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Helping shippers achieve sustainability – a new, key demand – is no longer solely in the hands of major multinational forwarders.
Yesterday Metro Shipping, based in Birmingham, UK, led the way for independent forwarders as it launched an in-house-developed programme to help customers measure, reduce and offset their CO2 emissions.
The free-to-use MVT ECO module, a cloud-based SaaS, monitors emissions – and their costs – for every consignment in every mode, and enables shippers to choose how, or if, to offset them.
The move helps shippers with their Scope 3 indirect emissions measurements.
The free reports are verified and conform to European standards on consumption and greenhouse gas (GHG) emissions. It is also accredited by the Smart Freight Centre, using the Global Logistics Emissions Council framework.
Simon George, technical solutions director, explained: “The dashboard shows customers the emissions data, year, confirmed departure and CO2 equivalent. And it reveals the total cost to offset. You can easily flick between key metrics.”
Metro said it had decided to develop the technology after “half a dozen” customers started asking for data. But despite the demand, the forwarder said the real test for customers began now.
“Once you have measured the emissions, the second point is what you are going to do about it,” said Claus Rasmussen, director of information systems for Metro.
“Most companies don’t have a huge amount of impact – ie, no trucks or warehouses. But some have started to do something about things not in their immediate control. They will either have a CSR policy and a choice of offsetting, or they want to let their service provider do it for them.”
Using offsetting programmes offered by specialist Comply Direct, customers can choose how to offset emissions via the Metro platform.
“When the reporting is in place, we’ll select a portfolio of one to three products for Metro CO2 offsetting, which will be for projects of value. Generally, you can decrease CO2 by avoiding it, storing it, or offsetting the impact on the planet. By combining two or three, you’d have a good scope of offsetting,” explained Mr Rasmussen.
What has surprised Metro, however, is the scale of emissions, and the subsequent cost of offsetting.
“We are unsure what level companies will commit to. Some of the numbers can be fairly significant. We want to find out our customers’ interest in offsetting and get into a dialogue about a better choice, and maybe create different supply chain choices. Is air freight really necessary? Is road or rail better?
“There is a new dynamic in the talks we are having with customers,” added Mr Rasmussen. “For one thing, now we are not just talking to shipping and logistics departments, other customer departments are getting involved.
“Either way there is a cost to companies, of offsetting, or of avoiding offsetting. As we start getting into the analysis, we’ll start to see some trends. It’s too early right now, we are still checking the data.”
Mr George agreed: “It can come as quite a shock, how much they need to offset. Total offsets could be £6,000 in one month for a significant shipper.”
Metro’s cost reporting is based on two approaches: damage cost – ie, costs which compensate for the damage that has happened; and avoidance cost, which avoids damage. The latter is the more expensive, “on the high-side, up to £90 per tonne of Co2 emissions,” said Mr George.
“We are also allowing our users to select a damage cost approach, which defaults at about £15 per tonne, but can range between £5 and £100.
“That’s when the project chosen becomes important. Offsetting is a true marketplace, with market dynamics, but it also equates to a choice in where you want your money to go.”
Perhaps counter-intuitively, while freight rates are very high, there is less pressure on the purse for offsets.
“Adding $200 is not that big a deal on very high freight rates,” explained Mr George. “When the freight rates go down, the percentage becomes much higher. It can make a big difference.
“For us though it’s more about reporting at this stage, and making sure we capture all the pricing elements. Every time we get a quote from a carrier, we’ll look for standard pricing, and an eco option.
“If you had asked a year ago, customers would have shaken their heads. But now there is a continuous conversation about a less impactful choice. How can you identify better options alongside standard services? It’s built into the tech solution.”
Metro is now considering offering the platform to others.
“The cost of getting the data is reasonable, affordable, but knowing what to do with it is the hard bit,” said Mr George. “We are currently discussing selling to trade, or others in our group. Many companies are probably waiting for software companies to do it for them.”
Metro is also starting to look at sustainable fuel solutions and talking to potential partners, but Mr George said it was aware of its limitations, and the complexity of the market.
“We’re certainly not experts on what is and isn’t sustainable fuel, but we do present all the market options to customers so they can make their own choices on the matter.” he said.