Biofuels as the Bridge to Low-Emission Logistics: Europe’s Path to Sustainable Freight
The European Green Logistics Market is undergoing a significant transformation, largely driven by the adoption of sustainable energy sources in transportation and warehousing operations. Battery Electric Vehicles (BEVs) are the most prominent segment, making up 43.92% of the market. This dominance is a reflection of Europe's ambitious regulatory frameworks, incentives for low-emission vehicles, and corporate sustainability commitments that are fueling the electrification of freight transport. Key players in this shift include Germany, France, the Netherlands, and the UK, where government subsidies for electric trucks, investments in charging infrastructure, and urban low-emission zones promote zero-emission deliveries. BEVs are especially effective for last-mile delivery, which is crucial for the retail and e-commerce sectors two of the largest end-use segments driving green logistics adoption. The surge in e-commerce, along with rising urbanization, has spurred demand for electric vans and trucks capable of operating efficiently in congested city centers, while also reducing noise and local air pollution. Additionally, the integration of telematics, AI-based route optimization, and fleet management solutions boosts the operational efficiency of electric fleets, enhancing total cost of ownership and making electrification a more commercially viable option for logistics operators.
While BEVs lead the market, biofuels including biodiesel, bio-LNG, and bio-CNG account for 27.11%, underscoring the continuing importance of renewable liquid and gaseous fuels in decarbonizing medium- and long-haul freight operations. Biofuels are particularly appealing to industries with existing internal combustion engine fleets or long-distance supply chains, where full electrification may not currently be feasible due to limitations in battery capacity or charging infrastructure. By adopting biofuels, logistics operators can significantly reduce carbon emissions while utilizing existing assets, providing a cost-effective bridge to fully electrified or hydrogen-powered transport. Moreover, European countries have implemented blending mandates and incentives for biofuel use, further driving uptake in road freight, rail, and maritime transport. These fuels are especially prevalent in sectors such as manufacturing, automotive, and chemicals, where long transport distances and heavy loads are common.
Renewable energy-powered warehouses, which represent 20.19% of the market, form another key pillar of the green logistics transformation. Energy-efficient, solar- or wind-powered warehouses help reduce the carbon footprint of storage and material handling while complementing electrified transportation networks. In countries like Germany, the Netherlands, and Scandinavia, logistics hubs are increasingly incorporating on-site renewable energy generation, energy storage systems, and smart energy management to optimize power consumption. These strategies are particularly crucial for cold chain logistics in the food and beverage and pharmaceuticals sectors, where refrigeration energy can represent a significant share of operational emissions. Renewable-powered warehouses also help logistics operators maintain operational resilience against grid volatility while minimizing reliance on fossil fuels.
LNG and CNG, which account for 8.11% of the market as low-emission transition fuels, continue to play a strategic role in bridging the gap between conventional diesel fleets and fully electric or hydrogen alternatives. These fuels provide immediate reductions in CO? and particulate emissions for heavy-duty and regional freight transport, making them particularly appealing in Central and Eastern Europe, where the electrification infrastructure is still being developed. The adoption of LNG and CNG is supported by European Union directives promoting cleaner fuels in commercial vehicles, alongside several private initiatives targeting sustainable long-haul corridors. Hydrogen Fuel Cell Vehicles (FCEVs), however, represent a very small share at 0.67%, indicating that hydrogen logistics remains in an early adoption phase. Although FCEVs promise zero tailpipe emissions and high energy density for long-haul applications, their current deployment is limited by challenges such as inadequate fueling infrastructure, high capital costs, and technology maturity. Nonetheless, pilot programs in Germany, France, and Scandinavia indicate growing interest, suggesting that hydrogen may become a key solution for decarbonizing heavy freight in the coming decade.
The segmentation by energy source illustrates the comprehensive approach that European logistics operators are taking to achieve their sustainability goals. Electrification is predominant in urban and medium-range applications, while biofuels and LNG/CNG facilitate emissions reductions in long-haul and industrial supply chains. Renewable energy-powered warehouses further minimize emissions in storage and distribution processes. Collectively, these energy solutions are supported by stringent EU regulations such as the Corporate Sustainability Reporting Directive (CSRD) and Fit for 55, which require compliance and transparency in sustainability efforts.