Explainer: Freight & logistics decarbonization — the concepts, the economics, and the decision checklist

In 2024, global container shipping emissions reached a record-breaking 240.6 million tonnes of CO₂—a 14% increase over 2023 and the highest level ever recorded (Xeneta, 2024). This spike, driven largely by Red Sea diversions forcing longer routes around the Cape of Good Hope, underscores a sobering reality: freight and logistics account for approximately 40% of all transport emissions and nearly 10% of global CO₂ output. Road freight emissions alone have surged 55% since 2000, now contributing 5% of global energy-related emissions despite trucks representing only 9% of vehicle stock (IEA, 2024). With regulatory pressure mounting—from the EU Emissions Trading System expanding to maritime in 2024 to 36 countries committing to 100% zero-emission truck sales by 2040—decarbonizing freight has moved from a sustainability nice-to-have to an operational imperative. This article provides procurement leaders, sustainability officers, and logistics executives with the conceptual foundations, economic considerations, and decision frameworks necessary to navigate this transition.

Why It Matters

The freight sector's emissions trajectory presents both an existential climate challenge and a significant business opportunity. Maritime transport emissions reached 973 million tonnes of CO₂ in 2024, representing a 6% increase over 2023 and 9.4% growth since 2019 (OECD Maritime Transport Database, 2024). Heavy-duty trucks, while constituting just 2% of vehicles in the EU, generate 26% of the region's greenhouse gas emissions. Globally, freight trucks account for 39% of road vehicle emissions despite being only 9% of the vehicle fleet.

The economic stakes are equally compelling. McKinsey projects the green logistics market will reach $350 billion by 2030, while global investment in electrified transport exceeded $757 billion in 2024 as part of $2.1 trillion in energy-transition capital. The EU Emissions Trading System now caps shipping emissions, creating direct cost exposure for carbon-intensive operations. Companies failing to decarbonize face not only regulatory penalties but also procurement exclusion as major buyers increasingly mandate Scope 3 emissions disclosure under the Corporate Sustainability Reporting Directive (CSRD).

Modal efficiency differences reveal significant optimization potential. A single gallon of fuel moves one tonne of freight 576 miles by barge, 413 miles by rail, but only 155 miles by truck. One 40-car freight train replaces approximately 100 trucks. These physics-based realities create clear opportunities for strategic modal shifting, with intermodal road-rail and road-waterway routes reducing CO₂ by 30-60% compared to truck-only alternatives.

Key Concepts

Total Cost of Ownership (TCO) Parity

TCO parity represents the inflection point where zero-emission vehicles become economically competitive with diesel equivalents across purchase price, fuel costs, maintenance, and residual value. Electric trucks are expected to achieve TCO parity in most use cases by 2025-2027, with Department of Energy projections indicating nearly 50% of electric trucks will be cheaper than diesel by 2030. Hydrogen fuel cell trucks face a longer timeline, with TCO parity for heavy-duty long-haul applications projected around 2030.

Scope 3 Emissions and MRV

Measurement, Reporting, and Verification (MRV) protocols have become critical as CSRD requirements force companies to account for supply chain emissions. The Global Logistics Emissions Council (GLEC) Framework and ISO 14083 standard provide harmonized methodologies for calculating freight emissions. Accurate Scope 3 visibility drives shipper-forwarder-carrier collaboration and enables informed procurement decisions.

Modal Shift Strategy

Modal shift involves transitioning freight from higher-emission transport modes (road, air) to lower-emission alternatives (rail, inland waterway, short-sea shipping). A 25% shift of U.S. freight to rail could achieve 13.1 million tonnes of annual GHG reduction. Successful modal shift requires infrastructure investment, schedule flexibility, and multimodal logistics orchestration.

Well-to-Wheel Analysis

Evaluating zero-emission technologies requires full lifecycle assessment from energy production through vehicle operation. Electric vehicles powered by renewable electricity deliver genuine emissions reductions, while hydrogen trucks' environmental benefit depends entirely on the hydrogen production method. Green hydrogen (electrolysis using renewable power) offers substantial benefits; grey hydrogen (natural gas reforming) may offer minimal or no improvement over diesel.

Sector-Specific Decarbonization KPIs	Baseline Range	Leading Practice	Target 2030
Fleet Carbon Intensity (gCO₂/tkm)	60-120	<40	<25
Zero-Emission Vehicle Share (%)	1-3%	10-15%	30-50%
Alternative Fuel Adoption (%)	5-10%	20-30%	50-70%
Modal Shift to Rail/Water (% of volume)	10-15%	25-35%	40-50%
Scope 3 Emissions Visibility (%)	20-40%	70-85%	>95%
Renewable Electricity in Operations (%)	15-25%	60-80%	100%

What's Working and What Isn't

What's Working

Alternative Fuel Vessels at Scale: Maersk's deployment of seven large dual-fuel methanol vessels (16,000-17,000 TEU capacity) in 2024 demonstrates that low-carbon maritime shipping is operationally viable. The company has secured over 50% of its green fuel needs for 2027 through long-term biomethanol offtake agreements, establishing a replicable procurement model for the industry.

Electric Trucks for Regional Haul: Battery-electric trucks have proven their viability for short-to-medium distance routes. Schneider's deployment of nearly 100 Freightliner eCascadia electric trucks in California has logged over 6 million zero-emission miles. Einride's 2024 opening of North America's largest operational charging site for heavy-duty freight at the LA/Long Beach ports signals that infrastructure bottlenecks are being addressed.

AI-Enabled Route Optimization: Uber Freight's AI platform has eliminated over 2 million empty miles since 2023, demonstrating how software optimization can deliver meaningful emissions reductions without requiring fleet replacement. UPS's ORION system has saved millions of gallons of fuel while reducing over 100,000 metric tons of CO₂ annually.

Regulatory Frameworks Creating Markets: The EU ETS expansion to maritime in 2024 and FuelEU Maritime legislation taking effect in 2025 are creating genuine price signals for decarbonization. These mechanisms make carbon-intensive operations progressively more expensive while providing investment certainty for clean technology deployment.

What Isn't Working

Hydrogen Infrastructure Gaps: Despite significant investment, hydrogen refueling infrastructure remains critically underdeveloped. Nikola's HYLA station network and other initiatives have made progress, but the geographic coverage required for long-haul hydrogen trucking operations remains years away. Some experts argue hydrogen trucks "won't be a thing" given they are currently 3x more expensive to operate than electric alternatives.

Grid Connection Delays: Electric truck deployment is frequently constrained not by vehicle availability but by grid connection timelines. Many fleet operators face 12-24 month waits for sufficient electrical capacity at depots, creating a hidden barrier to electrification that vehicle manufacturers cannot solve alone.

Fragmented Data Standards: Despite GLEC Framework and ISO 14083 adoption, emissions data across the freight supply chain remains inconsistent. Different carriers use varying methodologies, making it difficult for shippers to accurately compare options or track progress against Scope 3 targets.

Upfront Cost Barriers: Electric trucks remain 2-3x more expensive than diesel equivalents at point of purchase. While TCO may favor electrification over the vehicle lifecycle, capital constraints and financing structures often prevent fleet operators from making the transition, particularly in small and medium-sized enterprises.

Key Players

Established Leaders

Maersk leads maritime decarbonization with the world's first methanol-enabled container ships and the only Science-Based Targets initiative (SBTi)-validated net-zero targets in shipping. The company has committed to net-zero by 2040 with 96% reduction in Scope 1 and 2 emissions.

DHL Group operates a comprehensive sustainability program including a 30% Sustainable Aviation Fuel blend target for all air transport by 2030 and the GoGreen Plus program enabling customer-level carbon reduction.

UPS has deployed extensive sustainability investments including 40% renewable natural gas for ground transportation by 2025, ORION AI route optimization, and orders for up to 10,000 electric vehicles from Arrival.

DB Schenker offers eTruckNow electric vehicle delivery with full emissions traceability and operates smart warehouses with solar panels and integrated charging infrastructure.

Emerging Startups

Einride provides turnkey electric freight services combining vehicle leasing, charging infrastructure, and software-enabled fleet management, removing the need for customers to purchase vehicles directly.

WattEV leases electric trucks to major shippers including Walmart and Procter & Gamble while operating charging networks, addressing both vehicle and infrastructure barriers simultaneously.

Infinium produces electrofuels—drop-in zero-carbon fuels from renewable electricity and green hydrogen—backed by Amazon's Climate Pledge Fund, enabling decarbonization without fleet replacement.

Symbio (a Forvia, Michelin, and Stellantis joint venture) presented its first hydrogen-powered Class 8 truck at ACT Expo 2024 with a 400-mile demonstration route and is developing Europe's largest integrated fuel cell gigafactory.

Key Investors and Funders

Amazon Climate Pledge Fund has backed multiple freight decarbonization ventures including Infinium's electrofuels technology.

Breakthrough Energy Ventures (Bill Gates) continues significant investments in transport decarbonization technologies including hydrogen production and battery development.

U.S. Department of Energy allocated $750 million in Clean Hydrogen funding in 2024 and provides substantial support through the National Clean Hydrogen Strategy for trucking applications.

European Investment Bank finances green logistics infrastructure including charging networks and alternative fuel production facilities under its Climate Bank mandate.

Examples

1. Maersk's Methanol Fleet Transition

Maersk's 2024 deployment of seven dual-fuel methanol vessels demonstrates industrial-scale maritime decarbonization. The company completed the world's first retrofit of an existing container vessel (Maersk Halifax) to dual-fuel methanol capability, proving the technology pathway for fleet conversion. With 50+ additional methanol-capable vessels ordered for delivery through 2027 and long-term fuel supply agreements in place, Maersk provides a template for how incumbent players can lead rather than resist the transition. The approach has achieved first-mover advantage in green shipping services, enabling premium pricing for carbon-conscious customers.

2. Schneider's California Electrification

Schneider National's deployment of nearly 100 Freightliner eCascadia electric trucks in California represents the largest Class 8 EV fleet operated by a major truckload carrier. Partnering with PepsiCo and Goodyear on reduced-footprint deliveries, Schneider has logged over 6 million zero-emission miles while developing digital ESG analysis systems. The initiative demonstrates that electrification works for regional haul operations today, with route optimization ensuring vehicles operate within range constraints while maximizing utilization.

3. Port of Los Angeles Integrated Decarbonization

The Port of Los Angeles has deployed an integrated strategy combining shoreside power for vessels, electric cargo-handling equipment, and zero-emission truck requirements. Research indicates integrated port city strategies can achieve 34% reduction in peak CO₂ and 43% reduction in NOx compared to electrification-only approaches. The port's 2035 deadline for zero-emission cargo trucks at terminals creates demand certainty for manufacturers while its investment in charging infrastructure addresses the chicken-and-egg problem that has slowed adoption elsewhere.

Action Checklist

• Conduct Scope 3 emissions baseline: Map your freight supply chain using GLEC Framework or ISO 14083 methodology to establish current emissions by mode, lane, and carrier.

• Evaluate modal shift opportunities: Identify high-volume lanes where rail or waterway alternatives could reduce emissions by 30-60% without unacceptable service impacts.

• Request carrier sustainability data: Require contracted carriers to provide emissions factors and decarbonization roadmaps; incorporate sustainability criteria into RFP scoring.

• Pilot zero-emission technologies: Partner with electric truck providers like Einride or WattEV on defined corridors to build operational experience before fleet-wide commitments.

• Engage infrastructure planning: Assess depot electrification requirements and begin grid connection applications early—lead times of 12-24 months are common.

• Align procurement with regulatory timelines: Map your decarbonization investments to EU ETS expansion, FuelEU Maritime implementation, and Advanced Clean Fleets regulations to ensure compliance.

• Explore insetting over offsetting: Prioritize supply chain carbon reduction projects (insetting) that deliver direct emissions reductions over third-party offset purchases.

FAQ

Q: What is the current cost premium for zero-emission freight transport?

A: Electric trucks carry a 2-3x upfront cost premium versus diesel, though total cost of ownership (TCO) reaches parity over 5-7 years in many applications. Green shipping premiums range from 10-30% for low-carbon maritime services. However, carbon pricing under EU ETS is progressively closing this gap—shippers should model scenarios where carbon costs reach €100-150/tonne by 2030.

Q: Should we prioritize battery-electric or hydrogen fuel cell trucks?

A: The technology choice depends on use case. Battery-electric trucks are commercially available today, proven for regional haul under 300 miles, and benefit from expanding charging infrastructure. Hydrogen fuel cells may prove superior for long-haul routes exceeding 500 miles where weight and refueling time matter, but infrastructure remains limited and costs are 3x higher than electric. Most fleets should prioritize electrification now while monitoring hydrogen developments for future long-haul applications.

Q: How do we ensure emissions data quality across carriers?

A: Require carriers to certify emissions calculations using GLEC Framework or ISO 14083 standards. Specify primary data (actual fuel consumption, vehicle telemetry) over default factors where possible. Emerging platforms like Searoutes and Xeneta provide vessel-specific carbon tracking for maritime shipments. Include data quality requirements in contracts and conduct periodic audits.

Q: What regulatory deadlines should we be planning for?

A: Key milestones include EU ETS for maritime (2024-2026 phase-in), FuelEU Maritime intensity limits (2025), ReFuelEU Aviation SAF mandates (2% in 2025, scaling to 70% by 2050), California Advanced Clean Fleets (zero-emission truck requirements 2024-2035), and CSRD Scope 3 reporting (2024-2026 by company size). IMO will finalize global shipping decarbonization targets at its October 2025 meeting.

Q: How can small and medium fleets access zero-emission technologies given capital constraints?

A: Several models are emerging to address capital barriers. WattEV and Einride offer trucks-as-a-service, eliminating upfront vehicle purchases. Government incentives—including the Inflation Reduction Act's commercial clean vehicle credit (up to $40,000 per truck) and state programs—can cover 30-50% of incremental costs. Green financing through programs like the EPA SmartWay partnership and specialized lenders provide favorable terms for clean fleet investments.

Sources

• International Energy Agency (IEA). (2024). Transport Sector CO₂ Emissions. Paris: IEA Publications. https://www.iea.org/energy-system/transport

• OECD. (2024). Maritime Transport CO₂ Emissions Database. Paris: OECD Publishing. https://www.oecd.org/en/data/datasets/maritime-transport-co2-emissions.html

• Xeneta. (2024). Record-breaking carbon emissions in ocean container shipping. https://www.xeneta.com/blog/record-breaking-carbon-emissions-in-ocean-container-shipping

• McKinsey & Company. (2024). Decarbonizing logistics: Charting the path ahead. https://www.mckinsey.com/capabilities/operations/our-insights/decarbonizing-logistics-charting-the-path-ahead

• U.S. Department of Energy. (2023). The U.S. National Blueprint for Transportation Decarbonization. https://www.energy.gov/sites/default/files/2023-01/the-us-national-blueprint-for-transportation-decarbonization.pdf

• International Council on Clean Transportation. (2025). Beyond trucks: Toward a greener global freight transportation system. https://theicct.org/toward-a-greener-global-freight-transportation-system-oct25/

• Maersk. (2024). Sustainability Highlights 2024. https://www.maersk.com/sustainability/highlights-2024

• Nature Scientific Reports. (2024). Decarbonising road freight transport: The role of zero-emission trucks and intangible costs. https://www.nature.com/articles/s41598-024-52682-4