How can a circular economy help reduce railways’ Scope 3 emissions?

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Railways must reduce emissions by 6 percent per year to reach Net Zero by 2050.

While railways are one of the most energy-efficient ways to move both people and freight, they must still significantly cut their carbon footprint to meet sustainability targets. According to the IEA, railways must reduce their emissions by 6 percent per year to meet the Net Zero Emissions by 2050 scenario.   

This is only possible by cutting Scope 3 emissions, which account for around 70% of businesses’ carbon footprint 

Emissions are broken into three different categories: Scope 1, Scope 2, and Scope 3. Traditionally, railways’ sustainability plans have focused on Scope 1 and Scope 2 because they have more control over these types. Scope 1 is greenhouse gas (GHG) emissions that come directly from the railway, such as powering trains, buildings, and machinery using fossil fuels. Scope 2 includes indirect GHG emissions from purchased energy generation, such as electricity, steam, heat, or cooling. While the emissions are usually produced where they are generated, they are included because they are a result of railways’ energy use. 

Scope 3 emissions typically account for more than 70 percent of businesses’ carbon footprint so reducing them must be a top priority. Scope 3 emissions – all indirect emissions (not included in Scope 2) that occur in the company’s value chain, including both upstream and downstream emissions – are the most challenging to address because they include emissions that are outside railways’ direct control. For example, Scope 3 can include emissions from actions like upstream and downstream transportation and distribution, emissions from suppliers, waste disposal, and those caused by employees’ work commute.  

A circular economy is one of the answers to reduce railways’ Scope 3 emissions 

To reduce emissions, railways must develop and encourage a circular economy —  a model of production and consumption that focuses on reducing, reusing, and recycling materials and parts and extending products’ useful life through maintenance and repair.  

The shift toward railways’ circular economy is already taking place. For example, the International Union of Railways is pursuing ways railways can “improve material and resource management and reduce the environmental impact of industrial railway activities by reducing waste and pollution,” such as through reconditioning equipment signals, relays, and rails, and refurbishing – rather than replacing – trains.   

There are 3 practices that railway operators can take to develop railways’ circular economy 

#1 Encourage suppliers to invest in circularity.  

This means taking steps like: 

  • Using equipment with recycled materials 
  • Designing equipment to be repairable and recyclable 
  • Buying second-hand equipment, especially equipment that is circular economy certified  
  • Integrating maintenance services aimed at extending product’s lifecycle 
  • Improving transparency about equipment’s environmental impact 

#2 Make circular economy part of customers’ selection criteria 

Railway operators can go even further with making circular economy part of the selection criteria during the tender or Request for Quotation (RFQ) process. In addition to existing criteria referring to technical features, price, and cyber compliance, for example, they can include new criteria related to sustainability – particularly the need to promote a circular economy. But new circular economy criteria can only be applied if the entire value chain works together from the end-users to the EPCs. 

#3 Change the relationships between suppliers and customers 

Suppliers and customers must work together to build sustainable procurement in the rail industry. This is the best way to ensure a more resilient business. Firstly, it will shorten the value chain, a critical point in a world of shortage. Secondly, it will drive further decarbonization.  

This transformation in the supplier-customer relationship can start now. In the near future, regulations will accelerate the development of circularity, but suppliers and customers can already collaborate and innovate together, implementing tangible and impactful initiatives for a greener economy.  

What circular economy initiatives will drive decarbonization? 

Schneider Electric is a circular economy pioneer. We’ve been supporting a circular economy approach for over 20 years ago and have set up many key initiatives with measurable results, including: 

  • Obsolescence management and modernization with EcoFit: By focusing on circularity and repairability, we help railways make the most of their resources. For example, we can minimize waste by replacing equipment’s parts, rather than full equipment replacement. This makes it possible to extend equipment’s lifespan by 25 percent, which would mean adding 5 to 10 years to a piece of equipment with a typical life duration of 30 years. At the end of the day, it means less raw material used and CO2 saved. We are also working on using secondhand remanufactured parts for replacements. 
  • EcoDesign: Fourteen years ago we created a label called Green Premium. This label aims to provide our customers with more sustainable products and to be transparent with environmental information. Recently, the Green Premium program has evolved to integrate ambitious circular value propositions such as reparability criteria, enhanced recyclability, and use of recycled content. For example, we have already increased green material content in our product — reaching 11 percent in 2021 — and aim to reach 50 percent in 2025. We will achieve that target by qualifying and integrating more recycled content into our offers. 
  • Take-back service at end of use: We define the best recycling strategy for each piece of railways’ equipment. We are building a recycling partner network to dismantle equipment. For example, we can recycle or process SF6 gas from equipment and can deliver a circularity certificate. This is a solution to avoid primary resources consumption.  

These are some of the ways Schneider Electric delivers positive impact. From 2017 to 2021 we saved and avoided 83.6 MtCO2 for our customers, and target 800M tons of CO2 savings by 2025. 

Our circular economy initiatives have earned us the Railsponsible Supplier Award 2022  

We have been recognized by Europe’s leading rail organization for our outstanding performance in sustainability and circular economy in the rail industry and won the Railsponsible Supplier Award 2022. Railsponsible is an industry initiative focused on sustainable procurement, with the aim of continuously improving sustainability practices throughout the railway industry supply chain.  

Reducing Scope 3 emissions depends on a partnership between clients and suppliers 

It’s clear that to reduce scope 3 emissions and accelerate a circular economy, clients and suppliers must work together. Together, they can develop successful initiatives that lead to a more sustainable, resilient business.  


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