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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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

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

How to lift energy productivity in Freight Transport

A Roadmap to double energy productivity in Freight Transport by 2030” is now released for comment, and yours will be most welcome.

Urgent action is needed to generate more economic value from the energy used to move freight in Australia, as congested cities increasingly constrain productivity across the economy. Decisions made today can lock-in energy-intensive freight transport activities for decades.

Published by the Australian Alliance for Energy Productivity using extensive consultation with leading transport businesses, industry associations and government stakeholders, the roadmap aims to agree actions and priorities for both industry and government under the National Energy Productivity Plan (NEPP).

Transport is now Australia’s largest energy user, and with the freight task to grow 25% over the next decade, it will have ever-greater influence on congestion, climate change, air pollution and economic productivity across all sectors. The transport sector has some of the most cost-effective opportunities for energy and emissions savings, yet as the NEPP 2016 annual report notes, raising energy productivity in freight and commercial transport relies largely on voluntary action, and little progress is being made.

The Roadmap considers trends that will shape future energy use in the sector, including increasing urbanisation, a shift to renewable energy, vehicle electrification, connectivity and intelligent transport systems, automation and business model transformation. It gauges the extent of improvements possible via known technologies; it highlights the uncertainty expected from various levels of disruption that is coming; and it identifies measures to help the transition to a much more energy-productive freight sector.

Key suggestions will be incorporated into its final version, so please check it out and contribute your ideas.

 

How will Blockchain Disrupt Freight Transport?

Blockchain technology could slash the cost of transactions and reshape the economy.

Blockchain technology will soon facilitate and track financial payments, cross-border trade and freight flows. A peer-to-peer digital network, blockchain is an open-source distributed ledger that records transactions between two parties efficiently and in a verifiable, secure and permanent way, while also enabling ‘smart contracts’ that trigger transactions automatically.

Logistics companies are already using blockchain for commercial settlements of bills of lading and customs; to pay for international cargo fees with Bitcoin crypto-currency; to decentralise the tracking of shipping containers; and to record a globally accessible provenance trail for diamonds that has enormous applications for quality assurance in retail, agriculture and pharmaceuticals supply chains.

The impact of blockchain on freight transport will go hand-in-hand with the rise of autonomous and connected vehicles and other exponential technologies. Envision a world where self-driving vehicles, with routing and pricing software tuned to minimise energy use, are guided to the quickest route by real-time traffic updates and to the next customer by real-time requests, with blockchain eliminating the middleman to match freight with vehicles, charge transaction fees and set terms and conditions in a smart contract that sends payment to a supplier as soon as sensors confirm a shipment is delivered. No drivers, back office staff or banks required. Tolls, parking, energy and maintenance automatically transacted. Logistics companies face the prospect of competing with anonymous fleets of privately-owned vehicles optimised for quick, low cost delivery services.

Is this a realistic vision of blockchain’s impact on freight transport? What other possibilities are emerging? And how soon must we be ready for blockchain integration to our business models?

Are you ready for Intelligent Transport Systems?

Melbourne’s ITS World Congress 2016 was a mind-blowing experience for someone getting up-to-speed with the latest in a fast-changing field.

With 12,000 delegates from 73 countries, this annual event tracks the rapid progression in Intelligent Transport Systems (ITS), where leading players show how new transport technologies are disrupting business models across the globe.

No longer science fiction or 5-10 years away, ITS is already here, and not just in big cities like London, Singapore and San Francisco. Smaller places like Milwaukee, Ohio and Estonia are showing that Intelligent Transport Systems can be applied anywhere for those willing to collaborate and share value in new ways.

Visions of Transport’s Future:

ITS offers a vision of seamless transport of people and goods by connecting all elements of multimodal transport – passengers, freight, vehicles, information and communications technologies and infrastructures – in a digitally integrated system.

The National Transport Commission believes five disruptive technologies will change transport systems over the next 25 years:

  • Automation
  • Connectivity
  • Big Data analytics
  • The sharing economy
  • Zero emission vehicles

They see fleets of driverless vehicles providing on-demand shared passenger and freight transport services with a dramatic reduction in private vehicle ownership and the number of vehicles on our roads. Government reliance on fossil-fuel-based revenues to fund transport infrastructure is in jeopardy from relentless fuel-efficiency gains even before electrified vehicles (EVs) emerge, inevitably needing ‘user pays’ road pricing based on when, where and how people use roads.

Then there’s Gartner’s three key emerging digital technology trends for the next 5-10 years:

  • Transparently immersive experiences, such as brain-computer interfaces, augmented and virtual reality;
  • Perceptual smart machines, where radical computational power enables machine learning, artificial intelligence, autonomous vehicles/drones and smart robots;
  • The platform revolution, allowing organisations to connect with new business eco-systems that exploit internal and external algorithms to generate value, including quantum computing, Blockchain and Internet of Things (IoT) platforms.

Add to this picture a series of global Megatrends: urbanisation; online retail with free, fast shipping globally; decarbonisation and green finance; mobile connectedness; and social media, to name a few, and you get an explosion of new business models enabled by technology and collaboration that change the very nature of how people and freight move today.

What will this mean for Freight?

How will freight movement be transformed, and how will transport operators need to change their traditional thinking? Some opportunities include:

Smart GIS:           Geographic Information System (GIS) mapping provides content and context about everything, where everything that moves or changes is measured and reported real-time to networks in geospatial frameworks. Advanced space/time analytics enable Big Data visualisation for supply chain design using simulations, enabling new types of collaboration across networks of individuals and organisations using shared-information services. Daimler, BMW and Audi now jointly own the HERE map technology business whose map data is used by four out of every five cars in world today.  Daimler has made it an open platform to encourage innovation to optimise use of infrastructure, with interesting possibilities for its truck brands.

Automated & connected vehicles:            Supervised autonomous driver assistance systems; truck platooning; restricted-access route choice systems using infrastructure sensors to manage and monitor compliance; Truck drivers become Operators that are advised what to do, where to go and how fast to drive by voice-guided navigation and live sight augmented reality, which may help attract drivers to the industry. That’s if the vehicle isn’t driverless, as many road, rail, water, air, port, terminal and warehouse vehicles and equipment will be, always in the most fuel-efficient driving mode. Uber Freight’s self-driving truck acquisition, Otto, recently partnered with Volvo to complete its first shipment of Budweiser beer.

Freight matching:             Uber has released its freight platform that matches trucks with the right load wherever they are, aiming ultimately for a self-driving freight system. Both uShip and Australia’s yojee run online freight marketplaces, while Convoy has contracted 10,000+ regular scheduled shipments per year for Unilever in addition to on-demand deliveries.

Urban freight:    Better use of infrastructure capacity will take serious private-public collaboration. Technology helps negate barriers: EVs are quiet and safe to help extend off-peak deliveries; vehicle routing systems provide real-time congestion and cargo updates to combine with loading dock/zone scheduling to optimise flows; consolidating loads via matchmaker systems maximises equipment utilisation for fewer empty or under-utilised trips; and what about last-mile deliveries with e-trikes or robots?

Container optimisation platforms:            Melbourne start-up Opturion routes containers between wharf, container yards and transport yards using multi-source data sets to maximise efficiency within vehicle, cargo, site and route constraints.

Clean energy:  Rapid advancements in light and heavy electric truck technology combined with battery energy storage and renewable power present a ‘chicken & egg’ dilemma for developing charging infrastructure networks. Nikola isn’t waiting for public investment in refuelling networks for its zero-emissions heavy duty hydrogen electric truck, planning instead to build a network of hydrogen refuelling stations fed by its own solar farms that produce hydrogen from water using electrolysis.

Insurance:           Revolutionised to reduce costs, both through significantly safer vehicle operation and Telematics providing location, time and driver behaviour data to enable precise estimation of underwriting risk for lower insurance costs;

Then there’s some that don’t fit simple categories: Hyperloop One/DP World high-speed electric container transit system (possibly underwater); Blockchain crypto-technology to track financial payments, cross-border trade and freight flows; and the physical internet intended to replace current logistics models entirely with an open system routing freight using the principles of the Digital Internet.

Together, these technology-enabled business model advances offer greater asset utilisation, cheaper freight movement and happier, better-served customers.

Technologies need Collaboration

The key lesson for me is these technologies rely on collaboration to design, develop and apply into the community. Sharing knowledge and proprietary data via open access platforms is fundamental to a term used widely at the ITS World Congress – Collaborative-ITS.

Freight transport is a fragmented, diverse sector, with four modes of road, rail, sea and air transport connecting networks of transport yards, sea ports, airports, intermodal terminals, warehouses and customer distribution systems. Austroads found generating interest from industry for its urban freight improvement project very challenging, because individual freight operators believe there’s little they can do to make a difference, while for their customers freight is only a small business cost.

Yet there’s plenty of examples around the world that may inspire action here.

  • Singapore is leading the way with Big Data networks. To optimise every mile of road on their small heavily populated island, the Land Transport Authority has smart sensors installed everywhere to collect transactional real-time movement information which is shared at a rate of 400 million downloads per month. They aim to enable mobility on demand services via driverless vehicles, sharing and electrification services while doubling its rail network to reduce reliance on privately-owned vehicles. What impact on collaborative freight management will this open source information sharing platform have?
  • With no room to expand, Hamburg Port optimises its infrastructure by connecting IoT sensors to collect and share data with all port stakeholders via mobile devices. Real-time delay updates prevent more widespread disruption within and outside the port. Smart sensors communicate truck parking availability; connect multimodal interfaces between ship, road, rail and movable bridges; and connect truck drivers to traffic lights to prioritise cargo movements.
  • The US state of Iowa’s Department of Transport conducted a supply chain design model for all products moving in the State at a zip code level using bill of lading data in a massive public and private sector data gathering and analysis exercise. Finding a clear need to better consolidate freight, with a private partner it’s developing the Cedar Rapids Logistics Park with intermodal cross-dock rail/river/highway access which will return a benefit of US$26.53 for every dollar invested.

Disruptors are coming from outside the transport industry, blindsiding traditional players. Partnerships with and between outsiders such as Google, UBER and Tesla abound, moving smart/shared concepts forward using technology. Amazon is building its own logistics business, buying branded truck trailers, leasing freight aircraft and building warehouses (opening 23 globally in Q3 2016 alone) to “control its own destiny” as well as serve other retailers and consumers. Even within the traditional players, disruption is underway. Deutsche Post DHL now makes its own electric vehicles enabled by open automotive standards, bypassing auto-makers to deal directly with their suppliers to build new tailor-made delivery EVs that they may even sell to other logistics providers.

Freight’s intelligent future

Future freight transport is automated, connected, shared, safe and clean. It’s all about data. Epic advances in volume and speed to generate, process and store data will fundamentally change goods movement.

Data overload and digital fatigue already hold back many from embracing new analytical capabilities that can create value for customers. Yet it’s riskier to do nothing or use Digital simply to protect existing business models.

We can continue to work around inefficiencies we see in the freight transport system every day, or join with progressive people to embrace an ITS future. To solve systemic challenges, we can do more together than we can alone.

 

#cleantransport