I recently gave the academic keynote address to the 29th International Symposium of Logistics which was hosted by Wiesbaden Business School. As the main theme of the event was ’embedding circularity in supply chains’, I decided to take this opportunity to explore the role of circularity in ‘climate logistics’. This is a short summary of my talk, to accompany my presentation.
What is ‘climate logistics’? I use this as the collective term for all the ways in which logistics will play a crucial role in our management of the climate crisis. As I discussed at length in a 2024 journal paper, this portrays logistics as playing eight roles in the crisis: as a cause, a decarboniser, a victim, an adaptor, a facilitator, a rescuer, a remover and, possibly and controversially, in supporting geo-engineering. In this presentation I added a ninth role, that of a beneficiary, because the other roles will greatly increase global demand for logistics services, creating major new commercial opportunities for businesses in this sector. I will focus here only the decarbonisation, facilitation, humanitarian logistics and carbon dioxide removal roles.
What is circularity? I adopted the broad definition of the concept proposed by the Ellen MacArthur Foundation and McKinsey in 2015. This comprises six activities whose names spell the acronym ReSOLVE: Regenerate, Share, Optimise, Loop, Virtualise and Exchange.
In their description of these activities the authors identify a series of processes that have a direct bearing on logistics’ role as a decarboniser. As I discuss in my 2018 book on the subject, decarbonising logistics involves pulling five sets of levers, affecting freight transport demand, modal split, capacity utilisation, energy efficiency and the carbon intensity of the energy used. The diagram below maps the main interconnections between the ReSOLVE circularity framework and the 5-lever logistics decarbonisation framework:
How can circularity affect the five decarbonisation levers?
Lever 1: the conventional view is that the re-use, recycling and remanufacture of products reduces dependence on the sourcing of raw materials from distant locations and therefore has the effect of geographically compressing supply chains. The extent of this effect at a global level is questionable, however, given the steep growth of trade in some categories of ‘secondary materials’, such as used textiles, and the efforts of the World Trade Organisation and others to create a liberalised global market in these materials. The World Bank has also contradicted ‘widespread views that 3D printing will shorten supply chains and reduce trade’. At least at a global level, circularity may not be reducing freight transport volumes, and their related emissions, as much as expected.
Lever 2: Despite the inclusion of ‘multimodal transport’ as a form of circularity in the ReSOLVE framework it is not clear how lower-carbon transport modes can capture a larger share of freight traffic in more circular supply chains. On the contrary, as these modes have a comparative advantage in the movement of goods over longer distances, their market position may be weakened by the localising effects of circularity.
Lever 3: Capacity utilisation of all freight transport modes can be improved by the greater directional balancing of freight flows in circular supply chains. The return flow of waste material for recycling and of re-useable packaging and handling equipment, makes it easier to find backloads and to cut empty running. This, however, usually requires greater co-ordination of transport in the forward and reverse channels.
Lever 4: Use of ‘autonomous vehicles’ as recommended in the ReSOLVE framework will improve the energy efficiency of trucking. Despite ‘compelling use cases’ and a worsening truck driver shortage, their deployment is proving very slow. Preventive maintenance of freight vehicles, which enhances their energy efficiency, is intrinsic to circularity as it prolongs the life of the assets and helps to minimise material use and waste.
Lever 5: Circularity plays a key role in logistics’ transition to renewable energy. In the short-to-medium term, biofuels made with recycled organic waste, such as HVO and biomethane, are increasing their share of freight transport energy use. In the longer term, when trucking fleets are largely electrified, the recharging of batteries will essentially be a circular process, while the reconditioning of batteries and recycling of battery materials will become standard practices.
Moving on to logistics’ role as a facilitator of the decarbonisation of other activities, it is clearly critical to two major processes, (i) the creation of the circular economy and (ii) the transition from fossil to renewable energy.
Circular economy: research by various organisations has established that increasing circularity can significantly reduce greenhouse gas (GHG) emissions. It has been estimated, for example, that using circularity to cut material use by 28% could see GHG emissions fall by 39%. This would require, among other things, an increase in the efficiency and capacity of closed-loop supply chains, better design of products for the returns process and overcoming the numerous barriers that still inhibit reverse logistics.
Energy transition: Fossil-fuel supply chains extending from exploitation to the release of atmospheric emissions are inherently linear. Their replacement by renewable energy systems complies with the core principles of circularity. The construction and installation of renewable energy infrastructure is removing the need to move and store fossil-fuel but are themselves highly material- and transport-intensive processes. The greater geographical dispersal of renewable electricity generation, the ‘out-of-gauge’ dimensions of equipment, such as wind-turbines and solar panels, and their global sourcing imposes a heavy burden on logistics systems.
The increasing frequency, severity and duration of climate disasters are enlarging the populations dependent on humanitarian logistics as a rescuer in times of crisis. Efforts are underway to make humanitarian supply chains less linear and more circular, partly by sourcing and recycling more materials locally. This can significantly improve their operational efficiency and frontline effectiveness.
Logistics’ role as a remover should be seen in the context of countries’ and companies’ commitments to be Net Zero by some future date, typically 2050. The point is long passed when they could reach Net Zero solely with mitigation measures. According to the main climate models, mitigation will have to be supplemented by the sequestration of billions of tonnes of CO2 annually from the atmosphere. All the natural, engineered and hybrid means of achieving this will be very logistics-intensive. Some have been described as forms of ‘waste management’ and ‘recycling’, in essence reversing the release of GHGs into the atmosphere. I call this ‘existential circularity’, as the future of civilised life on this planet may ultimately depend on our ability to achieve it at scale.
Carbon dioxide removal, particularly its ‘engineered’ forms, is widely challenged and criticised for a range of scientific, technological, economic, political and logistical reasons, though the fact remains that the more we overshoot our carbon budgets for a 1.5oC increase in average global temperature, the more dependent we will become on CDR. It is important therefore that we assess the nature and scale of the logistics operations that will be required by the construction of carbon capture and storage infrastructure, manufacture and distribution of the necessary equipment, the movement of the related biomass, minerals and chemicals and, finally, the transport of sequestered CO2 to underground burial sites or factories where it can be used as a chemical feedstock.
The use of captured CO2 as an ingredient in the production of e-methanol and e-kerosene provides a good illustration of circularity in action for the decarbonisation of, respectively, shipping and aviation. In both cases, CO2 ‘sucked’ from the air and combined with green hydrogen is returned to the atmosphere when the e-fuel is burned. Unfortunately, on a life-cycle basis, this is not a ‘zero-sum game’ given the large amounts of energy consumed in both the CDR and e-fuel supply chains.
Overall, climate logistics activities will generate huge amounts of freight movement. These flows will be in addition to the freight traffic growth already factored into the main global, EU and national forecasting models. Application of circularity principles, both in the general management of supply chains and in the climate-specific logistics operations outlined above, should help to restrain this growth. It may still, however, prove very difficult for logistics as a sector to meet Net Zero targets. Perhaps special regulatory dispensation could be granted to those logistical activities making a vital contribution to our efforts to deal with the climate emergency.