A roadmap for decarbonizing logistics?

It may appear that we live in an ever-more digital world, with an increasing share of commerce and communication conducted in the relatively eco-friendly online sphere.  But behind every online interaction and transaction is a much larger, more complex offline supply chain.  One that, historically at least, is most definitely not quite so eco-friendly

Every purchase we make, whether online or not, needs transporting to its place of use.  Goods need physically moving from their place of production to the homes, factories and sites where they are needed, whether by road, air, sea or rail.  And transport, by and large, means carbon emissions.  So how do we set about decarbonizing the logistical burden of freight transport?

First, we must accept the scale of the problem.  The freight industry is estimated to account for around 8% of all CO₂ released annually.[1]  Without swift intervention the problem is unlikely to diminish.  According to OECD data, CO₂ emissions from international freight are expected to reach 8,132 MT by 2050, almost four times higher than the 2,108 MT emitted in 2010.[2]

Getting what we want, when and where we want it, carries a steep price for the environment. 

In the shadow of COP26, industry leaders and lawmakers are beginning to come together to tackle the looming climate emergency.  This means that the freight industry, like all others, must be scrutinized for green efficiencies . . .  one sector at a time.

So, what are the easy wins, and the long battles ahead, that can help us sustain our standard of living while simultaneously leveling the environmental balance sheet of the resource-hungry global logistics network?

Long haul to clean up road freight

Transportation as a whole is one of the biggest contributors to global warming, responsible for more than one-fifth of all greenhouse gas emissions worldwide[3].  Within transportation, 22% of all pollutants are caused by just one activity – road haulage.[4]

A deeper dive into the figures is even more incriminating, with Heavy Good Vehicles (HGV) accounting for around a quarter of global road emissions despite representing a mere 1% of all vehicles.[5]  Road freight leaves a disproportionate carbon footprint, emitting around 100 times as much CO₂ per kilometer as a ship carrying equivalent cargo.[6]

The World Economic Forum (WEF) states that only a joint effort encompassing governments, vehicle makers and infrastructure designers can enable the haulage industry to make a defining shift toward affordable sustainability.

On current WEF evidence, battery electric vehicles (BEVs) are starting to make sound environmental sense.  Researchers examined three stages in a vehicle’s lifespan to compare the carbon footprint of BEVs with traditional internal combustion engine (ICE) models: vehicle production; fuel transfer (well-to-tank) versus battery production; and driving emissions..

Across all three major markets – the EU, US and China – combined pollutants throughout a vehicle’s lifespan are shown to be lower for BEVs than for average ICEs.  Further, since the overwhelming share of BEV pollutants comes via electricity generation, as the grid itself becomes increasingly decarbonized, so the sustainability gap between BEVs and ICEs will become ever more pronounced.  In fact, by 2030 the average BEV in the EU will emit under 100g/km of CO₂, less than half that of a typical ICE.[7]

Stepping away from the environmental argument, BEV truck purchase prices, a traditional deterrent for mass adoption until now, should continue to become more competitive.  BEV prices have dropped 85% over the last decade and are predicted to halve again by 2030, when electric trucks are predicted to become 12% cheaper than diesel equivalents to buy and run.

And the remaining ‘range anxiety’ concerns?  They won’t be around forever.  Within five years bigger batteries will allow 800 km trips for 40-ton trucks on a single charge.  Ultimately, the market will speak.

Legislation, and public policy in general, can help hasten, what is now the inevitable decline of fossil fuel-powered trucking.  The UK government, for example, has decreed that all trucks under 26 tons will need to be zero-emission by 2035, with heavier vehicles becoming carbon-free by 2040.[8]  Norway aims to get there first, investing in a comprehensive network of high-speed chargers in its desire to become the first nation with an entirely electrified transport network.[9]

COP26 saw 30 countries join the new Zero Emission Vehicle Transition Council (ZEVTC), signaling a joint push to explore various technology options for clean, green HGVs.[10]  Meanwhile a new fund, coordinated by the World Bank, was convened to help decarbonize road transport in the developing global south.[11]

Although it may be a while before electric trucks dominate the highways, truck manufacturers like Tesla[12], Volvo[13], Scania[14], and Kenworth[15] have all announced plans for electric models, meaning electric trucks are en-route to our roads.

Hydrogen energy might play its own, albeit smaller, part in the future of road haulage, with high-capacity hydrogen fuel cells potentially complementing the long-distance needs of trucking networks.

It’s little surprise, then, that governments worldwide are directing resources into green hydrogen, with the UK, Germany, Japan and Australia all unveiling hydrogen strategies in recent years.  The Netherlands intends to have 500 MW of green electrolyzers running by 2025, and Portugal is planning a new solar-powered plant to produce green hydrogen by 2023.[16]

In Europe, epicenter of much of the hydrogen buzz, the European Commission (EC) has identified green hydrogen as a key ingredient for becoming carbon neutral by 2050.

The EC’s phased strategy includes:

• installing at least 6 GW of renewable hydrogen electrolyzers in the EU by 2024, producing up to one million tons of renewable hydrogen
• installing at least 40 GW of electrolyzers, producing up to ten million tons of renewable hydrogen, between 2025 and 2030
• deploying hydrogen technologies at large scale across all ‘hard-to-decarbonize’ sectors between 2030 and 2050[17]

Anticipating hydrogen’s potential, the EC has launched a new partnership called the European Clean Hydrogen Alliance (ECHA).  The ECHA unites national and regional leaders, banks and industry heads to secure an investment pipeline for scaling-up green hydrogen production.

Momentum is firmly behind hydrogen from a cost perspective. 

The European Bank for Reconstruction and Development (ERBD) notes that green hydrogen currently costs around US$ 3-6 per kilogram but could fall to no more than US$ 1.50 per kilogram by 2050 – comparable with natural gas.[18]

Change cannot happen overnight; more needs to be done to prepare for widespread carbon-free road haulage.  Take infrastructure.  At present, the rollout of charging networks differs from country to country, even though long-haul BEV lorry drivers would need access to charging facilities on both sides of a border.  To combat these disparities and maximize the opportunity, the WEF is calling for common software protocols and universal connectors for both vehicles and chargers.^[19]

Still, the road freight industry may prove more nimble to change than the global shipping industry, where vessels are built to last for decades, and creative thinking is required when it comes to carbon cutting.

Shipping plots course for cleaner future

The shipping industry accounts for around 2.5% of global pollution – in real terms, approximately 940 million tons of CO₂ annually.  It is both fundamental to our societies (90% of goods are at some point moved via sea) and tricky to electrify.[20]  If left to follow its current trajectory, and as trade volumes continue to grow, shipping could represent around one-tenth of all greenhouse gas emissions by 2050.[21]  Instead, by that date the International Maritime Organization (IMO) is aiming to cut the industry’s CO₂ output by 50%.[22]

As ever, the path to this goal lies at the nexus of technology and policy.

The Global Maritime Forum’s Getting To Zero Coalition, an alliance of more than 150 private  companies spanning the maritime, infrastructure, energy and finance sectors, aims to have zero-emission deep sea vessels commercially viable by 2030.[23]

Achieving this will mean not only changes to vessels but also (as with road freight) changes to the future fuel supply chain to make zero emission energy economically competitive.  As such, the Getting to Zero Coalition advocates for greater government and private sector investment in zero-carbon energy projects, particularly within developing countries, where major renewable energy sources remain untapped.

The WEF, meanwhile, is calling for new policies incentivizing “shipowners, operators and fuel providers in a direction that drives investments in new fuels and technology to enable a zero-emission fleet”.[24]  Such measures include setting an adequate price on CO₂ emissions based on a full life-cycle analysis to discourage use of readily available fossil fuels.

Legislators worldwide are beginning to coordinate efforts.

At COP26 22 countries, including the UK and USA, signed the Clydebank Declaration, an agreement to establish six ‘green shipping corridors’ (routes between two or more ports suitable for zero emission ships) globally by mid-decade.[25]

Technology can help seal the economic case, but alternative fuels and energy storage systems for seagoing vessels linger at various stages of development and are proving slow to roll out.[26]

Liquified natural gas-powered ships are gradually beginning to appear in fleets, but at just 30% less carbon intensive than Heavy Fuel Oil (HFO), liquified natural gas is regarded more as a transition fuel on the way to 2050 targets, rather than a long-term solution themselves.[27]

Green hydrogen and ammonia are cleaner but await further refinement to make them truly viable at cargo scale.  Both have emissions far lower energy densities than HFOs, entailing more refueling stops or compromised cargo space.  Hydrogen also needs storing at ultra-low temperatures.

It is early days.  Just last year Norwegian firm Norled took delivery of the world’s first hydrogen-powered passenger ferry, launched to sail the country’s fjords.[28]

Regardless of these tentative experiments, not enough hydrogen and ammonia is currently produced to meet the requirements of the global shipping industry.  Partly this is due to their high production costs.  Inevitably, as cheap renewable power becomes more abundant, prices should decline, and supplies increase to satisfy an eager new market. 

In a recent survey by Deloitte and Shell, 65% of respondents in the shipping sector believed green hydrogen would comprise a significant part of the industry’s future fuel mix, with 55% expecting the same of green ammonia.[29]

Next generation fuel cells will one day offer new ways to store energy from green fuels such as hydrogen and ammonia in a safe, affordable and more compact way.  These are by some estimates another five to 10 years away from fruition but could prove real game-changers as the technology evolves.

Meanwhile, Japanese shipping company NYK Line is striving to demonstrate the case for an electric-powered maritime industry. [30]

As far back as 2012, its vessel NYK Apollo, which is fitted with a 6.6 KV alternative maritime power container unit, became the nation’s first to connect with the Port of Oakland’s shoreside electric power supply when docked, eliminating the air pollution caused by onboard generators during its period in the port.[31]

Now, NYK has signed a deal with another Japanese company, PowerX, to develop and test Power ARK energy transfer vessels and marine energy storage solutions (ESS).

PowerX is currently constructing its automated Power ARK trimaran for transporting offshore wind energy from wind farms in Japan’s deep coastal waters.  After testing, the trimaran should enter operation in 2025 and carry a cargo of 100 grid batteries – enough energy to power 210,000 homes.[32]

PowerX hopes the first-of-fleet vessel, capable of traveling up to 300 Km on electrical power only, will prove key to unlocking intercontinental clean power transmission and help hasten the shift

to zero-emission vessels and automation.

Expanding on the partnership arrangement, NYK Senior Managing Executive Officer Tomoyuki Koyama described marine batteries as “key to solving the obstacles facing renewable energy adoption and expansion”.[33]

Such radical thinking could help take the environmental sting out of the air freight industry, too.

Air freight: Sustainable fuels gain altitude

The aviation industry, as a whole, accounts for around 2.5% of worldwide carbon emissions and contributes around a billion tons of CO₂ to the atmosphere every year.[34]  Yet it is a vital component of the global logistics network, transporting 35% of all world trade value in just 1% of its volume.[35] 

New research suggests aviation will be the direct cause of 0.1^oC of global warming by 2050.  However, the industry could intervene and halt this rise entirely if a way could be found to switch to a 90% carbon-neutral fuel mix by that date.[36]

Alternative propulsion systems such as electric or hydrogen powered aircraft are currently deemed at a low state of technological readiness, particularly at the cargo weights and distances required by the logistics industry.[37]  The question of how to decarbonize air freight therefore becomes an issue of finding a clean fuel suitable for the high demands of aviation.

Sustainable aviation fuels (SAFs) can cut lifetime aviation emissions by up to 80% and are compatible as a blended fuel with existing aircraft.  However, at up to eight times more expensive than conventional fuels, SAFs currently comprise just 1% of the 300 million tons of aviation fuels consumed annually.[38] 

Something needs to spur change, with the International Energy Agency’s (IEA) Sustainable Development Scenario giving biofuels around a 10% share of aviation fuel by 2030, and almost 20% by 2040.[39]

Current SAFs are produced from organic materials such as waste oils from plants and animals.  Scientists hope to one day create synthetic SAFs using CO₂ expelled during other industrial processes and hydrogen harvested from low-emission sources.[40]

Other SAFs recently approved for study by the American Society for Testing and Materials (the SAF certification authority) include a synthetic paraffinic kerosene (SPK), for up to 50% fuel blends, and a synthetic iso-paraffinic kerosene (SIP), for up to 10% blends.[41]

If research into biofuels for aviation still has a long way to go, political will at least seems to be massing behind the movement.  At COP26, 23 countries, including the US, Japan and the UK, formed an International Aviation Climate Ambition Coalition to help the world hit its net-zero 2050 goal by cutting aviation emissions and encouraging more fuel-efficient planes.[42]

The coalition, recognizing that air cargo is set to increase significantly in the next 30 years, aims to ensure the aviation industry makes sustainability a cornerstone of its recovery from COVID.  In a multi-pronged approach, member countries pledged to support the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and to promote the further development of SAFs to cut life-cycle emissions.

The UK government in 2020 unveiled its own Jet Zero Council, uniting industry bosses and ministers in a bid to decarbonize aviation.  The government’s ‘green industrial revolution’ also included a £15 million (US$ 20.2 million) competition to back SAF production in the UK; a consultation on the compulsory blending of green fuels into kerosene from 2025; and a further £15 million (US$ 20.2 million) for a 12-month study into zero-emission aircraft capable of take-off by 2030.[43] 

Could green hydrogen, either from direct combustion or via a fuel cell, provide an alternative propulsion technology for the air industry?  It’s a cautious ‘yes’, but these are very early days.

Significantly, in a weight-sensitive industry such as aviation, hydrogen contains more than a hundred times the energy (per unit of mass) than lithium-ion batteries, and more than three times the energy of regular jet fuel.^[44]

In 2020, a six-seater Piper M-Class adapted by ZeroAvia to run on hydrogen energy undertook its maiden flight from Cranfield airport in the UK, recording the country’s first commercial-scale hydrogen plane take-off.  A second iteration of the aircraft could carry around 20 people up to 350 miles.  By 2026, ZeroAvia is aiming for flights of up to 500 miles by 80-seat aircraft.

Looking further ahead, industry giant Airbus is likewise eyeing hydrogen to spearhead its own range of clean commercial aircraft.  It hopes its three concept ‘hydrogen hybrid’ planes (burning liquid hydrogen as fuel and generating electricity via hydrogen fuel cells) could enter commercial operation by 2035.

The first concept is for a propeller-driven plane capable of carrying 100 people 1,000 miles; the second a jet carrying twice as many passengers up to 2,000 miles; and the third a blended-wing design of as-yet unspecified capacity.

Technical challenges of hydrogen-powered flight abound, largely because hydrogen gas needs cooling to -253˚C to be stored in compressed or liquid form.  This entails the use of bulky tanks on flights, squeezing passenger numbers, or requiring larger airframes subject to greater drag – to say nothing of new infrastructure at airports.

The technological and commercial case for pure electric-powered flight is even more tentative.  Even mainstays of the aviation industry believe the world is decades away from large electric aircraft taking to the skies, due to the enormous weight burden of batteries containing enough power for long-haul flights.[45]  Baby steps in the direction of electric flight are already under way, but at sizes that will be of little use to cargo carriers for the foreseeable future.  In 2019, Canadian seaplane company Harbour Air recorded the world’s first fully electric commercial flight, a half hour trip for a six-passenger 750-horsepower DHC-2 de Havilland Beaver.  In the USA, NASA is working on the battery and design of an all-electric X-57 two-seater plane, with a 100-mile range and 172mph cruising speed – an ambitious attempt to help spur the necessary technology.  

Ultimately the aviation industry might find itself gravitating towards a hybrid solution, marrying a jet engine with an electric motor for cleaner, albeit not zero-emission, propulsion.

The technology for true net-zero mass air freight may still be embryonic, but the high stakes of climate change will ensure ongoing efforts to decarbonize aviation.  As with all global sustainability initiatives, leveraging the expertise of the private sector is vital to fully exploit the potential of supportive public policies.

Liberating logistics from fossil fuels

With some of the technical pathways to a net-zero solution not yet commercially available, it is little wonder the IEA declares that “reducing CO₂ emissions in the transport sector over the next half-century will be a formidable task.”[46]

Certainly, the shipping, aviation and especially road haulage sectors have a long way to go to compete with the environmental credentials of rail.  With its capacity to move large tonnages along networks which – in the developed world at least – are already largely electrified, rail accounts for just 1% of transport’s overall emissions, even when freight and passenger figures are combined.[47]

In the fight against climate change global unity is key, which is why COP26’s Transport Day on November 10, 2021, provided hope for those striving to decarbonize the logistics sector.

Apart from the Clydebank Declaration and the International Aviation Climate Ambition Coalition mentioned above, Transport Day saw two other major mobility initiatives unveiled to widespread support: the Memorandum of Understanding on Zero-Emission Medium- and Heavy-Duty Vehicles (targeting 30% zero-emission new lorry sales by 2030, escalating to 100% by 2040); and the Declaration on Accelerating the Transition to 100% Zero Emission Cars and Vans (ensuring all new vehicles run on fossil-free fuel by 2040).[48]

Clustered at the intersection of these various agreements are Canada, Finland, the Netherlands, New Zealand, Norway, Denmark and the UK – each a signatory to all four initiatives.

Private sector players like Abdul Latif Jameel are energized about joining this international quest for a carbon-free logistics chain.

The Jameel Family, through JIMCO, is already an investor in electric vehicle pioneer RIVIAN, which is pushing forward the boundaries of BEV technology with its range of electric utility vehicles and delivery vans.  It is also focusing its attention upstream, on the energy needed to power freight’s electric future.  FRV-X, for example, the innovation arm of Abdul Latif Jameel Energy’s flagship renewable energy business, Fotowatio Renewable Ventures (FRV), is deploying its pioneering research in battery energy storage to advance the cause of electrification, as well as green hydrogen buses and taxi projects.

In September 2021, FRV-X embarked on its third utility-scale battery storage project, at Clay Tye, Essex, UK, developed in partnership with Harmony Energy. 

At 99 MW/198MWh, it is the biggest battery energy storage system under construction in the UK.

Clay Tye builds on the success of previous FRV-X battery storage projects in the UK – the 34 MW Contego project in West Sussex incorporates a system of 28 Tesla Megapack lithium-ion batteries.  

Meanwhile, the 7.5 MW battery plant at Holes Bay, Dorset, stores energy from the UK National Grid to provide flexibility to supplies during peak hours, contributing to network stability and supporting Britain’s decarbonization plan.

Abdul Latif Jameel is also involved in efforts around the world to generate truly clean, green electricity – the kind of energy resources necessary for this vision of an interconnected zero-emission logistics network.  Active on five continents, FRV’s solar power experts have developed 50+ renewable energy plants worldwide, managing a portfolio of more than 2.5 GW in solar markets across Australia, the Middle East, India, Africa, USA and Latin America.  It is also developing a 5 MW hybrid solar and battery storage project in the Dalby region of Queensland, Australia, the first hybrid project in the country.

Wind power will play a vital part in any green energy mix, too, so FRV teams are currently exploring power generation potential in both greenfield and brownfield sites worldwide.  

Meanwhile, Abdul Latif Jameel Logistics and their domestic last-mile delivery service S-Mile are exploring a number of smart mobility solutions as part of their 2022-2024 strategy.

The businesses are exploring the introduction of digital green delivery modes in Saudi Arabia across a range of possibilities, including autonomous trucks and delivery vans, drones, and PUDO (pick-up and drop-off) systems instead of direct delivery.

They are studying partnership opportunities with a number of international players, as soon as the regulatory environment permits such link-ups – a move currently under discussion at the Saudi Ministry of Transport.  As well as the obvious Net Zero benefits, the strategy also aligns with goals of Saudi Vision 2030 to strategically position Saudi Arabia as a global logistics hub.

“Technologies exist now for diluting freight’s contribution to transport emissions, but these technologies must be honed and made ever more economical in the coming years as we face down the universal threat of climate heating.

Although we all appreciate the green imperatives of localization in terms of production and consumption, the fact remains that in today’s integrated society goods still need transferring in large volume between manufacturers and markets,” says Fady Jameel, Deputy President and Vice Chairman, Abdul Latif Jameel.

“An innovative private sector, active within a supportive policy environment, can help overcome the outstanding challenges and ease logistics’ transition into clean propulsion systems and eco-fuels. 

How better to preserve our way of life and safeguard the planet for generations yet to come?”