In this article we’ll look at greenhouse (GHG) gas emissions in the logistics industry, and give you 4 innovative ways to lower your emissions and make your operations greener while saving the environment. Whether you’re a forwarding agent, a carrier or a trucking company dealing with industrial chemicals, or a logistics or supply chain manager in a chemical company, these tips will challenge you and your team to think about operational efficiency and the environment in a new light.
As our world is becoming more and more environmentally conscious, we, as an industry, can no longer insist and sustain the “old way” of doing business, and just claim that environmental pollution, caused by inefficient logistics operations, is an unfortunate side-effect of our métier. Instead we must stand up and be the leaders of a world in which the chemical industry, together with our logistics partners, is at the forefront of new, ethical and environmentally friendly business practices that go hand in hand with commercial and financial considerations.
Before we give you our top 4 suggestions, we want to give you some background information on the role of logistics in our society today and how it is related to one of the biggest environmental challenges: air pollution.
Logistics plays a fundamental role in the way our society is organized. Without logistics there is no physical movement of goods and hence no economy like the one we know today. If we are to keep our economies (and capital) moving, it is expected that goods can be moved from place A to place B in the most economically viable way. However, in global logistics, the cheapest way from A to B is not always the shortest. And since no equipment owner likes their tanks, containers or trucks to stand still (that would be wasted money), equipment is always expected to be moving, even if that means shipping a half empty container from Sydney to Hamburg or from Rotterdam to New York. This expectation, however, often does not take account of the ensuing consequences to the environment: greater emissions of hazardous air pollutants and increase of fuel consumption which are just two of the (many) catalysts of the greenhouse gas effect.
And it’s not only the environment that is impacted. The World Health Organization (WHO) estimates that around 7 million people die every year from exposure to fine particles in polluted air and 91% of the world’s population lives in places where air quality exceeds WHO guideline limits.
GHGs, or greenhouse gases, trap heat and radiation in the atmosphere of the earth and it’s our sun that emits this radiation that passes through the atmosphere with no resistance. Once the radiation reaches the surface of the earth, it is immediately absorbed and bounced back into the atmosphere where it gets trapped, causing the Earth to warm up. This effect is called the “greenhouse effect”.
Of all the gases in our atmosphere, carbon dioxide (CO2) is the most abundant greenhouse gas, which is why there is a lot of on-going international effort to lower carbon dioxide emission levels. The European Union, for example, has created the “ EU emissions trading system” (EU ETS), which works by setting a cap on the total amount of CO2 that can be emitted by installations covered by the system. The cap is reduced over time so that total emissions automatically fall.
On a country by country level, Denmark, Finland and Norway are the countries that are doing the most to reduce GHG emissions. Denmark has created policies ensuring that at least half of its energy consumption in 2030 comes from renewable energy and they have said that they want to be independent from fossil fuels by 2050. Finland has created a “green” agenda to reduce GHG emissions and protect forests and farmlands, while Norway is implementing the use of hydro power on a large scale, making its power system almost 100% renewable. By stark contrast, the USA, the world’s biggest polluter in terms of GHG emissions, has been cancelling many existing environmental protections since President Trump came to power in 2016, including the Paris Agreement, which they are set to leave in 2020.
Furthermore, it is industrial production that accounts for nearly 15% of the total worldwide emissions of CO2. The total growth of these emissions has been steadily rising by roughly 1.2% per year since 2016 and, according to the Netherlands Environmental Assessment Agency, there are no signs of this number dropping any time in the near future.
Well, if we rank industries according to end use, one of the biggest polluters is road transport. In fact, heavy trucks alone account for nearly 30 quadrillion Btu,or 16 million barrels of crude oil usage (with accompanying GHG emission levels), on a yearly basis.
But there is a paradox that is plaguing the logistics sector as a whole: It must accommodate a growing demand for transport services while at the same time achieving aggressive climate goals. Achieving that requires the improvement of transport (and carbon) efficiency.
Luckily there are several ways to achieve that. As promised, here are our 4 ways to make your logistics operations greener and help save the environment.
Vehicle technology plays a key role in reducing vehicle CO2 emissions. The European Commission has noted that “improvements in car technology have delivered the bulk of the CO2 reductions” to date. Based on Tables 4.1 and 4.2 of King Review, Part 1 (pp 45–46) using the International Energy Agency, California Air Resources Board, Institute of European Environmental Policy, and Ricardo Consulting as source, some measures to improve engine, vehicle and fuel efficiencyinclude electric motor assist, low rolling resistance tyres, downsized engine with turbo/supercharging and dual clutch transmission. All these measures can lead to between 2-15% of estimated fuel savings per measure.
Carbon offsetting means that companies can balance out their own carbon footprint by introducing clean energy technologies or buying carbon credits from emission trading schemes. It can also include planting trees that physically absorb CO2 from the air. Although this is an almost purely paperwork affair, it can be an effective way to offset your CO2 emissions.
Instead of haphazardly shipping containers around the world causing additional CO2 emissions, why not use a smart platform where shippers and owners can find each other in real time, monitor empty equipment and balance offer and demand? Thanks to the digital transformation and the use of API’s in the logistics industry, this is now possible. The use of these new technologies is geared by several logistics startups from around the world. It has led to new SaaS platforms aimed at revolutionizing a complete industry.
After determining where energy is being used, companies should identify which segments of those energy expenditures are essential to the creation of a product or to the transformation of a raw material or work in progress. If something is not essential or being wasted— e. g. due to generating more heat than necessary to complete a task—then they should consider whether that element could be eliminated or reduced by changing the design of the product or the way the transformation is executed. Through this analysis, they can identify and assess the true drivers of carbon emissions and opportunities for reduction.
For the logistics and chemical industry this means looking at emission levels from all angles: from inventory to office real estate to modes of transport and even the food that is served in the lunchroom.
The basic question to ask: “where in our operations can we cut on the emission of CO2 while staying profitable?”
As the climate challenges of our world continue to grow year after year, it has become more apparent that the responsibility of reducing CO2 emissions lies with the chemical and logistics industry. After all, global logistics is a big contributor to global pollution and the chemical Industry is one of the logistics industries’ biggest customers. If these two can work together to find viable solutions to lower their carbon footprint, the environment and millions of people will be grateful for their efforts.
We hope that this blog has at least inspired you to start thinking about what you or your company can do to make your logistics operations greener and help saving the environment.