emissions ship

EU Emission target will cost shipping $Billions

With a goal of net zero emissions by the year 2050, the European Union is expanding its Emissions Trading System (ETS) to the shipping sector in 2024, which means container shipping lines will need to purchase emission allowances while investing in alternative fuels, with the increased costs likely to be passed on.

The European Union’s Monitoring, Reporting and Verification (EU MRV) regulation requires all ships exceeding 5,000 GT to collect and report data on CO2 emissions released to and from EU and EEA ports and will serve as the basis for shipping’s inclusion in the EU emissions trading system (ETS) from the 1st January 2024.

ETS is a ‘cap and trade’ scheme where a limit (the cap) is placed on the amount to emit specified pollutants and obliges individual shipping lines to hold an allowance for each tonne of CO2 or other carbon equivalent gases they emit.

The money from the sales of allowances will be used for EU’s green fund.

There will be no set price list for these emission allowances – instead, the price will be defined by supply and demand on the market. 

As the supply side of these emission allowances will gradually be reduced to support the 2050 goal of net zero emissions, emission allowances will be increasingly costly, putting an even higher pressure on shipping lines to accelerate efforts to reduce their environmental footprint.

ETS will include 100% of emissions for voyages within the EU, 50% of the emissions from voyages starting or ending outside of the EU, and all emissions that occur when ships are at berth in EU ports.

The UK has notified that they will eventually introduce a similar system which would have an impact both on UK domestic routes and UK-EU routes.

Total EU ETS-applicable emissions for the maritime industry amounted to 83.4m metric tonnes of CO2 equivalent which, at the current market value of €90 per emissions allowance (EUA), shipping emissions carried a total worth of €7.5bn for the year.

Taking into account the ETS phase-in period covering 40% of emissions in 2024, 70% in 2025 and 100% in 2026, the shipping industry could be liable for €3.1bn in 2024, €5.7bn in 2025 and €8.4bn in 2026. With container shipping potentially accounting for 30% of overall emissions, despite carrying less than 20% of seaborne trade (source: OECD).

There are still many unknowns relating to the EU ETS and what - if any - its cost impact might be. We will follow the developing situation closely, to keep you informed and to mitigate its impact on our customers.

We are also following the carriers adoption of cleaner fuel technology, the economies of scale offered by the largest vessels, the benefits of different routing options and any other initiatives which may offer cost and efficiency savings for our shippers.

Using our latest generation MVT Eco module, we develop low-carbon supply chain solutions, as well as measuring and monitoring the emissions of every shipment, by every mode, with offsetting alternatives, so our customers can work towards carbon neutrality in their global supply chain. 

The Eco module is under continuous development, with regular updates, including distance calculators, which may be adapted to measure liabilities under the new EU ETS regime. When it is rolled out.

To request an MVT Eco demo or to discuss any of the issues raised here, please EMAIL our CCO Andrew Smith.

solar panels

Survey confirms Metro’s strategy on environment

A survey by the British International Freight Association (BIFA) confirms that freight forwarders are coming under increasing pressure from customers to show evidence of decarbonisation, while those same customers need to get ready for carbon emission audits now.

The BIFA survey found that legislation compelling change in logistics decarbonisation will be a primary driver for respondents, with nearly a third citing client pressure as the leading motivator.

Results show 69% of respondents consider calculating emissions is part of their daily activities, yet 22% had assigned budgets of under £1,000 for green initiatives within their organisation. 

The conclusion is that there is growing awareness of environmental issues among the BIFA membership and, to some extent, a growing awareness of the need to measure carbon emissions and provide that information to clients.

It is also clear that it will be challenging to determine how they will use this data, and what they can actually do to reduce their carbon emissions. The general consensus is that significant changes will be required by forwarders, but what these will be are not clear at the moment.

The BIFA survey highlights just how far ahead Metro’s environmental strategy and actions are!

In consultation with customers Metro began development of our MVT ECO module in 2021. 

Today Metro is measuring and monitoring the emissions of every shipment, by every mode, for all of our customers, with offsetting alternatives, so they can work towards carbon neutrality in their global supply chain. 

As of 1st July 2023, MVT Eco has reported on 86,766 shipments, with a total CO2 equivalent of 279,864.58 tonnes.

Metro has committed to environmental transparency, using international sustainability reporting standards and through ISO 14001 accreditation, Metro has been fully offsetting emissions through verified carbon offsets.

Metro has been certified Carbon Neutral for two years.

The Corporate Sustainability Reporting Directive (CSRD) that becomes effective from 2024 will extend a company’s obligation to report on sustainability issues, to stimulate the EU’s transition to a sustainable economy.

However, it is likely to cause headaches for companies needing to report on Scope 3 emissions, which are outside their immediate control and brings reporting on emissions to the same level as financial auditing.

Scope 1 emissions are produced directly by companies, while Scope 2 is mainly from energy that is bought in and Scope 3 accounts for all other indirect emissions, the majority of which are in the supply chain. 

Scope 3 emissions account for the most – typically 10 times those of Scope 1 and 2 combined – and they are the hardest to measure, requiring a reliable, automated way to collect data and analyse it against targets.

UK companies operating in the EU will need to report Scope 3 emissions in CSRD and while reporting is currently voluntary in the UK, it will inevitably become mandatory.

MVT Eco uses reporting methodology that is in conformance with the Global Logistics Emissions Council (GLEC) and incorporates 30 pre-built charts and downloadable statements, to simplify Scope 3 reporting compliance for customers in the EU and UK.

The MVT ECO module is available free-of-charge to customers on their MVT dashboard. To request a demo or discuss your requirements, please EMAIL Simon George.

ECO globe

Sustainability is good business

As the effects of climate change intensify, the pressure on the food sector will increase over the coming decades, which is encapsulated by the FDF’s environmental ambition in creating a more sustainable food system. 

Supply chain issues, labour shortages, threats to energy security and rising inflation have added a new set of challenges for the food and drink industry over the last 12 months, however despite these obstacles, FDF members remain focused on their ambition to reach Net Zero by 2040 – a decade earlier than government targets.

The oft-quoted Forbes survey found that 82% of consumers want brands to practice sustainability and while some cracks have crept into the sustainability narrative as the cost of living crisis bites, the global pandemic and recent environmental disasters have maintained demand for sustainable practices and products.

Sustainability is good for business; it builds brand value, meets consumer expectations, attracts talent and creates new opportunities, but only if you communicate your efforts credibly, and avoid being perceived as greenwashing.

According to NielsenIQ survey data, 46% of consumers still expect brands to take the lead on bringing about sustainable change, which means that brands can no longer greenwash themselves. 

Packaging and last-mile delivery are primary sources of emissions with 53% of US and UK consumers wanting brands to produce less packaging and an average of 25% willing to pay a surcharge for eco-friendly delivery.

Manufacturers, producers, brands and retailers are already rethinking their practices, to find sustainable solutions, including the adoption of eco-friendly packaging, more climate-friendly shipping options, optimised waste management and completely eliminating packaging waste.

Despite today’s economic uncertainty, consumers are still open to sustainable products if they are affordable and offer value, which is why effective implementation and communication of these initiatives is critical.

Metro can help shippers switch to sustainable packaging for their products, by sourcing sustainable and ecological packaging materials, while our freight centres use renewable materials, which reduce packaging waste to a minimum.

Through our MVT ECO initiative, Metro is measuring and monitoring the emissions of every shipment, by every mode, for all of our customers, with offsetting alternatives, so they can work towards carbon neutrality in their global supply chain. 

CO2 emissions caused by transport are calculated according to EN 16258 to provide data and reporting that complies with the most demanding frameworks and methodologies. 

Using our latest generation MVT Eco module, we develop intelligent supply chain solutions. With accurate and representative data, that are respectful of the environment, we create low-carbon multi-modal solutions that blend air, road, sea, inland waterways and rail, together with NGV and electric vehicles.

The MVT ECO module is available free-of-charge to customers on their MVT dashboard. To request a demo or discuss your requirements, please EMAIL Simon George.

solar panels

Delivering the sustainable future, today

Alongside customers in key verticals, including food, drink, cars and commercial vehicles, Metro is committed to the highest environmental standards, by maintaining carbon neutrality, investing in alternative fuels and supporting our customers with technology-enabled sustainable supply chains.

The global food system will face significant  pressures over the medium term as demand for resources and the effects of climate change intensify, which is why the sector is fully committed to cutting CO2 emissions, embedding environmental standards in transport and increasing sustainable supply chains.

Despite the challenges that 2022 brought, including supply chain issues, labour shortages and threats to energy security, our food and drink customers remain focused on sustainable, resilient, and responsible supply chains, with an ambition to reach Net Zero by 2040 – a decade earlier than government targets.

The automotive sector continues to improve its sustainability, reducing energy use, sourcing more responsibly and increasing recycling. Indeed, total energy use has declined, by -6.1% on last year, and water use per vehicle fell -6.3%. Waste to landfill also hit a record low, of 0.6%, with 17 leading companies reporting zero waste.

Supply chains need to become more sustainable but you can’t change what you can’t see and experts at Automotive Logistics’ supply chain events agreed that better tools and partnerships are needed to identify emissions in complex supply chains, as a means to start reducing them, because what you can’t measure, you can’t work on.

Hot on the heals of our industry investment in Sustainable Air Fuel (SAF) and the Sustainable Flight Challenge, Metro has invested in solar panels at our UKHQ to move beyond our net zero achievement, toward Climate Positive and joined the Midlands Net Zero Hub, to share the region's vision to decarbonise and support key priorities for the Midlands.

With Metro’s MVT Eco module, all the CO2 measuring and emission analysis tools our customers need can be found in one single place. Eco calculations conform to EN 16258, to provide data and reporting that complies with the most demanding frameworks and methodologies.

Our ‘on demand calculator’ module means that shippers can predict CO2 impact, by any mode and location, based on IATA or UNLOC codes and use those insights to create efficient, low-carbon supply chain solutions.

Using our latest generation MVT Eco module, we develop intelligent supply chain solutions, based on accurate and representative data, that are respectful of the environment. 

Low-carbon multi-modal solutions that blend air, road, sea, inland waterways and rail, together with NGV and electric vehicles.

The MVT ECO module is available free-of-charge to customers on their MVT dashboard. To request a demo or discuss your requirements, please EMAIL Simon George.