Volvo Cars Switches to Renewable Fuels for Ocean Freight That Will Cut Fossil CO2 Emissions by 84%

Every year tens of thousands of containers of production material destined for Volvo Cars factories are carried across the world’s oceans on container ships. From now on, most seafaring journeys will be made with renewable fuels instead of traditional fossil fuels.

As the first global car maker to announce such a switch, Volvo Cars will achieve an immediate reduction in fossil CO₂ emissions from intercontinental ocean freight by 55,000 tonnes over a year. Thanks to renewable fuels, CO₂ emissions are reduced by at least 84 per cent¹ compared to fossil fuels. 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.

Volvo Cars will use renewable fuel for inbound ocean container transports of production material destined for manufacturing plants based in Europe and the Americas and 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 our Chief Operating Officer and Deputy CEO Javier Varela. “Yet this initiative shows that we can act now and implement solutions that achieve significant results while waiting 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.” 

Volvo Cars has been working on this initiative with its 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 unavailable on a specific shipment, the logistics partner uses Volvo Cars‘ renewable fuel allocation 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 is certified and not produced in competition with food crops. It is, therefore, sustainable by the EU Renewable Energy Directive.

“We’re continually exploring sustainability opportunities across all aspects of our supply chain and 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.”

Volvo Cars‘ 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. The company is also aiming for climate-neutral manufacturing by 2025. Both these milestones are important steps toward the company’s climate-neutral ambitions.

¹Comparison of fuels include emissions from production and use of the equivalent amount of energy, called Well-to-Wake (WTW).

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