Global logistics giant FedEx on Wednesday announced a goal to be carbon neutral by 2040. The plan includes a $2 billion investment across electric vehicles, clean energy for operations and a new academic center with Yale focused on capturing carbon.
FedEx — which uses over 180,000 vehicles to deliver packages across continents and operates the world's largest cargo airline — has been implementing sustainability practices for years, but the announcement represents a major acceleration of the company's commitments. FedEx generates close to $70 billion in annual revenue and has seen its business grow in recent years partly thanks to the boom in global e-commerce.
The fossil fuels used to power the company's vehicle and airline fleets contribute to 92 percent of FedEx's carbon footprint, according to its most recent sustainability report. That fuel also accounts for 6 percent of its annual operating budget.
Swapping all that diesel and jet fuel with batteries and biofuels won't be easy.
But FedEx has a goal to move its entire package pickup and delivery fleet to zero emission by 2040. The company says that by 2025, half of FedEx Express' new package and delivery fleet purchases will be of zero emission vehicles (ZEVs). By 2030, 100 percent of those new purchases will be ZEVs.
FedEx already has made some progress with electric vehicles. In 2019, the company added 400 electric vehicles to its fleet including delivery trucks, forklifts and airport ground service equipment and by the end of that year was operating close to 3,000 EVs.
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Last mile delivery — where a FedEx worker uses a delivery van to move packages from a local distribution center to your front door — is a particularly hot area for electric vehicles. Electric delivery vans are dropping in price and actually can save operators money in places where electricity is cheaper than diesel.
A growing number of large manufacturers, such as GM and Ford, recently also have launched electric delivery van models. FedEx's carbon neutral news follows the company's announcement at the Consumer Electronics Show in January that it will be the first customer for GM's new electric delivery BrightDrop service.
The larger commercial vehicles — such as Class 8 trucks — are more difficult to electrify due to a lack of models from manufacturers and a higher price tag than their diesel equivalent. But the company is piloting ways to move these vehicles, too. FedEx Freight has been working with Tesla to use Tesla electric tractor Semis in its operations.
Charging infrastructure will be a major hurdle, and opportunity, for a global logistics operator such as FedEx. FedEx Express Managing Director of Global Vehicles Russ Musgrove said at the VERGE 20 conference last year that utility infrastructure was his biggest pain point in electrifying the fleet.
Last year FedEx ran a pilot with infrastructure provider ChargePoint, which owns and maintains the charging infrastructure. FedEx Express is developing an electric infrastructure strategy that it says can be used anywhere in the world.
Decarbonizing FedEx's airline fleet will be even more difficult than moving its trucks to batteries.
The company has a goal to move its 700-plane airline fleet to 30 percent sustainable aviation fuel — made from bio sources instead of fossil fuels — by 2030. FedEx planned to receive the first shipment of its sustainable aviation fuel in the second half of 2020, although it's unclear if the company hit that milestone. FedEx is working with Red Rock Biofuels, which is building a facility in Oregon.
Beyond its transportation fleet, FedEx is doubling down on clean energy for its operations and is launching a new academic center with the Yale Center for Natural Carbon Capture. FedEx has committed $100 million to the new center, which will focus on biological and geological ways to capture and store carbon emissions.
Carbon dioxide can be captured directly from the air through chemical and biological processes or from the flues of power plants. That CO2 then can be repurposed to make products or stored in places such as underground caverns.
Companies in particularly difficult industries to decarbonize — such as airlines — have shown increased interest in investing in carbon capture technologies.
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