How to accelerate the decarbonisation of the sector that drives the economy
We cannot fight climate change without decarbonising the logistics and transport sector, an industry that alone generates 11% of global greenhouse gas emissions. The backbone of most economic activities, the sector has seen tremendous expansion over the past 50 years, enabling rapid economic growth in a global sense and developing ever faster and more interconnected modes of freight and passenger mobility. However, this exponential growth is matched by the upward curve of emissions, which is steeper than in other sectors due to the sector’s heavy dependence on oil, which still provides more than 90% of the energy used. The increasing demand for faster and longer-haul transport and logistics solutions, ci-fra in a globalised society, leads logistics to be an industry whose carbon footprint is currently increasing. It is clear that decarbonisation efforts in other sectors will not bring the desired results without parallel concrete actions on logistics and transport networks.
From the crisis an opportunity to speed up
The escalation of global crises related to climate change, the pandemic and geopolitical tensions with consequent alterations in the energy market may seem like a setback for the low-carbon movement, which only a few years ago was rapidly gaining shape and momentum. In reality, the shock that the crises have given our society has been instrumental in revealing the vulnerability and importance of supply chains and how they are essential to the functioning of any social and economic structure. Progress and development come through the complex gears of logistics and go at its own speed. “One of the main drivers of the Italian and international economy, logistics is also one of the most climate-impacting sectors. This dual status determines its unequivocal responsibility for action and, at the same time, the enormous potential for change of an industry at the heart of economic development,” explained Francesco Taddei, Sales & Key Account Manager at Carbonsink The need to decarbonise logistics has become increasingly evident during the current crisis. The macro-trends are positive and are going – even if too slowly – in the right direction, both from a regulatory and voluntary point of view, responding to a need that involves companies, investors, consumers and civil society. Confirmation of this resumption of momentum also comes these days from the European Central Bank, which plans to gradually decarbonise its portfolio of corporate bonds, integrating climate change into monetary policy and aligning activities with the objectives of the Paris Agreement. If we look up and contemplate the big picture, we see that what had seemed to us to be a setback on the path towards low carbon is actually an interval, a technical pause that becomes a springboard for accelerating transversal and coordinated action, action that has already begun in an international sense.
“Carbonsink, a leading company in the definition of decarbonisation and climate risk management strategies, sums up the path to net zero in five steps, a path that starts by defining the climate strategy integrated into the core business”.
An industry on the move
Especially since the Paris Agreement in 2015 and the establishment of the UN’s 2030 Development Agenda, commitments by companies and countries to reduce their environmental impact and align with increasingly structured international frameworks to limit the rise in global temperatures to 1.5°C compared to pre-industrial levels have intensified. Key tools to achieve these goals are the Nationally Determined Contributions (NCDs) – voluntary national decarbonisation strategies that propose national roadmaps to reduce emissions across the board. While in 2015 only 8% of the proposed NCDs contained a concrete emission reduction target for the transport sector, this figure has doubled by 2021. The role of the transport sector in the context of carbon emissions was also made clear at the last international climate conference COP26 in Glasgow, where various stakeholders, including governments, the private sector, local governments, investors and financial institutions, formalised a collective commitment to achieve 100% zero emissions in the transport industry by 2040. The target is very ambitious and represents a strong signal of awareness and willingness to change in one of the currently most polluting sectors. Stakeholders in logistics are aligning themselves through coordinating entities such as the International Maritime Organisation (IMO) and the International Civil Aviation Organisation, which are acting as reference points for coordinated sector action. The European Union has also included the goal of zero net emissions in its 2050 strategy, with a 90% reduction target for the transport sector. Actions include increasing efficiency by exploiting digital technologies, accelerating the deployment of low-emission energies (advanced biofuels, electricity, hydrogen and synthetic renewable fuels), and accelerating the transition to zero net-emission vehicles and routes. Also in the context of the European Green Deal is the enlargement to the transport sector of the European carbon credit market (Ets), an emissions trading system that forces large polluting companies to buy carbon credits to offset their emissions. The enlargement of ETS to the transport sector is a further step to regulate emissions from a hard-to-abate industry, i.e. one whose transition today presents obvious challenges both in terms of technology and cost, and for which offsetting remains a key instrument on the path to decarbonisation.
The importance of climate strategy
Despite the progress and the many initiatives in the sector, complexities remain and logistics companies often struggle to feel part of the transition to a decarbonised economy, despite being the real driving force behind it. A clear roadmap, made up of concrete and implementable solutions along the logistics operational chain, therefore becomes essential to engage companies. Carbonsink, a leading consulting firm in Italy in the definition of net-zero decarbonisation and climate risk management strategies for companies, part of South Pole since 2022, summarises in five fundamental steps the company’s path towards net zero, a path that must necessarily begin with the definition of a climate strategy integrated with the core business.
- MEASURE – The first step in any climate strategy is measurement. In order to understand where you are, even compared to other companies in the same sector, the timely calculation of your carbon footprint is crucial and must include all direct and indirect emissions attributable to the company. Only when you have clarity about where you are can you define a goal and decide how to reach it.
- SET– Defining a reduction target based on science is the second step of this roadmap, necessary to identify reduction interventions that can be implemented in the short and long term.
- REDUCE – There are timely and implementable actions along the supply chain today to reduce a company’s emissions. Given the logistics sector’s heavy reliance on fossil fuels, one of the key actions to accelerate is the switch to renewable energy or electrical solutions. Other lower-cost actions range from improving ship design and aircraft aerodynamics, to the development of more efficient road vehicles, intelligent routing solutions and digital innovations.
- COMPENSATE – Non-reducible emissions can be offset through the purchase of certified carbon credits, generated by projects with a high environmental and social impact, which remove or avoid the emission of an equivalent amount of CO2 into the atmosphere. Offsetting is especially key for hard-to-abate sectors such as logistics, where too high costs and technology gaps do not currently allow all emissions to be reduced.
- COMMUNICATE – Communicating one’s commitment and results to stakeholders is fundamental to consolidating one’s reputation and establishing a relationship based on transparency with investors and consumers who are increasingly attentive to green issues. Reporting tools such as the Cdp rating are useful both for communicating information to investors on the company’s sustainability path, avoiding greenwashing, and as a tool for comparison with companies operating in the same sector, even internationally.
Together with logistics towards a net-zero future
The road to a net zero economy is long and complex, but the commitment of companies, governmental bodies, investors, researchers and civil society is tangible and is taking us in the right direction. By virtue of its interconnections with production sectors, logistics exemplifies the need for cross-sectoral and multi-sectoral climate action, where everyone moves forward organically and towards a common goal. Logistics supply chain choices are a key area where production sectors can act to reduce emissions. The climate actions that the logistics industry takes can therefore have strong positive repercussions along the economic chains in which it is embedded, confirming the enormous potential for change in a sector that can truly lead us towards a net-zero future.
“The road to a net zero economy is long and complex, but the commitment of companies, government bodies, investors, researchers and civil society is tangible and is taking us in the right direction.”
Carbon Neutral Logistics
To support Italian companies in the logistics sector in offsetting their carbon footprint, Carbonsink has developed the Carbon Neutral Logistics programme. The programme allows ALIS members and their customers to calculate their transport greenhouse gas emissions and balance them through carbon credits certified by international standards. This guarantees the reduction or removal of emissions and a concrete contribution to international projects for the protection of ecosystems, development of renewables and energy efficiency. “One of the needs identified by Carbonsink in our work with the logistics sector,” said Francesco Taddei, Sales & Key Account Manager, Carbonsink, “is for companies to know the impact of emissions related to their operations. We have thus created Carbon Neutral Logistics, a tool that responds to this need, available for ALIS members wishing to implement a robust climate strategy”.
The article was published in ALIS Magazine.
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