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Logistics News

Tax Credits & Sustainability in Trucking

As we progress further into the 21st century, it has become more and more significant to us as a society to pay attention to the way we take care of our planet. Generations new and old alike have succeeded in discovering ways for humans to reduce their impact and protect the resources that Earth still provides us. How can we apply this to the world of transportation?

Running in line with the research determined by the Rhodium Group, the results of a study came out roughly a year ago alongside a tax credit extension package being passed through policymakers. The article considers different strategies to be employed by the U.S. to help advance clean energy legislation. For example, if drivers were to exchange their gas-reliant vehicles for their electric counterparts, that change alone would “nearly double the number of electric vehicles on the road through 2025.”

The research states that, “By 2030, wind and solar could supply up to 31% of total US electricity.” The article acknowledges that although the current American political situation likely will not allow for much in the way of “comprehensive climate policy,” small changes are still a very real possibility and may present some opportunities that those in the trucking industry could take advantage of. Some of the proposed target tax edits would be “A credit of up to $7,500 for each new electric vehicle sold (Section 30D),” and, “A suite of tax credits for advanced biofuel producers and blenders (Sections 40, 40A and 6426).”

Shipping sustainably with green trucks

There are some that are hesitant to invest in the difference between electric and gas-powered automobiles, being understandably intimidated by the higher price tags often associated with going green. However, with the reality being that “the transportation sector has been the US’s top-emitting sector since 2016,” it is important to emphasize that “Rapid technology development has already lowered EV prices through steady reductions in battery costs by over 80% since 2010.” If America finds itself interested in becoming a leader in the international community for adopting sustainable practices, the time to start looking closely at these initiatives should be now. Legislation that relaxes policies trying to go green and reducing the costs to do so will prove most effective in providing incentives for companies to help decarbonize the U.S. The article even suggests replacing gasoline with low-carbon substitutes (especially conventional ethanol) to ease the process of transitioning.

Green trucking on a global scale

Looking at it from a global standpoint, the proposed tax credits “could fill up to 25% of the gap between US emissions under current policy and its Paris commitments.” Separate studies conducted by the EEA (European Economic Area show that thanks to their efforts, “[a]verage CO2 emissions of new passenger cars in the EU has fallen steadily over recent years, decreasing by around 30% since 2001.”

“The European Commission’s evaluation study suggests that the CO2 Regulation on cars is likely to have accounted for 65-85 % of the reductions in tailpipe emissions achieved following its introduction.” 

Statistics like these show that other countries have seen the importance of sustainability and are making genuine efforts to reach goals that they are setting in that aim. Paolo Gentiloni, the European Commissioner for Economy, stated earlier this year that, “Taxation will have an essential role to play in delivering on our climate commitments.” On the subject of environmental taxes, Gentiloni believes that they “can encourage more responsible behavior and help offset the costs of the environmental transition.”

Earlier this year in March, Gentiloni and his commission outlined a set of laws that intend to make the entire continent eliminate their net carbon emissions by 2050. While governments are figuring out how quickly they want to join the race to save Earth, it is up to companies to act quickly and make use out of the legislation being pushed forward. By pushing for and accepting tax credits, those in logistics can upgrade their technology at reduced costs through investing in better infrastructure

Related sources:

https://www.axios.com/tax-incentives-carbon-emission-cuts-34286c82-276e-4a6c-bbb2-c9adf039c850.html

https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/

https://www.eea.europa.eu/highlights/tax-breaks-and-incentives-make

https://www.eea.europa.eu/themes/transport/vehicles-taxation/appropriate-taxes-and-incentives-do

https://ec.europa.eu/clima/sites/clima/files/transport/vehicles/docs/evaluation_ldv_co2_regs_en.pdf

https://www.accountingtoday.com/articles/tax-deployed-as-europes-biggest-weapon-to-halt-climate-change

Categories
Logistics News Shipper News

Sustainability in Supply Chain Management

Sustainability, or “Going Green,” is a hot topic these days, for both consumers and companies. From a logistics standpoint, sustainability will require an emphasis on finding shorter, more optimal routes and greener technologies. It is also important to keep in mind worries that some may have regarding the maintainability of efficiency and lowered costs even while using more sustainable methods. 

Although many have begun incorporating sustainable practices for the planet into their daily lives, such as by recycling plastic bottles or no longer using straws, the most significant carbon footprints are up to large companies and governments to reverse. Jesse Klein from GreenBiz Group noted that Mike Roeth, “executive director of the North American Council for Freight Efficiency and truck operations leader at Rocky Mountain Institute, […] describes trucking’s current transition to more sustainable operations as ‘the messy middle.’”

A greener trucking industry

One suggestion to a greener trucking industry is to have drivers switch to electric vehicles, but this would require a large amount of time and investment in order to make the switch in infrastructure. Even then, during a webcast, “Patrick Browne, director of global sustainability at UPS, emphasized […] that going fully electric isn’t an option for most fleets. “It’s going to be a poly-fuel future,’ Browne said.”

Regardless of the difficulties, some states are marching ahead on orders to help save the planet. This year, California’s Air Resource Board (CARB) passed the Advanced Clean Truck rule, requiring that over half of all trucks sold by 2035 be zero-emission, and that by 2045, all trucks must be zero-emission vehicles. Not all states follow this model, but California is leading the way to a future that we all must eventually trudge toward – like it or not, we are all on the planet together, and how we leave it while we’re here will have direct impacts on its future health for further generations.

With that said, the Environmental Protection Agency (EPA) holds the trucking sector responsible for over 50% of nitrogen oxide (NOx) emissions and over 30% of volatile organic compound (VOC) emissions.

The importance of sustainability in logistics

“In Britain alone, known NO2 emissions have been estimated to kill 23,500 people every year, according to aerosol science professor Ian Colbeck of the University of Essex, southeastern England. […] In 2012, the World Health Organization’s cancer research agency classified diesel engine exhaust as cancer-causing.” Research has shown that these emissions are physically dangerous for humans to interact with over long periods of time, and that we would be better off curbing the amount of harmful production from our industry. What options do we have towards that goal?

Outside of fuel efficiency, those in the shipping industry can also look at optimizing loads: moving more freight with fewer trips means fewer carbon emissions, less fuel used, and higher levels of customer happiness. Derek J. Sine, Managing Director of Vander Group, writes that, “transportation department statistics show that somewhere between 30 and 40 percent of the available space on loaded trailers is not being utilized,” meaning there is still ample space to utilize this untapped resource. In addition, packaging using alternative methods can create a packaging process that is cheaper, sustainable, and more protective of both the product and environment. Sine also suggests targeting empty miles, as “DOT statistics show that around 20 percent of the truck miles being driven are empty miles during empty backhauls or deadheads.” 

Overall, ZUUM Transportation hopes for a brighter planet than how we have found it, and is happy to contribute to a future that is simultaneously green and efficient.

Related sources:

https://blog.solistica.com/en/sustainable-logistics-a-priority-for-supply-chains

https://hbr.org/2020/03/a-more-sustainable-supply-chain

https://www.greenbiz.com/article/there-are-many-routes-sustainable-trucking-industry-needs-all-them

https://www.greenbiz.com/article/californias-new-truck-rule-its-big-its-bold-its-controversial

https://www.smartcitiesdive.com/ex/sustainablecitiescollective/bringing-sustainability-trucking-industry/1157616/

https://www.supplychain247.com/article/how_trucking_can_improve_fuel_sustainability

https://www.epa.gov/smartway/why-freight-matters-supply-chain-sustainability

https://phys.org/news/2015-09-nox-gases-diesel-car-fumes.html

https://www.healthlinkbc.ca/healthlinkbc-files/air-quality-VOCs

https://www.inboundlogistics.com/cms/article/8-sustainable-supply-chain-trends-for-smart-supply-chains/