Food & Beverage Company Builds Green Mobility Roadmap for Third-Party Fleet

To meet corporate emissions targets, organizations should consider an integrated approach to decarbonizing transport and logistics, with dedicated efforts to develop green fleets of medium- and heavy-duty vehicles. While there is strong momentum to decarbonize transport, commercial fleets pose significant challenges. Many fleets are run by third-party haulers, which limits the direct control companies have over their emissions. Achieving a green mobility transition requires collaboration with logistics companies to ensure they are aligned with sustainability goals and are willing to adopt zero-emissions vehicles powered by low-carbon technologies.

In this case, a U.K. branch of a global food and beverage (F&B) company, aligned with Science-Based Targets initiative (SBTi) goals, aims to reduce its Scope 1, 2, and 3 greenhouse gas (GHG) emissions by 30% by 2030 and reach Net Zero GHG emissions by 2040. After identifying third-party distribution and transportation emissions as accounting for 8% of its Scope 3 emissions, green mobility became a key lever for decarbonization progress. The F&B company engaged ENGIE Impact to assess their mobility needs, explore market options, create an actionable roadmap for a green fleet, and work with existing third-party logistics companies to implement their green fleet transition.

Fundamental Considerations for Creating a Green Fleet

Fleet operators must address three key issues when developing short-, medium-, and long-term fleet decarbonization roadmaps to transition away from fossil fuels:

1. Operational feasibility: Assess the complexity of switching technologies. This involves identifying which designated routes are suitable for electrification or hydrogen adoption, which vehicle types are currently available on the market, their current and near-future “realistic mileage” achievable, as well as determining the availability of charging or refueling infrastructure, and the conditions and locations in which they operate.
2. Financial feasibility: Evaluate market maturity and the financial impact of switching technologies. Key considerations include CAPEX for new vehicles as older ones are retired (which occurs frequently), infrastructure, and OPEX for fuel and maintenance.
3. Risk analysis and future projections: Understand the risks involved, such as regulatory changes, technological maturity, commodity availability, price volatility, and environmental aspects. Future-proofing fleet decisions requires close monitoring of these variables.

The main hurdles to rolling out a green fleet of medium- and heavy-duty vehicles include the availability of alternative fuels, underdeveloped infrastructure, and technological readiness. Low-carbon fuel supply and infrastructure development remain inadequate in many regions, and the total cost of ownership for new technologies remains high. When planning for a transport fleet and the routes it would need to take, for instance, a company must consider if it would need to invest its own capital to enable a charging infrastructure.

Compounding these challenges, the UK government’s plan to ban the sale of new medium- and heavy-duty vehicles powered by fossil fuels by 2040 has added urgency for fleet operators. This regulatory deadline is driving fleet operators serving the F&B company to accelerate their green mobility plans.

The Path to a Sustainable Solution

The F&B company engaged ENGIE Impact to explore opportunities for decarbonizing its transport fleet. The first step was to engage key stakeholders to gather data and define success criteria. Creating a credible plan to decarbonize a fleet requires broad stakeholder engagement across the business and with third-party logistics companies. While the F&B company is focused on reducing its Scope 3 emissions, it’s important to note that the logistics companies are tasked with reducing their Scope 1 and 2 emissions. Recognizing this mutual dependence fosters collaboration, such as sharing the cost of introducing low-carbon vehicles, which can help accelerate the transition.

1. Gather fleet data: To assess use case feasibility, ENGIE Impact collected the F&B company’s operational data. Parameters included annual shipments, fleet size, vehicle types, payloads, daily mileage, operational locations, and potential fuel options like hydrotreated vegetable oil (HVO), electricity, or hydrogen.
2. Group the routes: Routes were categorized into low-, medium-, and high mileage groups based on average daily mileage. Tailored decarbonization options were then recommended for each group, depending on their specific operational requirements.
3. Assess market outlook and feasibility: Three potential decarbonization technologies – electric vehicles, hydrogen, and HVO – were evaluated. The criteria for assessing the feasibility and implementation timeline for each solution included technological readiness, market availability, infrastructure, and operational performance. ENGIE Impact’s internal database provided projections for CAPEX, OPEX, and commodity prices.

Defining the business case and designing an optimal fleet configuration involved assessing various options to mitigate operational risks and project the total cost of ownership. Finding the right configuration required testing different combinations of components to identify the most cost-effective and operationally viable configuration. The solution included the creation of a decision-making framework throughout the year, including a timeline to assess which technology to invest in and when.

Phased Transition as the Best Solution

Following comprehensive feasibility and techno-economic assessments, ENGIE Impact produced a final roadmap for decarbonizing the F&B group’s third-party logistics. The roadmap outlines the most viable pathways for each hauler group, detailing both the financial and environmental impacts of the transition.

Key actions taken and their results include:

• Assessed 12 third-party logistics companies: Determined which ones could feasibly implement a green transition, share the F&B company’s vision, and are willing to adapt.
• Designed four decarbonization scenarios: Applied these scenarios to each of the 12 logistics companies, offering tailored solutions based on their capabilities and challenges.
• Identified HVO as an immediate solution: Determined that HVO is technically feasible for all hauler types (low, medium, and high mileage) and can be implemented immediately, reducing carbon emissions by 87% compared to diesel.
• Modeled gradual transition to EVs: Created a roadmap for switching from HVO to EVs, beginning with low-mileage haulers in the near term and medium-mileage haulers in subsequent years, provided sufficient on-route charging is installed during the coming decade.
• Identified hydrogen as a potential long-term solution for high-mileage routes: proposed to initiate a pilot project within the next decade.

The key takeaway for the long term is that a fully integrated electrification and hydrogen solution could eliminate the entire CO₂ footprint of the company's UK fleet.

The successful design of this project was driven by the process and the people. The process relied on internal databases and expert market outlook assessments, ensuring high predictability of future costs and resource availability. On the people side, close collaboration between the client, service providers, and stakeholders ensured knowledge transfer, co-creation, and well-informed decision-making at every stage.