Tag: CO2 emissions

3 ways to reduce co2 emissions from sea freight

Remember that reducing CO2 in the logistics is a multipoint process. Historically, shippers — companies who need to move goods from point A to point B — have access to a quarterly report built atop their shipment history. This report summarizes scope 3 emissions, i.e. all emissions related to moving goods, and aggregates them per mode, to present a synthetic view of emissions. In essence that report is static, it presents one KPI — the quarterly CO2e emissions — with which companies are left to adjust their CSR strategy, iterate, find ways to reduce that number at the next cycle. This iterative process is slow, every quarter comes one more data point. And it is essentially impossible to relate that figure to a cause. Are emissions up because we had a better quarter, because sales increased, or is it because our logistics and operations suffered. Is it down because we use greener transporters?

Reducing CO2 emissions, a matter of data.

To make things worse, CSR managers are often left to propose solutions independently of sourcing and logistics. It is difficult to present evidence supporting a particular CO2 reduction strategy over another. And, to add fuel to the fire, the evidence gathered relies too often on data coming from carriers — which is difficult to compare, and sometimes difficult to trust! — or from emissions calculators with outdated methodologies. Too often, we see initiatives based on the (measure — compensate) cycle. What if I told you there is another way?

There is a simple CSR strategy you can implement immediately. It is based around iterations on the (tender — source — report) cycle. All you need is better data. Before looking into it, let’s imagine you are VP Procurement at a large shipper, and that your KPI is to reduce the cost of freight in year n+1. What tools do you put in place, which actions do you take?

Most likely, you will seek transparency on your buying price, for a certain volume on a given route. You will want to compare it across carriers during tenders. During the quarter, procurement will execute on the nominated routes. And, at the end of the quarter, you will review the shipments actually done, and reconciliate. You’ll use the results of reconciliation in the next tender, to improve your bottom line.

As VP CSR seeking to reduce the GHG Emissions of freight — your scope 3! — your strategy is exactly the same: nominate (tender) — measure (spot) — learn (report). Let’s see it work in practice.

Tender — Know your CO2 per services.

In previous blog posts, you have seen how CO2 can be measured either using default data, detailed modeling or primary data. At Searoutes, we’re using detailed modeling to estimate the amount of emissions a vessel emits, for a particular route between a port pair, at a particular speed. We use schedule data and routing algorithms to reconstitute the fleets operation between port pairs, for each carrier and their alliance. The result is what we call a “CO2 risk profile”, per carrier. That risk profile allows shippers to choose a particular carrier during tender, given a CO2 target set by CSR.

In the picture bellow, we show for each route, and for each carrier, the average CO2e emissions per TEU. CO2 values are reported on the x axis, and routes & carriers are on the y axis. Each circle represents an offering by a carrier, or service, on which it operates a fleet. The diameter of a circle shows the heterogeneity of a fleet on that service, it’s the standard deviation of CO2 on that service. A small circle means all the vessels on that service are about the same age, and sail at the same speed, to emit similar CO2e / TEU. A large circle means there are very different vessels sailing the same service, in tonnage, speed and age. Finally the color of circles shows how fast a particular service is: a blue circle means a short transit time, and an orange circle shows a long transit time.

When looking at this picture, there are 2 immediate remarks to be made. First, different carriers end up with similar CO2 risk profiles. How can that be? The answers lies in the fact that carriers, via their alliance mechanics, share the same fleets on a particular service. Therefore the CO2, and its standard deviation, are similar for carriers offering the same port pairs, across the same alliance. Second, high Co2e values (right of the picture) correlate with higher transit times (orange circles). Likewise, low CO2e values (left of the picture) correlate with shorter transit times (dark blue circles). This is immediate, since longer vessel rotations mean longer transit times, and therefore longer distances, so higher emissions. It shows that distance naturally has an impact on both CO2 emissions and transit time. And both can be reduced by picking the right services. It is not always the case however, some services with low CO2 come with higher transit time. You can see orange circles on the very left of this graph as well.

Bottom line is, during the tender process, overlaying the right granularity of CO2 data can help you set your company on the right track, to meet you CSR goals. You then need to execute it well, in your spot procurement process.

Spot — Know your vessels.

After CSR has set targets of CO2 emissions per trade lane, or port pair, you are left to execute, as part of the procurement process. When buying freight, your main worry is the cost, to make sure your lead times are respected, and that you find space on vessels (especially these days). However, CO2 values vary drastically, depending on the service you choose, or which vessel operates a particular loop. You can see for instance on the pictures below, a few schedules for 3 carriers between Hamburg (DEHAM) and Los Angeles (USLAX) coming from our Searoutes’ planner tool.

While reporting transit times, indicative price, carrier and number of transshipment, we also report CO2 values per TEU (in green). For the same carrier, the delta in CO2 between services on that port pair can be as large as 81%. Choose wisely!

Let’s look at comparable transit times. We see on the picture below, the 4th option down which shows a service with 2 transshipments and 29 days of transit time. That service emits 1.27 ton CO2 / TEU on average.

On the picture below, a direct rotation with no transshipment shows 2.03 ton CO2 / TEU with the same transit time of 29 days. That’s an increase of 60%!!

Why does a “direct” service emit more CO2? That’s related to the actual length of the rotation (the intermediate stops), the size of the vessel and its speed.

Assuming procurement has made wise decisions over the quarter, in line with the CO2 emission goals you set during the tender, comes reporting at the end of the quarter. This is a time when you check how you’ve performed against your targets, and start adjusting your CO2 strategy.

Report — Know your worst CO2 performers.

Once the month or the quarter is over, it’s time to review procurement decisions, measure relevant KPIs and confront them to the objectives set at the beginning of the quarter. CO2 KPIs often involve the computation of the intensity factors in kg CO2e / ton.km. It is a measure of how much CO2 is emitted, considering the weight of all the goods transported, and the kilometers traveled. The normalization to ton.km allows one to compare values month to month, independently of if volumes or distances have changed (and they most surely did!).

Typically, the monthly report is constructed in the same fashion as the example below 👇

The intensity factor however, does not have any causality link between a CSR or procurement decision, and the actual increase or decrease of that factor. The only way to find out what worked, is to go one level below, look at which shipment incurred abnormally high emissions, and what can be done to remedy it.

One avenue to explore, is how does your footprint compare to averages on the same port pair, or trade lane. Or how does your intensity factor for that port pair compare to last year’s? Isolate the long tail, the outliers, the shipments with significantly higher emissions than the benchmark. You can then look at the offering of other carriers, and put in place policies to frame these shipments in the next tender.

Everything you need to know on the GLEC Framework and the calculation of CO2e emissions

Because a lot of initiatives have been launched using different methodologies, data, and frameworks to compute CO2e emissions, you may not know where to start. 

In this blog post, we focus on the calculation of Scope 3 emissions. The objective is to give you a clear and simple overview on available methodologies and what you have to consider when it comes to CO2e calculation. 

How to find your way through CO2e emission calculation methodologies? 

Good to know: CO2 and CO2e difference. 

CO2e (equivalent) is a unit of measurement designed to compare and aggregate the impact on global warming of all greenhouse gases (GHG) such as nitrous oxide (N2O), methane (CH4), perfluorocarbons, etc. It measures the 100-year global warming potential of GHG. It calculates the heat absorbed by any greenhouse gas for 100 years in the atmosphere as a multiple of the heat that would be absorbed by the same mass of CO2. For example, 1g of CH4 will absorb over 100 years 25 times more heat than 1g of CO2. Hence 1g of CH4 in CO2e is equals to 25gCO2e. CO2e allows to take into account all GHG in the same value representing the impact on global warming; that’s why we calculate CO2e and not only CO2.

Smart Freight Centre to get everyone on the same page.

As of today, there are no ISO standards to measure CO2e in logistics and there exists a lot of ways to do it across modes. Main calculations for logistics emissions are:

  • The GHG protocol but it is not tailored to logistics
  • ISO standards 14064-I based on GHG protocol dec 2018

That is why the Smart Freight Center (SFC) was created in 2013. It aims to make the global freight sector more environmentally sustainable and competitive. SFC brings together the logistic community to compute CO2e in a consistent way across modes through their Global Logistics Emissions Council (GLEC) to meet an efficient and zero-emissions global logistics sector 

In 2016, the SFC released the GLEC Framework, in alignment with Greenhouse Gas Protocol, UN-led Global Green Freight Action Plan and CDP reporting

This is a guide for shippers, carriers and logistics service providers on how to measure and report emissions from logistics operations. To date, this is the only globally recognized methodology for harmonized calculation and reporting of the logistics GHG footprint across the multi-modal supply chain.  

Good to know: An ISO norm planned to be launched in 2022. 

The ISO 14083 norm  “Quantification and reporting of greenhouse gas emissions of transport operations” should be applied in 2022 to provide a single way to compute CO2 widely accepted and followed by industry, governments and investors. GLEC framework and other documents established by the standardization community (EN16258, ISO International Workshop Agreement) will be used as the baseline for standard development ISO.

This framework has taken into account methodologies and initiatives developed to measure CO2e across modes. Here below are the carbon accounting methods used to develop the GLEC Framework.

GLEC Framework for Logistics Emissions Methodologies

As you may know, a lot of providers have arisen to compute the carbon footprint of transport, but they differ from each other as they won’t use the same data and calculations. Some of them are SFC accredited in accordance with GLEC, others follow standard methodologies. How do you find your way? Data and calculation models are key when it comes to choosing your solution provider. Here’s how to make sense of it.

Input data types, CO2e emissions backbone

There are many ways of estimating CO2e emissions depending on the information you have and the level of accuracy you need.  This part aims at presenting the main differences between  the type of data and calculation approach used so that you better understand the offer.

Basically, the differences from the different available calculation methods come from the different data used for the calculation. This data can be of different types : 

  • Primary data;
  • Default data;
  • Detailed modeling.

These different types apply to any data you might need, for example :

  • Fuel consumption;
  • Electricity consumption;
  • Distance;
  • Vehicle specific emission factors;
  • Etc…
Real data from the carrierModels combine shipment data with information on vehicles and fleets in order to model fuel use and emissions.Industry average figures using standard assumptions of vehicle efficiency, load factor and empty running.
Example: Total annual emissions or average emissions per tonne-kmExample : SearoutesExample: SmartWay carrier performance data; Clean Cargo Working Group carrier data
Primary data

In other words, primary data could be called “real data”. Using primary data for CO2e calculation can be the most accurate method but it requires a lot of data that is often not public.

For example, the best method to calculate CO2e emissions is via the fuel consumption, using an emission factor (that converts kg of fuel burnt to kg of CO2e). In order to apply this method, you need the “primary data” : here the fuel consumption of the specific vehicle that carried the shipment from the source to the destination.

For example, suppose you know the vessel consumed 4600t of fuel and transported 15000TEUs. According to the GLEC, for 1g of BFO burnt, 3.41g of CO2e is emitted. Then the emissions of 1 TEU are 4600 * 3.41 / 15000 = 1046kg. 

The primary data can be of any type. For example, if your calculation method is based on the distance, primary data can be the exact distance travelled by your shipment as reported by the carrier instead of an approximation based on the source and destination.

Primary data can also be an aggregate of real data; for example an average value of the fuel consumption of all the vessels of a trade lane of a given carrier for the entire year. In this case, the results of CO2e calculations would be less accurate but still based on real life data.

Advantage : more accurate results if the information reported is complete and granular (depending on the type of data).
Disadvantage : hard to obtain and hard to have consistent data across all the carriers. 

Default data

The name of this data speaks for itself, they are default values that you can use when you don’t have much information on the shipment. 

One of the most well known default data is the GLEC default emission factors. For example on sea, GLEC recommends using the Clean Cargo Working Group emissions factors and on road the Smart Way emissions factors (US specific) and EN 16258 emissions factors. 

For any transport mode, they provide default CO2e emission factors in g/t.km (or g/TEU.km for sea transport). These factors represent the average shipping conditions for this mode and are not specific to your shipment.

For example, suppose you ship one TEU from Shanghai to Antwerp. According to the GLEC default emission factors, the shipment produces 49g of CO2e per km (Asia to-from North Europe trade lane). Using Searoutes route calculator, the distance from Shanghai to Antwerp is approximately 19700km. Hence the CO2e emissions of the shipment will be approximately 965kg CO2e.

Emission factors can be more or less granular but are always aggregate values. For example, you can use a train default emission factor or you can use an electric train default emission factor if you have this information.

Advantage : easy to obtain, easy to use.
Disadvantage : less accurate, cannot be used to implement a reduction strategy.

Detailed modeling

The detailed modeling can be seen as the middle way between primary data and default data. It makes it possible to calculate more accurate CO2e emissions without having access to all the primary data. Of course, among the detailed modelings, different levels of accuracy exist based on the complexity of the model used.

Let us detail a bit with some examples.

Suppose you ship a TEU from Shanghai to Antwerp in a 4000-7000 TEUs vessel. You do not know exactly which vessel your cargo was loaded on but you know its approximate size. Some calculators provide a modelization for vessel types and for some size ranges to be able to calculate CO2e of a type of vessel on a given distance. For our example, you would look for the emission factor of a container ship of around 4000-7000 TEUs and apply it.

Now suppose you know the IMO number of the vessel that carried your shipment. You can model the fuel consumption of this specific vessel and estimate the CO2e emissions of this specific vessel on the given distance. This is what we do at Searoutes.

For example, one TEU from Shanghai to Antwerp would emit 967kg CO2e on IMO 966xxxx vs 930kg CO2e on IMO 972xxxx.

Again, the detailed modeling can be applied to other data like distance. To keep our example of a TEU from Shanghai to Antwerp, detailed modeling can mean estimating the distance travelled using actual services instead of a direct distance. For example, on CMA CGM FAL8, the sequence of ports is the following : Shanghai, Kaohsiung, Yantian, Singapore, Columbo (Sri Lanka), Antwerp which represents around 20,270km (vs 19,700km for the direct route).

Based on the complexity of the models used for each data point, this method is the most granular in case you don’t have access to primary data specific to your shipment.

Advantage : does not need specific data, can be extremely accurate.
Disadvantage : requires sophisticated models.

As a shipper, how can I choose the right CO2e calculator partner?

Before you leave we wanted to share with you some tips to help you choose your CO2e calculation provider.

First, ask yourself: Which data do I wish to use to compute Co2e?

  • Detailed modeling
  • Default values
  • Primary data

Next, below are 4 questions to ask your provider, to evaluate his calculation and data reliability. 

  1. Is your calculation methodology accredited?
  2. Where does your distance data come from?
    • Theoretical distances
    • Direct distances
    • Network distances
  3. Which parameters do you take into account to compute CO2e?
    • Cargo types
    • Vehicle characteristics
    • Fuel types
    • Speed
  4. Can your co2 calculation provider take care of your scope 3 emissions declarations, in compliance with standards methodologies or framework?

Choosing the right partner to help you reduce CO2e emissions becomes a challenge when you don’t have all the ins and outs to make good decisions. But if you are alert to signals that point to solutions that are likely to lack accuracy and reliability, you can choose the right partner to support your CSR strategy. Want to know how Searoutes can help you?

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