Three powerful forces are driving the move towards sustainability in the logistics sector: financial incentives, government regulations, and customer influence – all interlinked.
Carbon taxes and government regulations highlight the clear benefits of choosing low-carbon supply chains. By directly reducing emissions or by working with suppliers/carriers that are committed to doing so, organisations can significantly cut costs under new taxation frameworks like the European Union Emissions Trading System and Carbon Border Adjustment Mechanism, turning sustainable processes into a financial advantage.
Equally compelling is the role of customer demand. The growing desire for sustainable products pushes companies to scrutinise every aspect of their supply chain. The immense spending power of consumers can shape and steer corporate sustainability strategies and force government action, proving that the voice of the customer is a formidable force for positive change.
For companies eager to decarbonise, starting with ‘quick wins’ is a smart strategy. Embracing initiatives that deliver a swift return on investment or boost efficiency can make a real impact. Installing solar panels and modifying vehicle fleets to enhance aerodynamic efficiency, as well as adopting advanced driver training to teach economic and environmentally aware driving —and thereby reducing fuel consumption—are prime examples.
Additionally, making the most of available resources, such as shifting transport modes and adopting drop-in alternative fuels that don’t require vehicle modifications and are sustainably sourced, can drive immediate and meaningful progress. These steps not only cut emissions but also showcase a commitment to sustainability that resonates with stakeholders and inspires further action.
“Transparency and accountability are the bedrock of our journey towards net zero as a sector. While celebrating positive change is vital, we must guard against greenwashing, which undermines trust in the sustainability claims organisations make,” Sam Warren, Woodland Group’s Sustainability Manager and the first chair of the British International Freight Association’s Sustainable Logistics Policy Group, explained.
“It is crucial to identify the best current solutions based on available resources and continually reassess them. For instance, Hydrotreated Vegetable Oil is a short-term fix for decarbonising road transport as a drop-in solution, but it potentially diverts feedstocks from sustainable aviation fuel (SAF) production. While alternatives like electric vehicles and hydrogen show promise for road freight, viable options for airfreight outside of SAF are still lacking, underscoring the importance of ensuring feedstocks for SAF long term as demand increases with time.”
Long term vision
Sustainable fuels like SAF, bioLNG (bio-Liquified Natural Gas), and hydrogen are solutions that urgently need to be scaled up. SAF, a renewable jet fuel derived from feedstocks like waste foods and oils, currently costs three to five times more than standard jet fuel but can cut emissions by up to 90 percent.
bioLNG, a biofuel used in the maritime sector, is produced by converting organic waste into biogas, which is then liquified. This biofuel can cut emissions by up to 90 percent compared to Heavy Fuel Oil. Hydrogen, when used in fuel cells, powers vessels with electricity and heat, producing only water and oxygen as by-products—making it essentially a carbon-free fuel when using green hydrogen.
To bring these sustainable fuels to the forefront, the industry must channel more funding into their development. Initiatives like the Book and Claim model of insetting can play a crucial role in bridging the gap. This model allows companies to purchase sustainable fuel to use in supply chains, earning them credits to potentially claim the resulting emission reductions (dependent on new/developing guidelines). Their investment drives the expansion of these cleaner fuels.
“The journey isn’t without challenges. The limited availability of SAF and the necessity for more renewable energy and green hydrogen to achieve truly carbon-free status highlights the need for increased funding and support. While grey, blue, black, and brown hydrogen still depend on fossil fuels, pushing for green hydrogen will pave the way for a more sustainable future. By investing in these fuels now, we can make them more accessible and effective and further their ongoing development, accelerating our transition to low-carbon economies,” Warren explained.
“Decarbonising the logistics industry presents numerous challenges, yet the progress is undeniable. Government subsidies for renewable fuels, ongoing customer demand, and collaborative efforts among organisations are key drivers. With an unprecedented number of green projects underway, the sustainability landscape of our industry is evolving rapidly. However, while new technologies and theories continue to emerge, it is essential to leverage existing solutions to tackle climate change head-on. By acting now and remaining vigilant, we can steer towards a greener, more sustainable future.”
