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In the quest to love on the latest greatest breakthrough (guilty!), climate techies often overlook what the legendary Amory Lovins (engineer and co-founder of Rocky Mountain Institute) calls the “largest, cheapest, safest, cleanest way to address the crisis” — energy efficiency.

As he told GreenBiz in 2019, “Since ’75, the cumulative energy saved by reduced intensity is 30 times the cumulative extra supply from doubling renewable output.” 

Think about that for a moment. It’s a great justification for why investments in the demand side of energy consumption are vitally important, and I would argue that efficiency technologies of every sort deserve far more attention as part of the climate tech ecosystem. Indeed, some investors — such as Blackhorn Ventures and MUUS Climate Partners — are making it a central focus of their portfolios.    

For the purposes of this essay, let’s consider a topic high on the list for any sustainability professional — reducing emissions related to the transportation of goods and services — and why efficiency really matters in this moment.

During a conversation I had last week with Procter & Gamble CSO Virginie Helias, she referenced the company’s commitment (announced in September 2021) to increase the “transportation efficiency of outbound finished products by 50 percent by 2030.” Supply chain disruptions and maritime shipping slowdowns — which required P&G to rely more heavily on air freight — have thrown that goal off track, according to Helias. (She didn’t say by how much.) But it’s now prioritizing action, including continued changes to packaging that lightweight products and help more of them fit on individual pallets. There will also be an increased emphasis on intermodal options for moving things around, she told me. “Eliminating air freight, that is one of the biggest drivers … so rail and shipping.”

And, yes, the potential for a U.S. rail strike was on both our minds last week. It would have absolutely been another blow to corporate sustainability agendas across the country. The federal action taken to avert it illustrates the agonizing tradeoffs that continue to be required for the transition to a clean economy. And it is not lost on me that the use of precision scheduled railroading — itself an efficiency measure and strategy — was the root of the dispute.

We’re playing a long game in climate tech, but we need these short-term wins.

But, back to the importance of rail and shipping, which we don’t talk about nearly enough. Clearly, there is a lot of research and development in progress across both sectors focused on alternative fuels that can drive down emissions for both rail (which accounts for about 2 percent of U.S. emissions as of 2019, including both passenger and freight) and maritime transport (about 3 percent). For comparison, aviation’s contribution is estimated at 11 percent.

Efficiency is the story here — we need this to complement climate tech investments in electrification and alternative fuels. And that will take technologies such as software, artificial and telematics — a market that could top $232 billion by 2030, for on-road vehicles alone. One example of this in practice is an application from Montreal-based RailVision Analytics, which last week snagged $4 million in seed funding from a group including (you guessed it) both MUUS and Blackhorn.

Barely two years old, RailVision’s EcoRail app has already helped rail operators with Genesee & Wyoming, Metrolinx, port of Montreal and Via Rail deliver fuel cost savings of 10-15 percent along with the associated cuts in greenhouse gas emissions. Benjamin Wolkon, managing partner at MUUS, describes technologies such as EcoRail as “high-leverage” climate solutions that deliver results quickly. His firm routinely uses the En-Roads modeling tool (smart!) and the open source Crane resource to evaluate the impact of potential investments on reducing GHG emissions.

“From our internal estimates, using the Crane tool, RailVision’s technology, if used globally, could reduce emissions by more than the annual emissions of Spain,” Wolkon wrote via email. “And fundamentally, from a business perspective, if we find a simple yet sophisticated software program that can instantly save customers expenses (fuel is the second-highest cost for rail operations after labor) and emissions at the same time, we’re going to be interested in that.”

It shouldn’t surprise you to hear that another MUUS portfolio company is ocean commerce efficiency software firm Nautilus Labs, which raised a $34 million Series B round in March that was led by two funds associated with Microsoft. (Its total backing is $48 million.) The software delivers the same sort of savings as the EcoRail app, with a potential savings of up to 30 percent, according to CEO Matt Heider. “Economic efficiency and environmental efficiency are best solved in union.”

The good news from my perspective is that there are literally dozens of firms developing transportation planning software. That’s not new. What’s newish is that sustainability considerations are becoming far more central to their missions. Another player to watch is Freightos, which has assembled a network of more than 30 airlines that are collaborating to improve the efficiency of air freight through an initiative called WebCargo that just added its first Chinese airline.

And I would be remiss not to mention another initiative taking flight: a collaboration between Delta Airlines and MIT focused on how airlines can use artificial intelligence and analytics to eliminate persistent contrails, which are ice clouds that trap heat and contribute to climate change. The concern is the ones that last for more than a few minutes. The AI could help pilots navigate to different altitudes to avoid them. “Much of the focus on climate within the aviation field is understandable on carbon dioxide, but contrail avoidance has the potential to greatly reduce the environmental impact of air travel quickly at low cost,” said Steve Barrett, director of MIT’s Laboratory for Aviation and the Environment, in a statement.

We’re playing a long game in climate tech, but we need these short-term wins.

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