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Mitigating Climate Impacts, One Click at a Time: Opportunities for E-commerce in Reducing Emissions from Urban Freight

This blog was first published on on April 19, 2021.

On 10 November 2021, the thematic day for transport sector at the COP26, the events will focus on galvanizing actions to decarbonize the transport sector. Within this sector, logistics accounts for 40% of global transport CO2 emissions. In India, this subsector constitutes 7% of total CO2 emissions, and is growing each year. With India’s new climate commitments emphasizing transitioning towards a low carbon economy and reaching net zero by 2070, it becomes imperative to pay attention to the role of low carbon logistics in decarbonizing transport.

With a Compound Annual Growth Rate (CAGR) of 10.7% between 2020 and 2024, the logistics sector is expected to play a pivotal role in steering India’s economic development in the coming decades. The pandemic induced growth in e-commerce, will push companies to cater to larger and more optimized deliveries. However, this is likely to exacerbate the CO2 emissions from this sector, currently amounting to 7% of total GHG emissions at the national level. In this article, we discuss case examples and explore potential areas for mitigating emissions from delivery and warehousing, the biggest sources of GHG emissions within the e-commerce and urban freight distribution industry.

Towards zero-emission deliveries

67% of urban freight uses road transport, out of which 26.8% moves by light duty vehicles (LDV), 10.7% by three wheelers and 16.2% by four wheelers. This contributes to more than 60% of the road transport emissions in cities. In highly polluted cities such as Delhi, urban road freight transport alone contributes to 67% of the total PM2.5 transport emissions. The World Economic Forum stressed that failure to green last mile freight can increase global urban emissions by 30% and add 11 minutes to the average commute by 2030.

Mitigating emissions from light duty vehicles

Although domestic sales of LDVs declined by 20.06% in 2019, the associated road emissions have doubled. This growth is largely due to lower trucking costs, greater flexibility and access to commercial and industrial locations, cheaper operations and higher efficiency for long distance hauling. Last mile e-logistics delivery is predominantly driven by diesel LDVs in Indian cities. Integrating EVs in the existing fleet and transitioning to 100% EVs in the long-term is important for decarbonization, with a potential to mitigate 14% of CO2 emissions by 2030. However, EVs will require clean electricity. Some players like Amazon, Flipkart and Ikea have adopted such strategies but more companies need to come forward. Cities can enable the transition through a) technological advancement in charging infrastructure, b) creating additional renewable electricity demand and c) incentivizing electric LDVs via policies through demarcated zero emission freight zones, parking fee exemptions and flexible freight timings. Though electrification is the first that comes to mind, alternative options include fuel-cell electric vehicles using green hydrogen and biofuels for light commercial trucks. Leveraging other corporate players and expanding leadership for corporate business climate action are pivotal enablers for this transition.

Mitigating emissions from heavy-duty commercial vehicles

Critical for transporting essential commodities, an HDV emits around 1,300 tons of CO2 over its lifetime and consumes the largest amount of diesel in Indian cities. A study estimated that CO2 emissions from HDVs in India are likely to increase by a factor of 8.5 between 2016 and 2050. With key corporate players such as Amazon, Mahindra Electric and IKEA pledging towards carbon neutrality, other e-commerce companies can contribute with a focus on reducing emissions from heavy-duty freight transport. Nationally driven initiatives such as e-corridors can further accelerate decarbonization efforts. However, proper feasibility studies must be conducted incorporating vehicle specifications, road infrastructure and charging type. Although electrification has been the de facto strategy, related challenges of energy density, battery weight and payload must be looked into. Hydrogen powered battery cells like those piloted in Shanghai, China also offer potential for energy efficiency across long ranges. Considering India does not have a national green freight policy for mandating urban green freight, this could be addressed in the next round of NDCs.

Non-motorized last mile deliveries

Examples of innovative last mile delivery include the use of electric cargo bikes, deliveries on foot and traditional pedal bicycles, usually for distances between 3 - 5 kms. A study in Toronto estimated that replacing a delivery truck with an electric cargo bike reduced 1.9 metric tons of carbon emissions per year. While the sustainability benefits are clear, expanding these measures in India will require adequate walking and cycling lanes, supporting charging infrastructure, parking management and conducive policies. E-commerce companies can collaborate with organizations having strong existing Non-Motorized Transport (NMT) infrastructure such as India post, which recently launched its e-commerce portal. With a Chandigarh based startup launching an e-bike with a carrying capacity of 80kg, India’s booming startup ecosystem can also play a role in expanding NMT last mile deliveries.

Tapping into renewable energy for warehousing

Companies like Ikea India, Amazon, Myntra and Flipkart have committed towards sourcing a significant portion of their energy needs from renewables, particularly for their warehouses. Moving forward, companies can leverage India’s significant rooftop solar potential. A large warehouse with a capacity of 1-2 MW solar could generate 1.5 million units a year, offering benefits such as reduced costs, reliable power and strengthened corporate reputation. Large scale investments in onsite or offsite renewable energy infrastructure, such as that announced by Ikea, lowered benchmarks for rooftop solar and strong corporate sustainability plans will play a key role in enabling green warehousing.

Online shopping has become the new normal for many households during the pandemic, which is expected to continue post-COVID. As e-commerce accelerates, retailers must work towards balancing demand with reduced emissions, particularly from urban freight. To advance the low carbon and clean energy alternatives discussed in this article, it is necessary to progress one click at a time, facilitated with heavy investments and R&D deployment. India has a long but promising road ahead for tackling urban freight emissions, harnessing synergies between local governments and private e-commerce players. With all these efforts laid together, a cleaner, greener and carbon efficient urban freight supply chain is well within our reach, taking the country one step closer to meeting its ambitious pledges and targets.

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