With some of the freak weather incidents that the world has witnessed in the past few years, the debate of whether climate change is ‘real’ or not should be finally put to rest. However, one could not ignore the role of fossil fuels in the economic development of countries. Emerging economies often cite the reasons such as poverty and quality of living issues, and hence using fossil fuels for such countries is crucial for ensuring economic growth. Various industries thrive with the region’s economic development, and an entire ecosystem has to be developed. Hence, from manufacturing to supply chain management, hundreds of thousands of enterprises utilise conventional fuel and increase their carbon footprints.
With the Indian PM recently announcing net-zero carbon emissions by 2070, it is clear that the government is firm on curbing pollution by making strategic changes. Logistics companies are one of the most critical aspects of economic infrastructure in a country. The scope of work of such companies starts with delivering raw materials to manufacturing firms and continues until goods are supplied at the doorsteps of the consumers. With the digitalisation of economic activities and the increased popularity of eCommerce companies, the overall role of logistics companies in a financial system has further expanded. Globally, these logistic companies are responsible for up to 30% of total greenhouse emissions in a few regions.
Therefore, logistics companies have the environmental duty of reducing their carbon footprints. The introduction of LNG-powered vehicles could be one of the first steps these companies could introduce to curb emission levels.
LNG is a clean fuel alternative
LNG is a clean fuel alternative that has been proved through a recent study. The study underlined that the carbon production and noise of LNG fuelled trucks and vehicles are significantly lower than the traditional diesel-powered vehicles. As an alternative fuel, LNG has 95% methane content and a small fraction of other components. With the pressure of decarbonising looming on auto companies, LNG could be the best choice for alternative fuel that could power vehicles without affecting their capacity and efficiency. Even in testing conditions, LNG has proved a more efficient and much cleaner alternative than diesel; logistics companies should take any opportunity to replace diesel vehicles with LNG.
Production of LNG through remote locations is a possibility
Availability of alternative fuels is always a challenge during the process of adoption and replacement. Diesel is a widely available fuel with pumps and stations located in almost all parts of the country. However, a few innovations in this field, such as Small-Scale LNG (SSLNG), a nascent industry right now, is an alternative solution to large-capacity LNG. Small and medium-sized companies have long-term plans to establish infrastructure to ensure that the overall availability of the fuel shall not be a problem in the future. With the government’s support, setting up fuel stations in different parts of the country will be a reality soon.
Growth of LNG infrastructure
Taking account of the growth of SSLNG, there are large corporations engaged in developing LNG infrastructure. Besides this, many logistics companies are collaborating with such small and large corporations to produce the fuel at remote locations. Hence, the production and transportation of such fuel could be facilitated through these logistics companies.
LNG is cheaper than diesel
Another critical reason for the quick adoption of LNG by logistics companies should be based on the cost element. Currently, LNG costs almost 30-35% cheaper as compared to diesel. Hence, besides fulfilling sustainability requirements, this alternative fuel can significantly push the overall profitability of logistics companies.
Government support
As has been mentioned earlier, the central government is keen on decarbonising different aspects of the economy. Logistics is one of the first areas that the government is looking forward to decarbonising. To ensure that economic development is not hampered, the government is supporting the growth of alternative fuels such as LNG. In the next few years, the government aims to develop over 1000 LNG stations that can cater to up to 1.5 lakh logistics vehicles. The government seeks to replace diesel with LNG as a long-haul transportation fuel.The government could also come up with subsidies and grants to the logistics companies and support SSLNG enterprises.
Summing up
Pollution and emissions of harmful gases are some of the main reasons for global warming and climate change. And logistics companies are probably one of the most crucial aspects of economic growth. However, economic development should not be a reason for irreversible damage to the planet. With the net-zero carbon aim in mind, one of the first steps before planners shall be introducing alternative fuels in core industries such as logistics. In collaboration with logistics companies, this transformation could be a crucial step in curbing pollution.
About the Author
Ashish Agarwal is the Director & CEO at SEROS Logistics, a leading player in multimodal and marine logistics that supports end-to-end requirements of bulk cargo. Nurturing a strong leadership team, Agarwal oversees the strategic direction for the company and its offerings. With his exceptional entrepreneurial instinct, he aims to keep the clients’ tactical distractions at bay, by offering them customized logistics solutions.
He envisions SEROS to be India’s largest green logistics company with the largest fleet of clean fuel-powered commercial vehicles. He strongly believes in India’s commitment towards a gas-based economy and wishes to help industries transition towards cleaner fuels. An alumnus of Harvard Business School, in his previous stint Agarwal worked as a Corporate Advisor at The Essar Group where he spearheaded the company’s long-term and short-term strategies.
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