15/11/2022

Decarbonizing Freight 2022: five reasons to download the full report

11/15/2022 | 7 min

Our latest findings in partnership with Kuehne Logistics University and Smart Freight Centre deliver much anticipated evidence that the decarbonization of freight is well underway.

In May 2022, 340 shippers and carriers were surveyed on the topic of decarbonization and the path to net zero. Real life insights and experiences articulated in the results reveal major changes in emissions tracking and reporting compared to activity recorded throughout the last two years. Both authors, experts Alan McKinnon, Professor of Logistics, Kuehne Logistics University and Alan Lewis, Technical Director, Smart Freight Centre agree this can be described as an encouraging leap forward.

The report is available to download for free now. If you’re curious about progress in the field of sustainability and keen to participate in sustaining positive change, we recommend taking the time to digest the data and commentary in full.

Read on for our summary of key findings.

The race towards science-based targets and CO2 reduction strategies

In 2022, 54% of all shippers claimed they were calculating their transport-related CO2 emissions, compared to 37% in 2021. The proportion of shippers with a decarbonization strategy and science-based reduction targets in place increased by 50% from 20% (2021) to 30% (2022).

Pressure is growing to meet critical and looming targets enforced by the EU Commission – however, we can feel optimistic about clear signals the freight industry has begun multiple major shifts in the right direction, that will contribute towards meeting legislated targets to achieve carbon neutral status in Europe. Survey results told us that since 2020, almost double the number of respondents agree that sustainability represents a large or very large business opportunity. In addition, results show a 50% increase in the number of shippers who claim to have implemented a decarbonization strategy incorporating science-based reduction targets.

Pay attention to the yellow bars below – the figure visualizes a much-needed and fairly rapid shift versus 2021 towards a larger majority of carriers getting proactive about implementing a decarbonization strategy.

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Shippers and carriers disagree on ZERO EMISSION VEHICLES

Carriers

In 2021, carriers stated the most popular alternative energy source was hydrogen, followed by hybrid engines and biofuel. Two years later the picture has changed drastically: biodiesel now gets top rating (23%) followed by LNG (21%) and battery electric (17%). Now, just 12% report a preference for hydrogen fuel cells.

Biodiesel is the most convenient option for many carriers as a drop-in fuel that doesn’t require any capital investment. Lessened interest in replacing fleets with low carbon vehicles is likely due to a combination of factors, including:

the steep rise in diesel fuel prices
uncertainty about future business conditions.

Shippers

Shipper preferences are markedly different. With 22% of the vote, battery electric topped the list followed by hydrotreated vegetable oil (HVO) (17%) and biodiesel (16%). LNG comes last with less than 8% support.

We must acknowledge the large amount of conflicting information available about the different options – and the common inconsistency with the latest scientific opinion. Differences in opinion may also reflect different impact timescales and thinking among carriers and shippers. Drop-in biofuels require minimal changes to existing equipment – whereas switching to electric relies on support from a broad group of stakeholders in addition to changing vehicle technology, energy supply, and system thinking.

Sustainability – a business opportunity for carriers?

Compared to 2021 (14%), almost double (27%) the number of carriers surveyed indicated they view sustainability as a large or very large business opportunity.

With broader attitudes towards sustainability improving amongst carriers – the group with direct responsibility for the majority of road freight CO2 emissions (Scope 1 emissions) – this year we can report a significant step in the right direction generally. However, the figure below provides a stark reminder that there’s still work to be done.

Incentives and show-stoppers on the way to decarbonize freight

What would motivate carriers to decarbonize? Consistent with findings from previous year, financial incentives remain in the top spot. Lengthening of freight contracts closely follows, to allow time for decarbonization-related investments to pay off.

In addition, carriers chose the following when asked what would encourage their company to cut its emissions:

Shippers paying more for lower carbon transport
Tax incentives and subsidies

Views on which factors constrain adoption of low or zero emission fuels and vehicles also remain fairly similar since last year. High costs and infrastructure concerns are still identified as the main barrier to adoption – and have actually increased by 15% year-on-year, which suggests government action may be required to financially incentivize the transition to low carbon energy and vehicles.

Step-changes in the green freight awareness

Overall, this year’s Decarbonizing Freight report reveals a step-change in awareness and green agenda setting.

Going forward, we must sustain these trends and efforts and a variety of sources must continue to influence shippers and carriers to ensure they are equipped to live up to their aspirations.

It seems then that the European Commission’s initiative CountEmissionsEU will come just in time to help keep track of the progress. Plans are in place to propose this initiative – which aims to establish a common methodology for measuring door-to-door GHG emissions – in early 2023 as part of the Greening Freight Package.