Wednesday, March 9, 2011

Logistics sector needs to make big carbon inroads

South Africa, already the largest African carbon dioxide (CO2) emitter from fuel combustion, needs to go beyond curbing its future emission and energy consumption to make logistics sustainable in the longer term, a new survey asserts.

The 7th State of Logistics survey, released on Tuesday by the Council for Scientific and Industrial Research (CSIR), Imperial Logistics and Stellenbosch University, pointed out that transport’s adverse impacts on the environment range from air pollution, smoke, odours, water contamination and noise, as well as vibrations, depletion of finite resources, land use, and wear of infrastructure, to accidents, delays and congestion.

Significantly, the cost of emission externalities could in future become an internal logistics cost, owing to the implementation of carbon taxes.

Initial indications from the National Treasury are that these carbon emissions could be taxed at about R165/t, with the proposed tax range calculated to be between R75/t and R200/t of emissions.

CSIR executive director of built environment Hans Ittmann said it was widely accepted that logistics enabled trade, foreign direct investment, development and economic growth. However, it has significant externality effects on the environment, which must be curtailed.

The local transport sector consumes 27% of South Africa’s total final energy, 78% of which is liquid fuels and 1,6% electricity.

The survey showed that 23-million tons of green house gasses were emitted in South Africa in 2009, owing to land freight transport activities. This amounted to 49% of transport emissions and just over 5% of total emissions for the country. Road freight contributed 20,3-million tons and rail 2,7-million tons, which translates to R4,6-billion and R0,6-billion in costs to the environment.

Further, South Africa’s freight transport is estimated to contribute roughly 8% of energy-related CO2 emissions globally.

Imperial Logistics CEO Marius Swanepoel said that, while fuel and environmental parameters are largely beyond company control, there are two levers that can be employed to achieve greener logistics.

“Companies can work towards optimising equipment by improving the emission characteristics of transportation equipment, as well as optimising movement by improving the efficiency of logistics operations and superior network design,” he noted.

As an example of the latter, sub-optimal routing and scheduling of deliveries and cargo loading or space use could add significant additional emissions through unnecessary distance travelled and wasted space.

However, the survey found that there are barriers to companies adopting improved environmental logistics initiatives, such as high costs, long payback periods and skills shortage.

Nevertheless, it pointed out that optimised and sustainable supply chain and logistics should not require a choice between making economic sense and ensuring that environmental factors are tackled, but that there should be a fine balance between both.
Edited by: Creamer Media Reporter

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