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The Philippines is struggling with adopting electric vehicles due to lack of infrastructure and renewable energy sources, says DHL Summit Solutions Inc. General Manager of Operations Christian Go
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High costs and capital investment requirements for EVs hinder both private and public sector adoption
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The Philippines currently heavily relies on fossil fuels, with 80% of energy sourced from non-renewables, limiting the green impact of EVs
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DHL calls for clearer government policies to encourage the private sector’s role in achieving long-term sustainability goals
The Philippines is struggling with adopting electric vehicles (EVs) due to lack of infrastructure and renewable energy sources, according to DHL Summit Solutions Inc. General Manager of Operations Christian Go.
“Everyone’s jumping into the trend of buying electric vehicles, hybrid vehicles and so forth. For us, we also have invested in electric vehicles. However, we have a slightly very controversial take on electric vehicles. Why do we use it? We’re not entirely happy or we’re not entirely there yet in terms of pushing electric vehicles as one of the solutions for sustainability,” Go said in his presentation at the recent Transport Con 2024 organized by Metro Pacific Tollways.
The Philippines remains heavily reliant on fossil fuels, he said. “The problem here in the Philippines is that our energy mix, last time we checked, it’s still not green energy. If you hook up to the grid, 80% of our requirements is still being fueled by fossil fuel and all of these non-renewables.
“We’re still not yet there. So, to say that if I run an EV today and it’s clean energy might be somewhat of a misinformation. If you still source your energy, you get it from the grid, that’s still considered as brown energy, not entirely green.”
According to another conference speaker, Denmark’s Ambassador to the Philippines Franz-Michael Skjold Mellbin, the transition to EVs in the country will need extensive support in infrastructure and policy to become viable.
DHL Express Philippines, for instance, has begun incorporating EVs into its fleet but recognizes that, with the current grid relying predominantly on non-renewable sources, running EVs cannot yet be fully considered a “green solution.”
Go said: “…we have 30 facilities across the Philippines and we want to set up solar farms on top of these facilities. If we’re able to charge our EVs from these facilities, then you could say that’s pure green energy. But the grid, because of that energy mix right now, that becomes an issue.”
While this strategy offers a more sustainable path forward, full implementation requires time and substantial capital investment, said Go. “There’s other aspects also of decarbonization that don’t really involve outright investing in EVs. The challenge for a lot of companies, private and us, other logistics companies, is that EVs require a huge capital investment.”
Apart from EVs, DHL focuses on decarbonizing through other means, such as optimizing logistics networks, utilizing telematics, and implementing software tools to reduce carbon emissions.
By optimizing routes and consolidating trips, the company has successfully reduced its trips for major clients by up to 80%, leading to a significant decrease in emissions.
“The very first step really is to establish a baseline. For companies, for manufacturing, FMCGs (fast-moving consumer goods), retail firms, you need to first establish how much CO2 emissions are you really contributing. For us, for every trip that you make, for every kilometer that you move in a year’s time, how many kilos or tonnage of CO2 emissions do you really add up to the overall economy?” Go asked.
“So, when you know that, then you can start looking into your details, the details of your operations and how to reduce this… (The) very first aspect, and there are two schools of thought here, what we call burn less and burn green operations.”
Go said, “(When) you say burn less, you look for ways to reduce emissions using technology. So, you have here network design; you look at where you put your distribution centers, how far you are from your market, how many trips, can I consolidate more trips. We do this for (Universal Robina Corporation). We actually reduce the number of trips that we make for them by 80%. And that 80% translates to about 100,000 kilos, 100 tons of CO2 emissions every year.”
He said DHL is aware that while sustainability efforts are gaining momentum, they come at a cost that could deter private-sector adoption without government incentives.
Go urged the national government to establish clearer policies and incentives to encourage investments in EV infrastructure, as well as broader decarbonization practices across industries.
“Electric vehicles upgrading is not that easy, although we want to do it as much as possible, as fast as we can. But there are still some considerations. EVs for commercial vehicles are still very, very expensive,” he said.
DHL’s approach highlights the importance of collaboration among logistics firms, clients, and government entities to reach a sustainable future. “We’re very much willing to work with our competitors. I’ve spoken to a few of them. It’s not anymore about which 3PL is the best, which service provider provides the best service,” he said. – Michael Barcas
