As the first global car maker to announce such a switch, we’ll achieve an immediate reduction in fossil CO2 emissions from intercontinental ocean freight by 55,000 tonnes over a year. Thanks to the renewable fuel, CO2 emissions are reduced by at least 84 per cent1 compared to fossil fuel. The reduction is equivalent to the CO2 emissions of a full truck driving around the equator about 1,200 times.
The fuel used is Fatty Acid Methyl Esters (FAME) and is based on renewable and sustainable sources, mainly waste cooking oil. No feedstock related to palm oil or palm oil production is used.
We will use renewable fuel for inbound ocean container transports of production material destined for manufacturing plants based in Europe and the Americas, as well as all spare parts distribution made globally by ocean container transports.
“Renewable fuel is not the end game for removing CO2 from the world’s ocean freight needs,” says Javier Varela, our Chief Operating Officer and Deputy CEO. “Yet this initiative shows that we can act now and implement solutions that achieve significant results during the wait for long-term technological alternatives.”
“We don’t view this initiative as a competitive advantage,” Javier adds. “On the contrary, we want to spark other car makers into action as well, to increase demand for carbon efficient ocean transports and to establish renewable fuels as a mid-term solution that works. We all have a responsibility to act.”
We have been working on this initiative together with our logistics partners Maersk, Kuehne+Nagel and DB Schenker. These logistics service providers have from 1 June 2023 switched to renewable fuel for equivalent energy needed for all container transports done for Volvo Cars.
When renewable fuel is not available on a specific shipment, our renewable fuel allocation is instead used by the logistics partner for another customer’s route elsewhere, so the overall cut in fossil fuel use is kept on par with actual use in container vessels. The methodology, called mass-balancing, is third-party audited regularly. The renewable fuel itself is certified and not produced in competition with food crops. It is therefore sustainable in accordance with the EU Renewable Energy Directive.
“We’re continually exploring sustainability opportunities across all aspects of our supply chain, and across our overall business,” Javier Varela says. “Our list of initiatives keeps growing as we work towards our ambition of becoming a climate neutral company by 2040.”
Our ambition is to reduce our lifecycle carbon footprint per car by 40 per cent between 2018 and 2025, which requires a 25 per cent reduction in operational emissions, including logistics. We’re also aiming for climate-neutral manufacturing by 2025. Both these milestones are important steps toward our climate neutral ambitions.
Why Renewable Fuels Matter in Ocean Freight
Ocean freight is a major contributor to global greenhouse gas emissions, accounting for nearly 3% of worldwide CO2 output. By switching to renewable fuels, companies like Volvo Cars can drastically reduce their environmental impact. Renewable marine fuels, such as bio-methanol and HVO, are produced from sustainable sources and offer a cleaner alternative to traditional fossil-based marine fuels. This transition not only helps combat climate change but also encourages the shipping industry to adopt greener practices.
Volvo Cars’ Broader Climate Commitments
Volvo Cars has set ambitious targets to become a climate-neutral company by 2040. The switch to renewable fuels for ocean freight is just one aspect of a larger sustainability strategy that includes electrifying its vehicle lineup, reducing emissions in manufacturing, and sourcing materials responsibly. By addressing emissions across its entire value chain, Volvo aims to lead the automotive sector toward a more sustainable future.
Industry Impact and Future Outlook
Volvo Cars’ decision to adopt renewable fuels for shipping is expected to influence other automakers and logistics providers to follow suit. As regulatory pressure and consumer demand for sustainability grow, more companies are likely to invest in cleaner transport solutions. The shipping industry is also exploring innovations such as wind-assisted propulsion and hydrogen fuels, which could further reduce emissions in the future.