According to TheClimateGroup.org, the transportation sector is the fastest-growing contributor to climate change, accounting for 23% of global energy-related greenhouse gas (GHG) emissions.
Efforts to achieve carbon neutrality are everywhere you look. Between countries announcing ambitious goals for the next decade, and some of the world’s largest companies (including Ikea, Daimler, Verizon, DHL and Lyft) making bold commitments in that direction, the reduction of carbon emissions is becoming an essential part of operations.
How, then, can you tackle such an extensive transition and get ahead of the carbon curve? If you were to research “how to achieve carbon neutrality,” the first answer you’re likely to find is “buy carbon credits.” That’s not a wrong answer, but it’s not a complete one either.
Reducing and ultimately eliminating your fleet’s carbon footprint is a journey that will only have a chance to succeed if you consider the following six steps:
Figure out where you are today. The first step in any reduction plan is to find out where you are. Based on the number of vehicles in your fleet alone, you can get a realistic picture of the amount of carbon you have to offset. If you’re a producer of goods, your carbon footprint is going to include your manufacturing processes as well. Carbon neutrality is about all of the carbon you produce — trash, office space and the like. All of it counts.
Plan. Once you understand the waste you’re producing, whether just for your fleet or throughout the entire supply chain you manage, you need to establish meaningful goals. Carbon neutrality is a process that takes time, and your employees, shareholders and customers need to know that going into the transition. They also need to understand the importance of carbon neutrality, and be aligned with achieving those goals.
Start with the fleet. Logistics and efficiency already go hand in hand, but to achieve carbon neutrality, you’ve got to go that extra mile. The main things to pay attention to are as follows:
Look beyond vehicles. When working toward a carbon-neutral fleet operation, it’s easy to get tunnel vision and focus only on the vehicles. The real key to carbon neutrality is in all the waste you produce. Keep in mind: wasted materials equals wasted money. That’s true for any business. When it comes to waste, you’ve got to think big picture.
An average ton of waste diverted from landfill reduces an estimated 2.5 metric tons of CO2 emissions. That’s 2.5 metric tons of emissions for which you don’t have to buy carbon credits.
If you are a fleet operation, there are waste streams that affect your carbon footprint that you might not even consider. Used tires, pallets, construction and renovation waste, hazardous waste, electronic waste and waste fluids all play a part in establishing your overall carbon footprint. In the supply chain, as a manufacturer or producer, the concept of overall waste production becomes more tangible. Waste reduction is a standard practice, but you can also apply it to your carbon-neutrality goals.
Overall waste reduction is the real key to carbon neutrality, because if you’re only buying carbon credits without first reducing your waste, you’re spending that money twice: once in wasted materials, and again in carbon credits you wouldn’t have to purchase otherwise. Each ton diverted from landfill counts. Start with the waste streams that are easiest to divert, and work your way to the more difficult ones. Your waste vendors become extremely important in this phase, so choose wisely.
Invest in carbon credits. Once your fleet is running like a well-oiled machine and you’ve cleaned up all of your potential waste streams, the last step is purchasing carbon credits, or “offsets.” Typically they take the form of financial support for projects that reduce GHG emissions in the short or longer term. The most common format is a renewable energy project, such as a wind farm, biomass energy or hydroelectric dam. Others include energy-efficiency projects, forestry projects, destruction of industrial pollutants or agricultural by-products, and destruction of landfill methane. Two of the most popular types of carbon-offset projects from a corporate perspective are energy efficiency and wind turbine projects.
Keep in mind that the average price of carbon offset is about $5.00 per metric ton of CO2. That’s why overall reduction of CO2 in every other aspect of your business is so critical. An example of this is spending $10 million a year to send waste to the landfill when a portion of it could be recycled. Once a well-run recycling program is established, you might end up spending just $8 million per year. Not only can you allocate $2 million in hard savings to fund projects that are core to your operation’s growth, but the emissions saved by not sending material to rot in a landfill also translates to reduced carbon emissions, and less carbon credit to purchase to achieve coveted carbon neutrality. All of those factors make waste minimization a key building block in your carbon-reduction journey.
Track and communicate. Throughout your journey to carbon neutrality, you need to share your progress. Again, this is where your waste vendors are especially critical, because they’ll be the ones actually tracking your landfill diversion rates. Using a similar formula outlined above, based on the type of waste you’re diverting from the landfill, you can let consumers and shareholders alike know how far along your journey to carbon neutrality you really are.
Companies across the globe are actively moving toward reduction and elimination of their carbon footprint, and the logistics and transport industry is going to be hit the hardest. The time to get the ball rolling on carbon neutrality is now.
Ray Hatch is CEO and board member of Quest Resource Management Group.
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