U.S. EPA SmartWay Transport Partnership GSA Transportation Forum Denise Kearns March 21, 2011 Good Afternoon. Thank you for inviting me to speak today about EPA’s SmartWay Transport Partnership. Briefly, for those who may not be familiar with SmartWay, SmartWay is a VOLUNTARY public-private initiative developed in collaboration with the transportation industry. EPA launched SmartWay in 2004, and the primary goal of the program is to improve efficiency and lower emissions from the freight sector.

Overview Executive Order 13514 Improve federal government’s environmental, energy and economic performance Supply chain, transportation & goods movement Reduce CO2 emissions and energy efficiency EPA SmartWay and Goods Movement Tools to track, report & improve supply chain performance EPA SmartWay Partnership & Transportation Sustainability Achieving progress through collaboration In my presentation today, I will briefly address the directives President Obama outlined in EO 13514, where he called on federal agencies to strengthen their environmental, energy and economic performance. We will take a look at the supply chain, specifically how important transportation and goods movement are to improving the sustainability of organizations, including the federal government. Next, I will provide some background on the tools and resources EPA’s SmartWay program has developed to track, report and improve supply chain performance through transportation and logistics management practices. Last, we will look at the overall progress EPA and its SmartWay partners are making.

Executive Order 13514 Requires federal Agencies to measure, manage and reduce greenhouse gas GHG Develop sustainability plans that reduce emissions, save money and create a clean energy economy Lead by example: leverage federal purchasing power to promote environmentally responsible products, technologies and practices Presidential Executive Order 13514 I am sure many of you in the audience are much more familiar than I with Executive Order 13514. It was issued by President Obama almost 3 years ago to reduce carbon emissions and save on energy costs and use. Specifically the order directed federal agencies to develop a plan to measure, manage and reduce carbon emissions. These reductions are to be achieved by reducing energy consumption – both the electricity used to heat buildings and the petroleum used to fuel vehicles – conserving water, reducing waste and contributing to sustainable communities. At another level, the order also was designed to encourage federal agencies to lead by example. As one of the largest consumers of energy, the President asked us to leverage our position and to collaborate with our suppliers and customers and find ways to promote environmentally responsible products, technologies and practices. NOTE:: federal govt: Occupies nearly 500,000 buildings Operates more than 600,000 vehicles Employs more than 1.8 million civilians Purchases more than $500 billion goods and services annually

Common Sources of Federal GHG Emissions* My understanding is that under executive order and GSA policy guidance, federal agencies are now reporting emissions associated a broad range of activities that fall within their organizational boundaries – As shown here – GHG emissions are to be inventoried and categorized as Scope 1, Scope 2 or Scope 3 emissions. Scope 1 emissions: direct GHG emissions from sources owned or controlled by federal agencies Scope 2 emissions: direct GHG emissions from consumption of purchase electricity, heat or steam And Scope 3 emissions: other indirect emissions from sources not owned or directly controlled by a federal agency: - such as emissions from employee commuting and travel, consumption of purchased electricity, AND EMISSIONS GENERATED IN THE FEDERAL SUPPLY CHAIN, including emissions from the transportation of goods procured with federal funds. Focus of my talk will be on how EPA’s SW program is supporting private and public sector in reducing CO2 emissions from the freight industry, which has the twin benefit of increasing energy efficiency and reducing fuel use in trucking fleets. *Source: EO 13514 Working Group 4

Sustainable Supply Chain Management Goods movement, Transportation & delivery Product concept, design Parts and raw materials Manufacturing processes Inventory Product Disposal There are several elements of the supply chain – Starting with the initial concept and design of product, Use of raw materials and parts The manufacturing process The transportation and delivery of products and goods All the way through to inventory and disposal. EPA water, waste and toxic substances offices partner with industry and other federal agencies in all of these areas. SmartWay is the agency’s flagship voluntary program developed specifically to addressing emissions from the freght and goods movement industry, that is emissions that are generated by trucks and rail to transport and deliver goods.

U.S. Transportation Sector GHG Emissions Transportation accounts for roughly one-third of total U.S. GHG emissions Transportation is critical to the health of our economy – we depend on it for the delivery of goods and services, our quality of life – including our freedom of mobility – a personal freedom that is especially important to Americans – these benefits, however, are not free – transportation does impose costs – considerable costs to public health and the environment. Transportation – cars, trucks, aircraft and boats -- accounts for roughly one-third of total U.S. GHG emissions – and also is a source of many other pollutants, including particulate matter, nitrogen oxides and many different toxics. Pollution from freight movement, also can affect communities and neighborhoods. GHG (1,820 mmt CO2-eq, 2009) DRAFT INVENTORY OF U.S. GREENHOUSE GAS EMISSIONS AND SINKS: 1990 – 2009 FEBRUARY 2011

Heavy-Duty GHG Contribution by Category Represents ~20% of Mobile Source GHGs Within transportation – the heavy duty trucks – the long haul freight tractors, combination day cabs and vocational trucks that haul the majority of our goods, account for about 20 percent of all mobile source greenhouse gas emissions. Improving the efficiency and reducing emissions from heavy duty trucks are at the heart of EPA’s SmartWay program. We also are working with the rail sector, but to date the focus – and success of the program – has been to reduce emissions and improve sustainability within the freight trucking sector. EPA MOVES, 2005

Business Case for Sustainable Freight As I mentioned earlier – by helping to reduce carbon emissions – SmartWay offers its partners the twin benefit of reducing fuel use and costs – which within the freight industry are one of the largest – if the not the largest -- operating cost that a freight company has. In fact persistently high diesel costs – along with corporate commitments to improve supply chain sustainability – are what’s driving shippers and their carriers – including GSA and other federal agencies – to initiate new and creative strategies to move goods more efficiently, at lower cost and with smaller environmental footprints.

Transportation Sustainability Starts with SmartWay A Value Proposition Carriers: Gain competitive advantage: Fuel efficiency, savings Preferred status Reduce emissions Motivated to improve fleet performance and operations Recognition and PR value with SmartWay brand Shippers & Logistics Management: Top of the supply chain, motivated to reduce carbon footprint Drive marketplace demand Give preferred status to SmartWay Carriers Better data improve their operations Recognition and PR value with SmartWay brand For many carriers, transportation sustainability starts with SmartWay.

SmartWay Tools Calculate Freight Emissions Measure Benchmark Improve

EPA SmartWay Achievements 3,000 Partners Top 100 U.S. truck carriers - Fortune 500 Shippers from every All Class 1 Rail lines from every business sector - Major logistics firms Since 2004, SmartWay Partners have saved: 16.5 million metric tons of CO2 - 235,000 tons NOx 9,000 tons PM - 50 million barrels of oil $6.1 billion dollars in fuel costs Equivalent to taking over 3 million cars off the road for 1 year

Some of SmartWay’s Partners U.S. General Services Administration Freight Transportation Management

U.S. General Services Administration Transportation Services First SmartWay Partner within federal civilian government Joined as logistics management partner Gives GSA access to performance metrics of Transportation Service Providers (TSP) Benchmark and track efficiency, energy use, emissions 13

U.S. General Services Administration Transportation Services Enables GSA to easily identify “green” Transportation Service Providers Provide TSP performance information to other federal agencies Drive environmental efficiency; lead by example Achieve EO 13514 objectives

Questions? www.epa.gov/smartway 1-734-214-4767 (helpline)