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Smart Freight Centre

Smart Freight Centre

 

 

Digitalization and transparency are critical enablers in order to understand your carbon footprint, take informed decisions and work towards achieving a zero-emission logistics sector. Securing access to reliable data from supply chains is therefore becoming more important.

To harmonize digitalization processes and increase transparency of logistics carbon footprints, Smart Freight Centre launched its latest guidance on Data Access and Exchange. This guidance provides industry insights on how to create visibility of logistics-related GHG emissions. It describes solutions to overcome common barriers to the necessary data exchange and introduces clear parameter overviews and associated data models for standardizing and automating logistics-related GHG data exchange across the transport chain.

The Data Access for Logistics Emissions Accounting and Reporting (“Data Access”) project aims to increase transparency of logistics emissions and decarbonization strategies through supporting shippers, LSPs, and carriers in accessing and exchanging GHG logistics emissions across their transport supply chain.

Building on the 5 insights gained in the first phase of the project (published in our Insights paper), today’s Guidance paper provides:

An introduction on how to overcome common barriers to exchanging GHG related information across your transport chain

Recognizing the need to move beyond reporting and to inform decision making, different use cases for calculating GHG logistics emissions are introduced, providing an understanding of required granularity of the data and associated calculations. In addition, it provides an indication of the respective responsibilities for capturing the data and solutions to overcome trust & data assurance issues. Finally, it covers initial concepts around costs & incentive topics to increase action across your supply chain and the industry.

Parameters overview and data model to harmonize and facilitate the automated exchange of GHG logistics emissions

Understanding and harmonizing the data requirements and associated processes will help your organization to advance and take more accurate business decisions in decarbonizing logistics. Focusing on the exchange on a transport chain element and shipment level, and therefore supporting highly detailed understanding of the GHG emissions at a single leg or of a single shipment, overview tables are provided that help users to understand which parameters are needed depending on three eventualities: (i) exchange of GHG emissions, i.e. after the GHG calculation is made, (ii) exchange of energy consumed, i.e. supplier provides the amount and type of energy consumed for the shipment or (part of the) supply chain considered and the calculation is made thereafter, (iii) the exchange of transport activity data, i.e. the supplier provides transport activity related information concerning the shipment or part of the supply chain to facilitate the calculation.

In addition, a first version of a data model for the automated exchange of GHG emissions for a Transport Chain Element is presented. The data model proposes constraints, requirements, units and data types for each parameter on a transport chain element level and acts as a base for standardized IT system integration of GHG emission data.

This guidance document has been developed in collaboration with the Global Logistics Emissions Council (GLEC) and selected partners through a series of workstream meetings from July to December 2021. The next step and third phase of this project will see the implementation of the guidance in practice and improve the proposed data model.

Smart Freight Centre and GLEC invite every organization to pilot and review the different elements of the guidance and participate on the further development.

At Smart Freight Centre, we offer a variety of support to help organizations on their journey to zero emission logistics. This introductory training is targeted at anyone who is directly or indirectly involved or interested in a company’s decarbonization journey. It provides knowledge and confidence to those team members who benefit from a better understanding of the importance of sustainable logistics.

The ‘Introduction to Sustainable Logistics’ training is aimed at creating awareness, introducing the first building blocks and providing a vital overview of sustainable logistics. It covers all the essentials that any logistics employee needs to know. The downloadable training modules allow you to complete the training at your preferred time.

What the course covers

This e-training consists of four modules which will help you to:

Understand the importance of taking action in sustainable logistics

Be familiar and up to date with relevant developments in the freight sector and learn how to build on existing efforts within your organization

Be equipped to use a step-by-step approach to manage sustainable logistics

Know how to apply the gained knowledge when improving your procurement & engagement strategies with your logistics contractors (carriers and Logistics Service Providers - LSPs) on sustainable logistics.

Amsterdam, 6 October 2021 - GLEC Program on Low Emission Fuels and Vehicles takes the first steps towards establishing new GHG emission factors for the various transition fuels and provides guidance on how to select the right solution for your organization.

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 zero emission vehicles 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 and what solution should be selected.

Our Low Emission Fuels and Vehicles program aims to assist shippers, LSPs and carriers on what LEFV solution to select for their application and market and how to report on those emissions. The work builds on the ‘Low Emission Fuels and Vehicles for Road Freight: Introductory guide’.

Today, we launch two new publications and a tool to assist organizations in adopting low and zero emission fuels in the road freight sector:

A desktop review of the GHG emission factors for various potential transition fuels, such as biofuels. The report is an initial step towards establishing more granular emission factors on the various transition fuels and is part of a wider effort to make GHG emission calculations of transition fuels more consistent and reliable.

A decision making matrix, which is a framework and associated tool designed to inform and guide organizations in understanding the emission reduction potential of the various transition fuels. The decision making matrix can act as a conversational tool to aid the decision making through the calculation of the Total Emissions of Ownership.

These insights conclude the second phase of the  Low Emission Fuels and Vehicles program, in which we presented and reviewed the various solutions available. In the next phase, we seek to work collaboratively in defining the wider sustainability criteria and establish a consultation program to define more granular emission factors for the various low and zero emission fuels for inclusion in the GLEC Framework.

Review of Emission Factors

The emission factors are highly dependent on the feedstock or electricity used for the production of the fuel. In the case of biofuels the distinction can be made between crop-based feedstock and waste-based feedstock to produce the fuel. For synfuels and efuels the carbon content of the electricity used largely determines the actual emission factors.This report provides a first indication of potential emission factors for calculating and reporting on the new fuels.Specific attention is warranted to (i) methane slip for gaseous fuels, (ii) the direct and indirect contribution to land use change for crop-based fuels, (iii) the LCA methodology adopted.

The Desktop Review is only an initial step towards understanding the emission factors for new fuels. Recommendations are made to carry out a further review and consultation of the emission factors, covering data gaps, market/technical readiness, review of methodologies and options for incorporation of land use change in the emission factor, identification and review of other sustainability criteria, and a review of certification mechanisms.

The report was supported by the Rijksdienst voor Ondernemend Nederland (RVO, Dutch Enterprise Agency).

Decision Making Matrix

The LEFV Decision Making Matrix is developed in consultation and collaboration with members and partners of European Technology Platform – ALICE and the Global Logistics Emission Council (GLEC), led by Smart Freight Centre.

The Decision Making Matrix provides a structure and methodology to consider the applicability, availability and feasibility of each solution. By responding to 10 questions included in the tool, organizations are able to understand and develop their strategic direction towards switching energy sources. A guidance to help answer the 10 questions is provided within the tool to further evaluate the Total Emissions of Ownership of the various solutions.

The tool is a simplification of the results of the 10 questions and provides a framework on which the different solutions are evaluated:

1. Applicability: determines the potential technologies and fuels which are ready for you, based on global technologies.

2. Availability: the implementation of new technologies requires the vehicle and fuel infrastructure to be available in your market or location.

3. Feasibility: the implementation decision requires assessing the total cost of ownership and the total emissions of ownership.

Get in contact

If your company is interested in joining phase 3 of the project, please get in contact with us:

Rik Arends:   

Rocío Espinosa:  

After our v 2.0 of the Global Logistics Emissions Council (GLEC) Framework was released in 2019, we have seen the expansion of GLEC Framework users across the globe. The GLEC Framework is the only globally recognized methodology for harmonized calculation and reporting of the logistics GHG footprint across the multi-modal supply chain, and more than 120 leading multinationals are now using the GLEC Framework. It can be implemented by shippers, carriers and logistics service providers, and covers all modes of transport and logistics sites.

We believe that increased transparency and collaboration will mobilize companies to reduce the climate and pollution impact arising from global freight transportation. Decarbonization is achievable together, no matter what language you speak.

Smart Freight Centre is continuing to support the local efforts of freight decarbonization in Mexico. We’re collaborating with the German Cooperative of Sustainable Development (GIZ) Mexico and with the support of national programs like Transporte Limpio, and the Secretariat of Environment and Natural Resources (SEMARNAT), developing training programs that will provide appropriate frameworks for calculating and reporting emissions.

As part of our work together, we are happy to announce the launch of the Spanish translation of the GLEC Framework – El Marco Operativo del GLEC.

“We’re really pleased to be able to spread the word even further about calculation, reporting and reduction of emissions from freight transportation thanks to the translation of the GLEC Framework and the associated e-training course into Spanish. We hope this opens up a whole new audience for this important topic. Thanks to all those who helped make it possible.” - Alan Lewis, Technical Director, Smart Freight Centre
For more information, contact 

 

Download here

Insights paper provides overview of status quo of logistics-related GHG data exchange across the supply chain and the necessary steps forward.

Over 120 multinationals are now using the GLEC Framework to calculate and report logistics emissions across the multi-modal supply chain. However, less than 20% of 2,600 surveyed companies that report to CDP disclose emissions arising from own or outsourced freight transportation and logistics. A key challenge for shippers and LSPs: gathering the necessary data (in their IT systems) from their partners across the transport chain.

The Data Access for Logistics Emissions Accounting and Reporting (“Data Access”) project aims to support shippers, LSPs, and carriers by improving data access, exchange, and IT integration. Today’s Insights paper summarizes the findings of the first project phase. By creating awareness of these insights, we seek to increase joint action and build momentum across the industry to improve the calculation and reporting of logistics emissions across the supply chain. Three key aspects need to be jointly tackled moving forward:

The complexity of numerous stakeholders, that are involved in every step of freight transportationThe complexity of various different IT systems that need to capture and exchange the dataThe complexity of the data collection itself, ensuring all necessary data is captured by each party in the right format

Through an extensive market research and numerous interviews with stakeholders, five insights on the status quo of GHG emission calculation and exchange were gathered that help to identify the necessary steps forward and highlight the need for a standardized data-exchange guidance and protocol:

Each party calculates and reports GHG emissions, but the exchange of values and the use of any exchanged values is limited. This results in duplicity of calculations, differences in assumptions and input values used, and differences in reported emissions.It is not just about the granularity of reporting but about using the right emission intensity granularity. Everyone is seeking to move beyond annual reporting to enable performance monitoring and facilitate decision making; however, the accuracy of the data is to a large extent determined by the granularity of the emission intensity factor used.The majority of systems in use by freight buyers use default and modeled data and cannot cope with primary data yet. Although it is planned by all parties to move towards primary data directly from the supply chain, this is not yet implemented nor does a system exist where companies can reliably exchange these values that can cope with all modes and the sheer number of stakeholders involved in a supply chain.Clear parameters and guidance are key to standardize any kind of exchange, independent of data type or use case. Due to the absence of clear guidance, companies are not capturing the necessary information in their systems and subsequently calculate with partial information.GLEC/ISO certified calculations by carriers or audited 3rd party intermediates will be needed to accept primary data. Primary data poses new challenges towards the verification and validation of the accuracy of the methodology and the input data; third party assurance will be required for nearly all organizations to accept and start utilizing this in formal reporting and decision making.

Download the report here 

The air transportation industry is responsible for a significant amount of greenhouse gas (GHG) emissions each year. Immediately before the COVID-19 crisis, the industry emitted approximately 3% of annual global GHG emissions - with that footprint projected to grow. It is therefore critical to reduce aviation GHG emissions as a part of efforts to meet global climate goals.

Use of sustainable aviation fuels (SAF), fuels with lower GHG emissions intensity than conventional aviation fuels, is one of the principal options currently available for reducing air transportation GHG emissions.

However, the cost of SAF - which can be several times the cost of conventional aviation fuels - has contributed to SAF’s limited use to date. Insetting, or the purchase of GHG emission reductions within an organization’s value chain, is a tool to spread the cost premium of SAF across the aviation value chain and increase the uptake of SAF.

Smart Freight Centre (SFC) and Massachusetts Institute of Technology’s Center for Transportation & Logistics (CTL) have developed guidelines for insetting in air transportation value chains to facilitate the use of more SAF and help decarbonize the sector.

The guidelines outline an approach to insetting that is flexible enough to drive the long-term value chain collaboration needed to bring SAF use to scale. At the same time, the guidelines include controls to provide entities along the SAF value chain confidence that emission reduction benefits from SAF are of legitimate origin, of a reasonable vintage, and are properly accounted for according to broadly accepted emission accounting methods.

More specifically, the guidelines provide air carriers, logistics service providers, freight shippers, business travelers, travel management companies, and fuel suppliers the details of an accounting and reporting system for SAF insets. There are two key elements to the guidelines:

1. Directions for SAF emissions accounting, based on the Global Logistics Emission Council (GLEC) Framework and aligned with the GHG Protocol.

2. Principles of a book and claim chain of custody system for the clear and transparent tracking and disclosure of the emission reduction benefits of SAF.

“Decarbonizing air transportation is critical to achieving an efficient and zero-emissions global logistics sector. Smart Freight Centre is proud to have collaborated with the CTL in developing these guidelines to scale the uptake of SAF and reduce aviation GHG emissions."
- Dan Smith, Senior Technical Manager, Smart Freight Centre

“Collaborating on projects like these that bring research results to bear on emerging supply chain challenges is one way we engage with industry to foster positive change. It’s exciting to see the publication of this framework and to see our models being put into practice in ways that can influence entire sectors.”

- Chris Caplice, Executive Director of MIT CTL
Download the new SAF accounting and insetting guidelines here. You can also visit the CTL website for more information on SFC and MIT’s work to facilitate collaboration across air transportation value chains, drive the investment necessary to bring SAF production to scale, and decarbonize the aviation sector.

 

Download the SAF guidelines here

 

 

What will be the new ISO standard about?

ISO 14083 will replace the existing European standard EN 16258. The intention is that the principles and methodology for freight transport will be based on, and consistent with, the GLEC Framework. This will emphasize its position as the common industry guideline for calculating and reporting emissions from freight transportation and logistics.

The annex will provide sector-specific guidelines on issues such as vessel categories, default emission intensity values and worked calculation examples for inland waterway transport, that supplement the provisions of the main standard. This is seen as an important opportunity for the sector to ensure alignment between existing sector practice and an international standard that is expected to play a significant role in the fight to cap future GHG emissions from transport. Read more about the ISO standard building on GLEC Framework here.

"Generally speaking, international standards are crucial tools. They give consumers and investors more confidence in the products, services and information that companies provide. Regulators and governments count on standards to help develop better and more consistent policy and regulations. Companies themselves save time when they can rely on standards, because they don’t have to reinvent the wheel."
- Alan Lewis, Technical Director, Smart Freight Centre


Any organizations that also wish to feed into the process can contact Smart Freight Centre or the European Inland Waterway Transport Platform for more information.

 

Photo credit: © Smart Freight Centre 2021 

A recent study from Smart Freight Centre (SFC) and the Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU) highlights the crucial role that small carriers play in achieving zero-emission road freight transport in Europe. The report finds that carriers need to strengthen their current commitments and multi-stakeholder collaborations will be essential.

The study, Decarbonizing the operations of small and medium-sized road carriers in Europe, builds on primary research with SME road carriers, supported by the global transport platform Transporeon, who provided anonymized data from over 800 carriers in 32 European countries.

European road freight transport remains one of the most important sectors to decarbonize, with heavy goods vehicles accounting for roughly 20% of transport-related CO2 emissions. In order to tackle GHG emissions from freight transport, governments, shippers, and logistics service providers (LSP’s) are setting ambitious decarbonization targets and strategies. The EU plans to achieve a 90% CO2 reduction in the transportation sector by 2050.

The study by SFC and KLU shows that there are important differences regarding the ability of carriers to decarbonize, depending on their fleet size. While the vast majority of carriers acknowledge the importance of decarbonizing the road freight sector, operators with larger fleets are in a better position to undertake concrete steps to bring down transport-related GHG emissions.

The majority of carriers with under 20 vehicles, on the other hand, see little or no business opportunity in decarbonizing their operations. The study finds that besides the associated costs, uncertainty about customer demand, emission reduction measures and new energy technologies are clear barriers for the carriers. As a result, many carriers lack basic emission calculation capabilities and available operational and technical fuel efficiency measures are often not implemented. This represents a large untapped potential for saving money as well as GHG emissions.

Moritz Tölke, author of the study, KLU alumni and Junior Technical Manager at Smart Freight Centre commented: “The aim of the research was to examine European road freight decarbonization from a carrier perspective. The results highlight the crucial role these carriers play, the current shortcomings and the resulting urgent need for all stakeholders to step up their engagement with this sector.”


The study outlines that the involvement and commitment of small carriers will be essential to reach decarbonization targets. More than half a million companies provide road haulage services for hire in Europe - 99% of them have fewer than 50 employees. As the amount of freight movement on European roads is projected to increase by almost 50% by 2050, crucial support and incentives are needed urgently from a number of stakeholders in the industry.

Prof. Alan McKinnon, co-author of the study, Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU) pointed out: “The discussion on road freight decarbonization in Europe is increasingly dominated by the choice of low carbon truck technology and energy sources – essentially a supply-side issue. This research shows that there will also be a major demand-side challenge in encouraging over half a million small carriers to switch to these new vehicles and, until then, to operate their current diesel-powered ones more energy-efficiently. KLU’s work on this subject recognises the need for managerial as well as technological change.”

Looking ahead, the study lists recommendations to multiple stakeholders in the industry on how to support and incentivise carriers on their journey towards a lower-emission freight industry.

Eszter Toth-Weedon, Senior Partnership Manager, Smart Freight Centre explained: “This report points out the necessity and value of collaboration. Road freight carriers, especially SMEs, need the support of freight buyers, OEMs and policy makers to ensure timely and efficient decarbonization. SFC will continue enabling these collaborations towards zero-emission freight together with key stakeholders in the Global Logistics Emissions Council (GLEC) community, including KLU and Transporeon.” Transporeon CEO Stephan Sieber added: “Decarbonization is already a decisive factor determining a business success. And the road freight market is no exception to this. We observe that more and more shippers are requiring their carriers to invest in measures limiting CO2 emissions. Transporeon supports such efforts with its solutions that allow to reduce the number of empty runs like e.g. with transport assignment best carrier, optimised route planning and real time visibility.”

Following a more general environmental progress report on European logistics by CSLS, the study is one of the first to focus on the decarbonization potential of SME carriers in Europe. It provides unique insights into current thinking in the road carrier market on the decarbonization issue. It examines emission calculation capabilities and the rate at which emission reduction measures are being implemented across a sample of more than 800 European carriers in 32 European countries, provided by Transporeon. It also highlights factors driving and constraining efforts to cut fuel consumption and emissions.

The data was supplemented by a more detailed online survey and a series of interviews with a smaller group of carriers to provide additional in-depth qualitative data. The research was carried out as part of Moritz Tölke’s master thesis at KLU.

The full report is available below.

Download 

A recent study from Smart Freight Centre (SFC) and the Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU) highlights the crucial role that small carriers play in achieving zero-emission road freight transport in Europe. The report finds that carriers need to strengthen their current commitments and multi-stakeholder collaborations will be essential.

The study, Decarbonizing the operations of small and medium-sized road carriers in Europe, builds on primary research with SME road carriers, supported by the global transport platform Transporeon, who provided anonymized data from over 800 carriers in 32 European countries.

European road freight transport remains one of the most important sectors to decarbonize, with heavy goods vehicles accounting for roughly 20% of transport-related CO2 emissions. In order to tackle GHG emissions from freight transport, governments, shippers, and logistics service providers (LSP’s) are setting ambitious decarbonization targets and strategies. The EU plans to achieve a 90% CO2 reduction in the transportation sector by 2050.

The study by SFC and KLU shows that there are important differences regarding the ability of carriers to decarbonize, depending on their fleet size. While the vast majority of carriers acknowledge the importance of decarbonizing the road freight sector, operators with larger fleets are in a better position to undertake concrete steps to bring down transport-related GHG emissions.

The majority of carriers with under 20 vehicles, on the other hand, see little or no business opportunity in decarbonizing their operations. The study finds that besides the associated costs, uncertainty about customer demand, emission reduction measures and new energy technologies are clear barriers for the carriers. As a result, many carriers lack basic emission calculation capabilities and available operational and technical fuel efficiency measures are often not implemented. This represents a large untapped potential for saving money as well as GHG emissions.

Moritz Tölke, author of the study, KLU alumni and Junior Technical Manager at Smart Freight Centre commented: “The aim of the research was to examine European road freight decarbonization from a carrier perspective. The results highlight the crucial role these carriers play, the current shortcomings and the resulting urgent need for all stakeholders to step up their engagement with this sector.”


The study outlines that the involvement and commitment of small carriers will be essential to reach decarbonization targets. More than half a million companies provide road haulage services for hire in Europe - 99% of them have fewer than 50 employees. As the amount of freight movement on European roads is projected to increase by almost 50% by 2050, crucial support and incentives are needed urgently from a number of stakeholders in the industry.

Prof. Alan McKinnon, co-author of the study, Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU) pointed out: “The discussion on road freight decarbonization in Europe is increasingly dominated by the choice of low carbon truck technology and energy sources – essentially a supply-side issue. This research shows that there will also be a major demand-side challenge in encouraging over half a million small carriers to switch to these new vehicles and, until then, to operate their current diesel-powered ones more energy-efficiently. KLU’s work on this subject recognises the need for managerial as well as technological change.”

Looking ahead, the study lists recommendations to multiple stakeholders in the industry on how to support and incentivise carriers on their journey towards a lower-emission freight industry.

Eszter Toth-Weedon, Senior Partnership Manager, Smart Freight Centre explained: “This report points out the necessity and value of collaboration. Road freight carriers, especially SMEs, need the support of freight buyers, OEMs and policy makers to ensure timely and efficient decarbonization. SFC will continue enabling these collaborations towards zero-emission freight together with key stakeholders in the Global Logistics Emissions Council (GLEC) community, including KLU and Transporeon.” Transporeon CEO Stephan Sieber added: “Decarbonization is already a decisive factor determining a business success. And the road freight market is no exception to this. We observe that more and more shippers are requiring their carriers to invest in measures limiting CO2 emissions. Transporeon supports such efforts with its solutions that allow to reduce the number of empty runs like e.g. with transport assignment best carrier, optimised route planning and real time visibility.”

Following a more general environmental progress report on European logistics by CSLS, the study is one of the first to focus on the decarbonization potential of SME carriers in Europe. It provides unique insights into current thinking in the road carrier market on the decarbonization issue. It examines emission calculation capabilities and the rate at which emission reduction measures are being implemented across a sample of more than 800 European carriers in 32 European countries, provided by Transporeon. It also highlights factors driving and constraining efforts to cut fuel consumption and emissions.

The data was supplemented by a more detailed online survey and a series of interviews with a smaller group of carriers to provide additional in-depth qualitative data. The research was carried out as part of Moritz Tölke’s master thesis at KLU.

The full report is available below.

Download 

  • 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

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