Environmental Defense Fund report makes the case for zero-emissions vehicles purchases

As myriad supply chain stakeholders continue to keep a watchful eye on climate change, sustainability, and the need, or even expectation, of having greener supply chains, a report recently released by theEnvironmental Defense Fund (EDF)presents the case for what can be done to spur on increased investment in, as well as the adoption of, electric vehicles used for delivery.

Thereport, entitled “Accelerating Zero-Emissions Delivery: An innovative approach to transforming the last mile,”explained that with most shippers leveraging third-party carriers to handle their shipping services, owning an entire fleet is cost-prohibitive. In order to counter that, EDF proposes the concept of what it calls the Zero-Emissions Delivery Zone (ZED Zone), which is defined as “a new innovative financing model that can accelerate commercial vehicle electrification, while delivering substantial financial, social, and environmental returns for forward thinking investors.”

In terms of how a ZED Zone model works, the report presented an example, in which a shipper, or a group of shippers, can catalyze $1 million worth of health benefits from reduced air pollution by sponsoring 15 electric delivery vehicles, which it said can unlock solutions for driving, environmental, and health benefits, including:

• creating a lever for business customers to transform shipping practices for non-owned vehicles in their supply chains;
• focusing zero-emissions vehicle (ZEV) depots to improve health and reduce disproportionate health disparities from air pollution, with help from state and local leaders;
• introducing a new role for public and private finance; and
• building capacity for a scalable pipeline of ZEV adoption projects

The report added that the ZED Zone model leverages the Power Purchase Agreement for Renewable Energy, which are long-term contracts to buy renewable energy in agreed volumes and at prices that meet the needs of the generator and the consumer.

And it also noted that various household name shippers are taking steps in tandem with this model, including: IKEA, whom is committed to achieving 100% zero-emissions last-mile delivery; Unilever, whom committed to zero-emissions shipping using a phased integration of EVs into their owned and leased fleets; and Etsy, whom committed to offset 100% of carbon emissions from shipping.

What’s more, EDF noted that delivery trucks and tractor trailers moving goods collectively represent 4% of total vehicles on the road, while being responsible for almost half of NOx emissions and almost 60% of the fine particulates.

“Achieving a net zero emissions future in 2050 rests on our ability to electrify commercial vehicles,” wrote EDF. “Transportation is expected to be the largest source of new greenhouse gas (GHG) emissions through 2050 with medium- and heavy-duty vehicles projected to account for a significant portion of the growth.”

In an interview, EDF Senior Manager, EDF+Business Aileen Nowlan explained that a motivating force for the ZED Zone model was how a number of companies did not really know how to transition to zero-emissions vehicles.

“Many of these are larger name companies are ones that don’t own their own vehicles or have their own drivers and yet have very robust climate goals as many companies do right now,” she said. “We were really laser-focused on that…in terms of showing them how to afford an EV if you are going to buy it. There is a business voice of folks really wanting to do better on climate and were just feeling like they did not have any lever to pull in terms of zero-emissions trucks usage.”

When asked what needs to happen to boost more widespread adoption of zero-emissions vehicles and how the ZED Zone model can help on that front, Nowlan said what has been missing is a critical voice in the form of an expression of demand from the customers of carriers, or shippers.

“There is so much shipping that happens,” she said. “These companies do have climate goals, but they do not have shipping goals. There really is a lot more that needs to happen with the business customers of those carriers saying ‘I want to buy 100% zero-emissions shipping services by a certain date, it could be 2030 or 2035. This is what you need to do for customer acquisition so figure it out.’ That goes back to that expression of demand, which really has not happened yet, as there is not a plausible avenue for companies to be saying they want to buy a 100% zero-emissions shipping option. We want to help them feel comfortable in making that type of commitment that is consistent with their broader climate commitments and also matters for climate and health and is something they can ask for.”

With what Nowlan called immense pent-up demand for zero-emissions shipping, she said that by giving companies something to ask for is essentially providing a release valve for that pent-up demand.