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Decarbonising Freight Transport

Professor Alan McKinnon

Logistics Research Centre

Heriot-Watt University

EDINBURGH, UK

European Responsible Care Conference

Prague 22nd October 2009

Extent of Arctic summer ice cover

million km2

most pessimistic

projection summer ice-

free Arctic by 2100

Some models now

projecting ice-free Arctic

by 2015-2020

Greenland Ice Melt

Source: European Environment Agency

25% of all fresh water frozen in the Greenland ice sheet /

complete melt would raise sea-level 7m

Exposure to Sea Level Rise of 7 metres

Source: http://flood.firetree.net

12 Ecological Tipping Points

Source: Schellnhuber, Potsdam Institute for Climate Impact Research

5.3

8.9

19

4.3

0.90

2

4

6

8

10

12

14

16

18

20

USA UK Sweden China Africa

Metr

ic t

on

nes o

f C

O2 p

er

pers

on

National Variations in Annual CO2 Emissions per Capita (2006)

Source: International Energy Agency

2 tonnes

by 2050

Global per capita limit to keep within 450 ppm of CO2

to keep temperature rise within 2o C by 2100

2006 emissions

International aviation & shipping*

UK non-CO2 GHGs

Other CO2

Industry (heat & industrial processes)

Residential & Commercial heat

Domestic transport

Electricity Generation

* bunker fuels basis

2050 objective

159 Mt CO2e

695 Mt CO2e

77% cut (= 80% vs. 1990)

2006 emissions

International aviation & shipping*

UK non-CO2 GHGs

Other CO2

Industry (heat & industrial processes)

Residential & Commercial heat

Domestic transport

Electricity Generation

* bunker fuels basis

2050 objective

159 Mt CO2e

695 Mt CO2e

77% cut (= 80% vs. 1990)

77% cut (= 80% vs. 1990)

UK CO2e Reduction Targets

Source: Committee on Climate Change

5-year interim carbon budgets

Carbon trajectory to 2050

34% reduction in CO2 relative 1990 by 2020

Forecast Growth of Freight Transport Activity by Region 2000-2050

Source: World Business Council for Sustainable Development - Mobility 2030 report

CO2 emissions per tonne-km also increasing due to switch from rail and water-borne transport to trucks and planes

+150%

freight transport = 8% of energy-related CO2 emissions worldwide

Decarbonisation Scenario for UK Road Freight in 2050

Amount of freight movement stable at 2007 level

Road share of freight tonne-kms reduced from 64% to 50%

% of truck kilometres run empty reduced from 27% to 17%

Average weight-based load factor up from 59% to 70%

40% improvement in energy efficiency

30% reduction in the carbon content of the energy

76% reduction in CO2 emissions

Combination of radical changes in key parameters required

Ignores complex inter-relationship between freight transport and other activities

Analysis by Maja Piecyk

Stabilisation Wedges

applied to freight transport operations

Business-as-Usual trend

Carb

on e

mis

sio

ns

2050

Adapted from Pacala and Socolow, 2004

electrification of transport with

low / zero carbon electricity

80%

increase fuel efficiency

improve vehicle loading

freight modal shift

reduce transport demand

Decreasing Carbon Intensity of Electricity Generation

2006 20202010 2030 2050

gC

O2 p

er

kW

h

Source: Committee on Climate Change, 2008

Projection for the UK

Direct transmission to freight transport services:

Increase in % of electrified rail infrastructure

(from 52% in EU in 2005)

Trolley trucks for inter-urban road network?

Electrification of Road Freight Transport

Batteries - improving storage capacity, performance, recharge times etc

- development of new value chain for batteries

hybrids plug-ins / all electric

Hydrogen – heavy energy use in production, compression, liquification etc

- need new infrastructure for storage and distribution of hydrogen

Energy Storage and Carrier Systems for Vehicles

‘Renewable energy is better distributed by electrons than by hydrogen’ (Bossel, 2004)

Stabilisation Wedges

applied to freight transport operations

Business-as-Usual trend

Carb

on e

mis

sio

ns

2050

Adapted from Pacala and Socolow, 2004

electrification of transport

low / zero carbon electricity

80%

increase fuel efficiency

improve vehicle loading

freight modal shift

reduce transport demand

Supply Chain Decarbonisation Measures

Source: World Economic Forum / Accenture

Reduction in congestion13

Increased home delivery12

Near-shoring / relocalisation11

Reverse logistics / recycling10

Freight modal shift9

Training and communications8

Enable low carbon production7

Improved packaging design6

Increased energy efficiency of buildings5

Optimisation of logistics networks4

Localised sourcing of agricultural produce3

Slowing down product flow2

Clean vehicle technology1

Reduction in congestion13

Increased home delivery12

Near-shoring / relocalisation11

Reverse logistics / recycling10

Freight modal shift9

Training and communications8

Enable low carbon production7

Improved packaging design6

Increased energy efficiency of buildings5

Optimisation of logistics networks4

Localised sourcing of agricultural produce3

Slowing down product flow2

Clean vehicle technology1

Advances in Vehicle Technology

Teardrop Dolphin

Drag coefficient 0.35

(average car)

0

50

100

150

200

250

300

350

Engin

e

Aerody

namic

s

Tyres

Aux

iliar

y eq

uipm

ent

Trans

mis

sion

Tota

l

En

erg

y (

kW

h)

base level after target reduction

Source: US 21st Century Vehicle Partnership

turbo-charging

anti-idling devices

low rolling resistance tyres

lightweighting etc.

Less potential for raising energy

efficiency of European trucks

Source: US 21st Century Vehicle Partnership

US Class 8 Truck

Shipping

3.3% of greenhouse gases today

Forecast growth of CO2 from ships

(with 33-50% increase in fuel efficiency)

69% reduction in CO2 per

container carried relative to

current average container ship

NYK Super-Eco Ship 2030

1bn

2008

2.4bn3.6bn

Source: Committee on Climate Change 2008

15-30% in carbon constrained world of 2050

2050

Weight of goods produced / consumed

Weight of goods transported by road

Road tonnes-lifted

Road tonne-kms

Total vehicle-kms

carbon intensity of energy

energy consumption

CO2

modal split

average handling factor

number of links

average length of haullength of links

average load on laden trips

average % empty running

Vehicle operation / fleet managemnet

energy efficiency

Similar analyses for other modes

timing of deliveries

aggregate key parameter - decarbonisation lever

Decarbonisation Framework for Logistics

supply chain structure

asset utilisation

energy efficiency

carbon content of energy

modal splitmodal split

warehousing /

materials handling

space /

equipment use

Levels of Logistical Decision-making

STRATEGIC: numbers, locations and capacity of factories and warehouses

Restructuring of logistical systems

COMMERCIAL: trading links to suppliers, customers and sub-contractors

Reconfiguring supply chains

OPERATIONAL: scheduling of production and distribution operations

Rescheduling of freight flows

FUNCTIONAL: day-to-day management of the logistics function

Changes in the management of freight transport

Interaction between decisions at different level determines

volume of freight traffic and related externalities

Green measures implemented at lower levels offset by

effects of higher level strategic decisions

Decarbonisation Options

• Reduce freight transport intensity

• Switch to greener transport modes

• Improve vehicle utilisation

• Increase fuel efficiency

• Reduce carbon intensity of fuels

Source: European Environment

Agency – TERM 2007 report

Ways of Reducing Freight Transport Intensity

Decentralisation / Re-localising

Reducing demand for freight movement

May not reduce energy / CO2 on a life cycle basis

Swap arrangements

for basic chemicals

Retail distribution centre assembly plant supplier warehouse

Pre off-shoring Post off-shoring

Export of carbon-generating activities reducing EU’s ‘carbon footprint’

Embedded carbon in imported products

Off-shoring production and distribution







% of total inland freight tonne-kms in EU 25

0

10

20

30

40

50

60

70

80

90

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

% o

f to

nn

e-k

ms

road

rail

inland waterway

72%77%

21% 17.5%

7% 5.5%

Source: Eurostat

Variations in CO2 Intensity by Freight Transport Mode

Assumptions about average load factors ?

Line-haul or door-to-door ?

Primary energy source of electricity ?

Inclusion of infrastructure development / maintenance ?

Passenger / freight split (bellyhold air and ferries) ?

Assessing the carbon benefits of freight modal shift

0

10

20

30

40

50

60

70

80

90

Heavy truck (

>38 tonnes

gross) - average

load

Heavy truck (

>38 tonnes

gross) - full

loaded

Short-sea

container ship

Rail Coastal ferry

(large 4500

deadweight

tonnes)

Deep-sea

container ship

Pipeline

gC

O2

per

ton

ne

-km

Petrochemical Sites

Existing Pipelines

Petrochemical Sites

Existing Pipelines

Concentrated Petrochemical Sites

Pipelines

Concentrated Petrochemical Sites

Pipelines

Concentration of Chemical Capacity and Integration of Pipeline Network

Source: Pratorius, 2004

Factors constraining vehicle loading

Regulatory

Market-related

Inter-functional

Demand fluctuations

Unreliable delivery schedules

Vehicle size and weight restrictions

Goods handling requirements

Incompatibility of vehicles and products

Lack of knowledge of loading opportunities

Infrastructural

Poor coordination of purchasing, sales and

logistics

Limited storage capacity at facilities

Health and safety regulations

Equipment-related

Just-in-Time delivery

Just in Time Deliveries – Too Carbon Intensive?

Some suppliers have adapted better than others to

the disciplines of just-in-time delivery

Relaxation of JIT

Switch to slower, lower carbon modes

Greater load consolidation

Lower speed limits

Relaxing Maximum Truck Length and Weight Limits

Longer and Heavier Vehicles

Potential benefits of 25.25 metre 60 tonne LHVs

• Replace 3 trucks with 2

• Reduce vehicle-kms and accident involvement

• Achieve fuel and CO2 savings 7%-25%

• Cut operating cost by 15-20%

Excludes diversion of freight from other modes and possible traffic generation effect

European Rail Industry Perspective on LHVs

CER – European Rail Association

Dimensions of Supply Chain Collaboration

Collaboration with LSPs

Horizontal

collaboration

Vertical collaboration

Core

individual

company

capability

Between companies at the same level in the supply chain:

within same sector in different sectors

Between companies at different levels in the supply chain

Creation of partnerships

Contractual relationship already exists

http://www.cefic.be/files/Publications/

supply_chain_excellence.pdf

Impact of Fuel Efficiency Measures (US data)

0 2 4 6 8

Maximum speed reduction (65-60 mph)

Idling reduction (automatic engine idle)

Driver training and monitoring

Improved Tractor Aerodynamics

Improved Trailer Aerodynamics

Wide-base tyres

Tare weight reduction

Low friction engine lubricants

Low friction drive train lubricants

Automatic tyre inflation systems

% fuel savingSource: Ang-Olsen and Schroeer

UK: 7% fuel efficiency gain

Eco-driving

Environmental Trade-off

CO2 versus other emissions

Truck engine

energy efficiency rating

Source: MAN AG Sept 2007

Euro 6 standard for heavy duty vehicles will carry 2-7% CO2 penalty

Source: Volvo

Effect of Worsening Traffic Congestion on Fuel Efficiency

United States: relieving congestion at 437 key bottlenecks would save

4.1 bn gallons of truck fuel over 10 years

45.2 million tons of CO2 over 10 years

source: American Trucking Association






• Reduce carbon intensity of transport energy

Biofuels: the rise of bio-methane

EU well-to-wheel

comparison of CO2

emissions from

biofuels

C02 emissions per km

Could displace 8% of transport fossil

fuel in the UK

Adapting the Chemical Supply Chain to the Effects of Climate Change

7 metre sea level rise

How much chemical production and storage capacity is at risk of flooding

Source: http://flood.firetree.net

Conclusions

• Broad range of decarbonisation measures and incentives available

• At an operational level, close correlation exists between CO2 and cost reductions

• Still much ‘low hanging fruit’ to be harvested in the ‘logistics garden’

• Exploiting self-financing green measures will not be enough

• Need stronger green commitment / mindset – especially at strategic level

• Freight transport / logistics will eventually be covered by emissions trading scheme

• Adapting to inevitable climate change poses major logistical challenges

To be published in March 2010

Logistics Research Centre

Heriot-Watt University

EDINBURGH UK

[email protected]

http://www.sml.hw.ac.uk/logistics

Contact details

www.greenlogistics.org

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