A Comparative Analysis of Carbon Emissions from Transportation and Logistics of the Consumer Goods Industry in Southeast Asia
Published at : 21 Apr 2020
Volume : IJtech
Vol 11, No 2 (2020)
DOI : https://doi.org/10.14716/ijtech.v11i2.3466
Mubarak, A., Rahman, I., 2020. A Comparative Analysis of Carbon Emissions from Transportation and Logistics of the Consumer Goods Industry in Southeast Asia. International Journal of Technology. Volume 11(2), pp. 333-341
| Andri Mubarak | Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia |
| Irvanu Rahman | Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia |
This research continues previous work that developed a framework for calculating carbon dioxide (CO2) emissions specifically for countries in Southeast Asia. The purpose of the present research is to comparatively analyze carbon emissions produced by the transportation and logistics activities of a consumer goods company with factories in Indonesia, Vietnam, Thailand, and the Philippines to better understand the factors driving CO2 emissions generated by the factories. Several steps were conducted for this research: calculating the carbon emissions from the factories in each country, comparing the results, and analyzing the impacts of several factors on the carbon emissions. The factors are the production numbers of each operating factory, the source of emissions related to the distance traveled, and the ratio of road and sea transportation used by the company. This research used three scenarios: data from (1) 2015 and (2) 2018 and (3) the optimal scenario considering the optimal distribution network.
CO2 emissions; Consumer goods industry; Green logistics in Southeast Asia; Transportation and logistics; Supply chain management
The
issue of greenhouse gas (GHG) emissions is increasingly the concern of
political leaders, business executives, and environmentalists alike, as they
contribute to the GHG effect by increasing the heat in the atmosphere,
ultimately leading to global warming (United
Nations Evironment Program [UNEP], 2003). The initiative to reduce GHG
emissions has also become an integral part of the sustainable development goals
as global warming and GHG emissions are significant challenges faced by all
countries. Rising levels of GHG emissions is a major driver of harmful climate
change. Reducing such emissions while preserving economic growth and social
welfare is a challenge all countries face (Berawi,
2016).
Transport and logistics, as parts of the operational activities of
companies, can have significant impacts not only on their competitive
advantages but also on their environmental sustainability. One activity that
requires close attention is how companies manage their consumptions of fuel to
reduce carbon dioxide (CO2) emissions from their transport and
logistic activities. Handling emissions wisely can improve their environmental
impacts.
The Intergovernmental Panel on Climate Change (IPCC) (Sims et al., 2014) explained that transport is a primary source of emissions, contributing around 23% of global CO2.
Southeast
Asia, where economic growth has been increasing at an average rate of 5% per
year (Diaconu, as cited in Maxim,
2014), will continue to become an attractive place due to its
competitive advantages. Southeast Asia has more than 600 million people under
the age of 30, indicating the region’s passion for new technology and the new
industrial revolution (The ASEAN, 2019). Indeed,
Southeast Asia is an exciting region for global manufacturing companies (Rao, 2004). From the perspective of
transportation and logistics, the challenges for a company in this region are
its geography, uneven population distribution, and excessive CO2 emissions.
Many
studies have researched sustainable supply chains and logistics. Building on
this literature, this study aims to understand the initiative of a company in
Southeast Asia to adopt sustainable supply chain and logistics as their
strategy, which faces two great challenges. The first is the problem of
measuring CO2 emissions as the basis for a sustainable supply chain
and logistics strategy. Several researchers have attempted to calculate CO2
emissions in this region, including Mubarak and Zainal
(2018), who developed a framework to calculate CO2 emissions
specifically in Southeast Asia. The second is that the region is dominated by
the sea despite many companies still using road transportation as the main mode
for distributing products (Tham and Siew, 2018).
Only a
few studies, however, have tried to calculate CO2 emissions in
Southeast Asia. If companies want to calculate their own CO2
emissions, they are forced to refer to methodology developed for the other
countries with different characteristics than those in Southeast Asia. Thus,
this research implements the framework developed by previous research for
factories in Indonesia, Vietnam, Thailand, and the Philippines.
To
study the drivers of carbon emissions of operating factories throughout
Southeast Asia, this research examines factory production numbers, distance
traveled, and the ratio of road and sea transportation used by companies in
daily business operations. This calculation and comparison of CO2
emissions should help companies in Southeast Asia calculate their CO2
emissions and better understand the emissions of each of their factories. These
calculations may form bases for companies to generate further environmental
initiatives based on the characteristics of the countries in which they
operate.
This
research builds on previous work on a framework to calculate the carbon
emissions of transportation and logistics activity in Southeast Asia. The last
study discussed the ideal framework to calculate CO2 emissions
specifically for this region because most of the methods developed by
researchers in the United States and Europe do not apply there. In this
research, the focus is implementing this framework to calculate the CO2
emissions of the company PT. XYZ to compare the CO2 emissions
produced by its operating factories in Indonesia, Vietnam, Thailand, and the
Philippines. The comparative analysis, which considered production numbers,
distance traveled, ratio of road and sea transportation, and transshipment
centers in three scenarios, deepens our understanding of CO2 emissions
by revealing several differences and similarities between operating factories.
The differences are mostly related to facility size, which positively
correlates with carbon emissions produced: The greater the production, the more
distance traveled by the company to distribute their products due to greater
energy consumption. Regarding similarity, the operating factories all mainly
depend on road transportation despite being surrounded by thousands of islands
that can be connected by sea transportation.
This
research can be built upon by analyzing the impact of shifting road
transportation to sea transportation on CO2 emissions. Integrating
these findings with financial aspects would also be an interesting next step,
as companies need to understand how their sustainable supply chain and
logistics strategies impact on their financial situations.
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