In an industry which centres around certainty of temperature and food safety, often combined with pressures on cold storage space and tight windows for deliveries, cold chain operators have long been expert in the resilience required to overcome the many and varied day-to-day challenges in cold storage and temperaturecontrolled distribution.
Over the past two years these operators have demonstrated this expertise at extreme levels, time and time again. Along with customers and supply chain partners, cold chain operators have met the extended series of challenges they have faced by finding new routes, entering into new collaborations, coming up with innovative ways to operate with reduced workforces, adapting to new customs requirements, and managing the extreme volatility of lockdowns and re-opening surges.
The cold chain is changing. There have been major impacts in the last two years from the pandemic, the UK leaving the EU, and the labour and energy crises. But many of the changes we are seeing have been much longer in their making and in UK cold chain areas of opportunity are now shifting, customer needs are adjusting, and the importance of long-term relationships has come to the fore.
Amidst all the change, however, there is no doubt that the resilience that cold chain operators have demonstrated for so long will remain central to our industry both in day-to-day operations and also in the industry’s long-term direction. And crucially, for cold chain businesses longer term resilience must go hand in hand with the journey towards net zero.
The UK Government’s target for a Net Zero Economy by 2050 is enshrined in law, and the pressures on businesses across all industries to improve energy efficiency and reduce harmful emissions will continue to grow over the coming years and decades. At the same time, customers are making their own net zero commitments, Transport Refrigeration Units no longer qualify for red diesel and there seems little hope for swift relief from the current sky-high energy prices which are so challenging for cold storage facilities.
In this context, it is no surprise that so many cold chain operators have already made good strides in decarbonising their infrastructure, equipment, and operations, and many are now accelerating their programmes. The successful Climate Change Agreements (CCA) scheme for cold storage has seen the signatories to the agreement improve energy efficiency, collectively, by nearly a fifth in 10 years. The CCA also saves the industry more than £10 million a year in tax and we are urging the government to continue a similar scheme beyond 2025.
Easier than ever to lower cold chain energy emissions 'significantly'
There are a range of exciting net zero opportunities which are now becoming a reality for our industry. Over the coming years and as we move into the 2030s, we can expect cold storage facilities to incorporate the structures, equipment and approaches that will help minimise chamber heat loads and maximise efficiency of refrigeration systems. In the future we can also expect the developing technologies of temperature monitoring and automation to lower the energy footprint of a cold store significantly.
In addition to greatly improving the energy efficiency of cold stores themselves, businesses with cold storage facilities can consider whether they could reap commercial rewards by carving out opportunities at the forefront of energy transformation in the UK. A cold stores typical size, design and location in industrial areas makes it well suited for renewable energy generation, grid balancing and battery storage. Key opportunities are outlined in our new Net Zero Project report into The Cold Store of 2050, available for download here.
These opportunities for change are exciting but there is no doubt that the move towards a net zero cold chain presents challenges. Uncertainty remains high over some important factors, such as Government strategy for investing in infrastructure and financial support to trial and adopt developing technologies. Government should detail its expectations for the technological landscape in 2050, for the adaptation of the power and transport network, and which technologies will be supported by infrastructure investment so that businesses can have confidence in investing in new technologies.
Affordability and investment is another challenge. In vehicle refrigeration, for example, lower emission technologies are currently more expensive in upfront cost than a diesel auxiliary powered option. There are opportunities in offsetting upfront cost against running costs but as the technology is new, the lifespan and resale opportunities for new technologies is hard to quantify reliably. We are therefore calling for targeted Government financial support to assist businesses to invest in developing low carbon technology and accompanying infrastructure, including buying incentives, scrappage grants, tax incentives, and support on the costs associated with grid connections.
Similarly, significant investment is required to bring existing cold stores up to future standards, particularly those operated by small and medium sized businesses. Government should supplement existing support mechanisms with grant funding for large capital energy efficiency investments, as well as easing planning restrictions to facilitate installation of low carbon infrastructure such as on-site energy generation.
The cold chain operators taking on these challenges are leading our industry’s progress towards a net zero cold chain that will meet Government requirements, support customer needs and benefit from the commercial opportunities of net zero, all while enhancing their businesses’ resilience. The Cold Chain Federation is here to support businesses at all stages of their journey towards a resilient net zero future, every step of the way.