What will it take to create a world powered by clean technology?

Technological innovation has had little regard for the environment for much of the past two hundred years. The products of human ingenuity met people’s needs with greater convenience, comfort, and speed than ever before. But they also left unintended consequences, such as the pollution and emissions causing climate change today.

Innovation remains the most critical tool to enable a new era of sustainable business. We must transform the energy supply chain from fossil to renewable fuels and make enormous efficiency gains to reduce consumption. Put simply, we need clean, renewable energy technology – and that’s going to take more innovative solutions than are available today.

Backed by a wave of advances in digital tech, such as artificial intelligence (AI) and the internet of things (IoT), alongside clean tech, such as renewable energy and electric mobility, we can meet the goals of the Paris Agreement. But we must continue to invest in digital and clean technology – and do so like never before.

At the recent Era of Sustainable Logistics Summit, experts gathered to address the challenges we face. Here’s a closer look at some of the results of that discussion. Get the full report here.

Right now, the world is not on track to reach the targets the global community has committed to. Digital tech can help close the gap to more clean technology solutions.

The World Economic Forum (WEF) estimates that digital technology could deliver one-fifth of the emission cuts needed to achieve net zero by 2050 in the three highest-emitting sectors: energy, materials, and mobility. That’s because digitalization holds the key to optimization. The data, software, and connectivity that make up digital networks can unlock efficiency gains in any sector, allowing companies to save resources, lower costs, and improve profitability. Digital tools enable us to create smart workplaces and supply chains that minimize energy consumption, emissions, and waste.

Clean technology starts with visibility. And visibility requires data. For example, sensors can monitor and measure operations at critical points in the value chain, while connected software can track and analyze the data collected. That’s IoT at work, and it’s transforming warehousing and supply chain management. Add AI to the mix and today’s digital supply chains go well beyond analysis and diagnostics to predictive and even prescriptive, meaning they can mine historical data to make forecasts or generate “lessons learned” to assist strategic decision-making.

1. Foundational technologies.
   Measurement, reporting, and big data analytics are well-established and expected to scale.
   
2. Decision-making technologies.
   Digital twins, AI, and machine learning provide valuable insights for process improvement.
   
3. Sensing and control technologies.
   IoT, drones and imaging, and automation and robotics are critical to data collection and turning decisions into action.
4. Enabling technologies.
   Cloud, 5G, blockchain, and augmented/virtual reality solutions are slowly expanding opportunities to increase speed, trust, and interaction with data.

Renewable energy and electric mobility

We will need green electricity to power the rapid growth of digital technology and enable the electrification of mobility. Data centers and transmission networks account for 1-1.5% of global electricity use, but emerging digital tech, such as streaming and blockchain, are poised to boost demand for data services. The electric vehicles and automated systems in state-of-the-art supply chains will also drive up electricity demand. Meeting these needs requires nothing less than transforming the energy supply from fossil to sustainable fuels, not to mention a massive increase in energy efficiency.

Toward a clean energy value chain

The International Renewable Energy Agency (IRENA) stresses the need for a radical shift in current energy usage across all sectors, driven by clean technologies (electrification and efficiency gains, supported by renewables, hydrogen, and sustainable biomass). IRENA estimates these measures could cut global carbon emissions by almost 37 gigatons annually by 2050. The IEA projects the need for a 20-fold increase in solar power and an 11-fold increase in wind power between now and 2050.

A new clean energy value chain must emerge – from generation to storage and distribution to usage. Producing clean energy will turn today’s mostly centralized grid of large power plants into a decentralized system of wind and solar farms. The increased use of battery and hydrogen technologies will change how we store and distribute energy, adding complexity and requiring smart and agile solutions. More electric vehicles and charging stations will alter how we use energy while driving demand for more.

Clean technology and logistics

Each new link in the clean energy value chain has significant implications for logistics. For example, more wind turbines require more ships and oversized trucks to transport the massive towers and rotors. The decentralized system will also require more touchpoints and individual shipments. Supplying the equipment needed for renewables could mean a 1,000-fold increase in logistics volumes.

The logistics of storing and distributing energy will grow equally complex. We’re already experiencing this in today’s electric car battery supply chains. The expansion of hydrogen technology will require other adapted logistics solutions. Furthermore, as last-mile and long-haul transitions to electric, logistics hubs like warehouses and distribution centers could become local power distribution hubs.

Clean technology supply chains will also need to adapt to the requirements of moving the raw materials and components needed for electric and hydrogen vehicles, such as proper temperature control and compliance with dangerous goods regulations. We will need more regionalized sources, multi-modal and low-carbon transports, and carbon-neutral warehouses and distribution centers. Interestingly enough, digital tech and IoT solutions will help deliver those solutions.

Clean technology for sustainable mobility

A sustainable world must remain a mobile one. That’s because mobility is the lifeblood of the global economy. We need to keep moving goods and people from point A to B but with a much lighter footprint. It won’t be easy, but there is so much potential: The transport sector currently accounts for around one-fifth of global carbon emissions.

Over the past decade, we’ve seen significant cost reductions in wind and solar power generation, making renewable-based electricity now the cheapest alternative in many regions. We must also accelerate the electrification of mobility and make it possible to scale up the production and consumption of clean hydrogen. In the meantime, we should make the most of biofuels as a bridge technology to cleaner options.

According to the IEA, the clean technology needed to cut the required emissions by 2030 already exists. We just need to scale up our use of clean technology massively.

Digital technology is one tool everyone can leverage to improve efficiency and cut emissions. Solutions are available and maturing rapidly, with early adopters making notable progress toward their commitments. The shift to clean technology and renewable energy is also well underway, but we must see the transition accelerate exponentially in the coming years. By understanding the pivotal role of logistics in the entire process, we can leverage state-of-the-art supply chain solutions to enable it.