How to Reduce CO2 Emissions from Freight Transport
Category: Analysis Author: OneChain Date: — Reading time: —
While international freight transport must cut its emissions by 64% by 2050 to meet the Paris Agreement commitments, over 60% of shippers have yet to define decarbonization targets for their transport operations.
In this article, we propose a framework for thinking and action to reduce greenhouse gas (GHG) emissions associated with freight transport.
Emissions from International Freight Transport
Freight transport accounts for 30% of emissions generated by the transport sector, representing 7% of global CO2 emissions.
In a context of strong growth in freight transport demand (expected to double by 2050), it is urgent for shippers and public authorities to make strong commitments toward the decarbonization of the sector.
To meet the targets set by the Paris Agreement, CO2 emissions from freight transport would need to decrease by 64% by 2050 (according to the OECD, relative to 2015 levels).
Identifying Emission Drivers
Before looking at solutions to reduce freight emissions, it is crucial to identify the factors that influence these emissions. The Kaya equation is here to help us.
Created by Japanese energy economist Yoichi Kaya in Environment, Energy, and Economy: Strategies for Sustainability (1997), this equation highlights the various levers for reducing CO2 emissions.
It notably reflects the debate between proponents of degrowth who advocate for sobriety and proponents of technological progress who emphasize efficiency (reducing the carbon intensity of energy).
Sobriety Levers
1. Transport Demand
Transport demand, expressed in t.km (tonne-kilometers), represents the total volume of goods transported over a given distance. It is the primary lever for reducing emissions (producing less or producing closer to the point of consumption) but also the one over which logistics teams have the least control.
Example: A company can optimize its supply chain to reduce the distance traveled by its goods, for instance by reshoring its production.
2. Modal Shift
Modal shift involves switching from a high-emission transport mode (such as air or road) to a cleaner mode (such as rail or maritime). In the Kaya equation, it represents the distribution of your usage across different transport modes (expressed as a percentage of t.km).
3. Load Factor
This is the average utilization of the transport mode. The higher the load factor, the fewer total kilometers traveled, which reduces emissions per tonne of goods transported.
Technological Levers
Energy Efficiency
Energy efficiency refers to the amount of energy needed to move one tonne of goods over one kilometer. Improving this efficiency reduces energy consumption and, consequently, CO2 emissions.
Example: A truck fleet can be upgraded to include vehicles equipped with more fuel-efficient engines and technologies such as low-rolling-resistance tires, which reduce fuel consumption per kilometer traveled.
Carbon Intensity of Energy
The carbon intensity of energy depends on the amount of CO2 emitted per unit of energy used. By reducing the carbon intensity of energy, we can lower the CO2 emissions associated with transport.
Example: Once the truck fleet has been modernized, it is still possible to power it with biofuel or biogas to reduce carbon emissions per liter of fuel consumed.
Levers Available to Shippers
Shippers have the power to influence four emission drivers:
- Transport demand
- Load factor
- Carbon intensity of energy
- Modal shift
However, two factors should be prioritized: carbon intensity of energy and modal shift.
Indeed, they are key to achieving the maximum reduction in emissions.
Modal Shift
Switching from air to ocean and from road to rail or inland waterway. This is the most effective lever because:
- It enables CO2 savings of up to a factor of 100 (between air and ocean) on the most emission-intensive part of transport — intercontinental shipping.
- The switch can happen quickly as shippers are often already familiar with these different transport methods.
- It does not require massive investments and may even reduce the transport budget.
Sometimes, switching to rail is not the best solution, as its emissions depend heavily on the country’s energy mix. Indeed, many countries still generate a significant share of their electricity from coal-fired power plants.
Carbon Intensity of Energy
- Opt for transport powered by alternative fuels (biofuels, LNG, SAF) where available.
- Additionally, once you have chosen your transport mode, make sure to partner with carriers that use green energy, operate a modern fleet, or optimize their routes.
Other Actions (Non-Exhaustive)
- Increase the load factor for FCL shipments (load optimization, cargo consolidation, and asset sharing).
- Choose the routing with the fewest transshipments.
- Reshoring — producing goods closer to the point of consumption.