Proposals for More Climate-Friendly Online Trade

In the research project “Making Online Trade Greener”, the Federal Environment Agency has had a roadmap developed to make online trade more climate-friendly. It involves measures for returns, shipping packaging and logistics.

The research project assessed the greenhouse gas emissions of typical online shopping processes. In addition to product manufacturing, most emissions are caused by last-mile logistics, shipping packaging and returns.

For these three areas, the Federal Environment Agency’s study examined possible scenarios for their savings potential and derived target values and measures. With a so-called roadmap, concrete steps are proposed up to the year 2030 that enable a reduction in greenhouse gas emissions from an online purchasing process compared to a comparable online purchase. The research project is one of two projects launched since 2018 as part of the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection’s (BMUV) Lighthouse Initiative “Paths and Building Blocks of a Digital Agenda for Sustainable Consumption.”

The study concludes that if all potential for optimization in shipping packaging, returns and logistics is leveraged, between 18 and 98 percent of greenhouse gas emissions can be saved per exemplary online purchase. Since some returned goods are destroyed, the CO2 emissions generated during production are also attributed to the online retail process in these cases. This makes this area particularly relevant.

The roadmap contains a large number of detailed proposals for action for policymakers, retailers, deliverers and customers on how to exploit the potential, for example:

Returns sector

In order to achieve the roadmap target values of an ecological online purchase by 2030, it would be necessary for consumers to return 40 percent fewer orders (return rate below 10 percent) and the destruction of returned goods by retailers would have to be reduced by 67 percent (to below 0.2 percent). If these targets are missed by 2030, bans on merchandise destruction could be conceivable, as emissions generated in manufacturing account for the largest share (up to over 90 percent) of total product lifecycle emissions.

To reduce the number of returns, retailers should provide more and better information about products, but also educate their clientele about the negative consequences of returns. Return fees are also a possibility.

To ensure that retailers prefer donating returned goods to destroying them, policymakers should make adjustments to the sales tax law. Shipping packaging By 2030, almost one-third of products could do without additional shipping packaging to avoid waste.

For 26 percent of shipments, shipping in reusable packaging is already the best option for optimization. Currently, the prevalence of reusable packaging in shipping has a market share of less than 1 percent. Here, customers and retailers would have to be open to new ways. In addition, the introduction of quotas would be conceivable if the target values of at least 11 percent are not achieved by 2030.

Logistics sector

80 percent of greenhouse gas emissions per delivery on the last mile could be saved by electrifying delivery vehicles and by delivery concepts with intermediate storage and bicycles (micro hubs). Policymakers can intervene to promote this and, for example, provide charging infrastructure and space for micro hubs, according to the Federal Environment Agency.

At least 20 percent of emissions per purchase could be saved by making deliveries to parcel stores or stations instead of home deliveries to online shoppers. Here, the rate should be increased from 13 to 40 percent. “Instant delivery” offers, for which the order is delivered in an expedited manner, should be scaled back. They can generate at least 60 percent more emissions than a comparative scenario with standard delivery times.