Transport is the most intractable area for tackling climate change, with road freight emissions growing fastest. We look at how the logistics industry is innovating in new fuels and vehicles to accelerate progress

Transport has proved a tough nut to crack when it comes to tackling climate change. Road transport, which accounts for about a fifth of the EU's total CO2 emissions, is the only major sector where greenhouse gas emissions are still rising, according to the European Commission.

All new technologies that could replace fossil fuels have cost, infrastructure and supply chain issues. And while research into alternative fuels for cars, lorries, trains, planes and ships is under way, biofuels have implications for land use and can compete with food production, while electric vehicles are only carbon-neutral if the electricity comes from renewable sources. The inexorable rise of e-commerce may also be adding to the challenge.
The urgent need to address climate change, and the attention now being focused on respiratory health, means that transport emissions is shooting up the corporate agenda. And with road freight CO2 emissions now the fastest growing component of transport emissions, both in Europe and globally, according to the OECD, logistics companies are at the sharp end.

Logistics firms are discovering that having sustainable operations has become a key requirement before any contract is even discussed, explains Peter Harris, director of sustainability in Europe for logistics giant UPS.
Deutsche Post DHL this month made the bold commitment to reduce all logistics-related emissions to net zero by 2050 as its contribution to the goal of limiting climate change.

The company’s target applies to both its own and subcontractors’ activities (see box). This is “not just some green stuff” but a tough business decision, asserts CEO Frank Appel. And he’s confident that if governments hold firm to their Paris obligations, companies will follow.

But there’s no “silver bullet” in the search for a replacement for petrol and diesel, observes Harris. Different technologies will find their home in different niches, says Brian Robinson, commercial vehicles lead for the Low Carbon Vehicle Partnership, which is trying to speed up the transition to sustainable fuels in the UK. It might be 30- to 40 years before another fuel is “as ubiquitous as diesel is now.”

But first, there are big advances to be made running current operations more efficiently. “The instinctive reaction is to start looking at advanced technology,” says Elizabeth Fretheim, director for logistics sustainability at Walmart. The US firm began examining whether it had the right equipment and whether it was being used to best advantage. It found driving techniques, for example, could improve fuel economy by up to 35%.
UPS began programming its vehicle routing system in 2004 so drivers made as few turns as possible across traffic, and has saved 10 million gallons of fuel, emitted 20,000 tonnes less CO2, and delivered 350,000 more packages every year as a result. Its latest routing system, Orion, will be fully rolled out in the US this year and is expected to slash operating costs by $300-$400m a year. Already, drivers using the software are travelling six to eight miles less each day.

Credit: DHL


New Fuels
Much of the innovation for fleets has focused on low-carbon alternatives to diesel. For years, drivers were encouraged to switch to diesel on the grounds that it produced fewer carbon emissions, but since the VW emissions testing scandal and widespread alarm about worsening air quality in cities, the government is being urged to rethink. A new tax scheme for diesel vehicles may be announced in the autumn.

At the end of 2016, Waitrose, John Lewis, and Argos announced they were running trucks on biomethane sourced from food and farm waste. Waitrose now has 12 dedicated gas vehicles, and another 44 dual fuel hybrids. CNG Fuels’ Leyland fueling station is providing the biomethane.

The John Lewis partnership says there is a “compelling business case” to switch from diesel. Each of the gas trucks costs 50% more than one that runs on diesel, but will repay the extra costs in two to three years with fuel savings of £15,000 to £20,000 a year. With the vehicles likely to be running for another five years, the company expects overall lifetime savings of £75,000 to £100,000, compared with a diesel equivalent.

Biomethane has been taken up enthusiastically in Scandinavia, where 30 cities power buses with biogas derived from anaerobic digestion of sewage, and household and food industry waste.

However, in the UK, biomethane is not an unlimited resource – thanks to efforts to cut landfill and food waste. In addition, there is a much greater financial incentive for the output of anaerobic digesters to go to the gas heat network rather than to transport. However CNG, which is developing a network of filling stations, says it has sourced enough fuel approved under the Renewable Transport Fuel Obligation. This mandates the industry to produce 5% of fuel from renewables, and helps bridge the price gap between biomethane and diesel. Director Baden Gowrie-Smith believes we’re at a tipping point. “There is just no other solution to heavy trucking that works – or is on the horizon.”

Peter Harris, director of sustainability in Europe for logistics at UPS


Innovate UK has just announced the winners of funding for low carbon freight and logistics projects: French industrial gas group, Air Liquide, as well as logistics group Keuhne + Nagel are amongst those who will explore biogas in larger HGVs (up to 44 tonnes). They are both also piloting liquid nitrogen refrigeration units in trucks. Sainsbury’s successfully trialled this technology last year, and is now testing CO2 as a refrigerant, which it says has 3,000 times less global warming potential than traditional refrigerants.

Harnessing hydrogen
Another potential fuel, hydrogen, will get a boost from the Tokyo Olympics, which aims to leave a hydrogen-economy legacy with 100,000 hydrogen fuel cell vehicles on the road by 2025. Japanese car-maker Toyota was one of the founding members of the Hydrogen Council, launched in January at Davos. The council members – car-makers, rail group Alstom, and energy companies – argue it is an ideal fuel with which to decarbonise the energy requirements of the transport sector. It is also being explored as a replacement for natural gas in the heating grid. A £7m Ofgem funded scheme to pump hydrogen into Keele University’s gas network starts this year.

There are several methods of producing hydrogen – one of which is using electricity to split water. Efficiency is a problem, but ultimately electrolysis could provide a means to harness excess renewable energy, which could be stored as hydrogen, providing a buffer for intermittent daily and seasonal electricity generation.

“Countries like South Korea are looking at going fully hydrogen for virtually all transport so they could provide a game-changer in terms of technology,” says Daniel Hayes of LowCVP.

An EU project is focusing on the bus network, which could ultimately have relevance for trucks. It aims for 144 hydrogen buses across Europe: Stagecoach is running six in Aberdeen, but at €1.1m each they are expensive and the fuel cell technology they’re using has a lifespan of just five years.

Overhead charging allows lorries to recharge on the move (credit:

Infrastructure is a major issue: ITM Power has just opened its first hydrogen fueling station on a petrol station forecourt, at Shell’s services on the M25. It has three other dedicated fueling stations. Elsewhere, the French postal service and Coop Switzerland are trialling hydrogen fuel cell vehicles; Liverpool-based Ulemco is converting diesel vehicles to dual fuel, which it says offers a 70% reduction in CO2 emissions compared with standard diesel vehicles. Last year it delivered the first hydrogen-powered refuse trucks to Fife Council in Scotland.

Walmart is using hydrogen fuel cells to power its forklift and palette trucks at a distribution centre in Alberta. It is anticipated that 530 tonnes of CO2 will be avoided every year, as well as improving productivity and efficiency.
The company is also exploring a range of fuels for its delivery trucks, including biodiesel: “We need to move as an industry,” suggests Fretheim. “There needs to be enough people saying ‘this is what we want’ to encourage innovators to invest. We alone don’t have enough demand for that to make sense.”

Electricity is a growing option for smaller vehicles. But major hurdles include availability of commercial vehicles and power supply. UPS has had to convert mid-life diesels into electric vehicles. It now has over 100 on the roads, but is running out of options for conversion.

Recharging an electric truck fleet places dense power demand on one location. UPS had to increase the power capacity of one of its London sites to allow more vehicles to be charged, “which cost us a ton of money” explains Harris. Moreover UPS doesn’t own the assets. So there is potentially much to be gained from an Innovate UK smart charging project. At the moment, a vehicle battery will start recharging as soon as it is plugged into the grid, but a smart grid system would delay and spread charging activity to avoid periods of peak demand. The project “will be instrumental not only to us but to the whole market,” says Harris. Another project with Tevva Motors will see it trial range extenders: where a depot is beyond the return range of an electric vehicle, a small generator would recharge vehicle batteries on the way in and out of a city, but allow emissions-free deliveries within it.

ITM Power has opened its first hydrogen fuelling station at Shell's services on the M25 (credit:

What about charging on the move? Inductive charging for buses has been trialled in Milton Keynes, and Utrecht. It is being used in Genoa and Torino, in Italy, where energy consumption over a pilot phase was three to five times less than diesel. Although expensive, a US study suggested pay back could be achieved within four years.

And why not overhead? Last year the first “e-highway” opened just north of Stockholm: a 2km stretch where Siemens has installed overhead power cables to allow lorries to recharge as they travel along the motorway, using retractable pantographs. The Swedish trial is using hybrid Scania trucks, which revert to battery or gas once off the motorway and making deliveries. Testing is also under way at two of the world’s busiest container ports – Los Angeles and Long Beach – where truck traffic is dense.

Where traffic density is an issue in cities, both UPS and DHL are abandoning four-wheel vehicles in the final mile. Electric vehicles provide great benefits, says Harris, “where the challenge is emissions – but if it’s congestion, then you’re still occupying road space.”

In Hamburg, UPS electric vehicles deliver containers to agreed city centre locations in the early morning. The packages are delivered on foot, and by tricycle (sometimes electrically assisted). Harris says the model could potentially be rolled out in other cities. This is also the model being explored by DHL. 

DHL is delivering packages by electrically assisted vehicles (credit: DHL)

Meeting targets
There is a great deal of innovation across the logistics sector, but supporting signals are sought from governments. The argument is that support should be directed to where the most impact can be made. In the UK, industry is still awaiting publication of the government's Emissions Reduction.

Plan, which the department for Business, Energy and Industrial Strategy had indicated would be published by the end of February. The plan will set out a road map for meeting the government's target of cutting the UK's greenhouse gas emissions 57% below 1990 levels between 2028 and 2032.


This article is part of our sustainable transport briefing. See also:

DPDHL goes electric to power zero carbon drive

Search for sustainable biofuels beset by turbulence

Boxing clever to cut emissions

KLM asks customers to fill biofuels funding gap

Heathrow carbon-neutral plan still blue-skies thinking



DHL  Paris Agreement  transport  Fed Ex  fuel  logistics  emissions  UPS 

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