Decarbonizing the chemical supply chain
Covestro initiates green logistics pilot program with partners in China
- Collaborative efforts with a focus on truck transport
- Program is key to the company’s reduction of scope 3 emissions
- Supporting customers’ sustainability and climate-neutral targets
The reduction of indirect emissions from upstream and downstream processes is crucial to the quest of Covestro to achieve climate neutrality because these processes make up about 80 percent of the company’s total emissions. However, such CO2 emissions (scope 3 emissions) that can stem from supply chains, transport of materials or the processing of raw materials during production, are usually hard to track. In light of this, Covestro is launching a pilot green logistics program with partners in China as part of efforts to decarbonize the chemical supply chain.
According to a memorandum of understanding (MoU) signed at Covestro’s booth at the China International Import Expo, the company will work with customers like Sherwin-Williams and Changzhou Changtu Chemical Co. Ltd, logistics solution and infrastructure partners such as Sinotrans Chemical International Logistics and Harbour New Energy Technology Shenzhen, as well as industry organizations such as Smart Freight Center China to devise new green logistics solutions to further reduce greenhouse gas (GHG) emissions across the industry ecosystem.
Truck transport in focus
In the Asia-Pacific region, around 70 percent of Covestro's goods are transported by truck, while in Europe and North America only around one-third is transported by road in each case, with inland waterways and railroads otherwise being used more frequently.
As such, the new partnership will focus on designing more sustainable means of road transportation by truck, and evaluate the viability of certain solutions under specific scenarios.
This includes the experiment of using electric trucks, which are prohibited for the road transport of dangerous goods under Chinese and European laws, for the short-distance shuttling of non-dangerous chemicals – free of limitations regarding the range. The team is also trying biodiesel, whose prices are subsidized in Shanghai, in long-haul transport of dangerous goods. Other solutions the program is looking at include hydrogen fuel cell-powered trucks. Some of the experiments will be adopted in real cases with cost and benefit estimation in the first half of 2023 under the partnership.
"The idea is to pilot, adopt and scale up low-emission fuels, vehicles and more sustainable logistics solutions with optimal costs and even financial benefits through an open platform," says Samir Hifri, Senior Vice President, Supply Chain & Logistics Asia Pacific, Covestro. "We believe the supply chain could be an essential part for the chemical industry to achieve climate neutrality, and it’s crucial for us to find a balance between economics and emission reductions through such collaboration."
Under the partnership, efforts will also be made to standardize calculations and reporting of GHG emissions. Through these efforts, Covestro and its partners hope to create a transparent and reliable certification mechanism that promotes green logistics as a widely applicable business model in the industry.
Jason You, Senior Supply Chain Director of Sherwin-Williams Asia, said: "Sherwin-Williams is committed to satisfying customer needs through quality products, excellent service and a highly trained and professional workforce and is constantly seeking ways to become more sustainable. We are excited to work with Covestro and other leading partners on this challenge. We look forward to continuing to innovate and introduce more sustainably advantaged product solutions to our customers in China and across the globe."
Key to scope 3 emissions target
Earlier this year, Covestro announced that it is aiming to become operationally climate neutral – this includes reducing both direct emissions from its own operations (scope 1) as well as indirect emissions from purchased energy (scope 2) to net zero – by 2035. The company will be reporting its scope 3 emissions target next year.
"The MoU marks an essential step in Covestro’s planned announcement of the scope 3 emission target in 2023," says Zhong Xiaobin, Senior Vice President of the Coatings and Adhesives segment of Covestro in Asia Pacific. "We expect to provide an integrated offering that combines more sustainable products and logistics services, thus supporting our customers to meet their sustainability and climate-neutrality targets and moving towards a circular economy."
Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, cosmetics and health, as well as in the chemical industry itself.
The company is committed to becoming fully circular and is striving to become climate neutral by 2035 (scope 1 and 2). Covestro generated sales of EUR 15.9 billion in fiscal 2021. At the end of 2021, the company had 50 production sites worldwide and employed approximately 17,900 people (calculated as full-time equivalents).
This news release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro’s public reports which are available at www.covestro.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.