Interview with an expert Reducing CO2 provides a competitive advantage to transport companies
In mid-April, 2022, TIMOCOM and their value added partner BigMile began helping their customers become carbon neutral. The SaaS standard platform helps to calculate, analyse and optimise carbon footprints along the transport chain. Managing Director Tobias Häßler details the advantages offered by the joint cooperation and those to be had from reducing carbon, and explains why critics get on board after being shown a simple calculation.
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Mr. Häßler everyone has heard the term ‘carbon footprint’. But why is knowing and reducing your carbon footprint so important?
The world wants to be carbon neutral by 2050. And there is increasing pressure on transport and logistics companies to start the decarbonisation process. Of course there are regulations to be obeyed. But also, business partners, customers and employees are increasingly interested in achieving carbon neutrality. One example: starting in 2023, companies in the EU with more than 250 employees and revenue of over 40 million euros have to begin reporting on environmental impacts as part of the CSRD (Corporate Sustainability Reporting Directive). Of course, these companies are also interested in ensuring that their business partners fulfil these requirements, as that will have a positive effect on their numbers.
Companies that know how much carbon they are responsible for emitting can work to reduce their footprint, which gives them a competitive market advantage. This is a complicated issue that requires radical new strategies, but it really has to be understood as an opportunity to prevent climate change. There’s a lot of pioneer and educational work required here, because lots of people still have trouble understanding the concrete issues.
You are now cooperating with TIMOCOM, as an added value partner. How does that benefit customers?
The transport industry is facing a challenge right now: they have to become carbon neutral and ensure that they are transparent when it comes to emissions. But how?
It’s a complex subject, there are regulations, different methods – and understanding how to navigate it all requires a great deal of expertise, time and of course personnel. We offer two solutions that allow companies to hand over the entire process to us. That means we calculate emissions in compliance with current standards, analyse them and write a report, then provide suggestions that will optimise CO2 emission reduction within the company. Carbon Footprint takes on the initial task, which is quite important: over the course of a year, we create up to five CO2 reports, one for each quarter and one for the whole year. Carbon Analytics is the second, more in-depth step. Here, emissions are calculated for individual shipments, modes of transport and each business partner, allowing for fine-grain optimisation. Since transport orders are archived in TIMOCOM’s System, customers already have access to all necessary information. This allows us to make retroactive calculations and achieve long-term optimisation goals based on regular reports.
So what can TIMOCOM customers expect when they work with you?
Once a user has logged in to our portal, they are asked to complete a survey. Step by step, we ask for key logistical data, for example modes of transport, consumption data, vehicle types, etc. Once the data has been submitted, we perform a validation check to make sure that the data is coherent and that there is enough data available for our calculations. We then use the GLEC method to calculate a variety of CO2 emissions key figures. The customers receive the results and can start the optimisation process. Externally, the results can also be used to compare the company to other service provides and also as a means of working with business partners to reduce emissions.
What do you say to critics?
Taking a look at the costs makes things simple:
The carbon tax will rise from 30 euros per tonne, the current cost, to 65 euros per tonne by 2026. Let’s say we have a truck, 40 tonnes, average consumption 28.5 l of diesel, driving on average 600km each day. That truck produces around 3kg of CO2 per litre of diesel, which could easily be 500kg of carbon each day, so over the course of a year we have to assume at least 100 tonnes of emitted carbon. In 2026 alone, that truck is going to cost the company around €6,500 in carbon tax. Every transport service provider can multiply that number by the number of trucks they own.
Now we also have to remember that some German companies will have to comply with the German Act on Corporate Due Diligence in Supply Chains (LkSG) as of 2023, and that they will be adding CO2 limits to their transport tenders. The service providers using traditional diesel engines, and contending with rising CO2 costs, will not be very competitive.
Of course, using a company’s carbon footprint as a tool to work towards carbon neutrality costs quite a lot. But as you can see, continuing with business as usual will be very expensive in the long run, and may even cause the company to lose out on bids.
Lots of companies offer carbon offsets – is that a good solution?
It is one approach, and certainly part of the solution, but carbon offsetting alone is not enough. After all, compensating for emitted carbon doesn’t change processes or consumption. It also doesn’t indicate that the company paying to offset carbon has made any progress at all in attempting to reduce the amount of carbon it emits. Carbon offset simply isn’t the same as carbon reduction. It does make sense to offset emissions that really can’t be avoided. However, the main goal should always be to avoid emitting carbon and reduce the amount emitted if at all possible.
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