Sustainability in Transportation

Industry Overview

Transportation accounted for about 15% of global greenhouse gas emissions in 2019, according to the IPCC, and 28% of U.S. emissions in 2022, according to the EPA—making it the largest emitting sector in the American economy. The sector spans passenger vehicles, freight trucking, rail, aviation, and maritime shipping, each with distinct decarbonization pathways and timelines. Light-duty vehicles are furthest along in the transition, with battery electric vehicles reaching cost parity in several markets. Heavy-duty trucking, aviation, and shipping remain among the hardest sectors to decarbonize.

The transformation underway is reshaping competitive dynamics. Fleet operators face rising fuel costs, tightening emissions standards in markets such as the EU, and customer demands for low-carbon logistics. Automakers are investing hundreds of billions in electrification. Logistics companies are competing on carbon intensity as shippers incorporate Scope 3 transportation emissions into their sustainability reporting. The companies that master this transition will define the next generation of transportation; those that resist it will be displaced.

The infrastructure challenge is equally significant. Widespread EV adoption requires massive expansion of charging networks, grid capacity upgrades, and new manufacturing supply chains for batteries and components. Freight decarbonization depends on infrastructure that doesn't yet exist at scale—hydrogen refueling stations, electric highway systems, and sustainable aviation fuel (SAF) production capacity. Public and private investment must accelerate dramatically to meet the physical requirements of a decarbonized transportation system.

Key Sustainability Challenges

Fleet Electrification at Scale

While light-duty EVs have reached commercial viability, electrifying medium- and heavy-duty fleets remains challenging. Battery weight and volume constraints limit range for long-haul trucking. Charging infrastructure for depot-based fleets requires significant electrical service upgrades. Total cost of ownership is improving but varies by duty cycle, geography, and utility rate structures. Fleet operators must navigate technology uncertainty while making capital commitments on long-lived assets.

Sustainable Aviation and Maritime Fuels

Aviation and shipping together account for roughly 5% of global emissions and are among the hardest sectors to decarbonize. Battery-electric flight is viable only for short-range routes. Sustainable aviation fuel (SAF) made up only about 0.6% of global jet fuel consumption in 2025, according to IATA, constrained by feedstock availability and prices about twice those of conventional jet fuel (up to five times in markets with blending mandates). Maritime shipping faces similar challenges, with ammonia, methanol, and hydrogen propulsion all at early stages of adoption.

Last-Mile Delivery and Urban Logistics

E-commerce growth has dramatically increased last-mile delivery volume, adding trucks and vans to already congested urban areas. Last-mile delivery is the most carbon-intensive leg of the logistics chain on a per-package basis. Solutions include electric delivery vehicles, cargo bikes, micro-fulfillment centers, and route optimization—but implementation requires coordination among shippers, carriers, and municipal authorities.

Regulatory Landscape

EU law requires new cars and vans sold from 2035 to have zero tailpipe CO2 emissions, in effect ending sales of new combustion-engine models, but in December 2025 the Commission proposed lowering the 2035 target to a 90% cut, with the rest covered by credits for EU-made low-carbon steel and renewable fuels; Parliament and Council were still working on their positions in September 2026. The EU has also established CO2 emission standards for heavy-duty vehicles requiring 90% reductions by 2040. The EU Emissions Trading System has been extended to include maritime shipping. The International Maritime Organization (IMO) adopted a revised GHG strategy targeting net-zero shipping emissions by around 2050.

In the U.S., the EPA's 2024 greenhouse gas standards for light-duty vehicles through model year 2032 no longer apply: in February 2026 the EPA rescinded its 2009 endangerment finding and repealed all federal greenhouse gas standards for cars and trucks. California's Advanced Clean Trucks rule was written to require increasing percentages of zero-emission truck sales, but in June 2025 a congressional resolution revoked the federal waiver it depends on; California and 10 other states have sued, and several states that adopted the rule have delayed enforcement. A 2021 federal SAF Grand Challenge set a goal of 3 billion gallons of U.S. SAF production a year by 2030, but the July 2025 budget law ended the SAF blenders' credit after September 2025 and removed SAF's higher rate under the clean fuel production credit from 2026.

The International Civil Aviation Organization's (ICAO) CORSIA program requires airlines to offset growth in international aviation emissions above a baseline set at 85% of 2019 levels from 2024, and ICAO has adopted a long-term aspirational goal of net-zero carbon emissions from international aviation by 2050.

Opportunities

Fleet electrification offers compelling total cost of ownership advantages in many applications. Electric buses, delivery vans, and short-haul trucks are already cheaper to operate than diesel equivalents when accounting for fuel and maintenance savings. Early movers in fleet electrification lock in energy cost advantages and position themselves for tightening emissions standards.

Carbon-efficient logistics is becoming a competitive differentiator. Shippers increasingly select carriers based on emissions intensity, creating market share opportunities for low-carbon operators. Companies like Amazon, IKEA, and Maersk have set ambitious supply chain decarbonization targets that flow through to carrier selection decisions.

Sustainable fuels represent a growing market. SAF production doubled from 1 million tonnes in 2024 to about 1.9 million tonnes (2.4 billion liters) in 2025, and IATA projects 2.4 million tonnes in 2026. Companies that secure SAF offtake agreements and develop production capacity are positioning for a market that will be supply-constrained for years.

How Council Fire Can Help

Council Fire advises transportation companies, fleet operators, logistics providers, and public transit agencies on decarbonization strategy. We develop fleet electrification roadmaps that account for vehicle availability, charging infrastructure, grid capacity, and total cost of ownership. Our team supports emissions measurement and reporting for complex logistics networks, including allocation methodologies for shared transportation and multimodal supply chains.

For ports and maritime operators, we provide guidance on IMO compliance, shore power planning, and terminal decarbonization. For aviation clients, we support SAF procurement strategy and CORSIA compliance. Our work integrates technical feasibility with financial analysis to deliver transition plans that boards and investors can support.

Frequently Asked Questions

When will electric trucks be cost-competitive with diesel for long-haul freight?

For short-haul and regional routes (under 200 miles), electric trucks are approaching or have reached TCO parity with diesel in several markets, driven by lower fuel and maintenance costs. Long-haul applications (400+ miles) remain more challenging due to battery weight, range limitations, and charging time. Reaching TCO parity for long-haul electric trucks depends on further battery cost declines and charging infrastructure buildout. Hydrogen fuel cell trucks may serve as a complement for the longest routes, though the refueling infrastructure is even less developed.

How do we measure and report transportation emissions in a complex supply chain?

Use the Global Logistics Emissions Council (GLEC) Framework, which provides standardized methodologies for calculating logistics emissions across all modes. For Scope 3 reporting, the GHG Protocol's Category 4 (upstream transportation) and Category 9 (downstream transportation) guidance applies. Start by mapping your major trade lanes and transportation modes, apply appropriate emission factors (ideally carrier-specific data, otherwise GLEC default factors), and allocate emissions based on weight, volume, or TEU as appropriate. Software platforms like EcoTransIT, Searoutes, and carrier-provided carbon calculators can automate much of this calculation.

What is CORSIA and how does it affect airlines?

CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is an ICAO program requiring airlines to offset CO2 emissions growth from international flights above a baseline: 2019 emissions during the pilot phase (2021-2023) and 85% of 2019 emissions from 2024. Participation was voluntary in the pilot phase and remains voluntary in the first phase (2024-2026); the second phase (2027-2035) applies to all ICAO member states except those exempted for low aviation activity or as least developed, small island or landlocked developing countries, which can still volunteer. Airlines must monitor and report fuel consumption and emissions, then buy eligible emissions units or claim reductions from CORSIA-eligible fuels such as SAF to cover growth above the baseline. CORSIA does not reduce absolute emissions—it offsets growth—but it creates financial incentives for fuel efficiency and SAF adoption.