CO2 Emissions: collaborate to calculate

12/16/2022 | 7 min

The first in our regular series of masterclasses for the Carbon Intelligence Mastermind community explained why and how transport businesses will benefit from carbon accounting.

Let’s start with some brief background. 

Over the course of the coming months, Transporeon will host and curate Carbon Intelligence Mastermind, a global community focused on helping the transport sector meet the challenges of reaching Net Zero. We’ll be doing a lot more than kicking the tires – Carbon Intelligence Mastermind is about carrying out a full service and overhauling your organization’s emissions strategy. Join the community to gain access to our series of masterclasses, events, and networking opportunities.

Hosted by Jakob Muus, Director of the Sustainability Tribe at Transporeon, and joined by experts Dr. Louise De Tremerie, Transport Policy Advisor at the European Parliament and Marc Issel, former Head of Carbon Intelligence at Planetly, the kick-off masterclass, “CO2 emissions – You can’t manage what you can’t track”, gave us a detailed insight into the high level of expertise and advice the industry will provide during the series. The conclusions? If you’re in the freight transport business and you haven’t thought hard about your emissions, the time to start is now. And if the word ‘collaboration’ has not been high on your agenda, perhaps it now should be. 

Let the experts explain... 

Takeaway 1: on carbon, the transport sector is running out of road

Dr. Louise De Tremerie started with a sobering truth: “While other sectors are cutting their emissions, the numbers for the transport sector are still rising.” Worryingly, this rise is happening despite the efforts and initiatives already taken to combat spiraling carbon emissions, while other sectors are starting to see declines since adopting those changes.

Marc Issel provided further back-up: “The transport sector is the only one not to reduce Greenhouse Gases (GHG) in the past 30 years – indeed, it is up by 8%, though we should add the coda that this includes the very high-profile area of passenger travel. But the bottom line is that transport could burn the entire EU carbon budget on its own.”

The wider story is too scary to ignore. Our carbon budget – in simple terms, what we emit, set against what we are able to absorb – is shrinking too fast. If we keep consuming emissions at the current rate, the Paris climate target of 1.5° will be broken in just 10 years' time. With EU27 statistics revealing that nearly a quarter (23.2%) of emissions averages come from the transport sector, and with those emissions still on an upward trajectory, clearly the sector must take action.

Takeaway 2: regulation is coming

The authorities are going to flex their muscles on this. Changes in the law are coming, as part of the EU Green Transition. With her close links to the EU Parliament, Dr. De Tremerie explained the regulatory instruments the EU wants to introduce to enable 55% reduction in GHG by 2030 and climate neutrality by 2050. The so-called Green Deal forms part of this strategy, covering many sectors (energy, transport and land use are key), as does the Sustainable and Smart Mobility strategy (SSMS). “The stand-out figure to note here is that transport will need to slash its emissions by 90% by 2050,” she revealed. “Modal shifts will be encouraged.” 

This will no longer be a choice, she added. “The Climate Law will set legally binding targets across states and sectors, with no right of veto.” 

The EU is deploying many instruments when it comes to transport. In the Road category, expect carbon pricing; the phase-out of ICE; norms on emissions and pollutants; infrastructure mandates, such as EV, hydrogen, and LNG, as well as renewable energy mandates and alternative fuels. Dr. De Tremerie revealed that there is still a lot more to come in the regulatory pipeline, and carbon accounting will form a key tranche of this. 

Takeaway 3: carbon accounting needs transparency

The objective of the EU’s Count Emissions proposal is to harmonize measurements and the calculation of GHG in transport and logistics. It’s linked both to SSMS criteria, such as modal choice, and CSR aspirations. Dr. De Tremerie predicted a project that should make a powerful impact on both data quantity and reliability.

There are hurdles, though. Issues targeted include fragmentation in GHG calculation methods as well as more forensic exploration of the barriers to sharing Transport and Logistics data. This brings up perhaps the most important keyword of the carbon accounting debate in transport: trust. Will T&L stakeholders be willing to share data to enable transparency? Dr. De Tremerie pointed out that take-up of emissions accounting has been slow in the sector, so there is a challenge ahead for transport service providers, users, and ecommerce platforms, and perhaps an even bigger one for smaller businesses. The hurdles mean no proposal has been made yet - but one is expected in Q2 2023. 

Takeaway 4: we can only manage what we can measure

“We can only manage what we can measure,” pointed out Marc Issel. So how to measure emissions, and how to make sure everyone measures in the same way? He explained that while no formal carbon accounting standards were in place since DIN EN 16258 in 2013, the GLEC Frameworks 1.0 and 2.0 have produced more regular standards. Meanwhile, the ISO working group published its first draft of agreed global standards in March 2022, with a final version due imminently.

These new accounting standards are certain to follow three fundamentals:

  1. They will cover the entire transport chain holistically, including all transshipment points, and logistics centers such as warehouses and ports. 
  2. The ‘Well to Wheel’ concept. This covers both tailpipe emissions and emissions made during fuel production (so electric vehicles, for instance, may not have tailpipe emissions but they do from the generation of electricity; meanwhile, refrigerated transport will contribute a high impact from fugitive gases). 
  3. Scope 1, 2 and 3 Emissions. Get used to this phrase (sometimes called direct and indirect emissions), recommended the experts, because you’re likely to hear a lot of it. What does it mean, though? Scope 1 refers to emissions made by vehicles and equipment under direct company operational control; Scope 2 refers to the emissions generated by that company’s energy purchases and uses – typically, the emissions created by the electricity generated in order to power an electric fleet. Scope 3 refers to those emissions outside the company’s operational control but required elsewhere in its supply chain both upstream and downstream. 

Takeaway 5: how to calculate

Marc Issel explained that Scope 1 and 2 emissions calculations are relatively simple – you measure fuel and electric consumption, then apply fuel emission factors to calculate the whole figure (these fuel emission factors can be found in the GLEC framework).

Scope 3 calculation is much more complicated. Employ shipment data to calculate transport performance for each mode, then apply emissions intensity factors to transport performance to calculate total emissions deploying, firstly, primary emission factors collected from LSPs (“This is the gold standard but needs to come directly from them, so data sharing is necessary,” cautioned Marc Issel). Further options are Program emission factors (e.g., Clean Carbon Working Group [CCWG] in the Maritime sector); modelled emissions factors (e.g., HbEfa); and Default emissions factors (e.g., those laid out by GLEC framework). It’s undeniably fragmented, and it’s clear that harmonization has a role to play here. Jakob Muus explained how Transporeon’s own brand-new Carbon Visibility Dashboard is already proving a huge help for relevant transport businesses. For a starting point on which factors work best for your business, Marc recommended road businesses to consult the GLEC framework.

Another option is to collect full data from your LSPs – real-time visibility technology from Transporeon has shown how data can be shared in this way – but of course this can only be done if those LSPs are carrying out full emissions calculations themselves beyond Scopes 1 and 2.

Takeaway 6: time to collaborate

Sharing and collaboration are going to be the watchwords of the emissions accounting drive in the transport sector. Marc Issel offered a thought-provoking example of where collaboration can work for everyone. “If you look at the Barcelona-Rome Civitavecchia road route, without data collaboration, a shipper might not be aware of LSPs using this connection via a direct sea ferry across the Mediterranean. Therefore, using default calculations, emissions will be overestimated by 60% to what they could be.” 

Summing up, panelists suggested useful next steps for companies and organizations to consider: screen your overall emissions using default calculations and optimize accuracy at carbon hotspots to enable targeted action.

Finally, collaborate with suppliers, LSPs and clients to drive transparency and, most importantly, reductions. Jakob Muus made a great point to drive this home: “One person’s Scope 1 is another person’s Scope 3, so let’s work together.” 

The next in our series of Carbon Intelligence Mastermind masterclasses and events will be announced on our regular channels - details soon.

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