RailTech Europe ’24: Towards sustainable tendering for the railways
The many accolades rail receives for being the greenest form of motorised passenger and cargo transport, and an essential component of reaching the European Union (EU) 2050, sustainability targets do not negate room for improvement. During the 2024 edition of the RailTech Europe Conference, Sven Schirmer and Matthias Landgraf will discuss the question of making the tendering process more sustainable within the rail industry. RailTech.com sat down with Sven Schirmer, corporate procurement coordinator at Austrian Federal Railways (ÖBB) to learn more.
According to the European Environment Agency, “train travel remains overall the most environmentally friendly mode of motorised passenger transport in Europe — in terms of greenhouse gas emissions — as compared to travelling by car or plane.” Rail’s efficiency, and ability to be powered by electricity, which can be sourced sustainably, contributes to its position. “In Austria, for example, we use 100 per cent green energy from our water power plants for trains, eliminating CO2 emissions in transportation. Unlike trucks, which lack advanced technology, trains remain the most efficient and environmentally friendly option,” comments Schirmer.
Rail is therefore an instrumental part of the EU’s journey towards achieving net-zero greenhouse gas emissions and climate neutrality in the next 26 years. The clock is ticking. Nevertheless, there remain avenues for improvement. For instance, “the construction side, particularly the materials used, poses a challenge. CO2 emissions in the supply chain of construction materials, such as concrete and steel, need addressing to make significant progress,” highlights Schirmer. Similarly, the carbon intensity of the rolling stock manufacturing process remains an emissions contributor.
Sustainable tendering model
An additional, and often overlooked area in which the rail sector can improve its overall sustainability, is in its approach to the tendering process. A more sustainable approach to tendering would entail factoring in the sustainability impact of the product, for instance rolling stock, over its entire life-cycle, rather than focusing solely on the economic considerations. To emphasise sustainability throughout the entire tendering process, “we have to consider the entire lifecycle when selecting a product or service. This principle applies universally. Additionally, we must not overlook the environmental costs, such as CO2 emissions, water usage, and ground utilisation,” explains Schirmer.
To address this, Sven Schirmer and Dr. Matthias Landgraf, CEO and founder of Evias Rail began developing a model to account for CO2 in the tendering process, which is now in use in Austria, by the Austrian Federal Railways (ÖBB). The model became part of the standard tendering procedure at ÖBB in 2021. “We are the first and only ones to consider environmental impacts in the procurement process. In 2020, we introduced a method of monetizing CO2 emissions as part of lifecycle costs. This approach, considering the entire lifecycle and environmental costs, helps us choose the best bidder and tender,” explains Schirmer.
In this year (2024), the tool is transitioning to a web-based, fully digitised format. It will now capture emissions throughout the entire supply chain, ensuring user-friendly functionality, and directly store data from the top bidder in a database. The acquired data facilitates focused supplier development, guiding efforts towards decarbonization and aligning with the goals of the Green Deal. Today, “it’s not used in 100 per cent of tenders due to resource constraints, but it has been successful without supplier discontent,” he adds.
Reception of the method
In his advisory work, with rail operators and public clients in Europe, Schirmer has noticed that “resource constraints and doubts about suppliers’ ability to provide information are common challenges. Many worry about overloading procurement and sales departments with new initiatives.” Additionally, when first presented with the idea of altering the procurement process, Schirmer admits to being often asked about the reaction from suppliers. “This was a concern for us initially. Surprisingly, we’ve never encountered any issues. All our suppliers willingly provided the necessary information,” he states.
Many expressed gratitude for the new model, “because they were keen to demonstrate their superiority over competitors. They’ve invested in their products, and now that investment in sustainability is becoming visible for the first time,” elaborates Schirmer. “Admittedly, we received numerous incorrect answers, but our bidding processes always involve two steps. In the initial stage, if there’s an incorrect response, we have the opportunity to assist them in correcting it, ensuring that the final offer is always accurate. Consequently, it has never been a problem,” he adds.
A cross-industry methodology
Beyond the procurement process for rail, “the concept generally can be applied to a wide range of industries. And we’ll probably have to eventually as legislation evolves,” stresses Schirmer. “It’s a cross-industry methodology, applicable universally to every product and service. Whether it’s tailoring it for a small procurement or for a large project like constructing a skyscraper, this methodology is versatile. Admittedly, it becomes more complex and time-consuming when dealing with larger projects compared to a simple purchase like buying a pencil. However, in the end, it all boils down to numbers,” he posits.
“I consistently emphasise the necessity of adopting such methodologies. While it doesn’t have to be an identical model to what we’re implementing, a similar approach is essential. The specifics may vary, as everyone can choose their path. The crux lies in having accurate numbers, we call it primary data. Without them, everything remains speculative. I don’t want to be merely guessing that I’ve achieved the Green Deal 2050 – credibility relies on concrete data.”
In addition to continuously sharing his model and insight gained from its application at ÖBB, Schirmer is now developing a new, web-based model for carbon accounting that goes down the supply chain to the initial steps of production, which aims to be simpler, applicable across industries, and compliant with evolving European guidelines.
Learn more at RailTech Europe 2024
Schirmer and Landgraf will speak in more detail about their model and insight during the 15th edition of the RailTech Europe conference. Their presentation, entitled “Environmental impacts and sustainable tendering in railways” will take place on Thursday, 7 March 2024 from 13:25 to 13:55, at the Utrecht Jaarbeurs. The talk will cover product lifecycle, calculation methodology, data collection, the new model, and the benefits of data obtained, especially for those involved in procurement and decarbonization efforts.
“Anyone involved in procurement and those working towards decarbonization should attend to understand how their efforts contribute to the entire product lifecycle,” emphasises Schirmer, “consideration of costs is crucial. CFOs and CEOs should realise that investing in sustainability is worthwhile, especially with the increasing costs of carbon emissions. Waiting until 2049 is not an option; efforts should start now.”
The conference program of the 15th edition of RailTech Europe, which takes place in Utrecht, Netherlands on 6 and 7 March 2024, will host a range of discussions on innovations, services and products that have a huge impact on the future rail infrastructure. A special focus will be on the future of rail in terms of sustainability in Session 3 of the conference. You can learn more about the conference program here and register here.
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