DHL Supply Chain has agreed a 10-year deal with Stream BioEnergy that will see €80m (approximately £69.4m) invested in a biomethane production facility in Cork, Republic of Ireland.
DHL says that the new facility will provide fuel for up to 150 trucks, which it calculates will lead to an annual carbon reduction of 15,000 tonnes.
Biomethane, also known as renewable natural gas (RNG), is a type of methane gas that is produced from organic materials through a process called anaerobic digestion or biomass gasification.
It is derived from biological matter such as agricultural waste and discarded food, making it preferable to fossil fuels from an environmental perspective. Producing biomethane not only provides a source of energy but can actually reduce the amount of methane in the atmosphere that would naturally be emitted by the decomposition of this organic matter.
The pressure to decarbonise road transport fleets had driven up demand for biomethane, with gas supplier Gasrec reporting that the company’s sales of the fuel reached an “all-time high” in June.
The production facility in Cork is expected to “process 90,000 tonnes of industry and consumer food waste per annum which could otherwise have been sent to landfill”.
One of DHL’s customers set to benefit from this investment is Tesco Ireland. Once the site is fully operational, 92 biomethane trucks are set to service the retailer’s distribution network in Ireland.
DHL has confirmed that it will subsidise the biomethane needed to roll out these vehicles whilst preparations are made at the production facility.
Ian Logan, retail and distribution director at Tesco Ireland, said: “We have one of the most sophisticated distribution networks in the country, and improving its efficiency and environmental impact will play an important role in our journey to net zero.
“Our current HGV transport fleet makes over 2,000 trips weekly, serving our growing network of 166 stores nationwide, so moving to a cleaner fuel in our value chain will play a vital role in achieving this.”
Both companies have set sustainability targets and the use of alternative fuels should contribute to their progress with these. Tesco Ireland has committed to become carbon neutral in its group operations by 2035 and net zero across its entire value chain by 2050.
Meanwhile, DHL Supply Chain’s parent company Deutsche Post DHL Group also committed to “reduce all logistics-related emissions to zero by the year 2050”, as part of its ‘Mission 2050’ sustainability strategy.
This isn’t the first instance of DHL Supply Chain’s investment in biofuel, having recently replaced eight diesel trucks in its Aston Martin logistics operation with new tractor units that run on biomethane liquified natural gas.
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