New sustainability-related regulations are being introduced every year, and it’s not always clear which ones apply to you or when they come into force. Even if you’re not directly required to report, your customers likely are, and they’ll expect you to provide accurate data for their disclosures.
That’s why we wrote this article breaking down the main sustainability requirements for LSPs and carriers, what they mean for your business, and how early compliance can help you gain a competitive edge.
What are the main regulatory requirements that apply to transport and logistics companies?
We’ll go through the regulatory requirements in more detail later on, but if you don’t have time to read the full article, here’s a quick summary of each requirement and the impact it has on LSPs and carriers:
- Corporate Sustainability Reporting Directive (CSRD): requires companies to report detailed, standardized information on their environmental and social impact.
- Impact on LSPs and carriers: Whether you already meet the CSRD criteria or have clients that do, you’ll need to be prepared to collect and transparently share or report on sustainability-related data under either the CSRD or the EU’s voluntary reporting standard, VSME.
- EU Taxonomy: a classification system that defines which economic activities can be considered as environmentally sustainable investments.
- Impact on LSPs and carriers: Determines which investments can be classified as sustainable, which affects access to green financing, grants, or other funding.
- Corporate Sustainability Due Diligence Directive (CSDDD): requires large companies to identify and mitigate human rights and environmental risks across their entire value chains.
- Impact on LSPs and carriers: Regardless of whether you’re a large company, you may have customers to whom you’ll need to provide material on how you identify and address these risks across your value chain.
- EU Emissions Trading System (ETS & ETS2): the carbon market where companies must buy enough emission allowances to cover the carbon emissions they emit. ETS applies to power generation and heavy industry, but ETS2 will expand its scope to transport and buildings in 2027.
- Impact on LSPs and carriers: Even if you don’t directly participate in the ETS, you’ll be affected by rising fuel costs so starting to track and reduce your emissions now will help you stay competitive in the next few years.
- Mobility Package (I, II, III): sets the rules for driver working conditions, cabotage, and cross-border transport across the EU.
- Impact on LSPs and carriers: directly impacts LSPs and carriers operating across borders, introducing new rules on driver rest times, cabotage limits, and truck returns that encourage more sustainable and efficient logistics.
Complying with these requirements is not just about ticking a box, it’s actually an opportunity to improve your success rate in tenders, enhance your sustainability credentials, save costs, and make your first reporting year less resource-intensive.
Top 5 regulatory requirements for the transport and logistics sector
We’ll now walk through each requirement in more detail and give you tips on how to prepare for compliance.
1. Corporate Sustainability Reporting Directive (CSRD)
Let’s start with the regulation that has received the most attention in recent times. The CSRD (Corporate Sustainability Reporting Directive) was first introduced in 2021 to hold companies accountable for their sustainability efforts, or lack thereof, by requiring them to report on how their business impacts the environment, and which climate and ESG risks may affect their business.
The CSRD replaces the older (NFRD) Non-Financial Reporting Directive, and brings significantly more companies under its scope. The implementation period is staggered based on company size, but over the next few years, it is estimated that the CSRD will impact around 50,000 companies across the EU.
However, in early 2025 the EU proposed a weakening of the CSRD requirements as part of the so-called ‘Simplification Omnibus package’ to avoid placing an excessive admin burden on smaller companies.
Basically, the EU wants to keep the core objective of the CSRD, but to ensure that it is doable for all companies in its scope. This includes the adoption of a voluntary standard for SMEs (VSME) that aims to help small and mid-sized companies not in the scope of CSRD to provide sustainability data to their larger clients and supply chain partners.
While final guidance on the future requirements of the CSRD hasn’t been made as of yet, it's worth understanding what it may entail and how it could impact your company, either directly or indirectly through requirements from your clients, supply chain partners, or investors.
Our advice for complying with the CSRD
Even if CSRD doesn’t directly apply to your company just yet, it’s more than likely that you’ll be required to provide transparent, accurate sustainability data in the future. That’s why we recommend all LSPs and carriers get started with collecting data that will be required by the CSRD, or recommended under the VSME if you have less than 500 employees.
Why? Because collecting this data is not just about complying with a directive, it can actually help you reduce your environmental impact, save money, and become known as one of the more sustainable companies in your sector.
And if you're already bound by CSRD reporting regulations (or will be soon), then we advise you to get familiar with the European Sustainability Reporting Standards (ESRS). These standards cover a wide range of topics, but for logistics companies, some of the most relevant will likely include:
- Greenhouse gas emissions (Scope 1, 2, and 3)
- Energy use and efficiency
- Pollution and waste
- Working conditions and human rights across your supply chain
You’ll also need to conduct a double materiality assessment, which means reporting both:
- How your company affects people and the planet
- How ESG factors (like climate risks) could impact your company’s performance
So don’t wait until you're officially required to report or provide sustainability data. The earlier you start, the more confident you'll be when it's time to publish. And it’s a whole lot easier if you use tools like BigMile’s carbon accounting software to help accurately collect, analyze, and report on your emissions data.
2. EU Taxonomy
The EU Taxonomy is a classification system for whether an activity is sustainable by setting out clear, science-based criteria to determine which investments can be considered environmentally sustainable. It aims to put an end to greenwashing and to direct more investments into activities that are truly sustainable. It sits alongside the CSRD but does not require any separate disclosures or reporting.
While not specific to the transport and logistics sector, it impacts whether LSPs and carriers can claim their investments–such as purchasing new fleet vehicles and installing charging points–are sustainable. And this has a knock-on impact on tax credits, grants, or other funding programs they can qualify for. Plus, sustainable investments are a lot easier to finance via loans or debt financing.
So what qualifies as a sustainable investment? Well, it must contribute to at least one of the following 6 objectives without negatively impacting any of the other objectives or human rights (i.e. it “Does No Significant Harm”):
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
Once an investment passes this first test of supporting at least one of these objectives, it can then be categorized as either ‘eligible’, ‘enabling’, or ‘transitioning’, depending on how it contributes to the objective.
You can easily see what activities fall under the EU Taxonomy by checking the EU Taxonomy Compass, but examples of sustainable investments for LSPs or carriers include:
- Purchasing electric trucks to replace diesel trucks that have reached the end of their useful asset life
- Installing electric vehicle charging stations at your facilities
- Using lower-emission fuels like HVO as an interim solution
- Implementing data-driven solutions for GHG emissions reductions (just like BigMile carbon accounting software!).
Our advice for complying with the EU Taxonomy
There is no mandatory disclosure associated with the EU Taxonomy for companies that don’t yet fall under the CSRD. However, by evaluating your potential investments under the EU taxonomy and choosing to pursue sustainable investments, you can access more favorable financing and funding and protect your business against claims of greenwashing.
If CSRD applies to you, then you’ll need to include to what extent your activities are covered by the EU Taxonomy in your annual report, and ensure you comply with the criteria set in the Taxonomy delegated acts. Find out more about reporting and the EU Taxonomy on the EU Taxonomy Navigator.
3. Corporate Sustainability Due Diligence Directive (CSDDD)
Often called the “EU supply chain law, the Corporate Sustainability Due Diligence Directive (CSDDD) entered into force in mid-2024 to make companies accountable for human rights and environmental impacts throughout their supply chains.
In short, CSDDD shifts the responsibility from just “doing no harm” in your operations to making sure your entire value chain also meets minimum sustainability and ethical standards. This includes your contractors, subcontractors, and third-party suppliers.
If you’re a large logistics service provider (LSP), international carrier, or a supplier to big brands, you may fall under the CSDDD — or be required to comply indirectly because your clients do.
Currently, it only applies to approximately 7,000 large companies that meet the following criteria:
- EU limited liability companies and partnerships that have:
- 1,000+ employees
- > €450 million net revenue globally
- Non-EU companies that have
- > €450 million net revenue in the EU
Like the CSRD, the reporting under the CSDDD will be simplified under the ‘Simplification Omnibus Package’ and the VSME will protect small and mid-sized companies (< 1000 employees) against the so-called trickling down of requirements.
However, the CSDDD will still require companies to identify and address potential adverse human rights and environmental impacts of activities throughout their value chain, and put a transition plan in place for climate mitigation. The first reporting will likely be in 2029.
Our advice for complying with the CSDDD
Only the larger LSPs and carriers will be required to report under CSDDD, but others may also be indirectly affected if their clients fall under the CSDDD criteria. While the VSME helps limit the requirements for SMEs, it’s better to start getting prepared now to avoid a last-minute scramble for information in a few years when the first reporting window opens.
Here are some steps you can take to get started:
- Map your supply chain and identify high-risk areas
- Evaluate your current performance in these areas using tools that help collect, consolidate, and analyze data.
- Set up a centralized tracker to gather information that you can easily share with clients (tools like BigMile’s carbon accounting software make this quicker, more transparent, and more accurate).
4. EU Emissions Trading System (ETS & ETS2)
ETS2 (from 2027) will apply to road transport and buildings, directly impacting fuel suppliers. Crucial for carbon pricing strategy.
Launched in 2005, the EU Emissions Trading System (ETS) is the world’s first carbon market. It works on a "cap and trade" principle whereby companies must buy enough emission allowances to cover the carbon emissions they emit through their activities (one allowance = right to emit 1 tonne of CO2 equivalent). Allowances are sold in auctions and may be traded.
The cap on the number of allowances available is reduced year-on-year, which means fewer allowances are available in the auctions. Under the system, companies must monitor and report their emissions annually and surrender enough allowances to fully account for their annual emissions. If these requirements are not met, heavy fines are imposed.
Traditionally, the ETS applied to sectors like power generation and heavy industry. But that changed when it was expanded to Maritime transport in 2024, and will change again when ETS2 comes into force in 2027 for road transport and buildings too.
Like some of the other regulatory requirements on this list, the ETS and ETS2 aren’t specific to LSPs and carriers, but they will have an impact on fuel costs and thus should not be overlooked.
Our advice for preparing for ETS2
Even if your company won’t be buying emission allowances directly under ETS2, you will more than likely feel the effects. Fuel suppliers will pass on the costs of allowances to customers, meaning diesel and other fossil fuels will become more expensive over time.
So what can you do? Start tracking your fuel consumption and emissions now so that you can understand how much of each fuel you’re using and the emissions you're emitting.
Then, you can start taking action to reduce your CO2 emissions by exploring lower emission transport options, optimizing your routes etc. And of course, carbon accounting software can do the heavy lifting of data collection, analysis, and scenario planning.
5. Mobility Package (I, II, III)
EU initiatives focused on fair competition and sustainability in road transport — includes rules on rest, posting of drivers, and cabotage.
Last but not least, the Mobility Package is a set of EU road transport reforms introduced in three waves (I, II, and III) from 2020 to create a fairer, safer, and more sustainable road transport sector across the EU.
On the surface, this package may seem focused on drivers’ working conditions and cabotage, but these rules can also have a big impact on LSPs and carriers’ sustainability. For example, rules that limit the number of cross-border journeys ensure that LSPs who opt for more sustainable options aren’t disadvantaged against low-cost LSPs from countries with less sustainable transport.
The measures under the Mobility Package also encourage investment in digital solutions that help track and optimize transport routes for efficiency, protecting the driver, and minimizing fuel use which helps reduce emissions.
Our advice for complying with the Mobility Package
If you operate road vehicles as part of your LSP or carrier business, then you need to be familiar with the rules under the Mobility Package. IRU (a permanent Delegation to the EU) has created an easy-to-navigate overview of the main elements of the Mobility Package, so this is the perfect place to start.
And if anything is unclear, the EU Directorate-General for Mobility and Transport’s website addresses several questions that national authorities had sought clarification on.
Benefits of early compliance with sustainability legislation
While it can be tempting to postpone taking any action until the reporting deadlines get closer or the regulations apply directly to your company, if you do this you’ll miss out an opportunity increase your success rate in tenders, improve your sustainability credentials, make cost savings, and you’ll have a stressful and resource-intensive first reporting year.
Not convinced? Here are the main benefits of opting to prepare for these regulatory requirements well in advance of having to make any public disclosures.
1. Gain a competitive edge in tenders
More and more tenders now include sustainability metrics in their scoring criteria, especially if you’re bidding for contracts with public sector clients or large multinationals. In fact, corporate sustainability goals and commitments were top drivers of 71% of procurement programs in 2024. This shows that proactively investing time and effort in increasing the sustainability of your activities pays off.
Getting certified by programs like the CDP or the CO₂ Performance Ladder can help give you an advantage when bidding for contracts, but simply monitoring and making efforts to reduce your emissions also helps you score better on sustainability.
Solutions like BigMile’s carbon accounting software make measuring your emissions easy and hassle-free, and help you identify quick wins to reduce your emissions and transparently share your progress with potential or existing customers.
2. Reduce carbon emissions and costs
The regulatory requirements we covered are aimed at improving the sustainability and competitiveness of companies in Europe, which includes reducing emissions. And the good news is, cutting emissions often delivers cost savings such as:
- Reducing empty runs and partial truckloads by optimizing routes
- Switching to lower-cost, more efficient fuels or electric vehicles
- Lower energy costs for warehouses, distribution centers, and offices
In today’s world, where the pressure to reduce emissions is only going to increase, getting ahead of the game by starting to reduce your emissions already will certainly help keep costs under control. Better for the planet and your bottom line.
3. Avoid a drain on resources and uncertainty in your first reporting year
The first year of mandatory reporting under any regulation or directive is typically going to be the hardest. Many companies underestimate the time, resources, and expertise needed to comply with requirements like those under CSRD or the EU Taxonomy. And don’t forget, pulling together this information on behalf of your customers can also be a huge effort.
By preparing to comply with requirements before they apply to your company, you can avoid this stress, admin burden, and risk of inaccurate data. But how can you prepare ahead of time? Here are some ways to get started:
- Map out which requirements will apply to your company, and when (this includes requirements that your customers will ask you to provide data for)
- Join industry associations like evofenedex that can help you understand how companies in your sector are preparing for these new requirements
- Implement a solution to automatically collect, analyze, and report on your data
- Educate your employees and customers on why you’re investing in becoming more sustainable
- Test your reporting before it’s under regulatory scrutiny
How carbon accounting software helps you comply with upcoming regulations
If you’re an LSP or carrier looking for a solution to help you get prepared for reporting and reducing your emissions, then look no further than BigMile. Our carbon accounting software can help you easily track, calculate, and report emissions while ensuring full alignment with leading industry standards like the GLEC Framework, ISO 14064, and ISO 14083.
With BigMile, you can:
- Automatically collect and analyze emissions data
- Get data-driven insights on how to reduce your emissions
- Generate reports that meet EU reporting requirements
- Transparently provide emissions data to your customers
In short, we not only help you to make your emissions reporting more accurate and hassle-free, but we also help you reduce your emissions and gain a competitive edge. Want to learn more? Book a call with one of your experts.
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