Decarbonising the Logistics Economy – Difficult But Possible
Logistics has a vital role in the economy, and decarbonising the logistics economy is crucial in fighting climate change. Some concerns have to do with environmental improvements damaging logistics economic productivity.
What Does Decarbonisation Mean?
It signifies a decrease in carbon. It is the transformation to an economic system that sustainably reduces and balances carbon dioxide emissions (CO2) naturally present in the atmosphere. The long-term target is to undertake a CO2-free global economy.
Decarbonising an industry is challenging – difficult but possible. It makes available raw materials, goods and chemicals necessary for a transforming development, including the energy changeover.
There are two kinds of emissions:
- Direct emissions like combustion of fossil fuels, leaks and by-products.
- Indirect emissions, such as the purchase of electricity and heat.
Whether we diminish indirect emissions by way of clean energies, uncontrolled direct emissions from industry would still be responsible for at least 20% of GHG emissions globally. Heavy industry, producing products like steel, iron, cement, plastics or chemicals, is mostly carbon demanding; consequently, we must reduce its significant direct emissions of CO2.
It is Time to Act
It is time for the decarbonising of the logistics economy. The pandemic crisis is remarkably challenging for logistics, forcing industries to a fast-track adaptation whilst mounting pressures come from many instances to cope immediately with climate change problems to meet environmental goals.
Logistical activities will be challenging to diminish because there is currently a demanding reliance on fossil fuels. Companies, at times, disregard these claims for environment-friendly programs due to doubts they could be productive.
Recent studies show that economic and environmental policies are well-aligned. Executives ratified that leading companies involved in the sustainability projects also bring in economic benefits. Those who think climate change is a long-term problem to solve are wrong; the longer it takes to tackle them, the hardest it would be to get logistics onto a course of zero emissions, as demanded by an escalating number of governments worldwide.
Numerous companies are currently attempting to decarbonise the economy, aiming to be net-zero carbon by 2050, the global effort to driving down greenhouse gas (GHG) emissions. A significant number of those frontrunner companies point out that getting back their businesses from the pandemic does not affect their logistics decarbonisation attempts. It is an excellent time to evaluate the extent to which logistics and supply chain managers are participating in this effort.
We can recognise them on two criteria:
- By their advances in setting up a sustainable logistics strategy and currently measuring logistics emissions.
- By aligning definite-carbon-cutback objectives for their logistical activities. These leaders stand for ‚best practice’ (no more than 30% of the total companies) considered sustainable logistics’ leaders, building up decarbonise programs at a corporate level.
These companies’ measures to boost supply chain resilience can better their environmental sustainability efforts while reducing carbon emissions, saving money, and cutting costs; commercial and ecological objectives are closely aligned, giving companies substantial benefits.
Most Cost-Effective Ways of Decarbonising Logistics
- Transforming freight to uncontaminated transport methods.
- Getting better vehicle loading.
- Moving to alternative energies.
Increasing the energy efficiency of logistics operations is low. However, approaches such as driver’s training and vehicles’ aerodynamic features are recognised to get low carbon mitigation costs and briefer payback times.
Logistics emissions will better from dropping carbon used in electricity, excellent capability for on-site production of renewable electricity by using wind-power or solar panels and offering the possibility of carbon-negative warehousing compensating emissions from businesses’ freight-transport strategies and so supporting logistics procedures entirely to accomplish net zero.
Digitalisation and Collaboration — Potential Game-Changers
Logistics digitalisation will have a transforming effect in the coming years; mainly, leaders most likely to boost decarbonisation advancements are supply chain visibility progress in transport management systems, modernisations in-vehicle routings, and online application logistics platforms. 3D printing, on the other hand, was expected to have only a minor impact in the future.
There is currently a minor supply chain collaboration level amongst contending companies. For logistics to achieve net-zero emissions, businesses must be much more willing to share their assets. There are various obstacles to broaden cooperation, encompassing lack of visibility, management culture, competitors, and alarms around data privacy, possibly violating competition principle.
Decarbonising the logistics economy is possible. Less than half of companies seem to progress in developing and implementing sustainable logistics strategies; some others are still evading responsibility for decarbonisation when outsourcing their logistics services, without considering the importance of freight procurement motivating carriers to cut emissions. Environmental implementation turns into a more significant- competitive differentiator in logistics markets.