Mandatory Carbon Reporting for Logistics? These are the IT tools you need!
3 oktober 2022
The EU has substantially expanded the rules for Carbon Reporting and Reduction. These affect both shipping agents and logistics service providers. In order to comply with complex requirements, advanced Carbon Reporting Tools are required. The Software company Visma Connect has teamed up with the Supply Chain Sustainability Experts of the UC Group to develop a new IT solution which complies with the latest requirements, as well as the EU directives. In the following article we explain how this Tool works and how it can benefit companies.
The Paris Climate Agreement of 2015 has set the goal of reducing Carbon Emissions by 49% in 2030. This reduction is measured using 1990 as the base line. In 2021 “Fit for 55” was introduced and the reduction by 2030 was increased to 55%. The pressure to reduce Carbon Emissions has been substantially increased. Companies will have to start measuring their Carbon Emissions as a first step. As of 2024 logistics and supply chain companies will be required to calculate their Carbon Emissions, based on EU rules and taxonomy. They will have to report to the Dutch government and in certain cases in their annual report as well.
The reporting is requires for the Carbon Emissions of your company, as well as third party Carbon Emissions, such as suppliers and logistic service providers. Large companies will have to retrieve Emissions Data for all their chain partners and seek cooperation to reduce Carbon Emissions together. The goal being 55% reduction by 2030. Meanwhile the Emissions Trading System (ETS) will gradually be abolished and a system of Carbon Pricing will be introduced.
Allocation of Carbon Emissions to a single client
The calculation of total Carbon Emissions is non other than to multiplication of fuel and the subsequent emission factor. The fact that carriers have multiple shippers as clients is the complicating factor, i.e. which part of the total emissions should be allocated to which shipper?
It is crucial that the allocation is executed correctly, as it determines the Carbon Pricing. One can not determine it based on TMS data. The EU has developed a calculation method which must be applied precisely. The method has a high complexity and therefore a specialized calculation tool is required to apply to the array of logistic scenario’s.
Multimodal and composed cargo
Suppose you have a training company which purchases products in China. The products are shipped to The Netherlands by shipping containers and forwarded from Rotterdam to your central warehouse in The Netherlands. From there the products are distributed to several regional warehouses within the EU and finally to the clients. How should one calculate the Carbon Emissions of this logistic operation? What is to be calculated for the cargo ship from China to Rotterdam, which carries only a couple of your containers amongst thousands of others? What is to be calculated for the logistic service provider which transports the containers from Rotterdam to your central warehouse and to the regional ones? International transport lanes consisting of consolidated shipments and several different modalities are especially complicated when applying Carbon Reporting.
The elements needed to the calculations are shipment, loading location, delivery location and fuel used. If one is reporting on their own lorries, this usually is without problems. This information is nearly always available. However for outsourced transportation this is far more difficult. When a logistic service provider ships 4 pallets form one warehouse to another, one does not have the information if there was any other cargo on board and which part of the carbon emissions of the trip belong to your cargo. It is unknown how much fuel was used. One could use an estimate, however this is highly discouraged. When you need to bill a party for Carbon Pricing, you nee to have accurate calculations.
Data from TMS systems
In order to make calculations which comply with the requirements, one needs data and the right calculation tool. In order to make execute the calculation, the allocation and the reporting of Carbon Emissions, one needs a tool which complies with the EU calculation method EN16258 and the subsequent Guidelines. The Loginex Carbon Intelligence tool complies with all of the requirements. It enables one to make the correct calculations for all means of transport: for multimodal, for international, for intercontinental and for all different means of transport. The Loginex tool is easy to connect to TMS and FMS systems, which contain the necessary data. Depending on the whishes of the user, data from most TMS systems can be copied into the system or by automatically means of an API.
Simulation, improvement and monitoring
The added value of the tool is the insights it provides in possible improvement which companies can apply to reduce Carbon Emissions in their supply chain. They can even simulate the effect of these improvements, like the result of different modalities , such as inland shipping or rail. Or the effect of applying biodiesel instead of regular diesel or the use of lorries which run on LNG. These simulations can be used for both your own company, as well as your partners in the supply chain. After reduction measures have been implemented you can properly monitor their actual effect.
A tool which enables companies to achieve their sustainability goals is of great strategic value. It enables them to comply with the reduction of Carbon Emissions year after year. It contributes to an increase op competitiveness, for transportation companies which are more Carbon efficient have lower costs as well. Therefore they are likely to be chosen as transportation partners. As a shipper you would prefer to do business with a logistics service provider which helps you to reduce your carbon emissions.
The ultimate Carbon Reporting Tool
Over the last 10 years the UC Group has achieved a high level of expertise in the field of sustainability and logistics. While assisting companies with improvement projects they have often supervised the selection process for IT systems. They found out that there are hardly any tools available which fit the above mentioned requirements. This has led to the cooperation between UC Group and the IT company Visma Connect to develop the advanced Carbon Reporting system called Loginex Carbon Intelligence.
The main advantages of the Loginex Carbon Intelligence tool are the incorporation of the latest governmental rules and regulations and the usage of the latest technology. It is available an Software as a Service (SaaS), enabling companies to pay based on use and without having to invest. The software does not require extensive implementation. It is a cloud based tool which can be put in to use quickly and easily.
The UC Group Sustainability Experts
The article above has been written by three of the UC Group Sustainability Experts; Peter Jasperse, Orvo Pels and Jos Eikhout. Alle of whom have several decades of experience in logistics, digitalization and sustainability.
Would you like to know how your company can prepare itself for the recently announced sustainability legislation and/or how to reduce Carbon Emissions? Would you like to learn mor about the lates Carbon Reporting Tool, Loginex Carbon Intelligence? (www.visma.nl/loginex) Do not hesitate to contact one of our sustainability experts. They will apply their expertise to assist your company to be among the first ones to benefit from this advanced Carbon tool.Click here to make an appointment!