What is Carbon Neutral and what does it mean for shipping?

Apple is aiming to become carbon neutral by 2030. Google claims to be carbon neutral since 2007. Many companies and the EU plan to go climate-neutral and set goals for the coming years.

That said, what exactly are carbon neutrality and climate neutrality? And what does it mean for the logistics and transportation industry?

Today we’ll be discussing the following:

  • The differences between carbon and climate neutrality;
  • The EU’s stance on all of it;
  • Their relationship with the logistics industry;
  • And how to achieve them.

What is Carbon Neutral?

Carbon neutrality is the concept of having a net-zero carbon footprint. This means that an organization avoids emitting as much carbon dioxide into the atmosphere as it can while they remove from it through offsets. It’s a way of taking responsibility for one’s actions and limiting one’s contributions to climate change.

However, this doesn’t cover all greenhouse gasses – only carbon-di-oxide (about 76% of the emissions, but not all).

What is Climate Neutral?

Climate neutrality refers to the reduction of greenhouse gases in general. Because other greenhouse gasses (GHGs) like methane and nitrous oxide can also contribute significantly to climate change, climate neutrality also considers these.

Like carbon neutrality, emissions are reduced as much as possible, and the rest is canceled through offsets. The goal is to minimize the impact of greenhouse gasses on the environment, however, this time – completely.

Achieving these neutralities is essential in combating climate change. It signals to businesses and governments that we’re serious about reducing our reliance on fossil fuels and transitioning to a low-carbon economy. 

The EU and Climate Neutrality

As a result of the Paris agreement in 2019, The European Union set itself the ambitious target of becoming the world’s first climate-neutral continent by 2050. This means reducing greenhouse gas emissions to net zero.

The EU has already made good progress towards this goal, with emissions from the bloc’s 28 member states falling by 23% between 1990 and 2016. But there’s still a long way to go, and the goal is big.

Achieving climate neutrality will require a significant transformation of the EU’s economy and how Europeans live. It’ll mean a massive increase in the use of renewable energy, as well as measures to improve energy efficiency and reduce consumption.

It’ll also require a fundamental change in how we produce and consume goods and services and how we move around. It’ll be a huge challenge, but the EU is committed to meeting it.

Some notable actions are:

  • In 2019, EU leaders accepted the European Green Deal to achieve climate neutrality by 2050 and a €1 trillion investment plan. It sets out a comprehensive green road map to achieve climate neutrality.

The deal also includes:

- Decarbonizing the energy sector
- Supporting innovation
- More energy-efficient buildings
- Development of cleaner forms of transport

  • In 2020, the EU targeted to reduce greenhouse emissions by at least 55% by 2030 compared to 1990;

  • EU leaders plan to allocate at least 30% of their budget for 2021-2027 to actions that contribute to reducing climate change;

  • The EU member provided €23.3 billion in 2020 to fight against climate change efforts.

Climate Neutrality in Logistics

The logistics sector is responsible for around 8%(11% if warehouses and ports are included) of global emissions, making it one of the most carbon-intensive industries. And if no actions are taken, it’ll become the most carbon-emitting sector by 2050.

There are many reasons why you want your logistics to be carbon-neutral.

  • As the world moves towards a low-carbon economy, businesses that don’t adapt will be at a competitive disadvantage, and many countries are providing tax cuts to green companies. A report by the economist showed that people are 85% more likely to buy from brands with a reputation for sustainability.

  • Many customers and clients are increasingly interested in working with low- environmental impact companies. A report by Uniliver showed that their greener brands showed 50% faster growth than those that didn’t.

What Are The Challenges of Achieving Climate Neutrality in logistics?

Achieving carbon neutrality in logistics is a challenge for several reasons:

  • The lack of carbon accounting is a serious problem. Many companies don't even track their carbon emissions through proper digitalized methods – especially scope 3 emissions that mostly happen because of shipping and other transportation services;
  • Companies mainly focus on scope 1 and 2 emissions, not extending the carbon footprint management to collaboration between logistics players throughout the supply chain;
  • There’s a general myth that any sustainability action for logistics results in major costs for industry players - and that’s not always true. 

There are several ways to take your company towards carbon neutrality in logistics, but let’s talk about some of the most important ones for the following years:

How to achieve it

  • Improve the efficiency of the supply chain: Using technology to not only track your carbon footprint but to start using it as a decision-making factor when choosing transport modes and routes; 

  • Digital multimodality in transportation: Multimodal transport supported by a freight forwarding platform will not only reduce costs but also directly impactyour CO2 emissions - with about 60 to 90% less than only truck shipments;

  • Offset emissions with sustainable alternatives: Plan for sustainable transformation across your supply chain, like carbon neutral buildings and warehouses, non-fossil fuels, and even e-vehicles for short term shipments, when possible.

How rouvia Can Help You Become Climate Neutral

rouvia is the first transport planning and management platform for freight forwarders that integrates all modes of surface transport to unlock cost efficiencies and environmental opportunities.

Our platform allows you to visualize real-time data about the CO2 emissions of every transport combination, guaranteeing optimized decisions for cost, ETA, routes and carbon footprint. Book a call with us now to know more.

Mehedi Hasan
Logistics Content Writer
November 17, 2022