Some industry sectors—such as the bicycle industry—have been slow to counter the effects of greenhouse gasses in the atmosphere.
But as we move deeper into the 2020s the movement to curb CO2 emissions within the industry is gathering momentum.
Let’s have a look at where the bicycle industry stands today and where it might be headed in the future, with particular reference to Trek’s 2021 Sustainability Report.
I will continue to update this article as regulations change, new information becomes available, and the industry adapts.
THE BIKE INDUSTRY CARBON FOOTPRINT
Taiwan’s fossil CO2 emissions have increased from around 36 million tons in 1971 (0.10% of the world’s emissions) to 276 million tons (0.77% in 2016).
By the end of 2021, the pressure for Taiwan’s bike industry to address the level of emissions in manufacturing processes was too much to ignore.
For example, in late 2021, Pacific Cycles issued a statement to all its suppliers that the sources and amount of carbon produced in manufacturing the components PC uses in its manufacturing must be reported in detail.
Taiwan’s d&i awards, held every year in conjunction with Taipei Cycle has also upgraded their categories for 2022.
Two notable inclusions now are Green Design and Smart Cycling.
The bike industry is thus now in the early stages of formulating a concerted response to the No.1 environmental issue of the 21st century.
As I write, the first edition of Taipei Cycle to be held since 2019 is set to go ahead in the 2nd week of March.
Since participants will mostly be Taiwan brands and manufacturers, I’ll be interested to see the degree of impact these changes are having.
But what is an appropriate standard to apply as both an action framework and a way to generally assess a company’s progress in curbing emissions?
The GHG Protocol offers such a framework.
GREENHOUSE GASSES PROTOCOL
The late 1990s saw increasing acceptance of the link between greenhouse gas accumulation in the atmosphere and climate change.
The World Resources Institute and the World Business Council for Sustainable Development saw the need for an international standard for corporate greenhouse emissions accountability and reporting which led to the publication of the first edition of the Corporate Standard in 2001.
After two decades of development and additions the GHG Protocol has evolved into an integrated set of global standards for measuring and managing the greenhouse gas emissions of private and public organizations, as well as the value chains in which they are embedded.
Because supply chains are extremely complicated webs of dozens of interconnected manufacturers which gets more complicated for companies the further downstream they are, the GHG Protocol divides emissions into three groups.
Scope 1 emissions come from sources that an organization directly controls. Burning fuel in vehicles or factory furnaces for example.
Scope 2 emissions are indirect. These include energy generated from a source that an organization or company does not own or control. Although an organization is, thus, not directly responsible for Scope 2 emissions, they are still accountable under the protocol as consumers of that energy.
Scope 3 emissions include sources of emissions not included under Scope 1 or 2 and are often referred to as “value chain” emissions. To put it another way, the scope 3 emissions for one organization are the scope 1 and 2 emissions of another organization.
Scope 3 emissions usually constitute most of an organization’s GHG emissions. And where reporting is required, only scope 1 and 2 emissions need be disclosed—there’s no need for scope 3 quantification.
Here’s the thing: leaving out or marginalizing scope 3 emissions severely limits the effectiveness of emissions reductions as a whole.
Targeting scope 3 emissions offers many opportunities for emissions reduction even though an organization may not itself as having the ability to directly impact the source of those emissions.
But the supply chain is made up of many tightly interconnected firms who therefore can wield more influence over their upstream than they might think.
Where there is a choice of vendors, the option to go with the supplier that works to reduce their own emissions with respect to scope 1, 2, and 3 emissions may be the obvious choice.
Scope 3 categories include:
- Upstream Transportation and Distribution
- Downstream Transportation and Distribution
- Waste Generated in Operations
- End-of-life treatment of sold products
- Business Travel
- Employee Commuting
These categories give a firm a clear target for internal policy formulation for emissions reduction.
Let’s now take a look at the most comprehensive policy response from a bike brand to date.
Trek’s Sustainability Report maps out a framework that can form the basis for other brands to craft their own response.
I’ll run through the major categories and make some observations with reference to the GHG Protocol and the bike industry generally.
The BIKE INDUSTRY RESPONSE
The bike industry has been slow to address its carbon footprint.
Trek has been the first major brand to take a position on this in their 2021 Sustainability Report and Corporate Commitment following an emissions audit carried out in 2020.
I’ll cover the main points in the 39 page document which is a public declaration of the measures Trek is taking to lighten their carbon footprint.
It sets out the goals they aim to achieve in this area as a guide to the decisions — daily and longer term — that all companies need to make, and so is instructive in that sense.
Trek estimates their total annual carbon footprint to be 300,000 metric tons or 300 million kg CO2e (“e” means “equivalent”). The way to approach reproducing the total output is to target particular components, which in Trek’s case covers 63 categories.
Their approach is organized into 10 focus areas which provides a potential framework for any company looking for a way to curb scope 1, 2, and 3 emissions.
Pursuing success in this area poses a dilemma: reduction of the carbon footprint vs efficiency production which includes timely delivery of goods to the consumer.
It’s a dilemma as old as industrialization and, in this context looks set to provide the ultimate test for many companies as regulations tighten over time.
10 General Focus Areas
Trek divides their business activities into 10 areas which helps them to formulate their action plan.
For companies yet to give serious (or perhaps any) thought to curbing their emissions, these categories can also be used as a way to think through the issues, and formulate their own response.
Company position in the supply chain is important.
Companies further upstream face fewer scope 2 and 3 emissions considerations.
1. SHIFT CYCLING MODE SHARE
This is the big one.
The more people you get on bikes, the greater the reduction in emissions . . . to a degree anyway.
Those reductions only count when journeys that would have formerly consumed fossil fuels are substituted by a bike trip.
The Covid-19 bike boom together with the ongoing mass market adoption of e-bikes is naturally bringing about this shift in a big way.
Nothing particularly actionable for a brand or a factory here, apart from the obvious—continuing to make bikes.
And factory production processes powered by renewables would appear to offer the fastest track to reducing scope 1, 2, and 3 emissions.
E-bikes recharged from an electrical grid supplied by renewables is also crucial for net emissions reduction.
2. INCREASE ACCESS to BIKE SHARE
Bike share system success depends on establishing as many bike share docking points in a system as possible, coupled with excellent management.
Good management equates to maintaining a balanced supply of working bikes across all docking points.
Bikes accumulating at one point need to be continually redistributed to stations with fewer bikes.
Trek’s Rule of 430 (or 692 km) holds that substituting 430 miles (692 km) that would have otherwise been fossil-fueled cancels out the carbon footprint of that production.
Given that a large majority of urban journeys are short distance, bike sharing coupled with the massive increase in private ownership is set to make a meaningful impact on emission reduction.
If most fossil-fuel substitute journeys are around 6 miles (9-10km) that’s around 70 trips which would surely be made up inside one year.
The rule only holds, of course, where a bike journey really does replace one that would have been made by car, or delivery van given the shift to e-cargo bikes for last-mile delivery.
3. REMOVE PLASTIC WASTE FROM PACKAGING
Reducing waste from unnecessary packaging relates to the level of emissions reductions from recycling practices.
Recycling limits the use of raw materials in packing manufacturing (including scope 1 emissions) and the amount of waste ending up in landfills.
Decomposition in landfills produces methane, a key greenhouse gas.
One estimate calculates that recycling will reduce CO2 emissions by 5.5 to 6.0 gigatons from 2020-2050 which equates to taking 1 billion cars off the road for one year.
Protecting a bike between the assembly plant and its final retail destination is essential for factories and brands alike.
Even a bike encased with bubble and styrofoam wrap inside its carton can suffer impact damage in transit. So the better it’s protected, the more likely it will arrive in saleable condition.
Rationalizing packaging is a tricky business since the downside to not getting it right will be a higher number of — technically — defective products.
Trek report cutting the number of non-recyclable packing pieces in half—from 24 to 12 on one model—for a total reduction of almost 197 tonnes of packaging in 2020-2021.
Replicating this level of reduction across the industry would significantly compound emissions reductions over time.
Signaling changing times, Mondraker bikes announced they will be shipping bikes in 100% recyclable materials in early 2022, upping the ante on Trek.
4. ESTABLISH AND PROTECT NEW TRAILS
Incentivizing landowners to create public access cycling trails on private land will encourage more people into cycling.
Would more trails significantly impact emissions . . . with emphasis on significant?
On balance the movement towards car-free, or at least more bike-friendly, cities together with the mass adoption of e-bikes promises a much more significant impact.
The continuing e-bike take over of the world, particularly with e-gravel bikes growing massively in popularity, makes trail-building a footnote to these changes.
5. CREATE ZERO-LANDFILL MANUFACTURING FACILITIES
Recycling, again, is the answer to reducing the amount of methane-producing material in landfills . . . as long as the scope 2 and 3 emissions produced by recycling technologies and systems are also the target of scrutiny and reduction.
6. INCREASE RELIANCE ON ALTERNATIVE MATERIALS
In 2017 Trek joined a number of the world’s largest corporations to collectively set up NextWave plastics, a consortium of companies dedicated to making use of the plastic refuse that ends up in the oceans.
Plastic recycled into bike accessories such as bottle cages probably reduces scope 1 emissions.
The aim of the consortium however is to create a movement which once widely adopted will have an impact.
The biggest cuts in emissions promise to be from improving aluminum and carbon fiber processing that forms the bulk of the material.
90-95% of the energy in aluminum smelting goes into turning bauxite into aluminum, so recycling aluminum has always made economic sense.
Recycling aluminum then translates into significant reductions in scope 1 emissions.
The real polluter, though, is carbon fiber production which has a much higher emissions footprint compared with aluminum.
The good news may be the e-bike revolution where weight is cancelled out by efficient mid-drive motors and hub drives.
Although high-end racing bike cyclists will always be looking for lightweight frames and supporting components, their proportion of overall demand for components will diminish.
The mass uptake of e-bikes is being built on aluminum frames, not carbon.
7. REDUCE CORPORATE TRAVEL
One of Covid-19’s legacies looks likely to be the degree to which the pandemic has curtailed business travel.
Before the pandemic, 1 in 67 jobs were remote. As write this in early 2022, 1 in 7 jobs is remote.
That’s a staggering number.
While we don’t know how many of those jobs will return to the office once Covid-19 becomes endemic in the population, you can bet that most of them will remain remotely based resulting in a significant reduction of commuting emissions.
The pandemic stopped almost all trade show traffic, causing most shows to build experimental online versions.
Touted as VR or AR, these pandemic shows were actually just glorified websites with 360° imaging, and demonstrated that a trade show is a live event . . . or it’s nothing much at all.
The advantages of face-to-face meetings ensures the future of trade shows and the corporate travel they rely on.
But they probably won’t return to how they were in the pre-pandemic glory days. Corporate attendance is likely to be lower, resulting in lower emissions of course.
And despite the inadequate early attempts to put on technologically sophisticated online shows, VR/AR technology IS developing quickly—truly VR events are not far away.
8. INCREASE RELIANCE ON RENEWABLE ENERGIES
Increasing adoption of new technologies reduces their cost and once a tipping point is reached, the price plummets.
In a short time renewables quickly became cheaper than traditional fossil fuel energy sources, in many case,s as adoption spread.
Trek made the transition in 2009, converting their Wisconsin operation to 100% renewables which accounts for most of their scope 1 emissions.
The issue is Trek’s reliance on companies in Asia (Giant has made many of their frames for many years) for most of their component manufacturing—or in other words their scope 2, and 3 emissions.
Consumer-facing brands are now moving to influence their scope 2 and 3 emissions by demanding their upstream suppliers work on their scope 1, 2, and 3 emissions.
Manufacturers upstream will soon be facing intense pressure to show progress in their scope 1 and 2 emissions, which may well be a deciding factor for a brand choosing whether to renew with an existing supplier . . .
. . . or change to a new one.
9. CONSOLIDATE SHIPMENTS TO RETAILERS
Consolidating multiple orders across multiple categories into a single shipment is an obvious logistical rationalization.
Delivering it poses a formidable challenge to logistics companies.
The extra fine-tuning in coordination this requires is being met thanks to the introduction of increasingly sophisticated digital systems which collate, process, and serve real time information via 5G — and very soon — 6G communication networks.
The ongoing revolution in last-mile delivery solutions by cargo bike is also a fortuitous development.
There are many roads to consolidating shipments when you have the reach of a company like Trek even without such technological advancements.
In short, it’s going to get easier sooner than later.
10. REDUCE USE OF AIR FREIGHT
The carbon footprint of air freight is 87x that of ocean freight and represents the largest proportion of Trek’s emissions, as it undoubtedly is with most companies. They plan to reduce their air freight to 75% of 2020 levels.
Clearly the great Covid-19 pandemic that was largely responsible for the massive supply chain disruptions and blow-out of ocean freight costs and time delays from early 2020, onwards has severely hampered carbon footprint reduction for all industry players.
Breaking large shipments into air freight packages has ameliorated this situation to varying degrees.
The short term emissions increase will reverse in time . . . but how much time?
The enduring problem may well be consumer expectations of receiving products if not immediately then with incredibly short lead times. (Thank Amazon for that?).
These 10 focus areas constitute Trek’s response to reducing scope 1, 2, and 3 emissions, although they don’t frame their approach in these terms.
Their broad framework is a model that can help any company look systematically at its own emissions and formulate a strategy to curb those emissions.
The key focus areas are 3, 5, 7, 8, 9, and 10 and offer any company looking formulate their strategy and policy a place to start.
By the end of this decade, a company’s emissions policy may well exceed missions and visions statements in importance.
As the rules get tighter over the next few years, every company will have to come up with a similar strategy and provide evidence of its effectiveness.
And 2022 looks like the year that the bicycle industry seriously begins to address its role in greenhouse gas emissions.