What does Net Zero mean for fleet operations?

Posted 5 Jan 2023

What does Net Zero mean?

In recent years many governments have made commitments to reach Net Zero by 2050. Net Zero is the balance between the amount of greenhouse gas (GHG) produced, and the amount removed from the atmosphere. Net Zero is reached when the amount we add is no more than the amount taken away.

What’s the difference: Net Zero, Carbon Neutral, and Climate Neutral

The following terms are often used interchangeably in place of Net Zero:

  • Carbon Neutral: The CO2 a company releases into the atmosphere because of their activities being balanced by an equivalent amount being removed.
  • Climate Neutral: Reducing all greenhouse gases (GHG) to zero, while eliminating all other negative environmental impacts caused by an organization.

A scientific and accountable approach to corporate Net Zero targets

Corporate response and commitment to Net Zero have been under intense scrutiny. The non-profit organization Net Zero Tracker has found that 622 of the 2,000 largest publicly traded companies in the world by revenue have technically committed to Net Zero. However, the policies of these companies can sometimes be lofty and unrealistic. One of the main concerns of Net Zero Tracker is of companies not accounting for emissions produced by their supply chain, or dependence on unreliable or unproven carbon offset strategies.

Consequently, for companies wanting to make more accountable moves to achieving Net Zero the Science Based Targets Initiative (SBTi – a partnership between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF)) has developed a framework / standard for companies to make actionable and credible Net Zero targets:

Key requirements of the Net-Zero Standard:

Rapid, deep emission cuts: A focus of the Net-Zero Standard is making rapid and deep cuts to value-chain emissions. This is the most effective and scientifically proven way of limiting global temperature rise to 1.5°C. The standard covers a company’s complete value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Under the standard, most companies will require deep decarbonization of 90-95%.

Understanding the difference between each of the scopes of emissions:

  • Scope 1 emissions: Include direct emissions from a company’s owned or controlled sources:
    • On-site energy (natural gas and fuel, refrigerants)
    • Emissions from combustion in owned or controlled boilers
    • Company vehicle emissions
  • Scope 2 emissions: The indirect emissions tied to energy purchased or acquired by the company.
  • Scope 3 emissions: Emissions resulting from assets not owned or controlled by the reporting organization, but the organization impacts indirectly as part of their value chain. Scope 3 emissions are divided in the following way:
    • Upstream emissions: The indirect greenhouse gas emissions produced in the manufacturing of any purchased or acquired tangible goods or intangible services.
    • Downstream emissions: Indirect GHG emissions within the company’s value chain, produced because of sold goods and services after leaving the company’s ownership or control.

Set near- & long-term targets: Companies must set both near-term and long-term science-based targets. This involves making rapid emissions cuts from the outset, halving emissions by 2030. With close to zero emissions, neutralizing any residual emissions that can’t be eliminated by 2050.

Claim Net-Zero once long-term targets are met: A company can claim Net Zero when it’s achieved its long-term science-based target. Which involves cutting emissions by at least 90-95% by 2050. The company must also use carbon removals to neutralize any emissions that cannot yet be eliminated.

Go beyond the value-chain: Companies are recommended by the SBTi to invest outside achieving their own science-based targets to help mitigate climate change elsewhere. This is in addition and not in place of deep company emission cuts. The focus should begin inwards with one’s own value chain.

Setting your own target

Your company can also adopt a science-based approach by committing to the STBi Standard to make a meaningful impact on corporate GHG emissions.

The fleet management response to Net Zero targets

According to the United States Environmental Protection Agency transportation is the largest contributor to US GHG emissions, perhaps not surprising given that fleet operations play a central and critical role in the global supply chain. Innovative fleet operators, however, are helping to lead the way toward Net Zero with sustainable transport strategies. They are moving to EVs and forming partnerships with tech companies to better understand their scope 1,2 and 3 emissions and utilize their data to optimize their operations. These technologies are helping to cut fuel and operational costs and to slash emissions at the same time.