Enhancing Sustainability in Pharma Logistics: The Role of Accurate CO2 Calculations

The pharmaceutical supply chain is a complex system with a few centralized production facilities and patients located worldwide. To reach these patients, pharma companies often rely on carbon-intensive air transport for the rapid delivery of their time- and temperature-sensitive goods. Consequently, major stakeholders like AstraZeneca, MSD, Pfizer, and GSK have set ambitious carbon reduction goals, which require addressing emissions from logistics, including transportation, storage, and distribution of pharmaceutical products.  

As part of our advisory role in optimizing pharmaceutical supply chains, our sustainability experts have thoroughly measured and analyzed logistics emissions. Our findings reveal that commonly used tools, based on standards like ISO 14083, significantly underestimate these emissions – by a factor of 20. We are committed to addressing this critical issue, supporting both pharmaceutical supply chains already committed to sustainability and those seeking to begin their journey toward more sustainable practices. 

This blog post delves into these challenges and offers solutions and support for the pharmaceutical industry, emphasizing the importance of accurate carbon accounting methodologies, such as the MIT University’s Center for Transportation and Logistics’ Methodology used by SkyMind DECARBONIZE – a cutting-edge and free CO₂ calculator – that ensures a comprehensive assessment of logistic emissions.  

Understanding the Discrepancies

In the following paragraphs, we describe three reasons why CO₂ emissions of pharma logistics are underestimated and provide solutions on how to fix the currently used methodologies.
 

1. Non-CO₂ Effects Ignored

Air transport produces CO₂ emissions, which contributes to global warming. However, this process also produces other significant effects, such as the emission of nitrogen oxides (NOx), soot particles, oxidized sulfur species, and water vapor. These non-CO₂ effects have a much higher impact on global warming compared to CO₂ emissions alone (European Comission, 2020). A recent study from the German Environment Agency (2023) indicates that non-CO₂ effects are responsible for approximately two-thirds of the aviation sector’s global warming impact. 

This finding underscores the importance of including non-CO₂ effects in carbon accounting to accurately reflect the true environmental cost of air transport. The high altitude at which airplanes operate exacerbates these effects compared to emissions at sea level. Therefore, to fully understand and mitigate aviation’s environmental impact, accurate carbon accounting must incorporate these non-CO₂ effects. 

2. Volumetric Weight Instead of Weight

Traditional logistics calculations often overlook the volume of goods, focusing only on cargo weight for calculating CO₂ emissions. By this method, an airplane full of feathers would seem to emit almost zero CO₂. While unrealistic, this example highlights a flaw. The International Air Cargo (TIACA) states volume often restricts airplane capacity, making it a crucial factor (TIACA, 2020). The solution, used in airfreight cost calculations, is to consider both weight and volume. Stakeholders calculate the cargo’s volumetric weight and compare it with the actual weight, using the greater value for CO₂ calculations. This method, spearheaded by the Network for Transport Measures and implemented by the before-mentioned MIT study, leads to more accurate emissions data and better logistics planning, revealing significant emission reduction potentials.

3. Include third-party packaging

Most calculation tools currently exclude third-party packaging from their CO₂ calculations due to the specifically exclusion in the ISO-standard 14083. As a result, emissions from rental pharma packaging are not accounted for, significantly underestimating the total emissions. Active pharma containers can be up to six times heavier than the products they carry, making it essential to include third-party packaging in carbon assessments. 

The Path to Net Zero Starts with Accuracy

The journey towards decarbonizing the pharmaceutical supply chain is both challenging and essential. Accurate carbon accounting is crucial for understanding and mitigating the true environmental impact of logistics operations. By addressing non-CO₂ effects, volumetric weight, and third-party packaging, we can reveal the real carbon footprint and identify significant reduction opportunities. 

SkyMind DECARBONIZE offers a path forward with advanced methodologies and tools, empowering pharma companies to make informed, impactful changes. The potential to significantly reduce emissions is within reach, and with concerted effort, the pharmaceutical industry can lead the charge in sustainable logistics. 

Stay tuned for our next post, where we will explore innovative solutions that can help reduce supply chain emissions by over 50%. Together, we can transform the future of pharma logistics, making it greener, more efficient, and better for the planet. Let’s seize this opportunity to create a sustainable future for all. Reach out to SkyMind’s sustainability team to embark on a transformative journey to decarbonize your logistics operations. 

Written by Michael Hegglin and Andrea Muñoz