Logistics sector and renewable energies

Renewable energy revolutionises logistics

Transport Renewable energy

One of the main objectives of a company today is to strike a balance between business sustainability and environmental care and respect. In a context of climate crisis in which stricter regulations are necessary, logistics can even become an ally of sustainability. We review global trends and Iberdrola's partnerships that are driving responsible logistics.

We are developing the first Mediterranean Corridor for 100% electric heavy transport.

Pollution caused by logistics processes has a significant impact on the environment, especially through the carbon dioxide emissions emitted by its activity. The International Energy Agency (IEA) estimates that freight transport generates around 10 % of global emissions, mainly from truck traffic. However, the logistics sector is not simply about transport and delivery, but involves a range of other associated activities such as warehousing, international supply, order picking or raw material supplies.

In a scenario of growing political and social awareness of climate change and commitment to energy transition, companies are increasingly looking for alternatives to reduce the environmental impact of their processes. 

What is green logistics?

One of the main objectives of many companies today is based on achieving green or environmental logistics, which seeks to minimise, as much as possible, the impact of logistics processes on the environment. To achieve this goal, it is necessary to modify each of the stages of the logistics chain to reduce emissions and achieve the transformation of strategies and structures. 

The adaptation of sustainable logistics is closely linked to the corporate social responsibility of companies and aims to strike a balance between economic and ecological efficiency. 

Logistics sustainability strategies contemplate different actions such as reducing plastics in packaging and minimising the material required or adopting technologies such as software that measures the emissions produced in real time for better planning of routes and resources. However, one of the most common alternatives is the transformation of the model through the use of renewable energies.

Advantages of using renewable energies in the logistics sector

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    Abandonment of non-renewable sources (fossil fuels) and reduction of CO₂ emissions

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    Reducing energy costs through self-generation of electricity

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    Competitive advantage over the competition as a differentiator

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    Improving the quality of life of workers and surrounding communities

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    Boosting the corporate image as an environmentally responsible company

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    Compliance with environmental regulations and prevention of possible penalties

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    Reduction of noise pollution associated with logistics processes

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    Attracting new customers and suppliers committed to sustainability

SEE INFOGRAPHIC: Advantages of using renewable energies in the logistics sector [PDF]

Use of renewable energies in the logistics sector

The use of renewable energies in logistics —a task in which Iberdrola has extensive experience by offering services to companies— has various applications and opens doors to a comprehensive transformation of the model. These are some of the keys:

"Green" warehouses and logistics centres

Having a sustainable infrastructure means establishing resources and storing goods efficiently in order to use procedures that reduce the pollution produced. Among the most relevant actions is the use of renewable energies to minimise the use of electricity.

A representative example of this initiative is the PPA (Power Purchase Agreement) that Iberdrola has with Amazon in the United States. Under this agreement, the energy company guarantees the renewable supply for the e-commerce company's facilities and logistics and distribution centres. In 2019, the companies extended the coverage of their contract to the United Kingdom, becoming the first replica of this alliance in Europe. In this case, the agreement covers the supply of energy from the Beinn an Tuirc onshore wind farm in Scotland.

This project is part of Iberdrola's ambitious investment strategy in renewable energy generation projects, as well as its commitment to bilateral contracts as a way to promote energy supply among large customers committed to decarbonisation. The company continues to advance its leadership in this field through agreements with various international companies such as Google, Apple, Facebook, Microsoft, PepsiCo, Nike and Danone, among others.

In addition to the supply of energy from renewable energy installations, logistics companies can also opt for self-supply. Warehouses usually have a large surface area, which is ideal for installing solar panels. Self-sufficiency allows them to cover lighting and air conditioning needs and they can even generate energy for distribution to other uses.

Transport and distribution can also be sustainable

A key phase of the logistics process involves transport and distribution. Traffic is one of the main contributors to carbon dioxide emissions. However, there are some sustainable alternatives in the transport sector, such as optimising routes, reducing the number of trips and, above all, replacing the most polluting vehicles with hybrid or electric fleets.

With sustainability as its goal, Iberdrola is leading the project in Spain to develop the first Mediterranean Corridor for 100% electric heavy road transport together with the transport and logistics company Disfrimur and the company specialising in power electronics, Ingeteam. This route will cover more than 450 km of emission-free route between the Region of Murcia and the Valencian Community and is expected to be extended to the rest of the country's freight corridors.

The initiative includes three areas of action: the procurement of heavy electric trucks up to 40 tonnes, the development of public charging infrastructure, as well as the deployment of a smart grid to service these chargers, ensuring maximum efficiency.

Consolidating a charging network for these vehicles is essential to achieve widespread deployment of sustainable mobility. In this regard, Iberdrola reached a strategic agreement with BP in 2022 to significantly expand the fast public charging system for both passenger cars and fleets of heavy vehicles and vans.

Batteries aren't the only solution: green hydrogen is on the march

Despite their usefulness, electric batteries cannot be the only solution to complete a logistics transformation, mainly because they have a high and unaffordable production cost for some companies. A promising solution may be green hydrogen. Its gas can be stored under pressure in tanker trucks or compressed in tanks and then distributed and used as vehicle fuel.

It is already possible to find some cases of hydrogen use in the logistics sector. Iberdrola is a benchmark in the production of this element as an electrification alternative for certain industrial processes and heavy transport, and maintains alliances for the development of projects in the main markets in which it operates: Spain, the United Kingdom, Brazil and the United States.

For example, the company has the largest green hydrogen plant in Europe in Puertollano (Ciudad Real), which facilitates the decarbonisation of the Fertiberia Group's fertiliser manufacturing process in the town; and it has partnered with the US company Cummins, which will locate one of the largest electrolyser factories in the world in Castilla-La Mancha. 

In Spain, the company is also leading the Y Basque Green Hydrogen initiative, a corridor that envisages the construction of three hydrogen plants in the logistics centres of Vitoria/Júndiz, Bilbao and Pasaia to provide renewable energy for heavy land transport, buses and light industrial vehicles, as well as port and airport uses in the region and the chemical industry. It is also promoting a project in Aragon for the construction of a hydrogen plant at the PLAZA Logistics Platform in Zaragoza for heavy transport.

In addition, the Iberdrola group plans to build a large green hydrogen plant at the port of Felixtowe (England) which, with an investment of around €170 million (£150 million), will contribute to the decarbonisation of the largest freight port in the United Kingdom. The facility, which will be operational in 2026, will supply hydrogen to vehicles and machinery used by the port and will be capable of fuelling up to 1,300 green hydrogen trucks. A non-polluting fuel which will also be used for the trains transporting goods to the port.

Iberdrola, through its Brazilian subsidiary Neoenergia, has also signed a memorandum of understanding with Prumo —one of the largest and most important energy and infrastructure complexes in Brazil— for the development of green hydrogen production in the industrial complex of the Port of Açu, in the state of Rio de Janeiro. This agreement is part of Neoenergia's strategy to promote green hydrogen through an area with great port and logistical relevance and which concentrates a large part of the country's energy consumption demand.