Corporate Climate Action Plans Drive Decarbonization of Logistics Industry

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by | Jan 25, 2021

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(Credit: Pixabay)

Corporate clients are expected to increasingly push logistics suppliers for decarbonization in coming months, according to a report from Guidehouse Insights. As corporations set ever-more ambitious targets for GHG reductions, they will expect their suppliers to find innovative ways to deploy and use low carbon and zero-emissions technologies to meet these new demands.

While these demands increase, zero emissions solutions in transportation are becoming more viable: EVs powered by renewables are poised to take over urban delivery markets and passenger transport, and fuel cell and battery electric truck makers are preparing for solutions for long-haul trucking. Suppliers that take advantage of these technologies will have a leg up over slower-to-act suppliers; those who don’t make use of new technologies risk losing business to the innovative suppliers or to more emissions-efficient modes such as rail, Guidehouse Insights predicts.

A quarter of global energy-related greenhouse gas emissions come from transport due to the high amount of fossil fuel consumed across the sector. “This could grow to a third by 2050 if nothing is done,” said Makhtar Diop, the World Bank’s VP for Infrastructure, during the En Route to COP26 event in December. Transitioning to zero-carbon transport worldwide is essential to achieving the SDGs and keeping climate change in check.

However, a gap in funding for the decarbonization of transport is a significant roadblock. “Innovative finance can help bring the scale that we need for funding decarbonization in the transport sector,” said Arunma Oteh, Executive-In-Residence, SAID Business School, University of Oxford. Some innovative finance tools that could be leveraged to raise the funds needed to decarbonize transportation might include disaster risk reduction management bonds, asset recycling, infrastructure funds, private equity, donor-funded multilateral agencies, green bonds, and public-private partnerships.

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