On this episode of Net-Zero Carbon, Danny Gomez, managing director of financial and emerging markets at FreightWaves, talks with Dominik Hengge, head of product at Tracks, about the basics of calculating emissions in transportation.
They discuss how complex this seemingly straightforward task is and how critical third-party firms like Tracks will be in reducing the data-sharing friction between shippers and carriers.
Gomez and Hengge said that measuring greenhouse gas emissions is an important first step to understanding a company’s impacts and figuring out where the easiest and most difficult areas to reduce emissions are.
Many companies are measuring emissions from direct operations (scope 1) and from utilities they purchase such as heating and cooling (scope 2). But few are measuring the emissions from their supply chains activities (scope 3).
Scope 3 emissions are often where the majority of a company’s emissions come from, so excluding them from emissions calculations doesn’t paint a full picture of a company’s impacts.
The Global Logistics Emissions Council (GLEC) framework was designed to make it easier to track and measure emissions from all modes of transport across the entire supply chain.
It starts with default values, which only require users to know the weight, distance traveled and mode of transport. These values automatically overestimate emissions so that no companies have negative impacts on their total emissions as they start to include more granular data.
“One of the fundamental things in any of these frameworks is it’s better to have any number than no number, so at least you have a baseline and something you can work off of for the future,” Hengge said.
Users who know more information such as the shipment’s type of truck, engine, route or how full the truck was can use GLEC’s modeling to get more accurate emissions numbers.
When carriers send primary data such as fuel consumption from a truck’s telematic system, TMS or auxiliary source, Tracks can calculate the real emissions associated with a shipment using the GLEC framework.
Hengge said, “With the real consumption, you can get to the real emissions. Now the trick is how do you allocate it to the shipment on this transport?”
Tracks aims to fairly allocate emissions to individual shipments in the cases of LTLs and shared truckloads, Hengge said.
The challenge with sharing emissions data
Gomez and Hengge talked about how shippers and carriers are both facing challenges when it comes to sharing data.
Gomez said: “Shippers don’t yet feel like the carriers are fully onboard, especially in the U.S. There’s not any government mandate at this point for people to be sharing information.” Most of the motivation in the U.S. to measure and reduce emissions comes from consumers and investors.
But Hengge said he has seen a lot of interest on the carrier side. He said shippers often change their mind about requesting emissions data when carriers say they would be happy to measure emissions and share their data, but it would cost shippers an extra cent or two per kilometer.
When asked how to get over the stigma against sharing data across the industry, Hengge said the industry needs to figure out how to incentivize both sides to share data.
Tracks uses the data it gets to calculate emissions data and share those numbers with shippers, but the company doesn’t share the carrier data such as fuel consumption used to calculate emissions. Using a third party to calculate emissions could provide both parties with what they want: privacy protection and emissions data.
“To get all of the parties involved at a table and exchanging data and making this possible is the largest challenge here for any company,” Hengge said.