Working Toward a Net-Zero Logistics Sector

New guidance from Davos will help get freight back on track

Published: Tuesday, February 14, 2023 - 13:02

The World Economic Forum’s annual meeting last month saw the launch of new guidance to support the logistics industry on its journey to net-zero emissions. Davos attendees got a first glimpse into how companies can better understand and track their logistics emissions. Released by the Smart Freight Centre and the World Business Council for Sustainable Development, the guidance sets out to help businesses in implementing their decarbonization strategies.

This new publication highlights the usefulness and benefits of ISO 14083, a much-anticipated International Standard offering the first universal method for logistics emissions accounting. A game changer for climate action, the forthcoming standard is expected to support the industry globally in its carbon-reduction efforts.

The logistics and transport sector contributes just over one-third of global carbon dioxide (CO₂) emissions, making it the largest emitting sector in many developed countries. And that share keeps growing. In 2021, the transport sector accounted for 7.7 gigatonnes (Gt) of CO₂—an increase of 8 percent since Covid pandemic measures were lifted. Today, the world’s total annual CO₂ emissions are about 35 Gt.

A sector that contributes so significantly to global emissions can play a critical role in the transition to a decarbonized future, as well as adapting to the effects of climate change. To meet the world’s net-zero targets, transport must reduce its emissions by about 20 percent—to less than 6 Gt by 2030—in anticipation of the projected growth in demand for global trade.

It’s clear that the transport industry is intent on taking a leading role in the just, healthy, and resilient transition to a zero-carbon world. The opportunity to break the deadlock is evident, and there is little time to lose if we’re to meet our climate ambitions. Momentum is building with the publication of “End-to-End GHG Reporting of Logistics Operations,” and there’s a sense of optimism that it can be done.

Freight transportation plays an important role in our global economy.

Bridging the gaps in decarbonization

Freight transportation in particular plays an important role in our global economy. Billions of tons of cargo are transported around the world each year by trucks, planes, ships, and trains. According to researchers from the Massachusetts Institute of Technology Supply Chains Initiative, freight transportation contributes approximately 8 percent of global greenhouse gas emissions. Add warehousing operations and this figure inflates to 11 percent.

Carrying billions of tons of freight annually requires masses of energy, and a lot of CO₂ emissions. A “business as usual” approach would see CO₂ emissions from freight grow. Yet this scenario is unlikely: The sector is already tackling its carbon footprint, and standards play a key part in the process. Recent data reveal that several countries are reducing their carbon emissions. In fact, many freight forwarders and transport companies are targeting net zero by 2050 or even earlier.

Keeping track of the carbon emitted during the production and trade of goods and services, and taking stock of progress made in reducing these emissions, will be key. With this in mind, different approaches have already been developed to quantify the amount of CO₂ emissions in products and economic activities.

Understanding where emissions come from is the first step in managing them.

Cleaner pathways

So how is the freight sector keeping up? What is the role for International Standards? It all begins with efficiency and a desire to reduce environmental impacts. As with all things, understanding where emissions come from, and establishing a detailed baseline of CO2 emissions, is the first step in managing them.

Supply-chain-focused coalitions—covering multiple transport modes—are reducing complexity by enabling shippers to participate in decarbonization efforts. Examples of such collaborative effort already exist. Take, for instance, the Smart Freight Centre (SFC). To help multinationals monitor, report and eventually reduce their CO₂ emissions, the SFC created the Global Logistics Emissions Council (GLEC) Framework. More than a hundred multinationals use the framework to disclose their logistics emissions, and it’s one of the primary inputs for a new ISO standard.

Bold steps are needed to further reduce trade-related emissions.

Mission possible

For Sophie Punte, founder of the SFC, developing an ISO standard is an essential step to building the credibility of the GLEC methodology and promoting its global acceptance and consistent application by governments, investors, and multinationals. “The GLEC framework—and soon the ISO 14083 standard—allow for consistent calculation and reporting of global logistics emissions,” she says. “If coupled with blockchain technology, the sector could deliver a transparency revolution.”

ISO 14083 will scale up the collective efforts. It provides a unique tool for these players to drive climate action, create policies and road maps to reduce emissions, and track progress. Developed through a multi-stakeholder process, the ISO standard is expected to garner greater support from governments worldwide, which in turn will enhance alignment between corporate and government accounting, and reporting of logistics emissions.

And there’s more good news: ISO 14083 covers both passenger and freight transport. This will ensure a common industry guideline for calculating and reporting emissions from freight transportation and logistics. The standard’s annex will supplement the main sections with sector-specific guidelines on issues such as vessel categories, default emission intensity values, and worked calculation examples for inland waterway transport.

This is seen as an important opportunity for the shipping sector to ensure alignment between its existing practices and an International Standard that is expected to play a significant role in the fight to cap future GHG emissions from transport.

Bold steps are needed to further reduce trade-related emissions. Ultimately, providing reliable, benchmarked calculations with sufficient geographic coverage should help businesses move goods in the cleanest, most effective way possible by selecting fuel-efficient carriers and modes, reporting emissions, and identifying the most viable technologies and strategies for emissions reduction.

First published Jan. 20, 2023, on ISO News.

About The Author

Rick Gould

Rick Gould is a contributing writer for ISOfocus magazine.