Logistics Green Deal – Smart Industry

From the Green Deal to the Smart Deal

“Mere formulations of goals remain wishful thinking if no concrete instruments are mentioned and the consequences are not thoroughly assessed. This creates frustration and investment uncertainty where massive investments are actually needed.”

Comment on the Green Deal

We all knew, in some way, that things couldn't simply continue as before. But no one took the first step. There were tentative attempts, yes. Individual measures like recycling or the deposit on PET bottles. The idea itself was good, but critics were highly critical of the implementation.

Thus, some of the separated waste isn't recycled at all, but disposed of abroad. Or waste that hasn't been properly separated is sorted out, but mostly incinerated. In the statistics, however, it's still listed as recycled. In 2016, around 89 percent of waste paper was recycled, but only 50 percent of plastics. Almost all the remaining waste in Germany ends up in incinerators. This rightfully raises the question: What's the point of all this effort? Why the statistical manipulation? Cui bono? Who benefits?

The introduction of a deposit on single-use beverage containers was intended to promote reusable, environmentally friendly glass and PET reusable packaging. The exact opposite has occurred. Within 15 years, these containers have lost almost 25 percent of their market share. Single-use PET bottles and aluminum cans, on the other hand, have gained 27 percent over the same period. But it gets worse: For every deposit bottle that isn't returned, the 25 cents per bottle remain with the bottler or retailer. This deposit loophole has thus developed into a billion-dollar business.

These examples demonstrate that something needs to change in general. Several other well-intentioned measures and programs could be listed that ultimately proved to be a complete failure.

The problem: Thinking green and acting in an environmentally friendly way is popular in the mainstream, but in economic life it is financially completely uninteresting compared to previous methods and measures and is therefore inferior.

This is set to change with the European Green Deal. The state must create the framework, because only planning certainty and transparency for industrial investors will foster a shift towards a green growth strategy. Critics, however, rightly point out that simply tightening climate targets is not enough.

“Mere formulations of goals remain wishful thinking if no concrete instruments are mentioned and the consequences are not thoroughly assessed. This creates frustration and investment uncertainty where massive investments are actually needed,” said Holger Lösch, Deputy Managing Director of the Federation of German Industries (BDI).

Environmental groups and the Greens, a member of the political opposition, criticize the Green Deal for not going far enough. “The draft EU climate law is a disappointment,” says the German Federation for the Environment and Nature Conservation (BUND). “When presenting her Green Deal, Commission President Ursula von der Leyen compared the European Union’s climate protection ambitions to the moon landing. But instead of a giant leap for mankind, it remains a tentative, tentative step.”

The start of the Smart Deal

Be that as it may, criticism is one thing, action is another. A closer look reveals that neither politics nor business has exactly covered itself in glory when it comes to sustainability. In fact, they've only ever achieved what conveniently fit their existing agenda. And if it didn't, they've made it fit. Take waste recycling or the deposit system for single-use beverage containers, for example.

Amazon's approach and development demonstrate that there is another way. Completely without political intervention, Amazon developed a strategy to secure and even expand its market position for the future. If cost reduction then aligns with a green growth strategy, it is perfectly legitimate.

Related: “CO2 neutrality – Learning from Amazon”

We are living in a time of transformation and change. Much has happened in recent years, gaining breathtaking momentum. This includes new approaches such as Industry 4.0, the Internet of Things, digital transformation, and other developments. What once took centuries to develop societally now occurs in decades and even shorter intervals, requiring us to adapt and manage these changes. The globalization of society and markets brings new changes every day.

Urbanization and the simultaneous maintenance of rural infrastructure is the greatest challenge of our time.

You can find more information in our specialist articles:

• “Urban Growth – How Japan is setting the course for the future“
• “Ensuring basic services in rural regions“

But it also presents an opportunity, especially for companies that see a growth market here through a green growth strategy.

More information can be found in our specialist article “Smart Cities – the solution for mega-urbanization?”.

The path to CO2 neutrality is key and is based on two pillars:

• Automation through digitalization (digital transformation), smart technology (especially smart factory), Internet of Things and Industry 4.0.
• Autonomy in electricity supply, increasing independence and energy efficiency, climate neutrality.