Interview with DB Cargo CFO Dr. Martina Niemann

NIEMANN There is scope in two main areas. First, in the consumers' willingness to pay. Even though we operate in the B2B segment, we have to start with the expectations of the end consumers, raise awareness and hone offerings. Studies and test projects show that end customers are quite willing to pay a few cents more for goods that are transported completely sustainably. This willingness must be explored, and prominent, low-threshold options clearly aimed at sustainability must be offered. 

The second scope for action lies in the company's own value chain, its processes. In addition to the reduction of packaging and the establishment of a circular economy, the establishment of a shared economy is particularly worth mentioning here. Standardized transport options in particular, such as containers, trucks or locomotives, should in future be shared assets in a pool of cooperating companies. In this way, empty runs can be avoided. To encourage this trend, which is difficult to enforce due to strong competition in other transportation sectors, I also consider higher toll prices for empty runs to be reasonable. 

NIEMANN That is exactly what we are doing. We specifically offer completely climate-neutral transportation and have many interested customers for this. Sustainable transport chains are becoming increasingly important for them. We also assume that sustainable solutions will no longer be significantly more expensive, if at all, than transports using fossil fuels in the future, as these are increasingly sanctioned. 

NIEMANN Again, we have two main areas. The first relates to alternative fuels. HVO (Hydrotreated Vegetable Oil) has been approved for the entire diesel locomotive fleet of DB Cargo Germany since mid-2022. This is a fuel that, unlike diesel, is produced sustainably – from plant waste that does not compete with food. For new acquisitions, we are relying on dual-mode locomotives that can be operated with both HVO and battery-electric power, and in the future also with hydrogen if it is available in sufficient quantities. 

The second lever is the power composition. DB Energie GmbH, the sister company in the DB Group, already supplies the DB Group companies with 65 percent traction power from sustainable sources. The goal is to increase this share to 80 percent by 2030 and 100 percent by 2038. This sustainable energy is not only needed to power the locomotives, but also to operate and maintain our infrastructure. In order to reduce consumption, we are also relying on circular economy. 

NIEMANN It is the lever that has always been our systemic advantage and is only now really coming into its own: energy efficiency. Transport by rail is particularly efficient, as rolling resistance is significantly lower compared to road transport. Our Achilles' heel is braking. This requires a comparatively large amount of energy, but much of it can be recovered. In general, we rely on intelligent consumption, which we control via sophisticated measurements, for example also in terms of loading. We also train employees to drive in an energy-efficient manner, and there is a great deal of acceptance for this. 

Another lever already mentioned is the establishment of a shared economy to curb empty runs, which account for up to 50 percent in the truck sector. The all-important question is who gets them "going," to use the metaphor. In addition to regulation, it is conceivable that this will happen via requirements from major customers. They can simply stipulate in their contracts that their service providers should achieve savings and efficiency benefits via quasi-forced collaboration. 

If one thinks in regulatory terms, for example, train route charges could be levied for empty runs. Empty runs can be determined via sensors on the rails and transmitted via IT. In general, I advocate raising tolls by 100 percent in the case of empty runs. If empty runs take up 20 percent or more, which is currently the case in some areas, then this is unacceptable. 

NIEMANN We have a sustainability organization that is anchored at Group level. It implements the sustainability strategy developed for the DB Group as a whole by drawing up a target path, clustering measures, monitoring implementation and progress, and reporting to the Supervisory Board. We have specific targets for the next fiscal year, for 5 years, for 10 years, and up to climate neutrality in 2040 – which is only 17 years away. In our investment cycles, that's not a lot of time. We have always taken a very long-term strategic approach to our business. At the same time, our immediate measures are diverse and effective. In addition to sourcing sustainable energy – DB Energie is one of the largest wind power consumers in Germany – this also includes, for example, shutting down the top two floors of our Mainz headquarters in the winter of 2022 and office-sharing by the Board of Management team to save energy. Save, share and reuse is not only the motto for our train formation facilities and maintenance, but for the entire Group. The sustainability transformation is like a dialog between the Group as a whole and the rail freight sector. Ongoing checks are being carried out to determine how the balance can be further improved, for example by replacing heating systems in buildings with geothermal energy.

NIEMANN We implement all standards applicable to us as binding reporting standards and include all dimensions. These comprise the EU Taxonomy, the CSRD, and the UN Sustainable Development Goals (SDGs). So in addition to climate protection, noise abatement and biodiversity, for example, also play an important role; in addition to ecological criteria, we work with priority on social concerns and governance issues. But it must be said: The variety of standards is diffuse, there should be harmonization. One meta standard would be optimal, unfortunately it does not exist (yet). 

NIEMANN In principle, I believe that the general climate protection law in Germany is the right way to go. With regard to rail freight, I already mentioned a possible increase in the cost of empty runs. We would certainly not turn a deaf ear to requirements for the use of sustainable fuels in Germany. For aviation, which is globally responsible for a large share of transport emissions, the use of Sustainable Aviation Fuels should become mandatory as soon as this is practicable. For the transport sector, I see three indispensable policy measures: the introduction of a speed limit on highways, a CO2-based toll that also includes smaller commercial vehicles up to 3.5 tons, and the expansion of the charging infrastructure for the successful electrification of mobility. Toll revenues should be invested in sustainable modes of transport, especially rail, in order to clear the investment backlog here. A "strong rail," which is also the name of our transformation program, can make a significant contribution to achieving the climate targets.