Ocean Freight

Decarbonizing the Logistics Industry – Current Challenges & Best Practices by DB Schenker

09/02/2022 | Reading time: 5 minutes

According to the World Economic Forum, logistics and transport currently cause more than 5.5 % of all GHG emissions worldwide. Accordingly, the industry is under increased pressure to reduce its GHG emissions. Not only regulators, but even investors and consumers are calling on logistics companies to develop climate-friendly processes and operations.

So far, logistics activities have been difficult to decarbonize. In particular, the collection of climate-relevant data remains a major challenge for many companies to get the necessary overview of their climate impact and progress. How can this problem be solved? This is what we learned in the Choice Event #42 from Andrea Goeman, VP Global Sustainability at DB Schenker. Here you will find the most important content from her lecture.

The Logistics Industry’s Key Role in Climate Transformation

As the climate transformation of the economy becomes ever more urgent, there is also a growing awareness in the logistics and transportation industry about the need to achieve climate targets. And rightly so, because logistics plays a key role in the fight against climate change. The transport sector is one of the top 4 global emission sources. In addition, there are potentially particularly effective measures to save CO2 in this area. For example, if freight transport could make it to zero emissions, the emissions worldwide would be reduced by 10 %.

The entire industry has therefore recognized its responsibility and is now trying to implement effective measures quickly and jointly. In the same way, DB Schenker, as a leading provider of global logistics services, has set itself ambitious climate targets.

DB Schenker’s Climate Goals

DB Schenker has an overarching goal to achieve carbon neutrality by 2040. In order to meet this target, the first step is to reduce emissions until the year 2030 by 20 percent. The company focuses on reducing overall emissions in all modes of transport, i.e. air, sea, land and rail. However, there is a particular focus on road transport in Europe, as DB Schenker has many of its own assets here. This means that the company is investing heavily in electric and hydrogen trucks. In addition, DB Schenker intends to rely on 100% renewable energy for its buildings such as offices, warehouses and other logistics facilities.

Source: DB Schenker

Exit of Fossil Fuels of all Modes of Transport

As with any logistics company, the most important lever for climate transformation is the phase-out of fossil fuels for transportation. Since not all of the appropriate solutions and technologies are available today, a forward-looking and well thought-out timetable for a step-by-step implementation is essential. 

At DB Schenker, this means that the company is now focusing on avoiding fossil fuels where it is already possible today. This relates, for example, to energy purchasing as well as investments in new technologies such as hydrogen trucks, electric vehicles for both last mile delivery and long distance transportation. In the field of air and sea freight, the main issue today is to continuously increase the use of bio-fuels. Only later, namely from 2030, will it probably be possible to use new technologies such as e-fuel on a bigger scale.

Source: DB Schenker

How DB Schenker Tackles Scope 3

When it comes to taking a close look at all corporate emissions and then reducing them accordingly, the first step is to classify them into Scope 1, 2 and 3 according to the GHG Protocol. Scope 1 emissions are direct emissions from owned or controlled sources. In contrast, Scope 2 emissions are indirect emissions from the generation of purchased energy. Lastly, Scope 3 emissions are all indirect emissions from both upstream (purchased goods and services e.g. transportation services along the value chain) and downstream processes (distribution and consumption of goods and services) from the respective value chain position.

For logistics companies like DB Schenker, Scope 3 represents the biggest source of emissions and therefore also the biggest lever for reductions. To tackle these emissions, it is best to work closely with the suppliers – in this case, for example, the contracted transport companies. Here, it is not possible to make direct system changes, because you do not own vehicles or operate the system. DB Schenker therefore focuses primarily on insetting. This means that the company buys non-fossil fuels somewhere within the transportation system and allocates them to its actual fuel operations.

Practical Examples for 3 Modes of Transport

Finally, to better understand the different ways in which logistics can reduce CO2, let’s take a look at three examples, each for road, air and ocean transportation.

Road – Fully Electric Urban Vehicle Fleet Ambition

DB Schenker has pushed its ambition towards a fully electric urban vehicle fleet by pre-ordering 1500 zero electric Volta Trucks. They are to be used across European terminals, transporting goods from distribution hubs into city centers and urban environments.

Air – Sustainable Aviation Fuel (SAF)

Through the use of sustainable aviation fuel (SAF), the first steps toward decarbonizing air travel can be taken. SAF is obtained from biowaste, for example from used frying fat. The CO2 emitted by the engines is exclusively that which the plants have removed from the atmosphere during photosynthesis.

Ocean – Sustainable Marine Biofuel

DB Schenker has made an upfront investment in biofuel, so customers can choose their preferred volumes and trade lanes. The company allocates the amount of biofuel needed for the freight as well as an overallocation of biofuel through insetting to achieve a total emission reduction of 100% for the shipment.

Watch the whole presentation

We thank Andrea Goeman for her insights into the current challenges and best practices of decarbonizing the logistics industry. You can watch her presentation in its entirety here.

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