Volvo Cars switch to renewable fuel for ocean freight transport
Every year, tens of thousands of containers of production material destined for Volvo Cars factories are carried across the world’s oceans on container ships. Volvo Cars announced that it is switching to renewable fuel instead of traditional fossil fuel to reduce CO2 emissions by at least 84%. The reduction is equivalent to the CO2 emissions of a full truck driving around the equator about 1,200 times.
As the first global car maker to announce such a switch, Volvo Cars will achieve an immediate reduction in fossil CO2 emissions from intercontinental ocean freight by 55,000 tonnes over a year.
The fuel to be used is fatty acid methyl esters (FAME) and is based on renewable and sustainable sources, mainly waste cooking oil. No feedstock related to palm oil or palm oil production is used, according to Volvo Cars.
Renewable fuel will be used for inbound ocean container transports of production material destined for manufacturing plants in Europe and the Americas, as well as all spare parts distribution made globally by ocean container transports.
“Renewable fuel is not the end game for removing CO2 from the world’s ocean freight needs,” says Javier Varela, chief operating officer and deputy CEO of Volvo Cars. “Yet this initiative shows that we can act now and implement solutions that achieve significant results during the wait for long-term technological alternatives.”
“We don’t view this initiative as a competitive advantage,” says Varela. “On the contrary, we want to spark other car makers into action as well, to increase demand for carbon efficient ocean transports and to establish renewable fuels as a mid-term solution that works. We all have a responsibility to act.”
Volvo Cars has been working on this initiative together with its logistics partners Maersk, Kuehne+Nagel and DB Schenker. These logistics service providers have switched to renewable fuel for equivalent energy needed for all container transports done for Volvo Cars from June 1, 2023.
When renewable fuel is not available on a specific shipment, renewable fuel allocation is instead used by the logistics partner for another customer’s route elsewhere, so the overall cut in fossil fuel use is kept on par with actual use in container vessels. The methodology, called mass-balancing, is third-party audited regularly. The renewable fuel itself is certified and not produced in competition with food crops. It is therefore sustainable in accordance with the EU Renewable Energy Directive.
“We’re continually exploring sustainability opportunities across all aspects of our supply chain, and across our overall business,” Varela says. “Our list of initiatives keeps growing as we work towards our ambition of becoming a climate neutral company by 2040.”
Volvo Cars’ ambition is to reduce its lifecycle carbon footprint per car by 40% between 2018 and 2025, which requires a 25% reduction in operational emissions, including logistics. The Swedish car maker which is owned by China’s Geely is also aiming for climate-neutral manufacturing by 2025. Both of these milestones are important steps towards the carmaker’s climate neutral ambitions.