partnership with FirstElement will support the long-term operation and maintenance expenses of new hydrogen refueling stations in California. FirstElement, as part of the agreement, will work to develop an integrated and reliable network of fueling stations across California in target market locations approved by Toyota and consistent with the California Fuel Cell Partnership Road Map.

"The first few years here in California will be a critical period for hydrogen fuel cell technology," said Bob Carter, Toyota's Senior Vice President of Automotive Operations. "We are showing the future owners of this amazing technology that Toyota is helping to ensure that hydrogen refueling will be available, no matter what car brand is on the hood."

Industrial gas supplier Linde LLC also plans to build a hydrogen fueling station on TMS-owned property located in San Ramon, California, adjacent to Toyota's San Francisco Regional Office and Parts Distribution Center. This location will serve local and regional customers, and will function as an important connector site between the Sacramento and San Joaquin Valleys and the San Francisco Bay Area.

"This is just a start, but it's the first step in getting to the point in the near future where this technology will move into the mainstream," said Carter.

Vehicle Target & Performance

Target: Successfully introduce new hybrid models in North America through FY2016 to reduce Toyota's product carbon footprint (on track)

While Toyota did not introduce any new hybrid models in North America during fiscal year 2014, sales of our existing Toyota and Lexus hybrids continued to do well (see Hybrids by the Numbers). We launched the 2015 Lexus NX 300h crossover in the fall of 2014. Toyota has plans to introduce additional hybrid models through fiscal year 2016.


Toyota offers several models that achieved best-in-class fuel economy ratings in 2014. Toyota Prius, the brand's first production gas-electric hybrid model, was named one of the "10 Best Green Cars" for 2014 by Kelley Blue Book's editors compiled a list of the most efficient vehicles available and then picked 10 standouts featuring a variety of price ranges and powertrains. The list also takes into account production methods and recyclability, and the editors try to seek vehicles appropriate for varying lifestyles.

Natural Resources Canada (NRCan) named six Toyota vehicles as best-in-class for fuel efficiency for the 2014 model year. That's more than any other auto manufacturer. The vehicles awarded by NRCan for the lowest estimated annual fuel use in their respective classes were:

  • Toyota Prius c (Compact car)
  • Toyota Prius (Mid-size car)
  • Toyota Prius v (Mid-size station wagon)
  • Toyota Tacoma (Small pickup truck)
  • Toyota Highlander Hybrid AWD LE Plus (Standard SUV)
  • Scion iQ (Mini-compact car)

This marked the 14th year in a row that a vehicle from the Prius Family was named to the list, including the Prius v leading the way in each of the three years it has been on the market. In fact, this year every Prius hybrid model won its respective category. It was also the fourth consecutive year the Tacoma pickup received the accolade.

Toyota achieved the required U.S. Corporate Average Fuel Economy (CAFE) standards and met the required GHG standards in both the United States and Canada.

Figure 13 Figure 14
Figure 15


Toyota pursues opportunities for reducing energy use and greenhouse gas (GHG) emissions in all areas of our operations: at manufacturing plants, office buildings and logistics centers, and during the transportation of vehicles and parts from our plants and distribution centers to the dealers. By investing in innovative technologies such as hybrid battery storage and LED lights, we strive to find efficiencies and opportunities for continuous improvement.

Toyota's approach to minimizing the carbon footprint of our activities in North America has three main parts: 1) reducing energy use, 2) increasing the use of renewable and alternative energy, and 3) meeting energy and GHG reduction targets.

Reducing Energy Use

Toyota's North American operations use over one billion kilowatt-hours of electricity each year; this is in addition to the natural gas, diesel and gasoline consumed. While most of this energy is used at manufacturing plants to build powertrains and vehicles, all of our facilities, down to the smallest office, carefully manage energy use. From simple lighting retrofits to more complicated adiabatic humidification projects, team members and associates across Toyota continue to find kaizens — opportunities for continuous improvement — that make our processes more energy efficient.


Toyota's engine plant in Alabama has switched to higher-efficiency motors and uses compressed air more efficiently. They also use LED lighting, solar lights and daylighting to reduce their purchased electricity. These projects — part of a $1 million investment into making Toyota Motor Manufacturing, Alabama more environmentally sustainable — result in annual savings of more than 3.3 million kWh and more than 2,000 metric tons of CO2.


Canadian Auto Parts Toyota, Inc. (CAPTIN), our aluminum wheel manufacturer in Delta, British Columbia, has reduced annual natural gas usage by about 220,000 cubic feet, thanks to a creative improvement to the chip melting process. Last fiscal year, CAPTIN melted about 19,000 metric tons of aluminum to produce 1.4 million wheels. When the chip melting process was first installed, aluminum chips entered a melt furnace and were then poured off into a holding furnace, where the metal was cleaned. The molten metal was then distributed to the casting process. Now, molten metal is transferred directly from the melt furnace to the casting process through a trough, which doesn't require any energy to operate.

Team members have drained and shut down two holding furnaces. Removing these furnaces eliminates natural gas usage and reduces GHG emissions by 336 metric tons per year. The amount of dross (solid impurities within the molten metal) has also been reduced by 4,500 kilograms (9,920 pounds) per month. This project took team members less than one year to conceive and implement, and is reducing the plant's operating costs by over $55,000 a year.


At our Canadian sales headquarters in Toronto, the salad bar in the cafeteria was identified as a high energy user. To reduce energy use, an electronic timer was installed that automatically turns the unit on at 6:30 a.m. and off at 1:30 p.m. on weekdays. This eliminates the need for someone to remember to turn it off before they leave. The return on investment was under 3.5 weeks and saves in excess of 3,400 kWh a year.


In the powertrain area of our assembly plant in Georgetown, Kentucky, the centralized coolant system for the V6 engine machining process requires constant circulation—even during non-production times—to prevent stagnation. Stagnation accelerates bacterial growth, which can ruin the coolant. This can lead to impacts to the life of the tools, unwanted odors, and potential impacts to part quality.

A high-efficiency, one-horsepower pump that can pump up to 4,000 gallons per hour replaced three 30-horsepower pumps. The small one-horsepower pump has a spray nozzle to aerate the coolant and prevent bacteria from growing.

Team members designed a piping modification that allows the smaller pump to circulate coolant between two side-by-side tanks. The modification means the coolant no longer has to be pumped through the entire header system to circulate. This kaizen has reduced annual energy use in the V6 coolant system by 670,000 kWh.

Figure 16


Toyota plants all over the world have implemented numerous improvements to the spot weld process to try to reduce, or even eliminate, weld spatter. The Weld Integrity Team at Toyota Motor Manufacturing, Kentucky (TMMK) took a fresh look at their welding process and found a way to improve it even further. In doing so, they cut electricity use by 21 percent.

Resistance welding electromechanically fastens metal parts together. In the Body Weld shop at TMMK, a combination of team members and more than 700 robotic welders make more than 4,200 spot welds per vehicle, transforming the steel parts into the strong body shell that is the foundation of the finished vehicle.

Weld spatter is produced when small particles of metal are expelled during the spot weld process. The spatter can create a ragged edge, or burr, which can cause lacerations to customers or team members and create visual defects on the vehicle body shell.

By atomizing the oil spray used during spot welding and optimizing weld parameters (such as voltage and current), team members were able to reduce annual electricity use by more than 1.6 million kWh — a 21 percent improvement — and oil use by 97 percent. Just as significant is the reduction in visual defects. This is the first time an atomizer has been used in a Toyota plant for welding. Over 40 percent of the robotic welders at TMMK are now spatterless.


The Lexus Eastern Area Office in Parsippany, New Jersey, was awarded Platinum LEED certification in 2014. This is Toyota's 12th facility to become LEED certified and is our first to be awarded Platinum, the highest level of certification granted by the U.S. Green Building Council.

The building was designed to maximize energy efficiency opportunities. Out of a minimum of 80 points needed to reach Platinum, Lexus Eastern earned 10 points for lighting and zoning controls. The HVAC system was designed with separate control zones for each solar exposure. All private offices and special occupancy spaces (such as conference rooms) have active controls capable of sensing space use and modulating the HVAC system in response to space demand. Each of the private offices and special occupancy spaces are provided with a separate thermostat control. The use of LED technology and occupancy sensors reduces lighting power by 35 percent.

Renewable energy certificates have been purchased to offset carbon emissions from 100 percent of the building's electricity.

In addition to these energy efficiency measures, Lexus Eastern also uses 40 percent less water (compared to a typical office space) by incorporating high-efficiency, low-flow plumbing fixtures. During construction and demolition, 83 percent of the waste was diverted from landfill. Click here for information on the site's recycling and compost program.

LEED (Leadership in Energy and Environmental Design) is a point-based system administered by the U.S. and Canadian Green Building Councils promoting a whole-building approach to sustainable construction and remodeling. LEED certification is based on meeting stringent evaluations in sustainable site development, energy efficiency, water savings, materials selection and indoor air quality.

For a full list of Toyota's LEED certified facilities, please see Performance.


Over the last several years, lighting upgrades have been completed in many Toyota facilities, including the Toronto head office just this past year. As a result of energy-efficient lighting and sound energy management, Toyota's Boston Parts Distribution Center and Regional Office was recognized as a 2014 ENERGY STAR Certified Building. The ENERGY STAR label is widely recognized as the symbol for superior energy performance. ENERGY STAR certified buildings and plants meet strict energy performance standards set by the U.S. Environmental Protection Agency. They use less energy, are less expensive to operate, and cause fewer greenhouse gas emissions than their peers.

Our sales offices recently evaluated ultra-efficient LED lights, which were installed along with integrated motion control sensors as part of a pilot project on one floor at Gramercy Plaza in southern California. The pilot project was successful: Electricity demand decreased by over 70 percent.

SmartWay Transport Partnership


In 2014, Toyota Transport, our in-house trucking carrier for completed vehicles, renewed its membership as a carrier in U.S. EPA's SmartWay® Transport Partnership, a market-driven partnership aimed at helping businesses move goods in the cleanest, most efficient way possible. According to EPA, SmartWay partners have eliminated 51.6 million metric tons of CO2 in the 10 years since the program began, resulting in savings of 120.7 million barrels of oil and $16.8 billion in fuel costs.

One of the main purposes of SmartWay is to improve fuel efficiency and reduce GHG emissions from the movement of goods. Between November 2012 and June 2013, Toyota Transport implemented kaizens that resulted in a 6.5 percent improvement in fuel efficiency for their truck fleet. That may not sound like much, but when you consider these trucks drive over 95,000 miles each year, it adds up: The 10 percent reduction in diesel consumption equates to annually eliminating 2,000 metric tons of CO2 emissions.

To achieve this improvement in fuel efficiency, Toyota Transport upgraded all 91 trucks in its fleet with selective catalytic reduction technology and equipped 84 trailers with battery-powered trailer adjustment motors. The older trailers had to idle during loading and unloading, in order to move the trailer tables up and down. The new equipment is hydraulic, and we no longer have to idle during loading and unloading. This eliminates 2.5 hours of engine idling per haul. With over 42,000 hauls last year, that's 105,000 hours of no idling.

In the beginning of 2014, we also began using a delivery specialist scorecard to track how our drivers were performing. We track their miles per gallon, as well as their attention to safety and other criteria. If a driver achieves better than 6 MPG, they receive a monetary reward. Since implementing the program, we have already had 25 drivers (20 percent of the driver population) achieve this milestone. This program will help us drive further improvements in our fuel efficiency.


Toyota's assembly plant in Princeton, Indiana, reduced the volume of air that has to be conditioned in the paint booths. Adequately conditioning the air is necessary for the paint to adhere to the vehicle. By reducing the air velocity in the booths and the downdraft in the spray zones, less air has to be conditioned for proper temperature and humidity.

This project reduced energy use by 125,000 MMBtus and GHG emissions by 8,900 metric tons. In addition to the energy and GHG savings, the improved paint transfer efficiency also led to reductions in paint usage and VOC emissions. This kaizen received the 2013 Region III Project of the Year Award from the Association of Energy Engineers (AEE).

SPOTLIGHT: A Decade of Energy Excellence with Energy Star

The city of Oakland, California, could be powered for an entire year based on the amount of energy reduced by Toyota's 14 North American manufacturing plants during the past decade. That's equal to almost 11 billion kilowatt hours of energy, enough to power nearly 400,000 average U.S. households for an entire year.

The continuous efforts of Toyota's 41,000 team members to reduce energy use in manufacturing have resulted in Toyota's 10th consecutive ENERGY STAR Partner of the Year — Sustained Excellence Award from the U.S. EPA for continued leadership in protecting the environment through superior energy efficiency. This is the most by any automaker.

During the 10-year period (2003-2013)3, total energy use was reduced by 22 percent per vehicle produced and total CO2 emissions were reduced by 19 percent per vehicle produced. Total cost savings during the decade are nearly $500 million.

"Through continuous improvement, good collaboration and sharing best practices, we continue to stay highly motivated to identify ways to minimize our impact to the environment," said Robin Haugen, General Manager of Toyota's plant and environmental engineering group. "Our team members demonstrate that when good ideas are shared, great things can happen, and we are grateful to receive our 10th consecutive ENERGY STAR Partner of the Year — Sustained Excellence Award from the U.S. Environmental Protection Agency."

In addition to the sustained excellence award, Toyota's North American plants also earned five ENERGY STAR Automotive Assembly Plant Awards and eight ENERGY STAR Challenge for Industry Awards.

3 The award was received April 29, 2014, and is based on performance during the previous year.

Figure 17

Using Renewable Energy

Renewable energy comes from naturally occurring sources that are not depleted as a result of consumption. Sunlight, wind, biomass and geothermal are common examples. Renewable energy can replace conventional fuels used for electricity generation and transportation.

There is strong public support for promoting renewable sources such as solar power and wind power. Climate change concerns, coupled with rising oil prices and government support are driving renewable energy legislation, incentives and commercialization.

Toyota has been expanding the use of renewable energy as a means of reducing our carbon footprint and our reliance on non-renewable energy sources. We are evaluating applications of solar, geothermal and stationary hydrogen fuel cells, as well as the purchase of green power either directly from a utility company or through renewable energy credits.

Toyota currently has 5,478 kilowatts of renewable energy capacity across North America. We began investing in renewable distributed generation in 2002, when we installed a photovoltaic (PV) system at our South Campus sales headquarters building in Torrance, California. Since then, we have installed several more PV systems at logistics sites and manufacturing plants.

Our California sales headquarters also has a 1.11 megawatt stationary fuel cell, which has about twice the capacity of the PV array installed in 2002. The fuel cell uses Proton Exchange Membrane (PEM) technology, the same technology used in Toyota's fuel cell vehicle. It is the first application of its kind and is the largest PEM fuel cell in the world.

The fuel cell performed very well during its first operating season (June to September 2013): over 481,000 kWh of electricity generated during 504 hours of operation, avoiding about 1,500 metric tons of CO2 emissions and delivering more than $55,000 in cost savings. The fuel cell uses hydrogen produced offsite from natural gas reformation. To offset GHG emissions from the reformation process, Toyota purchases landfill-generated renewable bio-gas.


Toyota Motor Manufacturing Canada Inc. (TMMC) has launched a $27 million Combined Heat and Power (CHP) initiative at their Cambridge plant that will help reduce demand on the local and provincial power grids. TMMC is also attaching a unique community service component to the development: A greenhouse will be constructed to tap the heat produced by the cogeneration project to produce vegetables for local nonprofit organizations. "This is a natural extension of the Giving Garden initiative our team members started several years ago" explained TMMC President Brian Krinock. "Now we'll be able to support them on a year-round basis."

When completed in 2015, the project will result in benefits to the environment and the community, as well as competitive cost savings for Toyota. Combined Heat and Power, or cogeneration, is the process in which a single fuel source, such as natural gas, is used to produce both electrical and thermal energy. The basic principle of cogeneration is that generating electricity produces heat; cogeneration equipment captures that heat and uses it to supply hot water, steam, space heating — even cooling. This makes the process highly efficient.

Mr. Krinock said, "This project offers significant benefits to many stakeholders. For the community and the environment, it will save enough energy each year to power more than 7,400 homes. For Toyota, the increased efficiency is substantial and will result in a major cost savings for our company, helping us stay competitive in the global manufacturing landscape."

TMMC worked closely with Cambridge and North Dumfries Hydro (CND), when planning this initiative. CND President and CEO Ian Miles said, "This is one of the largest energy-saving initiatives in Ontario, and we are very pleased to work with Toyota. Through this collaboration, our community will benefit from improved system reliability and avoided power generation costs. Toyota's leadership has been pivotal to the success of working towards meeting our mandated energy and demand reduction targets."


Toyota Motor Manufacturing, Mississippi (TMMMS), our assembly plant in Blue Springs, was accepted by the state's Department of Environmental Quality into the "enHance" program for the 2014 class as a Leader. This is a voluntary stewardship program that recognizes committed environmental leaders who accomplish goals beyond their legal requirements. Membership in the program is valid for three years, through 2016.

To achieve Leader status, TMMMS was required to implement two environmental improvement projects and a community service project. Both environmental improvement projects involved renewable energy:

  • A geothermal heat exchanger project supplies chilled water to a compressed air dryer to eliminate the chiller load in the winter months when the plant HVAC systems are not utilizing chilled water. The project is expected to reduce electricity usage by 1.5 million kWh per year.
  • A single axis solar cell array, installed at TMMMS in 2013, has a maximum output of 50 kilowatts. The power generated by the array is redirected back to New Albany Light, Gas & Water and is ultimately transferred back onto the grid for public use.

SPOTLIGHT: Landfill Gas Powers Kentucky Assembly Plant

The Kentucky plant that manufactures some of the greenest cars on the road, including Camry Hybrid and Avalon Hybrid, will soon be powered in part by green electricity.

Toyota Motor Manufacturing, Kentucky has teamed up with Waste Services of the Bluegrass to generate power from local landfill waste, marking the region's first business-to-business landfill gas to energy initiative. Toyota estimates the locally generated landfill gas will supply enough power each year for the production of 10,000 vehicles.

As solid waste naturally breaks down in a landfill, it creates methane gas. A network of wells at the landfill will collect this gas, which will be used to fuel generators for electricity. Underground transmission lines will then carry the electricity to Toyota's assembly plant, located a few miles south of the landfill.

The project is expected to be complete by early 2015. Once up and running, the system will generate one megawatt of electricity each hour the system is operating, or about what it takes to power approximately 800 homes, based on average consumption in the U.S.

Additionally, landfill greenhouse gas emissions will be cut by as much as 90 percent, which adds up to better air quality for the local community.

"At Toyota, we believe earth-friendly cars are just the beginning," said Jeff Klocke, Facilities and Environmental Manager. "Together with our community, we think we can contribute to a greener world."

Toyota's largest vehicle manufacturing plant in North America is Toyota Motor Manufacturing, Kentucky (TMMK). Over 10 million vehicles have rolled off Toyota's assembly line in Georgetown, where full-time employment is around 7,000 people and investment tops $5.9 billion. In addition to the Camry, America's best-selling car, TMMK assembles the Camry Hybrid, Avalon, Avalon Hybrid and Venza, and 4- and 6-cylinder engines. Beginning late 2015, the plant will begin production of the first U.S.-assembled Lexus, adding 50,000 vehicles to its current annual capacity of 500,000 (engine production capacity: 600,000).

Figure 18

Operations Targets & Performance

Energy Target: Reduce energy use 12% per vehicle by FY2016 (on track)

For the first time, we set a consolidated energy target that covers more than 85 North American facilities, including assembly and unit plants, parts and vehicle distribution centers, R&D centers, and offices. Our new target is to reduce energy use from stationary sources by 12 percent per vehicle produced by fiscal year 2016, from a 2010 baseline.

We are on track for meeting this target and have achieved a 10 percent reduction thus far.

Our target covers the purchase and use of electricity and natural gas. We convert all energy measurements to MMBtus for this target as a way to combine these energy sources into a single metric.

Figure 19

GHG Target: Reduce GHG emissions from stationary sources 12% per vehicle by FY2016 (on track)

For the first time, we set a consolidated GHG emissions target that covers more than 85 North American facilities, including assembly and unit plants, parts and vehicle distribution centers, R&D centers, and offices. Our new target is to reduce GHG emissions from stationary sources by 12 percent per vehicle produced by fiscal year 2016, from a 2010 baseline.

We are on track for meeting this target and have achieved a 9 percent reduction thus far.

Our target covers emissions from our use of electricity and natural gas. Our methodology for calculating GHG emissions from these sources is based on The GHG Protocol® developed by the World Resources Institute and World Business Council for Sustainable Development.

Figure 20


Each year we prepare an inventory of GHG emissions from Toyota's North American companies. This inventory measures GHG emissions from the consumption of electricity and natural gas at plants, logistics sites and owned and leased office space, as well as from fuel consumption by in-house trucking operations and third-party carriers, employee commuting and business travel. The methodology used to calculate emissions is based on The GHG Protocol® developed by the World Resources Institute and the World Business Council for Sustainable Development. The process of preparing this consolidated inventory has helped us better understand where GHG emissions occur and has facilitated information sharing across Toyota's North American companies.

Our Scope 3 emissions do not include emissions from the use of our sold vehicles. For information on our vehicle carbon footprint please see Fuel Economy & CO2 Performance.

Figure 21

Three of Toyota's North American manufacturing plants were required to report GHG emissions data under EPA's Greenhouse Gas Reporting Program. Individual plant data for our plants in Kentucky, Texas and Indiana are available on the U.S. Environmental Protection Agency's website through its online data publication tool.


We know that reducing our own carbon footprint isn't enough. Achieving a low carbon future requires collaboration with a wide range of stakeholders. That's why our outreach takes many forms. We provide funding, donate vehicles, and share our experience and know-how. We work with stakeholders ranging from government agencies to other companies and even individual communities.

Last year, we donated two Prius Plug—in Hybrids to the state of Vermont for use in their fleet. Other examples of how outreach helps us extend our commitment to a low carbon future include:

  • Working with First Element Fuel to develop hydrogen infrastructure for fuel cell vehicles.
  • Partnering with the National Renewable Energy Lab to test real-world interactions between the electricity grid, plug-in vehicle charging, solar power and home electronics.
  • Partnering with Nexus Energy to help Alabama residents lower their monthly utility bills while raising energy savings.
  • Helping Yellowstone National Park create a sustainable power source for the Lamar Buffalo Ranch.