Strategic Intelligence: Decarbonizing Supply Chain Logistics

Supply chain logistics refers to the overall process of managing how resources are acquired, stored, and transported from suppliers to manufacturers and then distributed to the end customer. This report identifies six key strategies for decarbonizing logistics within any supply chain.

Key Highlights

• Biofuels, liquefied natural gas (LNG), and sustainable aviation fuels (SAFs) provide near-term emissions cuts, but supply and infrastructure constraints limit scalability. Companies should adopt them as transitional solutions while preparing for hydrogen and ammonia in the 2030s.
• Electrification is already reducing emissions in last-mile and short-haul freight, with heavy trucks beginning to roll out. The main challenge is a lack of existing charging infrastructure.
• AI-driven route optimization can reduce empty miles today, while shifting freight from road and air to rail and sea offers the most significant structural efficiency gains. Both require rethinking network design and investment in digital tools.

Scope

• This report covers six key energy transition technologies and strategies that have the potential to decrease emissions from freight transportation and storage needs associated with logistics. They are: lower-carbon fuels, electrification, vehicle redesign, modal shifts and route optimization, carbon capture and storage, and storage decarbonization.

Reasons to Buy

• According to Climate Watch analysis, the electricity and heat sector was the dominant contributor to global emissions in 2022, contributing 16.7 gigatonnes of CO2 to the atmosphere.
• Transportation contributed around 8.2Gt, accounting for just under 14% of the world’s greenhouse gas emissions. Of the transport emissions, just under three-quarters were attributed to road use. Warehousing activity, including building and electricity use, accounts for around 7% of global emissions. 3% of global emissions are attributed to plastic packaging. Decarbonizing supply chain logistics can make a significant impact on total emissions and help companies meet their net-zero targets.