Haulage Sector Players Urged to Scale Up Gas Useage for CO2 Emission Reduction

Bennett  Oghifo

Operators in the haulage sector have been urged to scale up the use of CNG-powered vehicles to reduce the emission of CO2 into the environment.

The Logistics Director of Lafarge Africa Plc., Osaze Aghatise, stated this in his keynote address, at HAULMACE 2024 held in Lagos.

HAULMACE is a platform for showcasing excellence in the haulage and logistics sub sector.

Aghatise said he rephrased the theme: ‘Embracing Gas Initiative in Logistics in Nigeria’, to “scaling rather than embracing. And I think this is what this conference should really focus on. How do we scale up this gas initiative?”

He addressed three areas, which he said were, “the barriers to adoption and proposed solution areas in really adopting, embracing, scaling up, accelerating the gas initiative. But again I think one thing is more around sustainability, reducing our CO2 emissions is the right thing to do. It’s not whether or not we should do it. It’s the right thing to do. If you look at the logistics industry, the fleet that run on the road, day in day out, and the number of emissions that we promote in the environment, it will be silly of us not to make a switch, and make it quick, so that there is benefit on reducing CO2 emissions in terms of sustainability.

“On the second point, which is on cost. As business leaders, what makes sense always is to balance cost while you’re balancing on sustainability. I always say, if you do not balance both, then adoption will face more barriers. So the cost benefit is there, and we see it even in our operations today. Now, since we are aware that it makes sense from a cost point of view, it makes sense from a sustainability point of view, being responsible. So why are we not doing it? I think that’s the question or why are we not fast tracking it? Why are we not accelerating? Why are we not scaling up?” 

He said the sector players still face limited supply infrastructure today to scale up. “Good enough, the government has really put in a lot of effort in terms of setting the tone, in terms of policies to ensure that this barrier is broken. But it’s still not enough, because it’s one thing for the government to set the tone, and the tone has been very clear, both with policies, but however, we still face the limited supply capacity in terms of infrastructure. So for me, we need to start asking why. Why are we still facing that? And I started taking dive into this, not only for this conference, but internally. When we also started scaling up, it’s more around the financing, and I’m talking from the supply side. It’s good that we have the banks here. I think the appetite of banks towards scaling has to change, and has to change quickly. “In terms of this, I don’t see any reason why financing a green initiative should be the same as financing any other initiative, there has to be a differentiation in terms of this. So I think this is one major barrier that we face today. We cannot have a generic financing model. It can’t work. It will not work. We need to have something that is completely different, that is tailored-made towards scaling this. “Partnership with organisations is also important, and when I talk about partnership, I’m talking about multinational companies who are eager, who have basically keyed in or tied into this whole initiative. You cannot stand alone as an organisation, doing your own thing and not look for partners in the supply space. So what do I mean? For example, in my company, and I believe a lot of other companies where we already see this supply cut out, what you tend to do is to quickly look inward to having your own supply internally, which is great, but for a long term, for the industry, it would not help in getting up. So this is where I believe companies should come together, you know. And I think this is a great platform that we have, on how organizations come together with the suppliers, on how best we can scale maybe, and starting with even your supply route today, how can we put together with the supplier in ensuring that we have enough supply on this route? And I think we need to start looking at the big picture than just being very myopic in the way we address this topic.”

Giving the Lafarge story around scale, he said, “So for us, we started this CNG discussion about eight years ago, and we brought in a partner. So they brought in about 10 CNG trucks. And of course, at that time, people said, Are you mad? What are you doing? This doesn’t make sense and all that, but we saw that this was the right thing to do first, because of the money and because we saw that there was a cost benefit, but at that time we couldn’t scale because of these challenges I’ve mentioned, you know, lack of infrastructure, supply, the financing models and all that. So we went back and we partnered with another company that started with about four, five brought in and 50 of these CNG trucks, and it was a big deal. But before that time, we had worked on all those gaps that we faced. But even at that, in terms of scaling, because the ambition was very aggressive, we were still nothing. If I look at over the past eight years now, what we have injected in total, but we are looking almost 801,000 trucks, and still counting, you know, injection of this gas trucks. But the problem is that we’ve had to do this internally, meaning you as a business, had to finance 100% because the uptight of the financial institution is not there yet. And this is what I’m saying. We need to move from a very generic financing model to a tailor made one. So we had to scale, with so many gas trucks and still some coming on the way, because we started seeing the benefits. Our CO2 emissions reduced drastically because we measure it in terms of cost optimization. And I can tell you from an operating point of view, CNG today gives you almost 30%, compared to your diesel operational cost reduction, and there are some other hidden costs which you don’t see. You can talk about the drivers stealing fuel and all those kind of things, but for CNG, it doesn’t happen.”

In his welcome address, the convener of Haulmace, Mr. Alfred Okugbeni said, “In 2009 we decided to start publishing the magazine, the Haulage and Logistics Magazine, because we have had an experience in Haulage transportation in Nigeria, and it was a very difficult experience. And as at the time, it became clear to us that there was need to provide a platform to showcase these issues, the challenges that we are facing in the industry at the time. So we started a Haulage and logistics magazine in 2009 and in 2014 we organized our fifth year anniversary conference at the Sheraton Hotel at Ikeja Lagos and from that conference, it was very clear to us that, apart from publishing the magazine, we needed to create a platform where we could sit down the operators and the employers and all stakeholder government functionaries and departments to look at the policies of government, the operational issues that the transporters were facing, and find a way to provide solution. We wanted to provide a platform for showcasing excellence in the haulage and logistics sub sector and that was how Haulmace was birthed. 

In 2015 we started the first proper Haulmace and the theme then was stakeholders collaboration in resolving crisis in the Nigerian haulage industry.”