Key Sustainability Challenges Facing the Industry Today

A carbon-neutral European Union by 2050: this is the goal of the European Green Deal. To achieve this target, all industry and service sectors must be decarbonized.

One of these sectors, Logistics and Transportation, is responsible for generating nearly a quarter of greenhouse gas emissions in Europe. Furthermore, this sector has found the decarbonization process challenging and has not achieved the same reductions in emissions compared to other sectors of the economy.

In this article, we outline the main challenges faced by the sector and offer practical, technology-driven solutions to support transport and logistics companies on their path towards decarbonization. Ready to learn more?

Sustainability challenges faced by the sector

The logistics and transportation industry faces significant challenges in its transition towards a decarbonized economy. Four main challenges arise along this journey:

1. Understanding and applying regulatory frameworks: Companies face uncertainties regarding local, national and European regulations, which can compromise the accuracy of carbon reporting and expose them to legal risks.
2. Effective data management: The complexity of emission calculations, along with the lack of reliable data and limited digitalization, results in inefficiencies in the supply chain.
3. Adapting to constant changes: Environmental regulations are continuously evolving, requiring constant updates to calculation methods to meet international standards.
4. Setting reduction targets: The lack of reliable data makes it difficult to define realistic emission reduction targets and identify priority areas for intervention.

Overcoming these challenges requires a deep understanding of the processes that contribute to emissions, as well as collaboration across the value chain to effectively implement sustainable solutions.

Which sustainability legislation affects the logistics and transportation sectors?

At the European level, two key directives for sustainability are the CSRD and the CBAM.

The Corporate Sustainability Reporting Directive (CSRD) is a European Union initiative aimed at increasing transparency in business activities related to sustainability. It seeks to improve transparency in business activities related to sustainability by addressing environmental, social, and governance aspects.

Affected companies include large enterprises, listed companies (including SMEs), financial institutions, and non-European companies with subsidiaries in the EU.

To better understand what the CSRD is, we suggest you read the article Get ahead of regulations by effectively preparing for the CSRD.

On the other hand, the EU Carbon Border Adjustment Mechanism (CBAM) focuses on imports and requires importers to comply with emission regulations.

The initial affected sectors include cement, iron and steel, aluminum, fertilizers, hydrogen, and electricity. Companies importing into the EU must obtain certificates that reflect the carbon emissions of their imported products to prevent "carbon leakage."

Take a look at all the important features of the CBAM by reading the article CBAM: The key to balancing international trade with a fair carbon price.