Guide to Freight Emissions Compliance and Carbon Reduction in Logistics

The logistics industry faces unprecedented pressure to reduce its carbon footprint as new emissions regulations come into effect worldwide. Companies must understand their scope 3 emissions and implement effective carbon reduction strategies in logistics not only to maintain competitiveness but to lower emissions charges.

Understanding the Current Emissions Landscape

Carbon emissions in the shipping industry account for about 3% of global greenhouse gas emissions (Source: European Commission), making logistics emission reduction a critical priority. The logistics carbon footprint of any company extends beyond direct operations, encompassing complex supply chain activities that fall under scope 3 emissions categories.

The Three Scopes of Emissions

Freight emissions are categorized into three distinct areas within logistics:

• Scope 1: Direct emissions from company-owned vehicles and facilities
• Scope 2: Indirect emissions from purchased energy
• Scope 3: Other indirect emissions from supply chain partners and transportation services

Understanding these categories is essential for identifying supply chain carbon emission hotspots and achieving comprehensive supply chain CO₂ emissions reduction. You can refer to our latest blog post on the topic giving an overview of the GHG protocol, Scope definitions and Standards.

Key Carbon Emissions Regulations in Transportation

International Maritime Compliance

Maritime emission compliance involves several key frameworks:

• Energy Efficiency Existing Ship Index (EEXI) & Carbon Intensity Indicator (CII): These two regulations have been established by the International Maritime Organization. The EEXI measures the energy efficiency of existing ships and sets minimum requirements for reducing their carbon emissions. The CII measures a ship’s carbon intensity and requires it to meet specific emission reduction targets based on size and type. 
• IMO 2020: Mandates significant sulfur oxide emission reductions
• MARPOL Annex VI: Controls air pollution from ships

European Union Standards

Carbon emissions requirements in the EU include:

• EU Emission Trading System: (EU ETS) is a market-based approach implemented by the European Union to reduce greenhouse gas emissions. It operates on a “cap and trade” principle, where a limit is set on the total amount of emissions allowed, or companies must purchase emission allowances.
• EU Monitoring, Reporting, and Verification Regulation(MRV) regulation is a policy framework established by the European Union requiring ship owners to monitor and report greenhouse gas emissions from large ships operating within EU ports.
• EU Ship Recycling Regulation: is a policy implemented by the European Union establishing standards for the management of hazardous materials on ships, requiring the use of authorized ship recycling facilities and promoting the proper disposal and recycling of ships.
• CSRD: Corporate Sustainability Reporting Directive, an EU regulation that mandates more companies to disclose their environmental, social, and governance (ESG) impacts, risks, and opportunities in a detailed, standardized format.

Other Countries 

U.S.A

GHG emissions reductions measures  The U.S. National Blueprint for Transportation Decarbonization, led by the EPA, DOE, DOT, and HUD, aims to eliminate transportation-sector greenhouse gas emissions by 2050. Key strategies include travel efficiency (reducing single-occupancy trips, improving transit, and supporting cycling/pedestrian options), port emission reductions, and SmartWay, which has cut 152 million metric tons of CO₂ since 2004.

Canada

Transport Canada’s emission regulations are a set of policies and standards implemented by the Canadian government to control and reduce emissions from various modes of transportation. The regulations cover areas such as vehicle fuel efficiency, engine emissions, and adopting cleaner technologies to promote sustainable transportation in Canada.

China

China’s National Carbon Market is a carbon emissions trading system established by the Chinese government. The market sets a cap on emissions and allows companies to trade carbon allowances, incentivizing reductions.

Korea

Korea’s carbon market regulations for the transportation sector operate primarily through the Korean Emissions Trading System (K-ETS), which sets a cap on total emissions and requires covered entities in domestic aviation and maritime transport to surrender allowances for their emissions, as well as by a Target Management System (TMS) for smaller entities.

Australia

Australian Carbon Unit Scheme encourages carbon abatement activities, the Australian Government provides incentives called Australian carbon credit units (ACCUs). Under the ACCU Scheme, participants run projects that reduce or avoid greenhouse emissions (emissions avoidance) or remove and store carbon from the atmosphere (sequestration). Participants can earn one ACCU for every tonne of carbon dioxide equivalent (t CO₂e) emissions their project stores or avoids.

How to Reduce CO₂e Emissions in Transportation: Practical Strategies

1. Data-Driven Decision Making

Accurate emissions tracking requires precision in measurement methodologies. Companies should invest in logistics emission tools that provide:

• Real-time emission calculations using modeled data approaches
• Vessel-level emission profiles for informed carrier and service selection
• Integration with existing supply chain management systems for ease of use

2. Route Optimisation for Emission Reduction

Implementing ways to reduce CO₂e emissions from transportation starts with intelligent route planning. Logistics emissions tracking enables companies to:

• Compare door-to-door emissions across different port combinations
• Optimize routes based on carbon output rather than just distance
• Select carriers with consistently low emission ranges
• Select services that optimise port call rotations

3. Alternative Fuel Adoption

Although there is significant investment required, embracing cleaner fuel options will help to reduce emissions from transport

• Biofuels derived from renewable resources
• Liquified Natural Gas (LNG) for ocean vessels
• Electric vehicles for last-mile delivery
• Hybrid propulsion systems for maritime transport

4. Intermodal Transportation Benefits

Freight emission reduction can be achieved through strategic mode selection. Rail transport can reduce emissions by up to 65% for shipments over 1,000 miles compared to trucking alone.

Measuring and Tracking Logistics Carbon Footprint

How Does Logistics Reduce Carbon Footprint: Measurement Approaches

Successful logistics carbon footprint reduction requires accurate measurement using:

• Modeled data methodologies for precision
• Standardized frameworks like the GLEC Protocol, ISO 14083
• Regular benchmarking against industry standards

Logistics Emission Solutions Technology Integration

Modern carbon emissions supply chain management relies on:

• API-driven emission calculations
• Real-time tracking and monitoring systems
• Integration with procurement and sourcing platforms such as Keelvar
• Automated reporting for regulatory compliance

Supply Chain Carbon Emissions: Collaborative Strategies

Reducing Supply Chain Emissions Through Partnership

Reduce CO₂ emissions in the supply chain by:

• Collaborating with carriers committed to emission reduction
• Implementing freight consolidation programs such as Alpha Augmented
• Sharing resources and data across supply chain partners
• Establishing clear sustainability metrics in vendor selection

Carbon Emissions in Supply Chain Visibility

Achieving reducing supply chain carbon emissions requires:

• End-to-end emission tracking across all transportation modes
• Identification of high-emission shipments and routes
• Regular comparison against industry benchmarks
• Proactive adjustment of logistics strategies based on performance data

The Future of Sustainable Logistics

Reducing the carbon footprint in the logistics industry demands continuous innovation and adaptation. Companies that proactively address emissions legislation and broader transportation regulations will gain competitive advantages through:

• Enhanced customer loyalty and brand reputation
• Reduced regulatory compliance risks
• Access to sustainability-focused business partnerships
• Long-term cost savings through improved efficiency

Successful emission reduction requires a comprehensive approach combining regulatory compliance, technology adoption, and strategic collaboration. By implementing these strategies and maintaining focus on continuous improvement, logistics companies can significantly reduce carbon footprint transportation operations while meeting evolving regulatory requirements.

The transition to sustainable logistics is not just an environmental imperative—it’s a business necessity that positions companies for long-term success in an increasingly carbon-conscious marketplace. Searoutes offers the most granular data set to enable your Shipping

Ready to Transform Your Freight Emissions Strategy?

Navigating the complex landscape of freight emissions compliance and carbon reduction doesn’t have to be overwhelming. At Searoutes, we provide ISO 14083 and GLEC-compliant carbon emissions calculations, empowering you with vessel-specific, real-time data to make informed, sustainable decisions.

Take the next step toward a greener, more compliant supply chain. Connect with Josie to explore how our solutions can support your sustainability goals and help you stay ahead of evolving regulations.

📅 Schedule a meeting with Josie here and start your journey to smarter, cleaner logistics today.