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Logistics and net zero: a hot topic

Newly appointed Director in our Sustainability team, Barny Evans, hits the ground running with his first blog on logistics and net zero. Read on to find out why it’s so important, how it can be achieved and for more information on our Playing to our industrial strengths campaign.

I am bringing two of the hottest topics of the moment together; logistics and net zero.

The net zero drive is everywhere. Our clients are asking how new development or their existing assets can be net zero. Cities and regional authorities are aiming to achieve the same.

The logistics sector is also booming. A trend towards online shopping that has been turbocharged by COVID has meant that investment in logistics is growing, as investment in retail and office space declines. Alongside residential, the so called beds and sheds strategy, logistics is seen as the best bet.

So, what does net zero logistics mean?

In terms of greenhouse gas emissions, logistics buildings have traditionally been a relatively small issue. Even though logistics sheds are often huge, in most cases they use very little energy and even the embodied carbon in their construction is relatively low. Often, the main shed is completely unheated and needs only lighting, which is increasingly efficient. One big area of emissions has been the HGVs and vans that use the sheds. This is why it is more carbon-intensive to shop online than to go to a physical shop, in most cases.

Now though, there are lots of innovations and trends in the logistics energy system, and logistics itself, that are combining with the rapid growth in the sector, to make it one of the most exciting areas in net zero. These include opportunities for solar power, increased biodiversity, drone delivery and low carbon materials which are rapidly changing the sector, along with wider societal and technology change.

A new generation of green facilities are now emerging in the UK such as industrial developer PLP’s first net zero carbon-ready developments at its Crewe and Smithywood Commercial Parks.

The biggest trend is electrification. Logistics buildings themselves now rarely have a gas supply and use heat pumps for heating and cooling the office space. Vans and lorries are also electrifying fast. Up until recently, it had often been assumed that heavier vehicles would not be able to run on batteries, but most of the industry expects all surface vehicles to electrify, for example the HGV manufacturer Scania is now committed to all their vehicles being electric. This electrification reduces GHG emissions hugely, and they will continue to reduce as our electrical grid decarbonises.

Logistics sheds are also ideal for generating clean electricity. They have huge roofs which can host solar power arrays. As a rule of thumb, a logistics shed can generate 1/3 of all the energy it uses in a year from the roof, albeit not all at the right time.

But all this good news does bring some challenges. Electric HGVs have large batteries and need charging fast in most cases. A dedicated HGV charger may require 500kW. To put that in comparison an entire logistics shed of 20,000 sq m with office may only require 500kW. If we provide several chargers to each shed the grid connection costs will become prohibitive. That is before charging drones, forklift trucks, etc. Many investors with an increased focus on ESG and sustainability understand the need to increase electrical capacity and build charging points to ensure they are ‘future proof’.

All those solar roofs which help achieve net zero are an issue too. On a sunny day in June some parts of a logistics park will be using only a fraction of the power generated. You can export it onto the grid but that loses a lot of its value financially and is wasteful.

So, how do we enable this transformation in a cost-effective way? The answer is a smart energy system, or what we call a 360 energy approach. What is required is to design or retrofit logistics parks in a manner that allows them to share a common energy system. Building A can be using the power generated by Building B, and one common EV charging hub means we don’t need as many chargers. It isn’t easy. To achieve an optimum shared energy system on a logistics park requires careful analysis, calculations, the right infrastructure and a new commercial / legal structure.

Despite the investment required to retrofit or develop new logistics parks the end result is lower capital and running costs, whilst delivering the net zero goal. Those of us involved in the sector should be embracing this opportunity.

Our report ‘Playing to our industrial strengths’ provides further detail on net zero logistics and the future of the logistics sector more broadly.

For more information on net zero, please contact Barny Evans.

12 October 2021