Is carbon neutrality still a realistic goal for fleets in 2023? Find out on this week's episode of #UtilimarcFleetFYIs.
Gretchen Reese (00:19):
Welcome to the Fleet FYIs podcast, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week I'll be sharing with you not only over two decades worth of data insights, but some of the industry's hottest talking points and key metric analysis with the aims help you better understand your fleet from every angle. Before we begin, if this is the first time you've heard our show, thanks for stopping by. Once you've finished today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, I would really appreciate it. Give us a rating, five stars, I hope, or tell us what you liked, or leave us a comment or a question about what you've heard in today's episode. If we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later episode. Let's dig in.
Hello, everyone, and welcome back to another episode of the Fleet FYIs podcast. I'm super excited to bring to you today's topic. I know I say that every week, but I always find different topics within the fleet industry to be incredibly fascinating. And one of my latest fascinations ... and I say latest fascinations, but in reality, I've been interested in the topic for the last few years, is carbon neutrality as part of fleet's general sustainability goals and seeing how that can actually be impacted, or whether or not it's actually a realistic goal. We've heard around the industry that carbon neutrality is something that a lot of folks are interested in, organizations, fleets, facilities, the like. And in reality, a lot of people are questioning whether or not carbon neutrality is really a realistic goal that folks can anticipate being able to reach by their set timelines.
You have folks throwing around years like 2025, 2030, 2035, five-year increments, of course, but it's sneaking up on us quickly. And the question really is, do we have enough in our arsenal? Do we have enough in our sustainability arsenal to really be able to make this happen on that timeframe? I don't know if I'd be able to answer that question today in terms of is it realistic, or is it feasible, or is it possible? However, I wanted to plant the seed in your mind because if you're thinking about going carbon-neutral, what do you need in place in order to actually be able to make it happen? Let's dig in.
So whether by external mandate or internal initiative, more organizations than ever before are monitoring their greenhouse gas emissions and their general impact overall on the environment, which is awesome. Don't get me wrong. And as the world increasingly pushes for sustainable change, corporations and governments alike are setting goals to be carbon-neutral or have net-zero emissions in the near future. And if you don't know what carbon neutrality means, just as a general overview, I'm not going to go completely Merriam-Webster on you here today, but in general terms, what that means is for the amount of emissions that you are creating or producing, you are also offsetting them by the same amount. Therefore, you get that net-zero emissions number. Say, for example, you're planting a tree, or you're sourcing renewable energy or sustainable energy, that could be a way that fleets are doing it, but basically, the idea is to offset the same amount that you produce, net-zero emissions or carbon neutrality.
Major companies like General Motors, FedEx, Delta Air Lines, and Shell have publicly committed to reaching carbon neutrality as soon as 2030. Like I said, it's coming up in the near future. And alongside this goal, they have shared plans to invest in green technologies, switch to cleaner energy sources, and launch carbon offsetting initiatives that regenerate ecosystems all around the planet. Amazing, right? For some other heavy polluting organizations, greenhouse gas reporting and reduction may be done by obligation. In all fairness, the EPA has been a really big part of that push. In an effort to monitor the footprint of leading emitters in the country, the EPA has been requiring this carbon reporting from about 8,000 organizations nationwide. And in either case, close tracking and reporting of emissions is necessary to bring back the integrity and the transparency of these sustainability initiatives.
When we look at reporting overall, it's very possible that any type of report, especially if done manually, is prone to human error. That should not come as a surprise. Even think about it, if you're trying to list all 50 states in one spot or you're trying to write your grocery list, odds are you're going to name something twice. It happens. As regulations for these reports for sustainability get more and more common, and more strict as a result, one of the major concerns that a lot of folks have out there is like this grocery list effect. It's the validity of companies' carbon reports as a whole.
So in order to avoid charges, or sanctions, or even just the proneness to human error, organizations are trying to minimize or shift around their numbers in some cases, or they're actually outsourcing their data because sometimes when you have a new report, it's hard to know exactly which category that it fits into, unless you're working with a team that's used to reporting on this all the time, or you have someone on your team that knows exactly how to report on the information you're looking for. So for example, a fleet reporting on vehicle emissions, if they're going completely electric, does that mean that they're carbon-neutral? Maybe, maybe not. Because if the same fleet is relying on a grid that is powered by coal or by other non-renewable resources, they call it a quote, unquote, dirty grid, to charge all of their new electric vehicle infrastructure, is the fleet really carbon-neutral? Well, that's where it takes a little bit of extra digging to really figure that out.
And that's where I wanted to talk a little bit more about tailpipe versus facility emissions, because they are very different. And if you're looking for total carbon neutrality, that's something that I think organizations need to specify if that's one of their goals, because making sure that you are carbon-neutral in terms of tailpipe emissions, in my personal opinion, is easier to do than facilities overall. The reason I say that is because if you're looking to make your fleet emissions more carbon-neutral, that's where the initiatives are smaller, they're not on as large of a scale, where sometimes when it comes to facility, you're looking at your utility provider. You're not just looking at vehicles, you're looking at everything from how your uniforms are produced to how your materials that you're sourcing for your fleet yard are produced. There's a whole lot that goes in there, basically down to even the label or the name tag on your employees' uniforms, that is added into your carbon neutrality if you're looking at something. Overall, organization-wide, everything on your fleet yard is included into the carbon neutrality statement there, or maybe just your vehicles for tailpipe emission only.
But before I digress too much onto that little tangent, perhaps the solution to this problem would be for organizations to specifically clarify exactly how they're going carbon-neutral, like I said. In other words, if they're carbon profile is neutral, or if it's negative across the board, or if neutrality has been achieved at a specific scope, that could be a little bit more clear and easier to report on. For example, an organization whose fleet emits net-zero greenhouse gases is technically carbon-neutral at scope 2, but not the organization as a whole, if that makes sense.
This is the important difference between tailpipe and facility emissions. Like I had previously said before, all internal combustion engine vehicles produce some level of exhaust at the tailpipe, which discharges carbon dioxide, carbon monoxide, nitrogen oxides, and many other pollutants overall. And organizations looking to cut down at scope 2 may transition to cleaner vehicles, such as CNG engine vehicles, plug-in hybrids, or all electric vehicles, which ultimately would reduce their tailpipe emissions overall, potentially leading to carbon neutrality or carbon zero. These vehicles are a viable option for companies facing regulations around fleet greenhouse gases, and those that are looking to cut down as quickly as possible.
Doesn't necessarily mean that they're off the hook, though. A fleet of 200 vehicles, especially if their internal combustion engines going all electric, it can definitely reduce their carbon footprint. But again, it brings up the question of where are they charging these new 200 vehicles? Is it on a fossil fuel powered grid? Is it on a solar-powered grid. For a fleet only required to report on scope 2 emissions, this can be great news because the reality is that greenhouse gases are pretty much being shifted to another source instead of completely eliminated if you're looking at a fossil fuel powered grid. But again, that's where a little bit of clarity when it comes to carbon neutrality commitments can be really helpful.
Well, let's talk about a clean energy solution overall, because I don't want to seem too doom and gloom here. That's never a good thing. At the end of the day, the concept of carbon neutrality is evidently ambiguous. It's a bit of a vast concept if you haven't already gathered that. As more organizations commit to this goal, specifications might be necessary to clarify what the objective really entails. A lot of clarity is never a bad thing. Being overly communicative about what your interests and your goals are is always a good thing, as well. And for fleets looking to go carbon-neutral at all levels, the root of the problem is most likely that their energy source is either fossil fuel powered, or solar-powered, or other renewable resource. As long as fleets rely on dirty grids to power electric vehicles, they'll only be able to reduce their emissions to a certain extent. The true solution will be clean energy for powering clean vehicles. Pretty plain and clear.
But the case of, for example, and I'll give you a really good example to close out the episode here, Jersey City, they have a microgrid that is part of their municipality fleet system, and it presents an attractive opportunity for other fleets to model. We actually wrote a little case study on this not too long ago, I think maybe over the summer last year. But just all in all, the city is set to build the first self-sustainable municipal microgrid in the country, which creates power through solar panels, and this clean energy will then be produced and used to charge the city's fleet of electric garbage trucks.
So it could be a scenario where fleets start to look at things like this, like self-sustainable microgrids, or they could be looking to partner with organizations like Clean Cities to try and figure out where they can get their renewable power sources from. You never really know, but there's a lot of options out there for fleets. Even public utilities have alternative power options as well, so don't count them out because they're awesome, and they're working really hard to try and bring sustainable and renewable power sources to the masses, as well.
The key here, though, is the combination of independent renewable energy and a plan for fleet electrification, or whatever sustainable technology your fleet is looking to incorporate, because I don't want to come across that electric vehicles is the only option. It's not. It's one of the options, but it might not be the best one for your fleet. So it's definitely something to look into to see whether or not it would be a good option to pursue, because whilst these efforts take a great deal of investment, planning, support from stakeholders, it seems to be a feasible path to carbon neutrality today, but it's not the only one. So there's always a lot of other avenues to be able to explore.
I'm curious what you guys think, though. Are you keen on electrification? Are you keen on carbon neutrality? Do you have any questions about it? I'd love to hear your thoughts. I'd love to hear what you think. You can always send me an email. You can tag me on LinkedIn. You can use the hashtag Utilimarc Fleet FYIs, or as always, you guys can send me a carrier pigeon because we all love a bit of snail mail, especially if it's delivered by a bird, if you know what I mean. Anyways, that's all from me today. I will speak to you next Friday. Ciao.
Hey, there, it's me again. I think it's time to cue the virtual high five because you've just finished listening to another episode of the Fleet FYIs podcast. If you're already wanting more on all things fleet and vehicle technology, head over to utilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C dot com, for this episode's, show notes and extra insights coming straight from our analyst to you. That's all from me this week, so until next time, I'll catch you later.