The Carbon Footprint of Trucking: Towards a Cleaner Future
The pandemic may have temporarily curbed greenhouse gas (GHG) emissions, but even a global recession can’t negate the impact of transportation—especially the carbon footprint of trucking.
In 2020, lockdowns resulted in an 8% average global decrease in GHG emissions over the first half of the year, when compared to 2019.
As this infographic from dynaCERT shows, trucking remains a significant contributor of GHGs amid booming ecommerce and increased international trade. But innovative solutions can help.
GHGs and the Impact of Trucking
Between 2005 and 2012, global GHG emissions plateaued but have risen every year since.
This growth is not expected to slow in the coming years. Between 2019 and 2050, the amount of atmospheric CO2 is projected to nearly double, from 4.5 to 8.2 gigatons.
Carbon dioxide is not the only substance emitted by trucking that’s detrimental to the environment:
|Greenhouse Gases (GHGs)||Black Carbon (BC)|
Road vehicles have been major contributors to GHG and BC emissions for decades—particularly heavy-duty vehicles (HDVs) and diesel-engine vehicles, like those used for long-haul trucking.
Below is a snapshot of trucking’s global carbon footprint, beginning with global road emissions:
|Global Road Transportation||Heavy-duty Vehicles (Trucks)||Diesel Engines|
Industry Impact: Logistics and Shopping Show No Signs of Stopping
Ecommerce has become one of the most popular online activities. As a result, we’ve become more dependent on trucking—long-haul and last-mile—for the delivery of our goods, both personal and for business.
That trend is expected to continue:
- By 2040, it’s estimated that 95% of all purchases will be facilitated by ecommerce
- By 2022, e-retail revenues are projected to double from $3.53 trillion in 2019 to $6.54 trillion
- Logistics is already a $6.5 trillion industry, of which trucking makes up 43%
Combined with international trade, the impact on long-haul and last-mile transport—and CO2 emissions—becomes more pronounced every year, and has accounted for the 80% rise in worldwide GHG emissions from 1970 to 2010.
Although last-mile transport is increasingly reliant on electric vehicles, long-haul trucking still relies heavily on fossil fuels that emit GHGs like CO2.
As a result, road freight’s contribution to CO2 emissions is projected to grow to 56% by 2050.
The Carbon Market: Reducing Emissions and Improving Bottom Lines
In 1997, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) developed a carbon credit proposal—the Kyoto Protocol—to reduce global carbon emissions. It has guided policies ever since, leading to a proliferation of green strategies that mitigate climate risk and improve business operations.
Companies can leverage this opportunity with a multi-pronged, integrated approach that results in a patented way to harness the carbon market, while improving operations and bottom lines:
|The Carbon Market||Technological Solutions & Carbon Credits|
The benefits of integrated solutions range from improved driver safety and retention to optimized routes, fuel savings, and carbon credit accumulation.
Heavy-Duty Solutions: Driving a Cleaner Future
The long-term impact of the ecommerce boom on CO2 emissions remains to be seen. But it’s coming up quickly on the horizon.
When the weight of the pandemic is lifted, we are likely to encounter more than a transformed economy. An evolving global transport network—supported by technological innovation and new policies like those planned by the U.S. Biden government—is likely to enable more opportunities on the carbon market and pave the way for a greener future.
Decarbonization 101: What Carbon Emissions Are Part Of Your Footprint?
What types of carbon emissions do companies need to be aware of to effectively decarbonize? Here are the 3 scopes of carbon emissions.
What Carbon Emissions Are Part Of Your Footprint?
With many countries and companies formalizing commitments to meeting the Paris Agreement carbon emissions reduction goals, the pressure to decarbonize is on.
A common commitment from organizations is a “net-zero” pledge to both reduce and balance carbon emissions with carbon offsets. Germany, France and the UK have already signed net-zero emissions laws targeting 2050, and the U.S. and Canada recently committed to synchronize efforts towards the same net-zero goal by 2050.
As organizations face mounting pressure from governments and consumers to decarbonize, they need to define the carbon emissions that make up their carbon footprints in order to measure and minimize them.
This infographic from the National Public Utility Council highlights the three scopes of carbon emissions that make up a company’s carbon footprint.
The 3 Scopes of Carbon Emissions To Know
The most commonly used breakdown of a company’s carbon emissions are the three scopes defined by the Greenhouse Gas Protocol, a partnership between the World Resources Institute and Business Council for Sustainable Development.
The GHG Protocol separates carbon emissions into three buckets: emissions caused directly by the company, emissions caused by the company’s consumption of electricity, and emissions caused by activities in a company’s value chain.
Scope 1: Direct emissions
These emissions are direct GHG emissions that occur from sources owned or controlled by the company, and are generally the easiest to track and change. Scope 1 emissions include:
- Company vehicles
- Chemical production (not including biomass combustion)
Scope 2: Indirect electricity emissions
These emissions are indirect GHG emissions from the generation of purchased electricity consumed by the company, which requires tracking both your company’s energy consumption and the relevant electrical output type and emissions from the supplying utility. Scope 2 emissions include:
- Electricity use (e.g. lights, computers, machinery, heating, steam, cooling)
- Emissions occur at the facility where electricity is generated (fossil fuel combustion, etc.)
Scope 3: Value chain emissions
These emissions include all other indirect GHG emissions occurring as a consequence of a company’s activities both upstream and downstream. They aren’t controlled or owned by the company, and many reporting bodies consider them optional to track, but they are often the largest source of a company’s carbon footprint and can be impacted in many different ways. Scope 3 emissions include:
- Purchased goods and services
- Transportation and distribution
- Employee commute
- Business travel
- Use and waste of products
- Company waste disposal
The Carbon Emissions Not Measured
Most uses of the GHG Protocol by companies includes many of the most common and impactful greenhouse gases that were covered by the UN’s 1997 Kyoto Protocol. These include carbon dioxide, methane, and nitrous oxide, as well as other gases and carbon-based compounds.
But the standard doesn’t include other emissions that either act as minor greenhouse gases or are harmful to other aspects of life, such as general pollutants or ozone depletion.
These are emissions that companies aren’t required to track in the pressure to decarbonize, but are still impactful and helpful to reduce:
- Chlorofluorocarbons (CFCs) and Hydrochlorofluorocarbons (HCFCS): These are greenhouse gases used mainly in refrigeration systems and in fire suppression systems (alongside halons) that are regulated by the Montreal Protocol due to their contribution to ozone depletion.
- Nitrogen oxides (NOx): These gases include nitric oxide (NO) and nitrogen dioxide (NO2) and are caused by the combustion of fuels and act as a source of air pollution, contributing to the formation of smog and acid rain.
- Halocarbons: These carbon-halogen compounds have been used historically as solvents, pesticides, refrigerants, adhesives, and plastics, and have been deemed a direct cause of global warming for their role in the depletion of the stratospheric ozone.
There are many different types of carbon emissions for companies (and governments) to consider, measure, and reduce on the path to decarbonization. But that means there are also many places to start.
National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.
The Paris Agreement: Is The World’s Climate Action Plan on Track?
This graphic shows how close we are to achieving the Paris Agreement’s climate action plan, and what happens if we fail to reach its goal.
Keeping Tabs on the World’s Climate Action Plan
When the Paris Agreement came into force in 2016, it was considered by many to be a step forward in the world’s climate action plan. In the five years that have followed, more and more countries have established carbon neutrality targets.
Has it been enough to keep us on track? This graphic from MSCI shows where we are in relation to the Paris Agreement goal, and what may happen if we fail to reach it.
What is the Paris Agreement?
The Paris Agreement is a legally binding international treaty that lays out a climate action plan. Its goal is to limit global warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit), and preferably to 1.5 degrees Celsius (2.7 degrees Fahrenheit), compared to pre-industrial levels.
A total of 191 countries have solidified their support with formal approval.
Tracking Our Progress
To date, signing nations are not close to hitting the goal set five years ago.
|Scenario||Global Mean Temperature Increase by 2100|
|Pre-industrial baseline||0℃ (0℉)|
|Paris Agreement goal range||1.5-2.0℃ (2.7-3.6℉)|
|Government pledges||3.0-3.2℃ (5.4-5.8℉)|
|Current policies||3.5℃ (6.3℉)|
Source: UN Environment Programme
Based on policies currently in effect, we are on track for 3.5 degrees Celsius global warming by 2100—far beyond the maximum warming goal of 2 degrees. Even if we take government pledges into account, which is the amount by which countries intend to reduce their emissions, we are still far from achieving the Paris Agreement goal.
What about the impact of reduced emissions due to COVID-19 lockdowns? The temporary dip is expected to translate into an insignificant 0.01 degree Celsius reduction of global warming by 2050. Without significant policy action that pursues a more sustainable recovery, the UN Environment Programme projects that we will continue on a dangerous trajectory.
“The pandemic is a warning that we must urgently shift from our destructive development path, which is driving the three planetary crises of climate change, nature loss and pollution.”
—Inger Andersen, Executive Director, United Nations Environment Programme
The World Economic Forum agrees with this viewpoint, and identified climate action failure as one of the most likely and impactful risks of 2021.
The Potential Consequences
If we fall short of the climate action plan, our planet may see numerous negative effects.
- Reduced livable land area: Due to rising sea levels and increased heat stress, low-lying areas and equatorial regions could become uninhabitable.
- Scarce food and water: Global warming may increase water and food scarcity. In particular, fisheries and aquafarming face increasing risks from ocean warming and acidification.
- Loss of life: The World Health Organization projects that climate change will cause 250,000 additional deaths per year between 2030 and 2050.
- Less biodiversity: About 30% of plant and animal species could be extinct by 2070, primarily due to increases in maximum annual temperature.
- Economic losses: At 4 degree celsius warming by 2080-2099, the U.S. could suffer annual losses amounting to 2% of GDP (about $400B). If global warming is limited to 2 degrees, losses would likely drop to 0.5% of GDP.
What steps can we take to reduce these risks?
Advancing Our Climate Action Plan
Everyone, including investors, can support green initiatives to help avoid these consequences. For example, investors may consider company ESG ratings when building a portfolio, and invest in businesses that are contributing to a more sustainable future.
In Part 2 of our Paris Agreement series, we’ll explain how investors can align their portfolio with the Paris Agreement goals.
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