Transport has become one of the main sources of greenhouse gas emissions in the energy sector in Brazil. Data from the Climate Observatory show that the sector accounted for 47% of total energy emissions in 2019, with cargo transport accounting for 40% of this total – emissions come mainly from the burning of fossil fuels, especially gasoline and diesel. This context makes diversification in transport modes and better logistical planning central to Brazil’s decarbonization route.
Logistics and Transport Challenges
Today, one of the biggest challenges related to logistics in Brazil is the dependence on road mode. The long distances traveled in this mode lead not only to a high cost of transport, but also to a greater emission of greenhouse gases. Another important challenge refers to the paving of the extensive Brazilian road network, which has 1,563,600 kilometers, of which only 13.7% are paved. Studies estimate that traffic on inappropriate roads can lead to an average waste of 5% of the total diesel volume.
Brazil’s productivity, regional integration and international trade are also dependent on the quality of infrastructure. According to the World Economic Forum, in 2019 Brazil ranked 85th out of 141 economies in terms of overall quality of transport infrastructure. Despite an improvement compared to previous years, the current transport matrix results in high transport costs, equivalent to more than 6% of the national GDP. Approximately 65% of the country’s cargo is transported by road, with a smaller percentage transported by rail, waterways, cabotage, pipelines and planes.
Improvements in transport efficiency and the quality of infrastructure are central to the country’s competitiveness and the reduction of emissions in the sector. For an improvement in this regard, substantial investments will be needed, especially from alternative and sustainable sources. Worldwide, it is estimated that US$90 trillion in investment will be needed in the infrastructure sector by 2030. Considering that the transition to a green economy creates opportunities and job creation, we have a potential return of US$4 for every US$1 invested. Financing from traditional sources has become a challenge and there is potential to access resources in the capital market to finance road, rail, port, urban and logistics infrastructure projects that encompass Environmental, Social, and Governance practices – ESG . This investment will be essential for the recovery of the Brazilian economy and competitiveness.
Transformation of the Logistics and Transport Sector
A recent IDB study on infrastructure and services highlights the correlation between investments in infrastructure assets and service delivery, as these services depend on the capacity and quality of infrastructure. The infrastructure planning, management, regulation and operation process becomes essential for the availability and quality of infrastructure services. In the transport sector, for example, the interaction of multimodal logistics services requires good connectivity between roads, railways and ports.
Infrastructure planning must integrate sustainability and climate risk principles. By building more resilient assets, the lower the impact of climate-related events will be, whether in relation to the durability of highways and other modes of transport, with the occurrence of extreme events, or in relation to the reduction of interruptions in the services provided, avoiding economic losses. Another important factor in the resilience of infrastructure assets is the proper maintenance of these assets.
In this sense, the Ministry of Infrastructure established the Integrated Transport Planning – ITP, which aims to establish a systemic and intermodal logic for transport planning. The PIT is composed at the strategic level, i) by the National Logistics Plan – NLP, and, at the tactical level, ii) by the specific Sectoral Plans for each mode of transport (Terrestrial Sectoral Plan, Port Sectoral Plan, Waterway Sectoral Plan and National Airway Plan), iii) by the General Partnership Plan, and iv) General Plan of Public Actions.
The NLP identifies, through indicators (eg, transport costs and gas emissions), the needs and opportunities, present and future, of capacity supply of transport subsystems, in addition to outlining perspectives for the movement of people and goods and identify a set of transport infrastructures with high national relevance, considering the various possible scenarios in the planning horizon.
All of these elements contribute to a more sustainable and resilient transport and logistics sector, which lead to lower greenhouse gas emissions, greater safety and efficiency. In addition to having advantageous results in the long term with this approach, some solutions are already being introduced, such as the use of intermodal and multimodal transport, optimization of routes and processes. For example, according to the scenarios simulated in the NLP 2035, with projects already underway, it is observed that the results point to a more balanced transport matrix, with greater participation of large-capacity modes, such as railways, and, by consequence, with lower cost and more environmentally sustainable.
For the road sector, the challenge is bigger, but there are ways to minimize the environmental impact through sustainable practices, such as, for example, the use of less polluting fuels, prioritization of vehicles with clean technology, renewal of vehicle fleets and new paving technologies.
In this way, it can be seen that the issue of sustainability has been a guideline of the Ministry of Infrastructure, which has been taking into account, in its policies and actions, issues relating to the environment and climate change.
A Route to Sustainability
Despite the advances already observed, to achieve a more sustainable and inclusive transport system, improvements can still be implemented. With this challenge ahead, the IDB, in partnership with the Ministry of Infrastructure, developed the Infralog Project: Sustainable Transport and Logistics in Brazil, with the aim of identifying and creating solutions for planning, management, operation, maintenance and financing of transport infrastructure assets. The recently approved project will receive funds from the Sustainable Infrastructure Program of the United Kingdom (UKSIP), which aims to mobilize investments for sustainable infrastructure projects.
One of the project’s components will aim at analyzing the economic impact of sustainable logistics and transport, considering existing and planned projects, as well as projections for future expansion. Another component contemplates the strengthening of the transport governance and management process, through the insertion of the theme of sustainability in components of the Integrated Transport Planning. Finally, the third component will address the challenges of financing resilient and low-carbon transport and logistics, looking for solutions to attract private investment and identifying new instruments for long-term investment, considering the challenges in infrastructure concessions.
From this perspective, the first step will support the definition of a governance model, contemplating objectives, goals and indicators, for the road partnership plan, in a sustainable perspective, and may serve as a subsidy for the definition of similar elements in the other partnerships plans within the scope of the Federal Government’s Integrated Transport Planning.
Brazil is on the right path to decarbonize its logistics and transport sector, but there are still opportunities for improvement so that this transformation is even more sustainable. Integrating sustainability into logistics and transport planning, integrating climate risk and mobilizing investments for sustainable infrastructure are a step in that direction. In a post-pandemic scenario, reconstruction and construction guided by the ESG agenda become even more relevant for economic recovery, and the Infralog Project will bring important inputs for this transformation.
*Article originally published at Ideação.