Analyst Insight: Companies can reduce greenhouse gas emissions in their global logistics by exploring alternative fuel options across various transportation modes, understanding the geographical potential for leveraging these fuels, and recognizing the importance of accurate emissions reporting. 

In the ever-evolving landscape of global logistics, sustainability is a critical focus for organizations aiming to meet their environmental goals and reduce greenhouse gas emissions. Companies around the world are increasingly collaborating with shippers and carriers to identify opportunities to decarbonize supply chains. And one of the most promising avenues for reducing greenhouse gas emissions is the adoption of alternative fuels. 

Modes: Consider Your Options

Alternative fuels offer a variety of options across different transportation modes, each with its own set of benefits, opportunities and considerations. 

For road transport, biodiesel, compressed natural gas (CNG) and electric vehicles (EVs) have become popular choices. Renewable diesel, a drop-in fuel option, is widely available in certain regions and sold at competitive prices within those markets. Biodiesel is a blended fuel made from natural oils and fats, offering lower carbon emissions compared to traditional diesel. CNG, derived from natural gas, burns cleaner and produces fewer pollutants. EVs, with zero tailpipe emissions, are gaining traction as battery technology improves and charging infrastructure expands globally.

In the realm of air transport, sustainable aviation fuel (SAF) has become top of mind. According to the International Air Transport Association, SAF produced from renewable sources, like waste oils and agricultural residues, can reduce well-to-wheel emissions by up to 80% compared to conventional jet fuel. Although currently more expensive and less widely available, ongoing research and development is expected to make SAF a more viable option in the coming years.

For ocean transport, liquefied natural gas (LNG) and biofuels are emerging as sustainable alternatives. LNG, a cleaner-burning fossil fuel, significantly reduces sulfur oxides, nitrogen oxides and particulate matter emissions. Biofuels, derived from renewable sources, offer substantial carbon savings and can also be potentially used in existing marine engines with minimal modifications.

Rail transport, traditionally a low-emission mode, can further reduce environmental impact by incorporating alternative fuels such as biodiesel and hydrogen. Hydrogen-powered trains, for example, produce only water vapor as a byproduct, making them an attractive option for decarbonizing rail networks.

Geography: Not Bound by Borders

While some countries are further along in their adoption of alternative fuels, the potential for leveraging is not limited by geographic boundaries. For example, countries with abundant renewable energy resources, such as wind and solar, are well-positioned to produce green hydrogen. However, even regions without these resources can participate in the alternative fuels market through market-based exchanges of environmental attributes.

Reporting: Measure With Confidence

To effectively reduce emissions and track progress, it is crucial to have reliable data and robust methodologies in place. Accurate measurement of emissions, particularly Scope 3 transportation emissions, which occur upstream or downstream in the supply chain, is essential for setting benchmarks and identifying opportunities for emissions reductions. For example, the Smart Freight Centre's Global Logistics Emissions Council (GLEC) framework is a globally recognized standard for greenhouse gas accounting in the logistics industry. 

By following the GLEC framework, organizations can ensure their emission data is accurate and aligned with international standards. The use of blockchain-backed registries, alongside the GLEC framework, can also enhance transparency and accountability by avoiding double-counting of emissions. Independent third-party audits further validate the credibility of emission reductions and ensure companies meet reporting requirements.

Efficiency is at the core of reducing supply chain waste and, therefore, achieving sustainability goals. By understanding the available low-emissions transportation solutions, the global landscape, and the greenhouse gas accounting methodologies for measuring impact, shippers can make informed decisions that drive them closer to their environmental goals.