A worldwide push for cleaner and greener fuels is underway as firm and measurable action against climate change becomes more crucial than ever. The entire ecosystem is buzzing as corporations, financial institutions, policy think tanks, and governments make a concerted effort to cut down on harmful emissions.
As per a Deloitte report, the road freight industry, vital to the world economy, is responsible for about 9 percent of CO2 emissions worldwide. Road freight decarbonisation is becoming a global necessity and a top concern for businesses, governments, and society. In less than 30 years, this sector must cut its emission intensity by more than 80 percent to meet the targets outlined in the Paris Agreement.
Given its geographical size and population, India is a crucial cog in the global energy transition. Considering the challenge's enormity, India has initiated a series of steps in the last few years to build a gas- and renewable-led economy by 2030 to curb harmful emissions and contribute to goals on climate change.
With the government’s push to adopt green fuels, especially in high-energy demand sectors, the market is opening up for gas-based sources such as liquefied natural gas (LNG), bio-LNG, compressed natural gas, compressed bio-gas, and compressed coal bed methane. Gas further offers reduced transportation costs due to improved bulk storage with significantly reduced volume, enhancing economies of scale. Transportation works to be even more economical in the case of LNG.
Considering that the domestic gas supply is unlikely to keep pace with the rapid adoption of fuel in areas like industrial production and transportation, LNG is expected to play a vital role in meeting the expected spurt in demand.
The green fuel already promises to revolutionise long-haul transport with its ability to cover 1000–1400 km on a single fill. Further, there is minimal environmental impact in the event of an LNG or bio-LNG spill, as the non-toxic gas will vaporise and dissipate.
Using LNG as a truck fuel is a comprehensive strategy that addresses environmental concerns and supports sustainable, eco-friendly road transportation. By substituting LNG for traditional diesel fuel, a significant reduction of up to 30 percent in CO2 emissions can be achieved, aligning with global efforts to combat climate change.
Furthermore, utilising LNG-powered engines demonstrates impressive reductions in toxic emissions compared to diesel, with cuts of up to 30 percent in CO2, 100 percent in SOx, 59 percent in NOx, 91 percent in particulate matter, and 70 percent in CO.
Collaboration and decisive actions from stakeholders are crucial to accelerating progress towards decarbonising road logistics. This includes investing in LNG refuelling stations and infrastructure, providing regulatory support through incentives, promoting transparency in the supply chain, educating customers about the benefits of LNG-powered logistics, and making long-term commitments to prioritise sustainability.
Given the wide range of benefits offered by LNG, policymakers must ensure the addition of capacities and secure adequate, long-term supplies of green fuels to prevent industries from suffering due to a lack of gas. Otherwise, India’s dependence on polluting fuels like diesel and coal is unlikely to go down significantly, thus defeating the purpose of the entire exercise.
Another alternative solution is the electrification of fleets, which entails substituting conventional internal combustion engines with electric alternatives that produce zero emissions.
The widespread adoption of electric trucks requires advancements in battery technology, which will take a while. Similarly, other fuel options, like hydrogen and other synthetic fuels, are still in the early stages of innovation and require more time for full-scale development and final deployment. In this transitional phase, LNG can play a crucial role in significantly reducing emissions and bridging the gap until cleaner, renewable alternatives become feasible.
Furthermore, the logistics sector could radically transform if circular economy ideas are implemented, particularly concerning freight transportation. Reverse logistics is a crucial element that effectively manages used commodities to re-enter the supply chain rather than being disposed away. Regarding freight transportation, this means making the most of return trips and using empty trucks or containers to transport recyclables to reduce waste and maximise resource use.
Logistics companies and manufacturers can decrease the amount of disposable waste by arranging the return, restoration, and reutilization of pallets, containers, and packaging materials. By focusing on durable and reusable packaging, they can positively attain this objective, eventually benefiting both businesses and the environment.
In the pursuit of decarbonisation, implementing policy incentives and regulations becomes paramount. The government is increasingly recognising the importance of fostering a sustainable transition, offering initiatives such as emission standards, tax breaks, and grants to encourage the adoption of green technologies. These incentives alleviate the financial burden on businesses and stimulate the widespread integration of eco-friendly practices in various sectors, including transportation.
However, for practical and equitable progress, there is a need for consistent regulations across regions. A synchronised approach ensures a level playing field, prevents businesses from facing conflicting standards, and fosters a global environment conducive to decarbonisation efforts.
A cohesive regulatory framework facilitates smoother transitions and encourages international collaboration, which is essential for addressing the global challenge of climate change in a unified and impactful manner.
The Indian road logistics sector is on the verge of a bright future. Despite facing inflationary pressures and rising input costs, the industry is expected to experience a revenue surge of 6–9 percent in FY2024, according to ICRA.
This growth is driven by strong demand, but it also comes with specific responsibilities. As environmental awareness and social obligations become more critical, companies in the industry must tackle these challenges with adaptability and foresight. By adopting sustainable practices and innovative solutions, the road logistics sector can maintain its path towards stability and prosperity.
As we observe the encouraging path of the logistics industry and its dedication to sustainable methods, businesses must adopt the decarbonisation process. This corresponds to environmental accountability and opens doors for economic advancement.
(Anand Mimani is the CEO of GreenLine Mobility Solutions.)