The reliance on fossil fuels to power trucks, trains, vessels, and aircraft in the transportation issue has a decided impact on emissions. The International Energy Agency estimates that transportation was responsible for 8.26 gigatons, or 26% of CO2 emissions worldwide in 2018. In the U.S., passenger and freight transportation contributed 28% of the total greenhouse gas emissions in 2018.

These impressive numbers do not go unnoticed by the industry. Transportation and logistics companies are acutely aware of their impact on the environment and the need to decrease their carbon footprint, and there are several ways to do so. In order for the logistics industry to achieve a ‘net zero’ carbon footprint, it will require buy-in from all entities in a supply chain. Decarbonizing the freight industry will need more research and adoption of green technologies.

Carbon Insetting as a Solution

Carbon insetting is a way for a company to reduce its supply chain carbon emissions by evaluating processes that can be optimized to decrease the carbon footprint of the company. Instead of counteracting an action that has already happened as is the case with carbon offsetting, carbon insetting tries to reduce emissions from the source. This can significantly reduce a company’s emissions.

Insetting requires an investment in subcontractors and the freight transportation industry to increase the rate at which the sector decarbonizes. When done correctly, it could result in a shift toward a greener transportation and logistics industry.

Carbon Insetting for the Logistics Industry

Companies are starting to realize the effect that transportation has on their supply chain when carbon insetting is applied, but it is still in its infancy. More companies need to adopt these practices for a larger impact. Some examples are:

• – Sustainable Fuels. The use of sustainable fuels will greatly reduce a company’s carbon footprint. United Airlines for example, is looking at a sustainable aviation fuel.
• – Engine Adaptations. Using diesel filters, which reduce black carbon or using low-carbon fuel as opposed to fossil fuel engines.
• – Equipment Decommissioning. Freight carbon insets can provide funding to put equipment with high levels of emissions out of commission.
• – Logistics Efficiency. Supporting changes in logistics, driver training programs, and route planning are also ways to reduce emissions.

These actions can cause significant greenhouse gas reduction. Freight carbon insets could possibly be interchangeable with Renewable Energy Credits in the future, however, the support is not there yet to make a sizeable impact on carbon emissions. There must be a better balance between carbon offsetting and insetting within the freight shipping industry.