New Accounting Framework to Address Barriers to Transport Decarbonization
Amsterdam, 21 June 2023 – With publication of the new Voluntary Market Based Measures Framework for Logistics Emissions Accounting and Reporting, Smart Freight Centre (SFC) provides the latest in a series of tools to accelerate heavy transport decarbonization.
High costs for freight emission reduction technologies and large, complex, and dynamic freight transportation supply chains can make heavy freight transportation emissions particularly hard to abate. There is significant demand for a framework to overcome these barriers.
As such, in the fall of 2021, SFC partnered with World Economic Forum and a series of leading multinationals in a project to develop a voluntary market based measures accounting framework to accelerate the uptake of low emission transportation solutions and services.
The accounting framework, released today, outlines a way for shippers, logistics service providers, freight carriers, and freight decarbonization solution providers to effectively partner with each other to deploy low emission transportation services. The accounting framework is based on a “book and claim” chain of custody approach that permits:
- A provider of freight transportation or of a freight decarbonization solution to allocate a low emission profile to the organizations that contribute to the emission abatement cost, even if those organizations’ freight is not always transported using a low emission solution or service.
- A purchaser of freight transportation to contribute to the cost premium of and report the greenhouse gas emission profile of a low emission transportation service, even if their freight was not physically transported on that low emission transportation service.
This new framework builds on and supplements the fundamental transportation greenhouse gas emissions accounting principles described in SFC’s GLEC Framework. The market based measures accounting framework was developed with support from a multi-stakeholder technical working group and considering feedback received from both a 2022 public comment period and through extensive bilateral engagement with organizations active in developing market based approaches to transport decarbonization.
“With this framework, SFC establishes clear accounting rules for market-based measures based on a book and claim mechanism within logistics, paving the way for collaborative decarbonization action by partners across the value chain. The acknowledgement of such mechanism is essential, as it enables and accelerates the journey towards net zero emissions in all modes of transportation, powered by sustainable fuels and technologies.”
Dr. Andreas MündelSVP Strategy and Operations Programs, Deutsche Post DHL Group
For more information about DPDHL’s market based approaches to transport decarbonization, see here.
Since we introduced carbon insetting for transportation in 2017, we’ve understood the necessity to develop a recognized framework that formally governs this process. Our goal at GoodShipping is to achieve the highest quality emission reduction in the most impactful way, so we view this publication as a collective step of the industry towards our shared objective of replacing fossil fuels within transport.”
Janne ErxlebenBusiness Development Manager, GoodShipping
For more information about GoodShipping’s market based approaches to transport decarbonization, see here.
“C.H. Robinson is committed to advancing sustainability efforts that deliver impact for our customers and carriers, and encourage industrywide transformation. This framework is an exciting new point of entry; more companies from all parts of the supply chain will now have further opportunities to engage with and adopt solutions that address global emissions challenges. SFC is a trusted voice and collaborative work like this provides meaningful value to our business stakeholders, people, our planet and the broader transportation industry. We’re thrilled to be part of this important project.”
Rachel SchwalbachVice President of ESG, C.H. Robinson
“This harmonizing framework is an important step and progress in enabling decarbonization of logistics in the near term. Initiated by leaders of the Supply Chain and Transport Industries community, this concrete collaborative effort is resulting in a tangible framework that can accelerate transport decarbonization.”
Margi Van GoghHead, Supply Chain, Logistics and Transport Industries, World Economic Forum
On 28 June, SFC hosted a webinar providing an overview of the market based measures accounting framework. Watch a recording of the webinar here.
To download a copy of the new accounting framework, click here.