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Smart Freight Centre

Smart Freight Centre


  • ŸWhite paper sees carbon insetting as important lever to accelerate decarbonization of the transport sectorŸ
  • Effective action requires comprehensive collaboration between carriers, forwarders and shippersŸ
  • Development and acknowledgement of international accounting methods and guidelines are a prerequisite for successful implementation of insetting in logistics

Smart Freight Centre, a non-profit organization dedicated to sustainable freight, together with Deutsche Post DHL Group, is advocating a new pathway to freight decarbonization – carbon insetting. A jointly developed white paper, “Carbon Insets for the Logistics Sector”, recommends an innovative approach for allocating funds to decarbonization projects in the logistics industry. By unlocking this vital resource, a significant lever would be created to support the technological shift towards greener logistics. Ample solutions already exist, such as sustainable fuel, fleet renewal, engine retrofitting, and efficiency projects. These investments would not only be a highly efficient way to decarbonize the transport sector, but also result in structural improvements of the entire logistics supply chain in the long run.

"There is an opportunity to channel carbon offset funds related to transportation emissions to projects within the logistics sector - a practice known as carbon insetting," says Suzanne Greene, Smart Freight Centre's Expert Advisor and author of the white paper. “This paper lays the foundation for a system to accelerate freight decarbonization.” The concept of carbon insetting for the freight sector was developed through her work with the Massachusetts Institute of Technology's Sustainable Supply Chains initiative.

“To ensure that the logistics industry can continue to contribute successfully to the fight against climate change, we need a uniform and sector-specific standard for compensating for, and reducing, carbon emissions,” says Tim Scharwath, Member of the Board of Management of Deutsche Post DHL Group, CEO DHL Global Forwarding, Freight. “In the long-term, greater decarbonization of transport is key to driving positive change. Future-proofed logistics companies should think now about developing a stringent insetting strategy.”

Setting the scene: carbon emissions in the logistics sector

Freight transportation is currently responsible for 8% of global carbon emissions (11% if emissions from logistics sites are included). Recent studies by the International Transport Forum forecast these emissions to double by 2050 as demand is anticipated to grow threefold in this period. Climate action by companies is largely voluntary and lacks coordination and thus the pace of freight decarbonization is too slow. Some freight operators mitigate part of their transportation emissions by investing in carbon offsets, such as in forestry projects. In 2018, only 0.2% of the USD 268 million voluntary carbon offset market went into transport-related projects. Funds spent outside the transport sector are meaningful but will not help to advance the decarbonization of the global freight transportation network itself.

Proposed solution: Carbon Insetting

Carbon insetting, where offset funding is directed to address impacts inside the logistics supply chain, can be part of the solution to accelerate decarbonization of the transport sector.

The types of projects that could be applied at scale are numerous: the scaling of alternative, sustainable fuels, fleet renewal or engine retrofits can upgrade transportation networks with lower carbon technologies. Improving the efficiency of shipments leads to reduced fuel consumption and avoids excess emissions. All these approaches provide meaningful reductions in climate impact, as well as benefits for public health and safety and therefore do not only contribute to achieving the Paris Agreement, but also support the Sustainable Development Goals.

Putting the concept into practice: Lighthouse projects already ongoing

The white paper highlights specific examples that provide a blueprint for insets. For sustainable aviation fuels (SAF), an insetting solution with a book and claim mechanism for sustainable fuel certificates would remove barriers, such as the need for physical traceability of those fuels in a company’s supply chain, while providing the funding to incentivize further development of these fuels. This concept is similar to the GoodShipping program, which is advancing the use of biofuels in ocean freight. In addition, Deutsche Post DHL Group’s insetting program to foster sustainable road freight technologies, the Skicka Grönt (“Send Green”) program in Sweden is featured: customers participating in the program pay a fixed surcharge for every shipped parcel, which is then fully invested into biofuels and electric vehicles within for the Swedish transport network.

Call for action: Collaboration across the industry needed

While there is vast potential to apply carbon insets to the transportation sector, there is a need for an industry-wide initiative to further develop, advance and standardize the concept. MIT Sustainable Supply Chains, Smart Freight Centre and its Global Logistics Emissions Council (GLEC), which Deutsche Post DHL Group is a member of, want to move the needle on this issue. The first step is to develop methods and guidelines for carbon inset accounting and reporting, based on the GLEC Framework, that covers logistics emissions more broadly, and test this with companies. This is the first prerequisite for taking further steps to fully enable acceptance of carbon insetting as a viable means to reduce outsourced “scope 3” freight transport emissions in the logistics industry. The next step is for these mechanisms to be acknowledged by existing and future reporting and accounting standards. Carriers, forwarders and shippers need to work together to achieve this goal.

Download the paper here

Smart Freight Centre launches a new guidance to support stakeholders with the transition to zero emissions, with support from the Global Logistics Emissions Council (GLEC) and funded by the Dutch Ministry of Infrastructure and Water Management and the Dutch Enterprise Agency (RVO).

More governments and companies are setting climate targets. The end goal is zero-emission transport for all road transport, and in this transition phase road freight transportation with low emission fuels or electric vehicles (LEFV) is an important part of an effective strategy in the transition to net zero emissions. However, it is often unclear what ‘low’ or ‘zero’ emissions really means.

The Low Emission Fuels and Vehicles for Road Freight is an introductory guide to support the transition to zero emissions for different stakeholders who all have a role to play in this: freight transport operators (‘carriers’), freight transport buyers (‘shippers’), energy and infrastructure providers, vehicle and engine manufacturers (‘OEMs’) and policy makers. The aim is to create a common starting point for these stakeholders in order to make emission calculations more consistent and reliable, and to inform better and aligned decision-making regarding uptake of low emission fuels (natural gas, biofuels) and electric vehicles (electricity and hydrogen) for the road freight sector.

Key messages are:

Companies need to balance what they can do in the short term (e.g.biofuels and urban electric freight vehicles) with preparing for a full switch to electric/hydrogen for the entire trucking fleet.The true climate impact from fuels and vehicles can only be determined by calculating emissions from the full fuel/energy life cycle, or ‘well-to-wheel’ rather than fuel combustion only or ‘tank-to-wheel’.The total emissions of operation (TEO) should be considered alongside the total cost of operation (TCO) of electric freight vehicles so that companies can be assured that their investment makes economic and environmental sense.

"Knowing the right questions to ask is fundamental to good decision making, knowing which questions are the right ones is the tricky bit. The Low Emission Fuels and Vehicles for Road Freight introductory guide will to help operators and shippers understand the issues around the many low emission fuels that are coming onto the market. From simple definition of terms to total emission of ownership calculations, this guidance will help get the road freight sector on the right road to sustainability." - Colin Smith, co-author and Certification Manager of The Energy Saving Trust “New options for low emission fuels are being proposed and made available all the time.

As a next step beyond our initial Low Emission Fuels and Vehicles for Road Freight introductory guide, we intend to pull together the existing information about the emission performance of the most promising and widely available options. This will enable potential users to make informed decisions based on the latest credible evidence.” - Alan Lewis, co-author of the guide and Technical Development Director at Smart Freight Centre

Download the Executive Summary here.

Download the full guide here.

Photo credit: © Smart Freight Centre

The recently launched Sea Cargo Charter sets a new benchmark for responsible shipping, transparent climate reporting, and improved decision making in line with United Nations decarbonization targets. Smart Freight Centre is proud to have contributed, together with UMAS, to writing the Technical Guidance underpinning the Charter.

A group of the world’s largest energy, agriculture, mining, and commodity trading companies will for the first time assess and disclose the climate alignment of their shipping activities. United Nations agencies estimate the international shipping industry to carry around 80% of world trade flows and to be responsible for 2-3% of global greenhouse gas emissions annually.

Large industrial corporations are significant users of international shipping services. The shipping of crude oil, coal, iron ore, grain and other bulk commodities used worldwide make up over 80% of global seaborne trade. The Sea Cargo Charter is a global framework that allows for the integration of climate considerations into chartering decisions to favor climate-aligned maritime transport.

The Sea Cargo Charter establishes a common baseline to quantitatively assess and disclose whether shipping activities are aligned with adopted climate goals. The Sea Cargo Charter is consistent with the policies and ambitions adopted by member states of the International Maritime Organization (IMO), a specialized agency of the United Nations responsible for regulating shipping. This includes its ambition for greenhouse gas emissions from international shipping to peak as soon as possible and to reduce shipping’s total annual greenhouse gas emissions by at least 50% of 2008 levels by 2050, with a strong emphasis on zero emissions.

“A standard greenhouse gas emissions reporting process will simplify some of the complexities often associated with reporting. It will encourage a more transparent and consistent approach to tracking emissions, which will be a critical part of making shipping more sustainable,” says Jan Dieleman, President, Cargill Ocean Transportation and Chair of the Sea Cargo Charter drafting group.

“The shipping industry as a whole needs to adopt a transparent approach, advocated by the Sea Cargo Charter, in order to fully understand the sector’s overall greenhouse gas footprint and for us to collectively rise to the challenges faced,” says Rasmus Bach Nielsen, Global Head Fuel Decarbonisation, Trafigura.

“The Sea Cargo Charter is an important step in laying the foundations for a net-zero emissions shipping industry. Collaboration such as this, from across the sector, is vital to scale-up customer demand for low- or zero- emissions shipping. This same spirit of collaboration is also vital in the pursuit of the technological advances needed to unlock decarbonisation solutions, and in building industry support for regulation which can create an ambitious but level-playing field under which to invest. Building on this momentum we would like the IMO to use its 2023 strategy review to set the trajectory for the sector to move to net-zero emissions by 2050,” says Grahaeme Henderson, Global Head, Shell Shipping & Maritime.

The 15 Founding Signatories of the Sea Cargo Charter include Anglo American, ADM, Bunge, Cargill Ocean Transportation, COFCO International, Dow, Equinor, Gunvor Group, Klaveness Combination Carriers, Louis Dreyfus Company, Norden, Occidental, Shell, Torvald Klaveness, and Trafigura. All other responsible shippers are invited to join the initiative.

“The Sea Cargo Charter enables leaders from diverse industry sectors to use their influence to drive change and promote shipping’s green transition by choosing maritime transport that is aligned with agreed climate targets over that which is not,” says Johannah Christensen, Managing Director, Head of Projects & Programmes at international non-profit, Global Maritime Forum.

“The Sea Cargo Charter helps to increase transparency of greenhouse gas emissions from bulk shipping. Smart Freight Centre is proud to have contributed, together with UMAS, to writing the Technical Guidance underpinning the Charter. A next step is to expand maritime greenhouse gas reporting to full fuel cycle emissions, in line with the GLEC Framework, forthcoming ISO 14083 and GHG Protocol, – to support a prompt transition to alternative, cleaner energy sources.” says Sophie Punte, Executive Director, Smart Freight Centre.
The Sea Cargo Charter is intended to evolve over time as the IMO adjusts its policies and regulations and when further adverse environmental and social impacts are identified for inclusion. They also aim to support other initiatives developed to address climate, environment, and social risks in shipping, such as the Poseidon Principles.

The Sea Cargo Charter is applicable to bulk charterers with interest in the cargo on board; those who simply charter out the vessels they charter in; as well as the disponent owners and all charterers in a charterparty chain. They apply globally, to all chartering activities where a vessel or vessels fall under the purview of the IMO.

The development of the Sea Cargo Charter has been led by global shippers – Anglo American, Cargill Ocean Transportation, Dow, Norden, Total, Trafigura – and leading industry players – Euronav, Gorrissen Federspiel, Stena Bulk – with expert support provided by the Global Maritime Forum, Smart Freight Centre, University College London Energy Institute/UMAS, and Stephenson Harwood.

Read the full press release here

Photo credit: Marco Savastano, Unsplash 

Smart Freight Centre analyzed the state of logistics emissions disclosure to CDP, using the 2019 CDP disclosures of 2,604 companies. The key conclusion is that there is a lack of transparency due to under-disclosing of transport and logistics emissions by companies to CDP, with stark differences between modes and between industrial sectors that rely on freight transport.

Only 110 transport operators report their direct, or scope 1 emissions, amounting to less than 20% of global freight emissions. The majority of that comes from aviation, while the high-emitting road freight sector is barely represented. Looking at supply chain, or scope 3, emissions, just over 500 companies report these emissions, accounting for only 10% of global transport emissions. Furthermore, no carriers specifically address well-to-tank emissions, which highlights a gap in understanding of the emissions required to produce and distribute transportation fuels – an important element of the low-carbon transition, especially as alternative fuels like biodiesel, natural gas, or hydrogen increase their market shares.

There are many opportunities to increase transparency in emissions using the CDP questionnaire, which can also inform corporate climate goals, investment ratings, procurement programs, and circular economy strategies. This report provides guidance on best practices for disclosing freight transport emissions to CDP for scope 1, 2, and key categories of scope 3 for transportation in line with the GLEC Framework. The Global Logistics Emissions Council (GLEC) Framework, developed by Smart Freight Centre together with the GLEC partnership, is the global method to help companies to calculate and report freight transport emissions, including to CDP and the Science-Based Targets initiative.

Finally, five recommendations are provided to close the logistics emissions disclosure gap:

1. Invest in disclosing by road freight companies
2. Ask companies to disclose carbon intensities
3. Improve capturing of well-to-tank emissions from transportation fuels
4. Give guidance on how to provide meaningful comments in CDP reports
5. Encourage companies to look beyond disclosing

This additional guidance is entirely in line with the GLEC Framework.

"To achieve our global climate goals for freight transportation, we must face climate impacts head on and make carbon a KPI throughout our business operations. Disclosing carbon emissions in your operations and supply chain is a meaningful step all companies can take, which will in turn enable companies to set and reach their climate targets. We have the tools we need to manage carbon emissions, the GLEC Framework provides measurement method and CDP provides the disclosure platform." - Suzanne Greene, Expert Advisor, Smart Freight Centre.
"Measuring and transparently reporting climate impact is crucial for companies to ensure risk awareness, prepare for the future and respond to the growing market demands for disclosure. Over the last 20 years environmental disclosure has become a new business norm, with 8,400 companies covering over 50% of global market cap disclosing through CDP’s system in 2019. But of course, this varies by sector. The freight sector, which is such a crucial enabler of other business activity, needs to step up on climate disclosure”. - Dexter Galvin, Global Director of Corporations & Supply Chains, CDP.
Smart Freight Centre and CDP will continue to support companies on their journey to zero emissions freight through increased transparency and climate action.

Download the report here 

Smart Freight Centre is proud to be a partner of the IW-NET project. In collaboration with 25 other European companies, research institutions and public organizations we will work together towards emission reduction from inland waterway transportation (IWT).

Exploiting inland waterway transportation (IWT) is an essential ingredient to reach the European Commission's ambitious target for reducing greenhouse gas emissions from transportation in the upcoming decades. Over the next 36 months, the research project IW-NET will support the EC’s strategic efforts by enabling and providing innovation for the IWT landscape.

Creating the “Innovation-driven Collaborative European Inland Waterways Transport Network”

The consortium of 26 companies, research institutions and public organizations from Austria, Belgium, France, Germany, Greece, Italy, the Netherlands, Romania and Spain has teamed up to develop and prove technological solutions and improvements for inland waterway transport. The vision for the upcoming years is to create an “Innovation-driven Collaborative European Inland Waterways Transport Network” (IW-NET).

Digitalization, infrastructure improvements and innovative vessel technologies

“In order to sustainably shift more transport to inland waterways, we need to change more than just one parameter”, coordinator Nils Meyer-Larsen from the Institute of Shipping Economics and Logistics (ISL) in Bremen and Bremerhaven explains. “Therefore, we will follow a holistic approach which not only covers digitalization and multimodal integration in inland waterway transportation but provides solutions for improved infrastructure management as well as for the next generation of vessels. The heart of the project is the IW-NET Living Lab that will serve as a testbed for the technological approaches and solutions. Different application scenarios will comprise a diverse set of experiments along representative corridors in Germany, Belgium, France and Austria and will thereby create valuable insights on how to develop the future of European inland waterway transport.

Collaboration is key: Smart Freight Centre's role

The role of Smart Freight Centre (SFC) within the project will include transferring best practice in GHG emission calculation and associated data collection from the GLEC Framework, and developing it to specific context of the inland waterway sector. SFC will also support partners to assess the potential impacts of project measures in the short, medium and long terms. A key part of this will be taking the lead on compiling a roadmap of IWT infrastructure developments to 2030.

For more information on SFC's role in the IW-NET project, contact Alan Lewis, Technical Development Director. 

Photo credit: Unsplash 

This month Smart Freight Centre released the Smart Freight Procurement (SFP) Questionnaire. Buyers of freight and logistics services can use this tool during the tender process to assess suppliers for their commitment to decarbonization — and their ability to deliver on that commitment.The world’s freight emissions will double between now and 2050, from 2.9 billion to 6.2 billion tonnes CO2 according to the International Transport Forum. We need a strong market signal demanding low carbon freight. The SFP Questionnaire can assist buyers in sending this signal and making decarbonization matter.

“The SFP Questionnaire provides both insightful and practical elements that Heineken will leverage in upcoming Freight Source-to-Contract processes” confirms Mike Borst, Global Category Buyer Logistics at HEINEKEN. The SFP Questionnaire accompanies the Smart Freight Procurement Guidelines and helps the industry address a common challenge. Buyers are often motivated to include decarbonization efforts in their procurement decisions. But despite their expertise and in-house tools, they are unsure how to assess the performance of their logistics service providers (LSPs) and carriers in this area. As a result, LSPs and carriers are confronted with an increasing number of non-transparent, non-standardized questionnaires. These create an administrative burden that often has no positive impact on the procurement process.

To overcome this problem, Smart Freight Centre has provided a set of robust questions, designed to be meaningful for the buyer, while being clear and practical for the supplier.

“We receive many questions on our sustainability efforts which is a great signal. The bandwidth and complexity of questions can be a challenge. The SFP Questionnaire is a practical and actionable collection of questions on transport decarbonization and we encourage our customers to use it. This standardized approach will help to simplify RFI/Qs and underlines in the same time the commitment of all market players involved to focus on decarbonization measures.” states Kathrin Brost, Vice President and Global Head of GoGreen, DHL Global Forwarding.

To make this tool as useful as possible, Smart Freight Centre and the Global Logistics Emissions Council (GLEC) cooperated with more than a dozen shippers, LSPs and carriers. The result is a questionnaire that covers all freight modes and which companies of all sizes, worldwide, can use to procure sustainable logistics services.

“We are always happy to answer relevant and straightforward questions. The questions included in the SFP Questionnaire will enable our customers to ask exactly these kinds of questions,” says Simone Ziegler, Sustainability Manager at Hapag-Lloyd. “What’s more, Hapag-Lloyd is also planning to use some of these questions in our own procurement processes.

The SFP Questionnaire includes a manual that not only provides crucial insights and information to the buyer, it also includes clear and helpful guidance to assist the supplier in the response process.

“The topic of decarbonization is so complex that often it is hard for stakeholders to understand the larger context. The manual is a great addition to the SFP Questionnaire as it explains the key points of the topic in a practical manner and gives meaningful insights for the buyer as well as the supplier” concludes Lindsay Zingg, Senior Director Group Sustainability at DSV-Panalpina.

This project complements the Clean Cargo Sustainable Freight Procurement Framework and the development of the Clean Cargo Supplier Index.

The SFP Questionnaire is available for download here.

For information on other ongoing GLEC projects, go to: GLEC projects.

Decarbonization and the shipping sector

The focus on decarbonization in the shipping sector has increased significantly over the past couple of years. This has been driven by the IMO’s strategy to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008, while, at the same time, pursuing efforts towards phasing them out entirely. This has led to a number of recent initiatives, including the Getting to Zero Coalition led by the Global Maritime Forum. This was announced at September’s UN Climate Summit, and studies that set out the economic, legislative and technical requirements and implications of various options; among the most relevant studies are: World Bank, “Understanding the Economic Impacts of Greenhouse Gas Mitigation Policies on Shipping”; International Transport Forum, “Decarbonising Maritime Transport”; Energy Transitions Commission, “Reaching Zero Carbon Emissions from Shipping – Consultation Paper”; UMAS, “LNG as a Marine Fuel in the EU”.

LNG – a low carbon fuel?

“LNG as a Marine Fuel in the EU” is of particular relevance because, in the light of the increasing pressure to act, significant interest and subsequent investment have been generated in LNG (liquified natural gas) as a low carbon fuel.  However, the implications of the studies are that LNG, which is itself a fossil fuel in the most commonly available form, is likely to be at best a transition fuel to other lower or potentially zero-carbon fuels, with significant variability in the life-cycle GHG emission reductions that can be achieved through the use of LNG depending on feedstock and technology deployed.

The need for industry evidence

In conclusion there is a need for an unequivocal evidence base to be generated and agreed across the industry, within a relatively short timescale, so that coordinated investment in fuel supply, infrastructure and supportive policy can be implemented in time to meet the agreed 2050 goals.

Join our journey towards efficient and zero emissions freight and logistics here.

Photo by Andy li Unsplash

Tuesday, 08 October 2019 16:50

Smart Freight Centre

About SFC

SFC is the Smart Freight Centre, SFC was established in 2013 as a global non-profit organisation leading the way to a more efficient and environmentally sustainable global freight and logistics sector.


SFC’s objectives

SFC is dedicated to remove market barriers and leverage existing initiatives to catalyse the uptake of practical solutions throughout industry that improve fuel efficiency, reduce emissions and lower operating costs. SFC can play this role because it is a fit-for-purpose organisation with secured funding, independent from industry or government, and has a global network across stakeholder groups. SFC focuses on three approaches:

  • Define and drive business leadership and make a connection between the private sector, government and civil society to maximise cooperation and alignment (Smart Freight Leadership)
  • Create a universal and transparent way of calculating logistics emissions across the global supply chain through the Global Logistics Emissions Council (GLEC)
  • Catalyse the sector-wide adoption of proven and cost-effective technologies and solutions starting with road freight through SFC's Smart Trucks Platform.


SFC’s aspirations for Navigating a Changing Climate

Awareness of climate change issues is variable across SFC’s network. Many initial contacts at the forefront taking action in respect of greenhouse gas emissions reduction in the logistics sector but there is less awareness elsewhere. Participation in the Navigating a Changing Climate initiative enables SFC to work with like-minded organisations in the sector to set the agenda and lead the development of consistent, workable approaches to calculation and reporting of greenhouse gases from maritime and inland waterway freight transportation and from associated terminal operations. This is an essential step towards effective decision making and emission reduction strategy development and subsequent action.

Including the carbon footprint as a factor in business decisions (alongside costs, time and reliability, etc.) is becoming of greater importance for the implementation of environmental policies e.g. as a result of actions following on from the Paris agreements. Interested parties can download their tool for assessing the emission impacts of future infrastructure investment decisions here

Image credit: Johann Siemens Unsplash

Download your guidance on how to carbon audit logistics buildings  on our website , on the Global Logistics Emissions Council downloads section, published by Fraunhofer IML.

This guidance provides advice on how to carbon audit logistics buildings with view to logistics chain calculation (e.g. with reference to GLEC Framework and EcoTransIT World). A step-by-step description how to calculate greenhouse gas emissions of logistics sites (e.g. warehouse, distribution centers, terminals) is missing so far. The obtained carbon intensity values provide transparency to identify reasonable GHG reduction measures.

Photo by Marcin Jozwiak on Unsplash

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