(L-R) Riley Bruce (College ’26), Charlie White (College ’25), Eric Fang (College ’25), Jared Maksoud (College ’25), Isaiah Matute (College ’25), Ari Pribadi, Senior Managing Director of Marathon Capital (Photo by Jean Lachat)

Team Members: Eric Fang (College ’25), Riley Bruce (College ’26), Charlie White (College ’25), Jared Maksoud (College ’25), Isaiah Matute (College ’25)

When starting our presentation, it was first important to analyze the current standing of Kuehne and Nagel’s (KN) financially as well as within the context of their current decarbonization goals. To do this, we used their Annual 2022 Report and Sustainability Report to get a grasp of their market power, the technologies they were already using, and how we could work to further augment their sustainability goals to align with our decarbonization plan.

To decarbonize the road sector, we opted for an immediate insetting of all existing diesel use using hydrotreated vegetable oil and phased in battery-electric trucks to take on the short-haul trips. We planned to complete this transition and begin phasing in fuel cell electric trucks for the long-haul mileage by the start of 2030, though we recognize this timeline is particularly dependent on the green hydrogen supply chain reaching the point where it is no longer a significant logistical barrier. We used per-mile expenses and projected EV premiums to analyze the cost of the transition compared to continuing to use diesel. Our base assumptions found an excess cost of 18.8% over the whole period, or $1.18 Billion, and we used sensitivity analysis to understand the impact of our critical energy price assumptions.

To maintain KN’s coverage of Scope 2 emissions with renewables post-implementation of the planned EV rollout, we decided to explore installing solar panels over the millions of square meters of warehousing space that KN owns and operates. Using irradiance data from the CDC and several formulas from the National Renewable Energy Laboratory (NREL), we found that solar panels installed on this land area could not only cover EV trucks but could actually be NPV positive over a 35 year asset life.

To decarbonize KN’s largest segment, maritime, we planned to adopt the use of blue methanol as fuel in the short term. We would have to put together carrier agreements to guarantee usage on these renewable vessels and cover the costs of building them and using renewable fuels. In the long term, we would transition the fuel usage over to green methanol so that it becomes entirely net-zero by 2040. The total PV cost of this would be $2.25B.

To decarbonize air logistics, we emphasized an incremental adoption of SAF that exceeded goals set by the IEA and EU. Using figures produced by PwC Strategy and McKinsey & Company, we used projected SAF share by plan and SAF markup over jet fuel figures to calculate the NPV of transitioning to SAF which is -$1.3B.

The final total cost of a total decarbonizing KN to net-zero was $4.96B discounted back to today. We found that this seems to be relatively feasible for KN considering they should generate a total sum of FCF of $16.87B over the same period. With their cash alone it can be done, but if we factor in the use of a green premium which is standard, we can backsolve to get an NPV neutral project. For this decarbonization project to come at no cost to KN, they would have to charge a green premium of 15.1% over the next 16 years.

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