In today's business landscape, the ability to accurately measure, report, and reduce greenhouse gas emissions has become essential for organizations across all sectors. While companies are making progress on measuring their direct emissions (Scope 1) and those from purchased energy (Scope 2), many still struggle with Scope 3 emissions - particularly those from transportation and distribution activities within their supply chains. These Scope 3 transportation emissions often represent the largest portion of a company's carbon footprint, yet they remain the most challenging to quantify with precision.
Within the realm of Scope 3 transportation emissions measurement, one metric stands out as particularly valuable: carbon intensity. But what exactly is carbon intensity, how is it measured, and why should supply chain leaders prioritize this metric?
Defining Carbon Intensity
Carbon intensity measures the amount of greenhouse gas emissions produced per unit of economic activity or output. In transportation logistics, this is typically expressed as:
- WTW CO2e g/ TEU*km (for vessels)
- WTW CO2e g/ton*km (for trucks)
This means gram of CO2 equivalent per 20-foot equivalent unit (TEU) (or tons) per km. Well-to-wheel (WTW) emissions represent the total carbon footprint of the fuel, from extraction to usage. Unlike absolute emissions measurements, carbon intensity provides a relative metric that allows for meaningful comparisons across different shipments, routes, and carriers regardless of scale.
What makes carbon intensity particularly valuable is how it relates cargo load transferred, distance traveled, and actual CO? emissions to create a comprehensive efficiency metric. While this measure is essential for evaluating the performance of global sea and land transport, it's important to distinguish between emission intensity and absolute emissions. For example, a vessel might have excellent carbon intensity (high efficiency) but still produce significant total emissions due to the distance traveled or cargo volume. However, reducing carbon intensity across global transportation fleets remains the critical parameter for achieving a sustainable supply chain transportation system.
Why Carbon Intensity Matters More Than Total Emissions
For sustainability, procurement, logistics, and finance leaders, carbon intensity offers several advantages over focusing solely on total emissions:
- Performance Benchmarking: Carbon intensity allows for fair comparisons between carriers, routes, and transportation modes of different sizes and capacities. For instance, a larger vessel may produce more total emissions but could have a lower carbon intensity, making it the more environmentally efficient choice.
- Scalable Decision-Making: As your shipping volumes grow, carbon intensity metrics remain relevant and comparable, unlike absolute emissions, which will naturally increase with business growth.
- Regulatory Compliance: With frameworks like the EU's Emissions Trading System (ETS) and FuelEU Maritime, carbon intensity metrics have become increasingly important for compliance and cost management.
Factors That Influence Carbon Intensity
Several key factors determine the carbon intensity of transportation:
-
Vehicle Efficiency: The inherent efficiency of vessels, aircraft, and trucks significantly impacts carbon intensity. Newer vessels with improved hull designs, more efficient engines, or alternative propulsion systems typically produce lower emissions per unit of cargo transported via ocean.
-
Utilization Factor: Perhaps the most significant, yet often overlooked, factor is how fully the transportation asset is utilized. A vessel or truck operating at full capacity will have a substantially lower carbon intensity than one carrying the same cargo type at half capacity. In container shipping, this means monitoring how many TEUs are actually loaded compared to maximum capacity.
-
Speed and Routing: Speed has a non-linear relationship with fuel consumption across all transportation modes. For maritime shipping, sailing at optimal speeds (typically 10-16 knots for container vessels) can significantly reduce carbon intensity. In road transport, higher speeds dramatically increase fuel consumption. Route selection also plays a crucial role across modes. Direct maritime routing versus multiple port calls, consolidated truck deliveries versus multiple stops, and optimized flight paths all significantly impact overall carbon intensity.
-
Weather and External Conditions: Real-world conditions like headwinds, ocean currents, and port congestion can dramatically affect carbon intensity. For example, during a transatlantic voyage - using Digital Twin technology - we detected strong headwinds that increased fuel consumption by 18% compared to calm weather conditions.
-
Fuel Type: The choice of fuel, from traditional bunker fuel to alternatives like LNG, biofuels, or methanol, directly affects the emissions profile of transportation. The choice of fuel directly impacts carbon intensity across all transportation modes. For maritime shipping, options range from traditional bunker fuels to alternatives like LNG, biofuels, or methanol, each with different emissions profiles. The same applies to aviation and sustainable aviation fuels (SAFs). In road transportation, the shift from diesel to biodiesel, and fully electric trucks can dramatically reduce carbon intensity.
Why Primary Data Matters for Accurate Carbon Intensity Calculations
Here's where the challenge lies for many organizations: calculating carbon intensity accurately requires granular, primary data—not industry averages or estimates.
Default or average-based calculations mask the true performance differences between carriers and routes, leading to potentially misleading conclusions. For example, two vessels of the same class traveling the same route can have significant carbon intensity variations based on factors like actual utilization, real-time speed, and operational practices.
Primary data for multimodal supply chain transportation includes:
- Actual distances traveled (not just port-to-port)
- Real-time vessel, aircraft, or vehicle speed
- Specific vessel, truck, or aircraft characteristics
- Utilization rates and load factors
- Fuel consumption measurements
- Weather conditions encountered during transit
The difference between using industry averages versus primary data is considerable. To make this more comprehensible, let’s use the Red Sea crisis as an example. To avoid Houthi attacks, vessels were forced to use an alternative route via the Cape of Good Hope. As demonstrated in a VesselBot analysis* for a single vessel's voyage, this rerouting resulted in a 47% increase in distance traveled and decreased speed and CO? emission intensity per TEU-kilometer. This example highlights the complex tradeoffs between distance, speed, cargo load, and emissions intensity. It underscores the importance of considering all these factors when assessing the environmental impact of shipping operations.
It is, therefore, evident that organizations using detailed primary data for their emissions calculations gain the unique ability to identify GHG reduction opportunities that would remain invisible with default approaches.
Moving Beyond Compliance
The importance of accurate carbon intensity metrics remains critical even as the regulatory and trade landscape evolves. Recent EPA deregulatory actions, the European Parliament's postponement of sustainability reporting requirements, and the implementation of Trump tariffs - estimated at nearly $1 trillion according to Trade Partnership Worldwide - will reshape global supply chains and transportation networks.
Despite these changes, organizations that invest in accurate, primary-data-based carbon intensity measurements gain a dual advantage. First, they'll be better positioned to adapt to policy shifts while maintaining environmental performance. Second, they will uncover operational efficiencies that drive business value beyond compliance.
By focusing on carbon intensity and sourcing the right primary data to measure it accurately, supply chain leaders can transform sustainability from a regulatory obligation into a competitive advantage that delivers tangible returns regardless of how political winds shift.