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    Technology is at the heart of change for the transport sector

    rethink sustainability

    Technology is at the heart of change for the transport sector

    Economies around the world have been hit in many ways by the pandemic, but online shopping has thrived as people are forced to buy from their sofas. This brings up another problem for retailers - keeping their shelves stocked as the transport sector struggles with supply chains.

    A fresh pressure on shipping, road and air transport has resulted in renewed focus on the transportation sector's environmental footprint. As energy prices spiral, the transport industry is working to reduce its environmental impact on the planet using technology to pave the way to a more sustainable future.

    Looking forward to 2022, what are the innovations that will transform this traditionally hard-to-abate industry which isn’t typically known for contributing to a carbon-free world?

     

    Shipping

    International shipping is one of the most significant sources of greenhouse gas emissions on the planet. Some 80% of global trade is moved across oceans on cargo vessels that are powered by fossil fuels. This results in some 940 million tonnes of CO2 every year - around 2.5% of GHG emissions, according to the European Union2. If the industry were a country, it would be the sixth biggest polluter on earth, ahead of Germany.

    If the [International shipping] industry were a country, it would be the sixth biggest polluter on earth, ahead of Germany

    However, these figures could become even worse if not tackled immediately. Considering the growth rate and the slow attempts to resolve the problem, it is estimated that shipping could account for 10% of global emissions by 20503.

    Pressure is on the shipping industry to decarbonise; this year it has called for a global carbon tax4. The International Chamber of Shipping (ICS) wants a global solution whereby governments tax its carbon emissions, forcing investment into new technology. Under the plan, worldwide carbon pricing would result in a fund that would be used to supply cleaner fuels such as hydrogen and ammonia. A separate initiative has also been launched to develop a $5bn research and development fund to create zero-emission ships by 2030. 

    Consumers are also applying pressure on the shipping industry. In October, a group of high-profile companies including Amazon, IKEA, Michelin, Patagonia and Frog Bikes amongst others, committed to using zero-emission ships to transport their goods by 2040. Earlier in the year, Maersk5 began decarbonising its fleet with eight vessels capable of running on both traditional fuels and carbon-neutral methanol.

    In October, a group of high-profile companies including Amazon, IKEA, Michelin, Patagonia and Frog Bikes amongst others, committed to using zero-emission ships to transport their goods by 2040

    Road Transport

    Often dubbed the “workhorse” of the domestic supply chain, the heavy goods vehicle (HGV) is vital to the distribution of goods to retailers, especially in the importation of stock from one country to another. The prevalence of HGVs on the roads creates an unsurprisingly high amount of emissions. In the UK, they account for 18% of greenhouse gas emissions6 and 13% of nitrogen oxide ones on the roads.

    There are ambitious plans to reduce this environmental impact. The British government7 has committed to being the first country in the world to phase out new, non-zero emission HGVs under 36 tonnes by 2035 and to make all new HGVs zero emission by 2040.

    Last year8, an alliance of truck manufacturers committed to spend up to €100bn to phase out traditional engines in favour of clean fuel, hydrogen and battery technology. While electric vehicles are a useful option in cities, for long-distance vehicles that require quick refuelling, hydrogen is a potential solution.

    The heads of Daimler Truck and the Volvo Group9 have said that hydrogen-powered HGVs that can travel long distances are likely to take off towards the end of this decade.

    The British government10 has committed to being the first country in the world to phase out new, non-zero emission HGVs under 36 tonnes by 2035 and to make all new HGVs zero emission by 2040

    Air Transport

    The aviation industry has committed to reaching net-zero carbon emissions by 2050 with airlines, airports and manufacturers having signed a declaration in October. Aviation accounts for around 2% of global emissions11 but the industry admits it will be a challenge to reduce this figure, as there is no obvious solution in the near future. 

    The majority of these reductions will come from the use of sustainable aviation fuel, as well as new technology such as electric and hydrogen-powered aircraft. 

    Sustainable aviation fuel (SAF)12 is produced from sustainable feedstocks and emits up to 80% less carbon emissions over its lifecycle compared to traditional jet fuel. It is currently more expensive, but is expected to become more cost efficient as technology develops. It has been used in the airline industry since 2008 and has so far powered more than 250,000 flights13. However, this fuel is currently in short supply.

    In collaboration with Airbus, the industry is exploring the use of hydrogen, stating that it expects to start building a hydrogen-powered airliner by 203014 and for one to enter service by 2035

    Another part of the plan to decarbonise aviation is through the use of new types of aircraft. In collaboration with Airbus, the industry is exploring the use of hydrogen, stating that it expects to start building a hydrogen-powered airliner by 203015 and for one to enter service by 2035. Rolls-Royce, meanwhile, is testing an electric plane.

    The International Air Transport Association, which has committed to net zero by 2050, has said that the remaining emissions would be eliminated by carbon capture or offsetting.

     

    Growing pressure

    The transport sector is under pressure: from retailers who want to see a reduction in their environmental footprints and from a consumer base which now sees sustainability as one of its main concerns when choosing where to shop. The deadline is one that looms for many - 2050.

    ln order to meet those demands, action is needed quickly. Emissions from burning fossil fuels will need to be tackled at a time when demands on freight, as well as personal transport, are increasing16. Yet whatever those demands and pressures, the prospect of failure presents a far greater threat.

     

    1 https://www.theguardian.com/business/2021/nov/25/uk-shoppers-face-biggest-price-rises-in-over-30-years-this-christmas
    2 https://ec.europa.eu/clima/eu-action/transport-emissions/reducing-emissions-shipping-sector_en
    Global shipping is a big emitter, the industry must commit to drastic action before it is too late | Casten Ned Nemra | The Guardian
    4 https://www.bbc.co.uk/news/business-56835352
    5 https://www.ft.com/content/800faea2-1024-4ea6-ade6-1680820e925b
    6 https://brc.org.uk/climate-roadmap/section-6-pathway-3-moving-to-low-carbon-logistics/611-heavy-goods-vehicles-hgvs/
    7 https://www.gov.uk/government/news/uk-confirms-pledge-for-zero-emission-hgvs-by-2040-and-unveils-new-chargepoint-design
    8 https://www.ft.com/content/7d49589b-ff50-444d-8eef-b8abe5691f91
    9 https://www.ft.com/content/7d49589b-ff50-444d-8eef-b8abe5691f91
    10 https://www.gov.uk/government/news/uk-confirms-pledge-for-zero-emission-hgvs-by-2040-and-unveils-new-chargepoint-design
    11 https://www.atag.org/facts-figures.html
    12 https://www.bp.com/en/global/air-bp/news-and-views/views/what-is-sustainable-aviation-fuel-saf-and-why-is-it-important.html
    13 https://www.shell.com/business-customers/aviation/the-future-of-energy/sustainable-aviation-fuel.html
    14 https://www.ft.com/content/87941b8d-0460-4b54-a861-d6ebc6da29e8
    15 https://www.ft.com/content/87941b8d-0460-4b54-a861-d6ebc6da29e8
    16 https://theicct.org/blog/staff/vision2050-explained-may2021

    Wichtige Hinweise.

    Die vorliegende Marketingmitteilung wurde von der Bank Lombard Odier & Co AG oder einer Geschäftseinheit der Gruppe (nachstehend “Lombard Odier”) herausgegeben. Sie ist weder für die Abgabe, Veröffentlichung oder Verwendung in Rechtsordnungen bestimmt, in denen eine solche Abgabe, Veröffentlichung oder Verwendung rechtswidrig wäre, noch richtet sie sich an Personen oder Rechtsstrukturen, an die eine entsprechende Abgabe rechtswidrig wäre.

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