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Global Transport Industry Lags Behind in Carbon Reduction Plans

The global transportation sector is behind other industries in terms of setting goals to reduce carbon emissions and energy consumption, according to a report from the Carbon Disclosure Project (CDP). They are also struggling to identify and report on climate-related risks and complete carbon emissions.

Even as the demand for oil increases, only 36 percent of transportation companies have put carbon and energy reduction plans in place, compared to 51 percent of the Global 500 Index of companies across all sectors, according to the report.

CDP says this is the first comprehensive report of its kind on the transportation industry, which surveyed 291 of the largest transport companies including road, rail, sea and air transport.

The “CDP Transport Report” (PDF) indicates a relatively low level of awareness and readiness to leverage regulations and low-carbon alternatives. Fifty-three percent of transport companies surveyed responded to CDP’s request, which indicates to CDP a lower level of engagement compared to the Global 500 companies with an 82 percent response rate.

CDP says this is relevant since the transport industry accounts for 13 percent of global emissions and 60 percent of oil consumption in high-income countries. Road transportation accounts for 80 percent of the sector’s total CO2 contribution, followed by air at 13 percent and sea transportation at 7 percent.

According to a recent study from the International Transport Forum, GHG emissions caused by transportation declined 3 to 10 percent in the last two years, the largest decline in the past 40 years, due to the economic crisis. However, GHG emissions rose by 45 percent from 1990 to 2007, and are expected to climb another 40 percent from 2007 to 2030 unless changes are made.

Transportation is a major contributor to the U.S. economy with transportation-related goods and services contributing $1.38 trillion to U.S. GDP (9.5 percent) in 2008. Despite this, only half of the transportation companies surveyed report having a clear understanding of the risks and opportunities associated with regulations, says CDP.

In comparison, almost 70 percent of Global 500 companies are turning risks into opportunities for growth, innovation and competitive advantage, according to the report.

CDP reports that only 9 percent of transportation companies reported having current investments in alternative low-carbon options or emission reduction initiatives and only 4 percent on future investments.

However, even with investment reporting just emerging, nearly $32 billion has been spent on low carbon initiatives and innovations in the transportation sector.

Of companies reporting on investment in low-carbon alternatives Asia represents the highest number of companies at 48 percent, followed by Europe at 36 percent, compared to just two companies in the U.S. at eight percent.

A handful of transport companies are setting the bar in carbon reduction initiatives and investments, including Air France-KLM, Easyjet, Canadian National Railways, Toyota and UPS, according to CDP.

New technologies include installation of renewable energy systems, developing more efficient transport routes, low carbon fuels, innovative vehicle design and product innovation for hybrids or electric powered vehicles.

The study also finds that less than half of the transportation companies surveyed have a clear understanding of the risks and business opportunities associated with regulations.

The report also looks at regional differences. As an example, 60 percent of South American companies and 52 percent of European companies have set emissions targets and reduction plans, compared to 47 percent in the U.S.

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One thought on “Global Transport Industry Lags Behind in Carbon Reduction Plans

  1. It is sad to see the outcome. With 80-90% of the emission footprint lying out side an organization’s internal operations, it is key to ensure we enable the whole value chain to take the necessary steps towards emissions management. Fleet and transportation is key to any organization’s supply chain and we need a more comprehensive regulatory and performance management framework to enable the transportation industry also embraces such a philosophy.

    So a few changes we need to see to motivate the transportation industry to work towards a more sustainable footprint are:
    1. A stricter regulatory framework
    2. Value chain partners dricing such organizations through scoring and certifications in vendor evaluation
    3. Move towards better fuel efficiency – The move towards better fuel efficiency has to become more mainstream now.

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