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Scope 1, 2, and 3 emissions, as according to the GHG Protocol corporate standards. They encompass all activities upstream and downstream of a reporting company.

Relevance to the Future of Logistics

Carbon Accounting & Tracking

Today, comprehensive accounting of Scope 1, 2 and 3 product emissions (direct, indirect, upstream and downstream, respectively) remains a challenge. Many businesses, including logistics organizations, do not account for these emissions at all. The ones that do may rely on various secondary sources of carbon calculation with generalized values and assumptions, and often fail to factor in emissions by second-tier and third-tier players. This makes it difficult for B2B and B2C customers to accurately compare and choose suppliers and service providers that meet their environmental standards, especially when evaluating on a product-level basis.

However, steps are being taken to address this customer need. For organizations that currently struggle with carbon accounting, we here at DHL offer carbon calculators, estimates, and externally verified reports. This enables companies to account for Scope 3 emissions from a single shipment across all trade lanes, including data from our third-party service providers.

In future, more granular data will be obtained. As sensor technology rapidly permeates the supply chain, it will be possible to accurately calculate and track at shipment level and even product level how much CO2e a truck or airplane emitted, as well as how much total energy was used to move a shipment through a facility. With this sensor data, logistics providers will not only provide companies with more accurate carbon footprint figures but also identify areas along the supply chain for decarbonization improvements.

Vehicle Electrification

Before COVID-19, freight transportation accounted for almost 10% of all global carbon emissions. While this stalled a bit during the pandemic due to travel restrictions, carbon emissions from freight transportation are projected to climb as the global economy recovers and e-commerce booms. To play an active part in the trend of Decarbonization, logistics organizations must focus on reducing emissions from vehicles in first-, middle-, and last-mile operations.

Electrification is an effective go-to solution across all transportation modes. In 2021, DHL Express ordered 12 electric airplanes from Israeli company Eviation to achieve emissions-free regional flights. In that same year, truck manufacturer Continental Automotive broke a world record with its electric delivery truck travelling almost 1,100 km (682 mi) on a single charge, while in early 2022, Ford released its E-Transit courier vans with a range of about 200 km (126 mi), 70% more than the average daily service range needed for such vehicles in the US. Furthermore, electric bicycles, tricycles, and scooters have been scaled in delivery operations around the world.

Although electrifying fleets is a powerful way for logistics industry players to reduce the carbon footprint, each transportation mode has different time horizons for viable electric alternatives. This means that for some modes, especially those carrying heavier loads and covering greater distances, it may make more sense for logistics leaders to investigate alternative fuels as near-term solutions to reduce, but not eliminate, carbon emissions in their supply chains. These can range from traditional biofuels like ethanol to renewable diesel, as well as sustainable aviation fuels (SAF) that act as ‘drop-in’ fuels to be mixed with traditional fossil jet fuel.

Carbon Capture

Whether offsetting CO2e emissions elsewhere through insetting or making the supply chain carbon negative, carbon capture technology helps logistics organizations meet sustainability goals. While today much attention is on newly constructed experimental facilities specifically designed to absorb CO2 from the air, logistics professionals can apply several existing and upcoming practical solutions to the supply chain.

American startup Remora, for example, has developed a truck tailpipe filter that is able to capture up to 80% of CO2 emitted, while Aramco is looking into adapting its own car-based carbon capture solution to ocean freighters. Solutions such as these often deliver a favorable return on investment (ROI) for interested logistics organizations as both the collected CO2 and the associated carbon credits are commodities that can be sold to recoup costs. In this way, carbon capture technology can provide lower-cost solutions for decarbonizing supply chains.

Optimizing Operations

Environmentally friendly solutions may be overlooked or rejected because of higher initial costs than more wasteful alternatives. Although many logistics organizations may want to replace whole truck fleets with electric models or cover an entire warehouse rooftop with solar panels, moves like this represent a significant investment. However, with customer demand for greater sustainability in the supply chain and with CO2e emissions becoming more commoditized and framed as operating costs, logistics players are finding ways to simultaneously reduce expenditure and waste.

For example, last-mile service providers can use German startup Greenplan’s route optimization software to reduce the distance vehicles travel. In doing so, they save on time, fuel, wear and tear, and maintenance costs, plus they achieve a reduction in CO2 emissions that is almost proportional to the travel saved. Similar principles can be applied when upgrading machinery to more efficient models – a unit of resource (electricity, gas, paper, etc.) is utilized more fully and with fewer emissions when manufacturing and using the new model.

Challenges

Electrified alternatives are not yet available for every vehicle and device so, until these gradually come to market, other carbon-reducing steps are needed.
A supportive ecosystem is essential for electrification and this can be costly; electric vehicles need chargers, different repair equipment, and perhaps staff retraining, along with sufficient space and infrastructure in the supply chain.
Data to calculate product carbon footprints (PCFs) and logistics emissions is often inconsistent, generalized, decentralized, and opaque across supply chains; this makes it difficult to assess and compare values.
Decarbonization solutions often require heavy upfront investment and potential implementation downtime.
As logistics providers invest in decarbonization solutions to meet demand, customers may see higher prices for products and services.

This trend should be PASSIVELY monitored, with applications still mostly being developed or explored.

Outlook

The pressure to be carbon neutral or even carbon negative in the logistics industry is stronger today than ever before. Given that supply chains lie at the heart of decarbonization conversations and agendas, it is imperative that logistics organizations make the necessary moves early. They should adapt to the changes to come, ensuring they deliver in an era of sustainability.

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