Reducing the carbon footprint of logistics chains

Cargo owners and supply chain managers are under pressure to make logistics operations more sustainable by reducing the carbon footprint of the full value chain. They are supported by a number of international initiatives focusing on decarbonising logistics. Shipping, which carries around 80% of global freight, contributes more than a 10th of the transport sector’s CO2 emissions. Miguel Izquierdo of Allianz Global Investors describes shipping as “one of the hardest sectors to decarbonise. “Improving its green credentials – while keeping shipping rates affordable and maintaining the efficiency of global trade – requires a delicate balance”. The sector is guided by the International Maritime Organization (IMO), which has published a strategy on reduction of greenhouse gas (GHG) emissions from ships. It aims for a 40% reduction in carbon emissions compared to 2008 by 2030 and net-zero emissions by or around 2050. Shipping is the first industry with internationally mandated targets to reduce emissions, according to the Global Maritime Forum. Reducing the carbon footprint of air cargo is another challenge. In 2023, aviation accounted for 2.5% of global energy-related CO2 emissions, having grown faster between 2000 and 2019 than rail, road or shipping. Willie Walsh, the director general of the International Air Transport Association (Iata), told the June 2025 Iata AGM meeting in New Delhi that the industry’s efforts to switch to biofuels (SAF) had “gone wrong”. “While SAF production will double to two million tons in 2025, it will only meet 0.7% of airline fuel needs.” Despite the shortage, EU airlines are paying penalties for not switching. “The EU mandate to mix 2% SAF in the jet fuel supply raised costs but not production. “It’s an outrage that suppliers are charging airlines compliance fees that value SAF at double its market premium over conventional jet fuel. That’s a billion-dollar windfall for fuel suppliers.” Additional challenges include insufficient support from governments and ageing aircraft fleet from 13 to 18 years. “This is not where we should be in 2025. We have a quarter-century to get to net zero,” he said. On the ground, supply chain decarbonisation includes using AI for live route optimisation, which, according to logistics professor Alan McKinnon, can reduce emissions by 10-30%. Companies are also switching to electric and hydrogen-powered vehicles and rail, where it is available. Warehouses add to the logistics cargo footprint through the energy used for lighting, heating, cooling, and material handling. Carbon offsets through support for reforestation and other CO2 sinks help shippers meet sustainability targets. Green certifications (such as ISO 14001) signal commitment to sustainability and help identify problem areas. ER