Roadmap to Net Zero: Dr. Janya Chanchaichujit on Sustainable Logistics in Thailand

Prince Songkla University (PSU) is a member of the Sustainable Development Solutions Network or SDSN Thailand, which was established to promote and support the United Nations’ Sustainable Development Goals (SDGs) within the country. As part of this network, PSU collaborates with various stakeholders, including other universities, government agencies, and private sector organizations, to advance sustainable development initiatives.

SDSN Thailand has an exclusive interview with Dr. Janya Chanchaichujit, an Associate Professor in Logistics and Supply Chain Management and a Director of the Center for Sustainable Logistics and Supply Chain Management at the Faculty of Environmental Management, Prince of Songkla University in Thailand. Dr. Janya Chanchaichujit is also a head of a research project called “The development of Net Zero Emissions execution roadmap and tools for sustainable logistics and parcel delivery service: Thailand Post Company Limited.”

SDSN Thailand: Why are SDGs important for business like logistics?

Dr. Janya Chanchaichujit : Logistics and transportation play a crucial role in the economy, serving two key functions. First, logistics significantly contributes to economic growth. An increase in logistics activities typically indicates a thriving business environment, as efficient transportation facilitates the movement of products. For example, seeing more motorcycles and trucks delivering goods suggests that businesses are generating more revenue. During the COVID-19 pandemic, however, logistics operations were severely reduced, leading to fewer products moving and lower production levels—an indication of economic stagnation.

On the other hand, the growth of logistics and transportation also leads to increased emissions. While a robust logistics sector is essential for economic development, it presents a conflicting challenge: more transportation means higher levels of pollution, including greenhouse gas emissions, noise pollution, and particulate matter (PM2.5).

This duality highlights the importance of balancing economic growth with environmental sustainability. The Sustainable Development Goals (SDGs) emphasize the need to find this balance, addressing both economic and social impacts while minimizing environmental harm. Achieving sustainability in this sector is particularly challenging but essential for fostering a healthier planet and society. This conflict serves as a source of inspiration for innovative solutions that can harmonize these competing interests.

Let me provide you with some examples that illustrate the significance of logistics.

For instance, freight and transportation contribute approximately 8% to 10% of climate impact. This is a substantial figure that highlights the importance of addressing emissions within this sector.

So it’s fair to say that logistics is one of the largest contributors to global greenhouse gas emissions, which underscores the importance of the Sustainable Development Goals (SDGs) in this sector.

In 2023, logistics accounted for approximately 4.2 gigatons of carbon dioxide emissions. To put this into perspective, if logistics were classified as a country, it would rank third in the world for emissions, following China and the United States, and surpassing India by a significant margin. This highlights the critical role that the transportation and logistics sector plays in efforts to achieve decarbonization and net-zero emissions.

Addressing emissions in logistics is not solely about reducing carbon output. Transitioning from fossil fuels to green energy can significantly decrease pollution levels, particularly concerning PM2.5, which is a pressing issue in Thailand. Transportation thus contributes to this pollution, along with noise and traffic accidents, which further impact public health and safety.

By focusing on cleaning up the logistics and transportation sectors, we can achieve direct benefits such as emission reductions while also enhancing social well-being by mitigating noise pollution and reducing accident rates. Additionally, improvements in this sector can lead to reduced costs associated with road maintenance and other related expenses.

In conclusion, the logistics sector is vital for supporting economic growth while simultaneously posing challenges related to pollution and emissions. By aligning our efforts with the SDGs and prioritizing sustainability, we can effectively reduce emissions and their social impacts, ultimately contributing to a healthier environment and society.

SDSN Thailand: In the abstract of your research project, you mentioned that the initiative aims to prepare and adapt business operations in response to future regulatory pressures (Law and Regulation Force), what will the situation be if businesses don’t adapt?

Dr. Janya Chanchaichujit : The current landscape of laws and regulations is becoming increasingly stringent and evolving rapidly. In the past two years alone, approximately 300 new sustainability-related regulations have been introduced, encompassing areas such as trade, cross-border activities, and finance. Given that logistics inherently involves cross-border operations, this sector is particularly impacted.

While Thailand’s regulations often align with those of Europe and the United States, the logistics industry is at the forefront of adapting to international laws due to its cross-border nature. As an exporting country, Thailand relies heavily on logistics for its economic activities. By focusing on this sector, we can support not only logistics businesses but also exporters, especially small and medium-sized enterprises (SMEs).

For instance, if exporters do not have a greenhouse gas emission disclosure report—typically issued by logistics companies—they may be unable to export their products to certain countries. In Europe, for example, the Carbon Border Adjustment Mechanism (CBAM) is set to be enforced within the next three years. Companies that fail to comply with these regulations risk being excluded from the market or facing high carbon taxes.

The greenhouse gas emissions reported by companies fall into three categories: Scope 1 and Scope 2 emissions come from direct operations, while Scope 3 emissions primarily arise from logistics and transportation. Therefore, if the logistics sector is unprepared for emission reporting, it will adversely affect not only logistics companies but also their clients, particularly Thai SMEs that may struggle to meet these regulatory requirements.

At Thailand Post, our project focuses on developing tools and roadmaps for greenhouse gas emissions, laying the groundwork for better practices in the logistics sector. Although Thailand Post mainly operates domestically, this initiative will provide valuable insights that can be applied to other companies. SCGJWD are currently collaborating with SCG Logistics on two parallel projects: one focused on freight and transport for exports and the other centered on domestic logistics.

Thailand Post’s express delivery service competes with companies like Flash Express and Kerry Express in the parcel delivery market. As the only Thai company in this sector, we aim to lead by example in pursuing net-zero emissions initiatives. Our research team and Thailand Post are committed to showcasing our efforts as a Thai company dedicated to sustainability, especially since many competitors are joint ventures or foreign entities.

SDSN Thailand: What are some of the challenges you faced during the conduct of the research?

Dr. Janya Chanchaichujit : The journey toward sustainability is still relatively new, and many people hold the perception that it leads to additional costs. This mindset persists, with some believing that sustainability initiatives create more work for employees without clear benefits. Additionally, many companies involved in this project are adopting a “wait and see” approach, viewing sustainability as a passing trend rather than a lasting change. Historically, there have been instances where government policies were introduced but then faded away, reinforcing this skepticism.

However, the reality is that sustainability is not just a trend; it is a fundamental shift that began gaining traction around 2010. During my PhD studies, I noticed that the research community was small and focused on these issues. When I first proposed sustainability projects to companies, there was little interest; many questioned the necessity of logistics sustainability due to perceived costs and lack of engagement.

In recent years, particularly since collaborating with Thailand Post, there has been a significant shift in interest. The urgency surrounding zero emissions and decarbonization has increased dramatically, along with the pace of regulatory changes. Now, I receive numerous inquiries from companies seeking collaboration and training on these topics. The transition from indifference to engagement has been remarkable.

Despite this progress, challenges remain. The first challenge is overcoming the mindset that sustainability is merely a trend that adds to workloads. The second challenge involves navigating the rapidly evolving landscape of decarbonization and net-zero emissions. We are currently collaborating with various associations in Europe and other countries to stay updated on frequently changing regulations and standards.

It is essential to communicate with companies about the importance of understanding these concepts while remaining adaptable to changes in details and requirements. For instance, in the past three years alone, there have been four versions of standards for calculating logistics emissions. The most recent version was issued in February 2023, with another already expected in 2024. This rapid evolution does not indicate carelessness; rather, it reflects the industry’s efforts to keep pace with new regulations and emerging best practices.

As we move forward, it is crucial to be resilient and dynamic in our approach to sustainability, recognizing that while challenges exist, the potential for meaningful impact is significant.

We are currently in the process of gathering use cases and comparing our work with the European Smart Freight Center. As part of this initiative, we are collecting case studies from Europe, America, China, and Asia to inform the development of a global standard.

One significant challenge we face is that regulations and standards are still evolving. At present, there are not enough use cases to draw from. For example, in Thailand, motorcycles are commonly used for last-mile delivery, but this practice is not prevalent in Europe or America. Consequently, there are no established formulas for calculating emissions from motorcycle deliveries. When I presented this case at a workshop, many attendees were puzzled by our use of motorcycles, as they are unfamiliar with this method in their regions. This highlights the need for standards and formulas specific to our local practices.

Thus, we must continue working on developing these standards to address such gaps in the existing frameworks.

SDSN Thailand: Can you explain what you meant by increasing competitiveness in the context of implementing a plan for logistics businesses to reduce greenhouse gas emissions?

Dr. Janya Chanchaichujit : Let me explain how emission reduction can translate into financial benefits for companies. First and foremost, reducing emissions enhances competitiveness. Companies that fail to comply with greenhouse gas regulations risk losing customers who prioritize sustainability. If you do not meet these standards, you may find yourself unable to compete with other businesses that do comply, effectively pushing you out of the market.

Secondly, there are significant cost implications to consider. In the next couple of years, regulations such as the Carbon Border Adjustment Mechanism (CBAM) in Europe—and similar measures in the United States—will require companies to declare their greenhouse gas emissions. If your emissions exceed established limits, you will incur additional costs in the form of a carbon tax. This will inevitably raise the price of your products, making it more challenging to compete.

Thirdly, having a robust emissions reduction plan can create opportunities for financial gain through carbon credits. Companies that successfully reduce their emissions may be able to convert these reductions into carbon credits, which can be sold or traded for profit in the future.

In summary, there are three key competitive advantages to consider: (1) Market Competitiveness: Compliance with emission regulations is essential for remaining competitive. (2) Cost Management: Non-compliance can lead to increased costs due to carbon taxes. (3) Revenue Opportunities: Implementing an emissions reduction strategy may enable access to carbon credits. This situation is reminiscent of the past two decades when companies needed ISO certifications to demonstrate quality and compliance. Just as businesses had to display their ISO logos to sell products, future companies will similarly need certifications related to their carbon footprint. In Thailand, we already have organizations like the Carbon Footprint Organization that certify products based on their carbon impact. This gradual shift indicates that sustainability certifications will soon be as crucial as ISO certifications were in the past.

SDSN Thailand: Thank you so much for your insightful interviews but that also brings us back to the very basic question of what exactly inspired you to conduct this research?

Dr. Janya Chanchaichujit: I believe there are two main reasons for my interest in this field. Firstly, I have a personal passion for logistics, supply chain management, and transportation. This sector fascinates me, and I am eager to contribute to its development. Secondly, I recognize the critical importance of logistics, which is often underestimated by many. While transportation may seem like a simple task, it plays a vital role in enhancing the competitiveness of countries and businesses alike. Every product we purchase—unless we walk to get it—requires transportation. By optimizing this process to be more efficient and reduce emissions, we can positively impact companies, economies, and society as a whole. This understanding of logistics as an enabler of efficiency and sustainability serves as my inspiration in this field. From this project, I have learned several important lessons as well.

First is that sustainability can be effectively driven by research and integrated into university practices to create meaningful impacts. As institutions of higher learning, universities play a crucial role in sharing knowledge and can contribute to sustainability initiatives through collaboration with stakeholders, particularly in the private sector. It is essential to engage and connect our staff and students with sustainability projects at the university. With a vibrant youth population, universities have a unique opportunity to empower the next generation to advocate for a better world. These young individuals can serve as spokespersons, spreading awareness and inspiring their families and friends to contribute to positive change. Lastly, Sustainability does not necessarily require advanced technology; it can begin with small actions that lead to significant results. Simple initiatives can have a profound impact on promoting sustainability within our communities.