Scope 3 goes legal: contracts demand carbon clarity

For road haulage, the backbone of the UK’s freight network, this is creating both a challenge and an opportunity. HGVs account for between 15% and 20% of UK transport emissions despite representing a small proportion of vehicles on the road, according to the UK DfT. Yet progress towards low-carbon alternatives has been slow: more than 95% of UK HGVs remain diesel-powered, and fewer than 1% of new UK truck sales in 2023 were zero-emission, according to the SMMT. This lag is colliding with rising pressure from customers to cut Scope 3 emissions - the indirect emissions in their supply chains - and it’s forcing a rethink on innovation, competitiveness, and investment.

The changing market reality

A decade ago, sustainability questions were often hidden deep within transport tender documents. But today, they’re front and centre, as public and private sector buyers now routinely assess environmental credentials alongside cost and service, with minimum thresholds necessary to even be considered in the running.

Under the UK government’s procurement criteria, suppliers bidding for central government contracts worth more than £5m annually must commit to reaching Net Zero by 2050 and produce a carbon reduction plan covering Scope 1, 2, and relevant Scope 3 emissions.

In the private sector, the same shift is happening. Major retailers, manufacturers, and e-commerce platforms are embedding emissions performance into supplier scoring, often disqualifying bids that fall short. According to data from the Carbon Disclosure Project (CDP), over 50% of companies surveyed in 2023 said they would drop suppliers that fail to act on climate. For hauliers, the risk is clear: standing still on decarbonisation risks being locked out of future business.

Why Scope 3 pressure is different

Scope 3 reporting requirements are what is turning supply chain sustainability into a contractual necessity.

Since 2022, large UK companies have been required to report climate risks and emissions, meaning that when a logistics provider delivers goods on behalf of a customer, the emissions from those transport services are included in that customer’s Scope 3 footprint.

If the provider operates a high-emission fleet, it inflates the customer’s Scope 3 totals, making it harder for them to meet their own reduction targets and stay compliant with disclosure requirements. For many corporate buyers, this has shifted the conversation from “we’d like you to be greener” to “we need you to be greener for us to do business”. The effect is significant: customers are no longer simply asking for low-carbon options, they are building them into contracts as non-negotiable.

The EV HGV challenge

While there’s growing consensus on the destination of reaching Net Zero by 2050, the road to get there is far from smooth for UK hauliers. Electric and hydrogen HGV technology is improving, but adoption remains in its infancy. As mentioned earlier, up until 2024 zero-emission HGVs accounted for less than 1% of UK truck sales (SMMT), and most operators are still trialling small numbers of vehicles rather than committing to large-scale conversion.

The barriers to this shift are well-documented: high upfront vehicle costs, lack of charging or refuelling infrastructure, and continued concerns about range for long-haul routes. The temptation for many is to delay investment until the technology and infrastructure are more mature. But the risk of waiting is that customer requirements and regulatory deadlines, such as the UK’s planned end to new diesel HGV sales by 2035 for smaller trucks and 2040 for heavier vehicles, arrive faster than fleet renewal cycles can keep up. The result could be a costly, compressed transition later in the decade, and diminishing competitiveness within the supply chain in the meantime.

A practical pathway to progress

The journey to decarbonisation doesn’t have to start with the most expensive steps, but it does have to start with clarity. Understanding your current emissions baseline is essential. Without it, it’s impossible to prioritise actions, track progress, or prove improvement to customers.

For many logistics operators, the fundamental first move is to target the “low-hanging fruit”: measures that reduce energy consumption and emissions quickly, with minimal capital outlay. Cutting waste across an estate, from warehouses to depots, through upgrading lighting, optimising heating and cooling, and improving insulation can deliver immediate savings. Those savings can be amplified by buying better: switching to more competitive energy contracts and procurement models (such as flexible procurement) and, where possible, sourcing renewable electricity through green tariffs.

The efficiencies and cost reductions from these early actions can then be reinvested into the bigger-ticket elements of transition, such as replacing diesel HGVs with electric or hydrogen models. This phased approach spreads cost over time while building momentum and credibility with customers. Alongside fleet replacement, there are emerging technologies to improve operational efficiency, such as advanced lubricants designed specifically to extend EV range and reduce maintenance needs.

A well-structured pathway typically combines quick wins with longer-term technology adoption:

1. Fleet decarbonisation – Gradual introduction of electric and hydrogen trucks for suitable routes, backed by trials to identify operational sweet spots. Interim solutions such as biofuels, for example, biomethane or hydrotreated vegetable oil (HVO), can cut lifecycle emissions by up to 90% compared to diesel (source: Zemo Partnership) and are already commercially viable in some applications.
2. Greener warehousing and operations – As mentioned, energy-efficient lighting, HVAC upgrades, automation, and on-site renewables reduce Scope 1 and 2 emissions, helping to lower the overall carbon intensity of logistics operations.
3. Logistics optimisation – Route planning, driver training, load consolidation, and modal shift to rail where possible can deliver immediate fuel and emissions savings, often in the range of 5–15% (source: Logistics UK).
4. Data as a competitive advantage – Real-time monitoring of fuel use, emissions per tonne-km, and delivery footprints enables hauliers to demonstrate progress to customers and differentiate in tenders.

Balancing cost and carbon

It’s no secret that decarbonisation requires capital, but it doesn’t have to erode margins if approached strategically. Grants such as the UK Plug-in Truck Grant (which has been extended into 2026) and innovation funding for zero-emission freight trials can offset upfront costs. Green financing, which increasingly offers preferential rates for low-carbon investments, is also becoming more accessible.

Some firms are also co-investing in greener freight solutions, recognising the mutual benefit for Scope 3 reporting. For example, collaborative funding models for electric vehicle trials or shared charging infrastructure are emerging in retail–logistics partnerships.

Future-proofing market position

The reality for UK hauliers is that environmental performance is now intertwined with market competitiveness. Those who embrace Scope 3-driven change early will be better placed to navigate tightening regulations, rising fuel costs, and shifting customer expectations. Those who resist risk losing not only contracts but also access to finance, as lenders and insurers begin factoring carbon intensity into their risk assessments.

Ultimately, Scope 3 pressure should be viewed less as a compliance burden and more as a catalyst for innovation. By aligning decarbonisation with commercial strategy, hauliers can secure a competitive edge, protect market share, and contribute to the resilience of the UK’s supply chains in a low-carbon economy.

Decarbonising UK road haulage is not just about meeting 2050 targets: it’s about staying supply chain ready in a rapidly changing market. The combined weight of customer demand, investor expectations, and government regulation means environmental performance is now a prerequisite for doing business.

For hauliers, the choice is stark: invest early and lead, or delay and risk being left behind. Scope 3 requirements are no longer an abstract ESG concept; they are shaping contracts, tenders, and financing decisions today. Those who act now will not only help drive the sector’s transition but will also define the competitive landscape for years to come.

Jack Goodson, senior business development manager, Equity Energies