Activities

9. Supply chain emission management and carbon footprint – the first application area for digital multimodal logistics

According to McKinsey, the supply chain impacts account for more than 80% of greenhouse gas emissions and more than 90% of the impact on air, land, water, biodiversity and geological resources.The FEDeRATED project is developing the foundations for a secure, open and neutral data sharing infrastructure provision to supply chains through practical Living Labs - without forgetting sustainability requirements and targets to boost carbon neutral development. Currently EU is actively progressing towards a sustainable future of Europe, where all the EU Member Stateshave their own important role. Transport and logistics sectors are in the core of this development, since on those sectors emission mitigation has not been achieved as plannedBut now we are living on the transition phase, where new operation models, energy sources and digital solutions are pushing us towards new era, where emission levelsmust decrease.

All beneficiaries in the FEDeRATED project are working towards the development of a future proof data sharing infrastructure provisioning that should be available throughout the EUThe foundation for this infrastructure is the common semantics, architecture and governance model, which enable authorized user to make use of data accessible through the publish and subscribe approach. Although FEDeRATED approach is covering all kinds of events in multimodal supply chains emission monitoring and carbonfootprint tracking might be one of the first use cases, where FEDeRATED approach will be really tested in commercial transportations.

Demand for reliable, traceable and usable emission data is rising, because of the urgency of climate actions and direct emission mitigation actions. Customers are demanding sustainability as EU taxonomy is demanding emission mitigation and transparency on non-financial reporting. The emission trading system together with different responsibility and Environmental, social, and corporate governance (ESG) reporting systems require reliable and high-quality data. When reflecting this to the FEDeRATED project goals -supply chain visibility, optimizing asset and capacity utilization andnew services - it is easy to state that emission monitoring is potential early adopter of the new data sharing principles.

Why we need new models for emission monitoring

Currently emission monitoring is lacking guidance, models and practices how to generate reliable and transparent data that can be used for stakeholder comparisons and sustainability incentives.There are various models which are setting the path for monitoring but still, those are too lose to provide reliable and transparent data. One challenge of the current models is that those models allow actors to report their performance by their own way. But the “own way” is not always the main problem - the lack of traceability or evidence is. Thus, FEDeRATED approach whichhighlights logistic events and making digital “shadows” for the transportation, will enable desired traceability for emission monitoring. With the digital event registry, it is easy to prove and also to calculate emissions for different supply chains. Digital event registry will work as an audit trail for emission calculations as especially from security point of view digital solutions are much harder to manipulate than traditional documents, let alonenon-documentation.

Especially in multimodal supply chains where system complexity increases, the importance of digital traceability and event tracking is growing. The more actors are engaged to one supply chain the more flexibility is needed for carbon footprint reporting. While some companies can provide shipment specific reports some actors might be able to provide only reporting based on some annual/quarter/monthly averages. In this kind of cases, we need data harmonization and more digital proof of what has been done in the transportation as we must be able to compare figures over the company boundaries. Luckily the current digitalization and connectivity is supporting the development, since these new technologies will decrease the costs related tomonitoring and wireless communication. After some years most of the vehicles should be able to report their energy consumption.When this information is linked to digital freight information, we are able to follow freight emissions on very accurate level.When emissions can be monitored on a shipment level,actors can also accelerate their emission mitigation actions with better knowledge and manageability and by focusing first on low hanging fruits and quick wins of emission cutting.

In the FEDeRATED project, a lot of focus has been dedicated to the data sovereignty and confidentiality. These two themes are well boosted also in emission monitoring, since the connection between finance and emissions/responsibility is continuously increasing. EU sustainability actions such as EU Taxonomy and Corporate Sustainability Reporting are linking sustainability e.g., to the terms of loans and investments. Thus, emission reporting must be reliable and transparent. And with this link between sustainability and finance the importance of ESG and corporate sustainability reports will get more attention.

When talking about sustainability and emission mitigations we cannot forget the urgency this global challenge has.Latest IPCC reports (see https://www.ipcc.ch/report/ar6/wg2/) highlight the urgency and the importance of concreate emission mitigation actions. Human behavior has negatively impacted on global temperatures and natural resources and in order to slow down global warming and cut down emissions all actions are needed rapidly. In transport sector emissions are directly linked also to fuel/energy consumption and currently we are facing very high energy prices, which will have positive impact on emission mitigation at least in short time period. However, we must remember that if the prices will decrease the transport volumes might increase and then transport sector should do even more effective actions.

 

Vediafi Ltd. from Finland is one of the FEDeRATED beneficiaries and represents private sector in the consortium. Vediafi is promoting Corridor as a Service (CaaS) concept and is adapting that to the FEDeRATED approachFor Vediafi, emission monitoring is part of the living lab actions. During last years Vediafi has been actively working with fleet and supply chain emission monitoring. Vediafi sees that the CaaS concept (which connects transportation to intelligent infrastructure event generation) together with FEDeRATED data sharing model enables effective and agile models for emission monitoring and emission mitigations.

Summary
Data sharing models and federated platforms will provide new digitalization layer for multimodal supply chains, but the change from paper and document-based supply chains to fully digital and data-based solutions will not happen overnight, the change will happen step by step. Firs early adopters and bigger actor might implement digital solutions, since for them the benefits closer. However, transition towards low emission transportation and even the pressure to report non-financial issues, such as sustainability and responsibility might be one sub-category in logistics, which will boost the transition towards digitalization. With digital traceability emission reporting will be doable even in complex multimodal and international supply chains.

Author: ​​Lasse Nykänen / Vediafi Ltd

 

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This project is co-funded by the European Commission Connecting Europe Facility (CEF)