From emissions cuts and remanufacturing to electrification and autonomy, the company is betting on flexibility to navigate an evolving low-carbon economy, and outlined measurable progress toward its 2030 environmental targets.

Joseph E. Creed, Caterpillar CEO (Image courtesy Caterpillar)

On-track goals include a 34% reduction in Scope 1 and 2 greenhouse gas emissions since 2018, but the report also reveals structural challenges for heavy equipment manufacturers adapting to a low-carbon economy.

The company, which recorded US$64.8 billion in 2024 revenue, estimates that more than 95% of its total emissions footprint still comes from customers鈥� use of sold products (Scope 3 emissions, which refer to indirect emissions from how a product is used by the customer after sale).

That long tail of emissions from diesel-powered machines, turbines and locomotives is typical of off-highway equipment makers, and Caterpillar鈥檚 strategy to reduce it hinges on fuel flexibility, digital tracking, product electrification, and lifecycle extension through remanufacturing.

鈥淏y leveraging these core technologies, we鈥檙e helping our customers navigate the evolving energy landscape with solutions that can lower greenhouse gas emissions, deliver energy flexibility and improve efficiency and productivity,鈥� said Joseph Creed, Caterpillar鈥檚 newly appointed CEO in a letter to shareholders.

Electrification in progress, but not universal

A demonstration of Cat鈥檚 906 electric wheeled loader (Image: Caterpillar)

Caterpillar says 100% of its new products launched in 2024 were more sustainable than the previous generation, meeting at least one of four criteria: improved efficiency, reduced waste, lower emissions, or enhanced design for remanufacturing.

But electrification remains limited to a few models.

Last year, Caterpillar made its electric Cat 301.9 mini excavator and Cat 906 small wheel loader available for lease through select dealers, while mid-sized machines like the 320 excavator and 950 GC wheel loader remain in field testing. The company is also piloting battery-electric trucks and larger systems 鈥� like the Cat 793 XE mining truck 鈥� as part of its Early Learner programme.

However, like the rest of the industry, Caterpillar does not yet offer a full battery-electric product line at scale, and many platforms remain in development.

The company noted, 鈥淓lectrifying industrial equipment presents more significant challenges than passenger vehicle electrification.

鈥淜ey considerations include extended battery life for entire workday operations and unique charging infrastructure needs in remote mining and construction sites.鈥�

Alternative fuels: flexibility over purity

Caterpillar 793 prototype battery-electric mining haul truck (Photo: Caterpillar)

A major development touted by the Sustainability Report: Caterpillar diesel engines are now capable of running on 100% hydrotreated vegetable oil (HVO).

It鈥檚 another step in the HVO revolution, as the OEM鈥檚 generator sets have been HVO-compatible for more than a decade.

The company also introduced dual-fuel engines, methanol-ready powertrains in marine applications, and high-hydrogen blends in turbine projects with Chevron, marking a busy year for alternative fuel development at Caterpillar.

However, these developments hinge on fuel availability and policy incentives beyond the OEM鈥檚 control.

Caterpillar shows new C13D flexible fuel engine at Bauma It will be a highlight at the company鈥檚 exhibit in Hall A4, Stand 336.

In its policy engagement, Caterpillar advocates for reforms to the federal permitting process and support for fuels such as hydrogen, HVO, and methanol, which are not built-out to support major commercial adoption. The company notes that permitting delays, infrastructure limitations, and uncertain regional fuel availability will remain key barriers to adoption.

But even though Caterpillar is engineering for flexibility, it stops short of setting a Scope 3 emissions reduction target, which is a notable absence compared to some of its European peers and competitors.

This is likely due to the complexity of predicting future fuel use, adoption rates, and equipment lifespans across global markets. As Caterpillar explains, most of its Scope 3 emissions come from 鈥減roducts and applications with high power output, high fuel consumption, high runtime and long product life鈥� 鈥� in some cases extending over multiple decades.

Estimating real-world emissions reductions in that environment remains difficult, especially when assuming all liquid fuel is still diesel, which Caterpillar did for its analysis.

This conservative assumption is part of why Caterpillar hasn鈥檛 committed to Scope 3 reductions: the company doesn鈥檛 yet have enough verified usage data to credibly project improvements.

This may also inform the OEM鈥檚 emphasis on telematics and digital tracking: eventually, better data for predictive analyses could replace the diesel-default baseline.

Remanufacturing/rebuilds, digitalisation, autonomy and safety

An overhead view of a Caterpillar unit surrounded by people and other machines. Image: Caterpillar

The company reported a 42% increase in sales from remanufactured offerings since 2018.

In 2024 alone, Caterpillar received 157-million lbs of end-of-life materials, and said its remanufactured components require up to 87% less process energy and emissions than new parts. With more than 57,000 Cat Certified Rebuilds completed since 1985, the strategy leans heavily on reuse, overhaul, and parts upgrades to reduce embedded carbon.

鈥淥ur strategy for profitable growth is delivering results,鈥� Creed wrote in the 2024 Annual Report, citing record adjusted profit per share and $24 billion in services revenue.  鈥淲e鈥檙e helping our customers navigate the evolving energy landscape with solutions that can lower greenhouse gas emissions, deliver energy flexibility and improve efficiency and productivity.鈥�

Caterpillar adds collision warning, payload options to medium wheeled loaders World鈥檚 largest OEM releases collision warning, payload options for wheeled loaders

For digitalisation, Caterpillar now has more than 1.5 million connected assets in its telematics ecosystem. VisionLink usage hit record levels in 2024, while features like Track Wear sensors, remote diagnostics, and predictive maintenance are pitched as both uptime tools and emissions reducers. The company said these systems reduce idle time, optimise fuel use, and avoid unnecessary site visits.

Autonomy is also advancing. Caterpillar mining trucks have now hauled 9.3-billion tonnes of material autonomously. In 2024, the company successfully demonstrated a self-driving Cat 777 off-highway truck at Luck Stone鈥檚 quarry in Virginia and is extending similar technologies to construction and aggregates segments.

On jobsite safety, Cat introduced Motion Inhibit systems that prevent machine movement if a hazard is detected. The company also launched the MindShift for Leaders training programme based on human and organisational performance principles; an approach that focuses on reducing system-level error.

Industry implications: incremental progress, not revolution

Caterpillar鈥檚 Kevin Coleman shows the Cat TH1255 at World of Concrete 2025. (Image: Mitchell Keller)

While Caterpillar鈥檚 reporting shows steady improvement in operational emissions and a meaningful push on remanufacturing, its approach reflects the practical limits of decarbonising high-power machinery.

Electrification remains piecemeal, and alternative fuels are promoted more for compatibility rather than rapid transition.

Caterpillar鈥檚 decision to frame fuel flexibility and lifecycle services as part of a profitable growth strategy, rather than as a direct response to environmental policy, may appeal to investors, but underscores a broader industry trend: decarbonisation in heavy equipment is being achieved more through engineering optionality and gradual retrofits than wholesale replacement.

As regulatory scrutiny and climate expectations intensify, especially around Scope 3 emissions, the pressure to set more explicit product-use emissions targets could grow.

For now, Caterpillar鈥檚 message is one of control: measured change that is deeply integrated into its services business and anchored by tractability, digitalisation and durability.

Caterpillar reports Q1 construction sales decline across all regions Caterpillar has reported a 19% year-on-year drop in construction equipment sales for Q1 2025, with declines across all regions