Transport Revs up Australia’s Emissions

Transport red-lines as Australia’s carbon budget is spent years early

  • Australia’s Transport emissions for Q4/FY2018 were again the highest on record.
  • By 2030, will grow +29% on 2005 levels under current and proposed policies
  • Global freight transport volumes will triple by 2050

Tyranny of distance

For the third consecutive year, Australia’s greenhouse gas emissions are at record highs, driven largely by transport emissions and the continuing rapid rise in diesel used by trucks. Heavy-duty vehicles produce most of every city’s smog and toxic air pollution and road freight is the fastest growing greenhouse gas emitter on the planet.

Growing populations in Australia and globally are getting richer and living longer, driving unprecedented demand for global trade and freight transport. Climate change can’t be stopped without decarbonising transport, yet because it relies on oil for 92% of its energy, transport is particularly hard to decarbonise.

ITF Freight grow graph

Source:  International Transport Forum, Transport Outlook 2017

Action by freight operators will be vital to reducing transport emissions, and solutions are readily available, yet unlike trends in comparable countries Australia is making very weak progress in transport energy efficiency and fuel switching.

So how do we reconcile these trends with global agreements and targets to act on climate change, and reduce transport’s negative societal and environmental impacts to enable clean prosperity?

#ShiftHappens

There’s been little urgency for transport operators to change. Lower diesel prices and replacing carbon pricing policy with voluntary incentives (Emissions Reduction Fund, Clean Energy Finance Corporation) coincided with waning freight customer interest in reducing their broader environmental footprints.

Percentage change in emissions by sector since 1990, Australia

NGGI June18

Source: Quarterly Update of Australia’s National Greenhouse Gas Inventory: June 2018, Department of the Environment & Energy

Now, with Paris targets and UN Sustainable Development Goals directing action, businesses are publicising strategies to reduce carbon footprints. Customer expectations of their supply chain partners are fast-becoming the prime offensive weapon against negative transport impacts. To meet the below 2oC degrees scenario for freight transportation, systemic improvements are urgently required, so collaboration among shippers, logistics providers and carriers is crucial to decarbonise freight transport alongside the projected tripling in demand.

Shippers, those cargo-owning customers of freight transport businesses, are beginning to act. Pledges to improve Corporate Social Responsibility performance – through such disclosure programs as the Global Reporting Initiative, CDP (Carbon Disclosure Project), We Mean Business, Science-Based Targets Initiative and Taskforce on Climate-related Financial Disclosures – are driving multinational corporations to play their proportionate role in helping the world achieve the Paris target of net zero emissions by 2050, which demands measurement and collaboration along global supply chains.

Three shipping examples in 2018 are particularly telling of the shift that’s occurring.

  • Commodities trader Cargill, the largest private company in the USA, aims to cut shipping emissions 15 per cent by 2020 in response to both regulations and demands from its food manufacturing customers. It’s a rational business decision driven by the end consumer according to Cargill:

“This is not a charity project. We’re in a competitive space, operating in a market-driven economy. Things have to make economic sense, so we need to push [shipping companies] to be more efficient.”

  • Fertiliser producer Incitec Pivot became the first Carbon Neutral bulk shipping customer. While there’s been carbon offsetting available through airlines, container shipping lines and global freight forwarders for some time, and Australian road carriers like Kings Transport and Transforce already offset their own carbon emissions, none match the scale of Incitec’s neutralisation of 75,000 tonnes of CO2-e each year.
  • Maersk, the world’s largest container shipping group, pledges to cut net carbon emissions to zero by 2050.

And then there’s TK’Blue, the European ratings agency that precisely measures the social and environmental costs of Shippers’ logistics networks which it benchmarks against market peers to improve economic performance and reduce negative impacts. TK’Blue offers a new business model for Shippers to take control of their global multi-modal logistics footprint.

Becoming Transficient – Transparent, efficient transport

So, it’s in this climate of change, where customer-led collaborations share data, benchmark and disclose performance to systematically improve transport impacts, where I’ve passed my latest milestone in a decade-long quest to make a real difference in transport environmental excellence.

Clean Transport Action has morphed into Transficient, expanding into supply chain safety compliance and business development services that broaden the ways freight customers and fleet operators can build more efficient, competitive, ethical and profitable supply chains.

Transficient will continue offering leading edge transport carbon and energy advisory services delivered with collaborators Resource Intelligence, Green Squares and Mov3ment, with more exciting innovations to be announced in the coming months.

3 circles of Zero Carbon Transport:

3 circles

Business drives Action

Currently available and foreseeable policy measures and technologies can put transport on a decarbonisation pathway compatible with Paris agreement goals, and it’s clear to me that the self-interest of big business and their supply chain partners will really drive action in freight transport.

To join increasing numbers of leading organisations working together to solve big social and environmental challenges in transport and logistics:

Contact me on new email david@transficient.com.au and website www.transficient.com.au.

PS: Big thanks to Toustone, Dutch Media and Business Wodonga for huge support.

 

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$5 billion for Clean Transport

The United States now offers the transport industry a choice of funding incentives to help vehicle operators and technology providers get near-term action rolling out clean transport equipment and refuelling infrastructure across the country. 

On top of US$2.925 billion made available from the Volkswagen emissions scandal settlement, being shared between all States to accelerate deployment of advanced clean transportation technologies and reduce harmful emissions, various State and public utility schemes are offering millions of dollars to support residential charging station construction and the electrification of medium- and heavy-duty vehicles.

“The problem faced by fleets and other stakeholders will no longer be where they can find the funds, but how they can secure the right funding opportunity.”

Read the full story here: https://www.act-news.com/news/clean-transportation-funding/

Act Now to Achieve IMO Carbon Targets – ITF

The International Maritime Organization (IMO) target of reducing greenhouse gas emissions by “at least 50% by 2050 compared to 2008” aligns the shipping sector with the Paris Agreement temperature goals. Strong actions are needed. The IMO strategy relies on technological innovation and alternative energy sources for global shipping, and support of governments and shipping customers will be essential to realise this new level of ambition.

With intuitive timing, a tremendous amount of guidance has just been made available by the International Transport Forum, releasing a series of reports over the last month that provide comprehensive analysis of the options and actions needed by a host of players in the global maritime industry. They suggest a path forward based on assessments of advancing technologies and best practices in operational management and government policy being used around the world to tackle the issue.

Decarbonising Maritime Transport – Pathways to zero-carbon shipping by 2035

This report explores the full range measures to effectively reduce shipping emissions, which represent 2.6% of total global emissions, and offers recommendations on policies to incentivise decarbonisation. The business-as-usual scenario projects 23% growth in carbon emissions from international shipping by 2035, yet with maximum deployment of currently known technologies it’s possible to reach almost complete decarbonisation in that time.

Alternative fuels and renewable energy can deliver much of required reductions, combined with technological and operational measures to improve energy efficiency. Clear guidance and interventions from governments will be essential to accelerate commercial viability, technical feasibility and investment in sustainable technologies and fuels.

The associated Case of Sweden report analyses why the Swedish shipping industry are pioneers of low-carbon shipping and how other countries can learn from their success. Their remarkable progress in LNG, electric and methanol-powered vessels can be explained by stakeholder cooperation between shipping companies and large Swedish shippers dedicated to green supply chains, along with financial support and regulation from government.

ship CO2 visual

Visualisation of CO2e emission across global shipping routes in 2015. Source: ITF

Reducing Shipping Greenhouse Gas Emissions – Lessons from Port-Based Incentives

Ports have a crucial role to play in facilitating the reduction of shipping emissions. This report identifies port-based incentives currently in place, examining their features and impacts. Most common is the environmentally-differentiated port fee, applied in 28 of the 100 largest ports, yet impacts on global shipping emissions are only marginal. It argues for wider, harmonised application of green port fees, green berth-allocation policies, green procurement and carbon pricing schemes to help enforce the “polluter pays” principle.

Fuelling Maritime Shipping with Liquefied Natural Gas – The Case of Japan

Japan is positioning itself to become the Asian hub for bunkering LNG-fuelled ships on the main East-West trade lanes. Still a marginal share of the world’s fleet, 118 LNG-fuelled vessels currently operating globally will double by 2020 and CMA CGM’s order of nine LNG-enabled mega-container ships is expected to be followed by competitors. Other Asian ports are developing similar bunkering facilities, with Singapore and Japan collaborating on an Asian bunkering network.

LNG’s growth is driven by regulations to reduce SOx and NOx emissions from maritime transport. Its advantages over conventional fuels can reduce ship carbon emissions by 20% but “methane slip” releases fugitive emissions that can negate its greenhouse gas impact. Further technological development is needed to enhance LNG as a greenhouse-friendly transition fuel in shipping.

ship LNG heatmap

 Heatmap of LNG-fuelled ship positions. Source: DNV GL

Important themes for Australia

Two red spots on the above graphic represent the two dual-fuel LNG/diesel powered vessels now operating in Australia – the Siem Thiima platform support vessel services Woodside oil & gas fields on the North West Shelf, and the SeaRoad Mersey II Ro-Ro carries passengers, vehicles and freight across Bass Strait. Several vessels plying Bass Strait are due for replacement, with operators considering LNG-enabled vessels to be covered for the IMO sulphur rules coming in 2020.

Japan is the world’s biggest importer of LNG, much sourced from Australia. Woodside, Australia’s biggest LNG producer, is leading a ‘green corridor’ initiative to develop LNG as a marine fuel for iron ore carriers operating from north-west Australia to China and north Asia. The project aims to build LNG infrastructure and bunkering facilities in the Pilbara, and Woodside has partnered with key mining and shipping players to design vessels and bunkering facilities for a grand vision with a range of benefits beyond emissions reduction, including energy security, regional development and upskilling workforce capability. Yet Australia’s climate policy focus on renewable energy means there’s little government support available. The irony of Japan fuelling LNG ships coming to the Pilbara with Australia’s own gas is wasteful not just in a ‘food miles’ sense, but also the lack of value-add to our plentiful raw resources.

The ITF reports highlight the role of leading ‘green ship index’ RightShip in actions that shippers, charterers, banks and ports can take to decarbonise shipping. Their GHG Emissions Rating covers 76,000 ships, and RightShip recently announced Australia’s major ship charterer Incitec Pivot as the first customer for its new carbon neutral shipping solution built on its carbon accounting tool that measures the ship-sourced scope 3 emissions of shipping customers. While some shipping lines and freight forwarders offer a carbon offset service for containerised freight movements, the size of the environmental benefit of offsetting 73,000 tonnes of CO2e each year from 200 bulk ship charters is a game-changer for supply chain emissions reduction.

Global Shippers Forum

It’s timely also then that next week Australia hosts the world’s most senior gathering of shippers, trade logistics providers and government representatives at the Global Shippers Forum in Melbourne. There’s keen interest in the Global Reform session tackling the issue of carbon emissions in the international supply chain, touching on the work of the Global Logistics Emissions Council who’ve developed a universal method for calculating logistics emissions from road, rail, air, sea and transhipment centres to help control greenhouse gas emissions across whole logistics supply chains.

As part of the global multi-modal supply chain that will keep growing with international trade, shipping’s carbon reduction target fills another piece of the puzzle in a world now aiming for net zero emissions, and we must act now.

#GLECFramework

@smartfreightctr

Transport Emissions Policy: Kicking the Big, Growing Can down the Road

Transport has Australia’s biggest emission reduction task – and little government support.

The 2017 Review of Climate Change Policies released over Christmas presents a re-hash of current policies and policy reviews, deferring new progress to after the 2019 federal election. Transport emissions will continue growing at record levels in the meantime, begging the question:

How long can we keep kicking the transport emissions Can down the road?

Australia’s Fast-Growing Transport Emissions

trend target 2

Transport is the main culprit in Australia’s rising greenhouse gas emissions story, it’s emissions now at record highs driven by ever-growing demand for freight and passenger movement. The sector contributes 18% of Australia’s emissions and has the largest abatement task ahead to help meet Australia’s reduction targets – one third of Australia’s total task to 2030. With Australia’s Paris commitment effectively a ‘floor’, our reduction targets will increase in ambition. To meet science-based targets that will slow down climate change below 2 degrees warming, Australia’s abatement task should be doubled.

Either way, there’s much work ahead for the Transport sector.

This without considering emissions from the long shipping and air routes we depend so heavily on for trade. Shipping remains the only industry without global legislation to limit or offset greenhouse gas emissions.

can small      Global policy challenge

“Of all the myriad ways that energy is produced and used,

transportation has the greatest promise to change our lives for the better,

and yet it is languishing under business as usual.” – Rocky Mountain Institute

Neglecting Transport in climate policy is a global problem starting to get some attention. The Bonn COP23 climate negotiations in November introduced several transport initiatives to achieve the Paris 2050 goal of a net zero emission world economy, noting “without rapid and ambitious mitigation action, transport emissions could more than double by 2050”.

Far from its climate policy leadership a decade ago, Australia is stuck with growing transport emissions, relying on voluntary action with no strategic goals or policy to reverse the trend.

Change will come with China’s emissions trading scheme, where scope 3 emissions from transporting bulk minerals to market may be counted in Chinese carbon footprints, applying a carbon price that exposes our policy vulnerability and drastically reduce competitiveness.

can medium      Weak current policy

black spot

Transport is trapped in a carbon policy Black Spot nation-wide, often specifically excluded from energy policies at federal and state levels, while energy and emissions are a side show in transport policies. Vague notions of improving productivity and supporting low emission technologies instead of clear emission reduction targets and integrated supporting actions.

How much decarbonising of transport is evident in the policies identified by the 2017 climate policy review?

POLICY REVIEW TABLEThe industrial sector needs huge amounts of carbon offsets for Australia to meet its 26% emission reduction target by 2030, but with large volumes of low-cost offsets available from the land sector, Reputex expects no Transport abatement in its ACCU supply curve outlook.

Business-as-usual won’t accelerate take-up of new technologies, practices, or – critically – management focus; a bold strategic vision is needed.

can big jpg      2018 opportunity & risk

Several current policy reviews can together help address the task effectively at least cost:

POLICY REVIEW TABLEThey offer hope that 2018 could instead be a year for strong policy action, integrating suites of co-ordinated measures at all levels of government to guide and provide certainty for business investment in low carbon transport.

With the fastest growing emissions of any sector, Transport has the biggest decarbonisation task of them all. When the Can gets so big we can’t kick it any further, we may look back to 2018 and ask why we didn’t address it sooner, when action was less difficult and expensive than when we’re further down the road.

 

 

 

“Run on Less” proves more is possible, now

The “Run on Less” truck fuel efficiency experiment achieved outstanding results over 10 miles per gallon, crediting its’ success to conscientious drivers taking advantage of the best fuel-saving technologies available today.

Trucks from 6 fleets and an owner-operator traversed a range of cross-country USA routes, duty cycles and truck profiles over 17 days in the experiment backed by the US EPA Smartway program.

Despite enduring two major hurricanes and their operational consequences, the vehicles carrying real customer loads smashed the US national average of 6.4 mpg to show transport operators around the world what’s possible in fuel-efficient trucking.

Interestingly for Australian operators, aerodynamic technologies played a big role in lowering fuel consumption, especially trailer tails which aren’t legal in this country. Solar technology is also becoming viable, with 3 trailers using solar power for hotel loads, charging batteries or assisting auxiliary systems.

A collection of learnings about fuel-saving technologies and practices are available at the Run On Less website, where a webinar on the experiment will soon be available. Find detailed Confidence Reports on particular technologies with indicative paybacks at www.truckingefficiency.org, where operators can assess the pro’s and con’s of a range of fuel-saving techniques to suit their business needs.

Fuel is a linehaul truck’s biggest variable cost, so what would a 50% improvement do for your competitive position and bottom line?

China’s carbon trading to capture supply chain emissions

https://uk.news.yahoo.com/china-emissions-trading-scheme-puts-170005461.html

The carbon intensity of Australia’s exports to China will come under increasing scrutiny when its Emissions Trading Scheme is launched this year, joining moves both planned and already underway by a host of other Asian countries.

Scope 3 emissions, such as transport & distribution, are generated outside an organisation’s direct control and are often the largest part of their emissions. Exposure to highly carbon-intensive products and supply chains will meet an explicit price signal that could harm the competitiveness of Australian products, and needs our increasing attention.

CILTA to host regional logistics event

Looking forward to a “highly productive” transport event run by the Chartered Institute of Logistics and Transport (CILTA) next week:

The Next Generation of Logistics in Regional Victoria

New rail and road developments will boost freight productivity for the benefit of manufacturing, agriculture, retail and industrial businesses throughout northern Victoria and southern New South Wales, with the Melbourne to Brisbane Inland Rail project underway and the coming expansion of the High Productivity Vehicle Network along the Hume Highway.

Leading logistics and infrastructure experts and government planners will share their latest thinking to help logistics businesses and their customers begin their strategic planning for a prosperous future.

It’s next Tuesday 8th August 2017 at The Cube, 118 Hovell Street, Wodonga, Victoria, 9am – 5pm

Sign up for the event details here