As an intern at C2ES, I’ve learned about the critical role of business in driving climate solutions. That’s why I’m thrilled to now be starting a position at FedEx, one of the companies helping to lead the nation’s transition to carbon neutrality.
Transportation is the largest source of greenhouse gas emissions in the United States. That’s one reason FedEx is joining companies making major pledges to reduce their carbon footprints. FedEx is the world’s largest transportation company, providing services for more than 3.6 million shipments each business day to more than 220 countries and territories. The company is setting ambitious aircraft and vehicle fuel efficiency targets to reduce its scope 1 emissions—from the fuel used to power its fleet of 679 aircraft and more than 180,000 vehicles. Those sources accounted for 92 percent of FedEx’s emissions in the last fiscal year. By reducing its scope 1 emissions, the company also hopes to separate business growth from its emissions.
The largest source of FedEx’s transportation emissions is its aircraft fleet. The company’s aircraft efficiency goal is to reduce emissions intensity by 30 percent from a 2005 baseline by 2020. So far, it has seen a 24 percent reduction from 2005. Another goal is to power 30 percent of jet flights using alternative fuels by 2030. FedEx and other airlines helped to develop the International Civil Aviation Organisation’s (ICAO) global market-based-mechanism, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). ICAO’s goal is to achieve carbon-neutral growth in international aviation after 2020 and to enact other reduction measures, such as infrastructure upgrades, technology, operations, and sustainable aviation fuel. FedEx has tracked its emissions from international flights in accordance with CORSIA requirements since 2019, and beginning in 2021, FedEx and other airlines subject to the requirements of CORSIA will be responsible for purchasing and retiring carbon credits to offset emissions in excess of the baseline set in 2020.
Other airlines, such as American Airlines, Delta and Southwest, have voluntarily agreed to participate in CORSIA. American Airlines set ambitious targets as a part of CORSIA, supporting the International Air Transport Association’s (IATA) targets for carbon-neutral growth through a cap on net aviation CO2 emissions from 2020 and a reduction in net aviation CO2 emissions of 50 percent by 2050, relative to 2005 levels. In 2020, American revised its goal to reach net zero carbon emissions by 2050. Delta’s past sustainability efforts have included adding more than 80 new aircraft in 2019 which were 25 percent more fuel-efficient than its previous aircraft, as well as looking to drive the development of more sustainable aviation fuel.
Shipping companies are also aiming to increase the fuel efficiency of their on-road vehicles. For FedEx, these are the second-largest source of scope 1 emissions, and its goal is to increase on-road fuel efficiency by 50 percent from a 2005 baseline by 2025. It has already achieved a 35 percent improvement in fuel efficiency. Plans for achieving these reductions include minimizing emissions through intermodal rail, replacing vehicles with more efficient models, and electrifying its fleet. Other companies such as UPS, Amazon, and DHL have made pledges to reduce emissions of on-road vehicles, but not necessarily through fuel efficiency improvements. UPS has its own On-Road Integrated Optimization and Navigation platform, which provides drivers with the most efficient route for deliveries and pickups. It led to annual savings of 100,000 metric tons of GHG emissions. Amazon is working to maximize efficiency of its existing fleet by including trailers of different sizes with skirts (panels attached to the lower side edges of a trailer to make it more aerodynamic) and automatic tire-inflation systems that keep tires properly inflated. At DHL, technological innovations are being made to current vehicles in fields such as aerodynamics, light-weight vehicle design, speed-limiting systems and low rolling resistance tires in order to reduce fuel consumption of conventional fuel vehicles.
While technology for personal electric vehicles has progressed, there are still many obstacles to electrifying a large commercial fleet. For example, charging infrastructure is not able to sufficiently charge hundreds of vehicles simultaneously. Despite the limitations, FedEx has added almost 400 electric vehicles to its global fleet in the last fiscal year. The company is also working to complete an electrification strategy that can be applied anywhere in the world, which will allow for greater use of electric vehicles and meet different cities’ varying regulatory requirements. FedEx also works with utilities to identify infrastructure upgrades needed to meet higher electricity demand, partners to build charging infrastructure, and vehicle manufacturers to ensure availability of parts for service and repair. The last phase of the process includes developing microgrids that can help to decrease demands on electric substations and save on energy costs by charging at off-peak times.
Other transportation companies have also vowed electrify their fleets. UPS announced its commitment to purchasing 10,000 custom-built electric vehicles to be deployed in Europe and North America. The vehicles will have advanced driver-assistance systems, which are designed to increase safety and operating efficiencies. In 2019, Amazon ordered 100,000 electric delivery vehicles, sending a market signal among large, global companies that the transition to a low-carbon economy is crucial. The company plans to start using these vehicles to deliver packages to customers in 2021, with 10,000 new vehicles on the road as early as 2022 and all 100,000 vehicles on the road by 2030. DHL’s pledge to vehicle electrification is more general. It states that the company is testing and deploying a number of promising alternative technologies in its fleets, including electric vehicles, fuel cell vehicles and vehicles powered by sustainable liquid fuels.
In addition to electric vehicles, transportation companies are using lower-carbon fuels in their fleets, including biodiesel, compressed natural gas, propane, and hydrogen fuel cells. They are also attempting to expand the use of alternative electric vehicles, bicycles, autonomous devices, and other last-mile delivery options. Furthermore, they are exploring emerging technologies that use artificial intelligence to connect vehicles to traffic lights and other infrastructure for route optimization.
The scientific community has stressed the importance of decarbonizing the global economy to avoid the worst potential impacts of climate change. In order to achieve net-zero emissions by 2050, the private sector must play a critical role in leading the climate effort. Without voluntary business action creating a solid foundation of effort, reducing carbon emissions will be much more difficult. This foundation needs strong and complementary climate policy and global cooperation to assure success by the middle of the century. A confident business community, encouraged by its own success, should advocate for appropriate and supporting policies.
Collectively, FedEx’s sustainability efforts have contributed to a carbon dioxide emissions intensity reduction of about 40 percent since 2009, a period in which revenue grew by 96 percent. While there is still much work to be done, the company’s efforts are part of a larger trend of companies taking the initiative to be key players in fighting the climate crisis.