Azerbaijan Railways releases the republic's first ever sustainability report for a major corporation

As COP29 comes closer, Azerbaijan Railways (ADY) released the first ever sustainability report by a major state-owned corporation at an event in Baku on October 23.

The company released its "Sustainable Transport for the Future” report on sustainable achievements of the company CJSC in the field of environment, social and management.

The main topic of the event was the work done to achieve the decarbonization goals of sustainable transport in Azerbaijan, especially railways, with the application of green innovations and advanced digital solutions, and the steps to be taken in this direction.

The new sustainability report is a testament to ADY's significant strides in reducing carbon emissions and electrifying railways. The report reveals a 5% reduction in energy consumption, a 9% decrease in carbon emissions, a 23% drop in water consumption, and a 16% decrease in natural gas consumption. Notably, 63% of the Azerbaijani railway network is now electrified, and approximately 47% of locomotives are powered by electricity. In response to these ambitious climate goals, the railway sector is stepping up to address the sustainability challenges faced by mass transit and freight mobility.

Speaking at the event, Deputy Minister of Digital Development and Transport Elmin Mammadov drew attention to the main points of Azerbaijan's strategic vision for international cooperation in the field of digital innovation and development of sustainable transport.

Since 2020, the Azerbaijani government has publicly voiced its intention to develop a green economy by using the potential of territories in the Karabakh region and the Nakhchivan Autonomous Republic. Specifically, the green economy is defined as low-carbon, resource-efficient, and socially inclusive. This comes within the framework of a Memorandum of Understanding on a Strategic Partnership in the Field of Energy between Azerbaijan and the EU in July 2022, which supports cooperation in energy efficiency and renewable energy sources.

In this regard, the country largely focused on transforming local transport lines into eco-friendly ones, including railway networks, thus making it more competitive. Given the government's new priorities, ADY developed and promoted connectivity, multimodal transportation, decarbonization, and carbon-negative concepts. Hence, the inaugurated ADY report indicates that a steady shift to renewable energy sources enables the transport sector to significantly reduce carbon emissions, as in the case of ADY, which emits only 1% of the country's carbon emissions.

The CEO of COP29, Elnur Soltanov, and the Chairman of the Natural Resources, Energy and Ecology Committee of the Milli Mejlis, Sadiq Gurbanov, in their speeches, highlighted the importance of transport in the fulfilment of global climate goals and decarbonization goals, the main global practices in this field, and National Priorities until 2030, as well as participants were given detailed information about the growing role of Azerbaijan in the green innovation sector.

Azerbaijan is currently focused on improving its green image on the international stage ahead of the UN sponsored Climate Crisis meeting slated to start on November 11.

The government is also investing into logistics to improve connections to the rest of the world. Baku has been promoting the Middle Corridor transport route that connects Asia to Europe.

The Middle Corridor links Central Asia to Europe and has become a viable alternative to the Northern Corridor, predominantly controlled by Russia due to its extensive passage through Russian territory, and the traditional sea route via the Indian Ocean. Known as the Trans-Caspian International Transport Route (TITR), this route connects nations including China, Kazakhstan, Azerbaijan, Georgia and Turkey.

With the world becoming increasingly fractured thanks to the current rising geopolitics between East and West, countries in the Global South are looking at several alternative land-based routes to unite the markets of East and West and Baku is positioning itself to become a major transport nexus.

In October Iran's Roads and Urban Development Minister, Farzaneh Sadegh, stressed the need for a strategic roadmap to boost annual goods transit between Iran and the Republic of Azerbaijan to 15mn tonnes. In the same month, Asian Development Bank (ADB) approved a $47mn loan to Azerbaijan today to assist in digitising the railway system and enhancing the safety, reliability and efficiency of the country's railways. And in September, ADY participated in the "Meeting with Global Partners – Trans-Caspian International Transport Route Forum" held in China, organised by China Railway Express to  strengthen cooperation with China, Uzbekistan and Turkey to promote the Middle Corridor.

Azerbaijan Railways chairman Rovshan Rustamov held a series of meetings with railway officials in September from Uzbekistan, Kyrgyzstan, Tajikistan, and China to discuss the creation of a Eurasian Transport Route Association to further deepen cooperation.

In May, the European Bank for Reconstruction and Development (EBRD) estimated that $18.5bn needs to be invested into the Middle Corridor infrastructure in Central Asia to make the route viable.

Addressing the participants at the launch of ADY’s sustainability report, Rustamov said that the first and most important aspect of railway sustainability is the reduction of emissions and energy efficiency. Rail transport accounts for just 1% of global carbon dioxide emissions and is therefore more efficient than other modes of transport.

During his speech, Rovshan Rustamov, the CEO of ADY, particularly mentioned that ADY's sustainability report was prepared in partnership with the well-known Deloitte company and is based on the reputable Global Reporting Initiative (GRI) and SASB (Sustainability Accounting Standards Board) standards. Notably, complying with international standards emboldened ADY to modernize all railway infrastructure, including full network digitalization rapidly. Since 2023, ADY has adopted a new digitalization policy for the local railway network, which received support from the Asian Development Bank with an approved $47mn loan in October 2024. The new support package will focus on modernizing key operations within ADY, including upgrading cargo operations management, asset maintenance, repair processes, and investment planning. For example, within digitalization efforts, ADY is on the brink of integrating Enterprise Resource Planning (ERP) software in early 2025, offering centralized information management for all clients.

Talking about the work done by ADY in this direction, the achieved results and future plans, Rustamov said that 1.12% of the total energy consumption in Azerbaijan is accounted for by railway transport, and the emission of gases that create a heat effect in this area is less than 0.5%.

"Our goal is to build a carbon-neutral railway transport system that is completely free from carbon emissions. In 2023, 100% of passengers and 80% of cargo were transported by electricity,” said Rustamov.

Azerbaijan Railways chairman Rovshan Rustamov vowed to reduce emissions from rail transport, which is already one of the cleanest modes of transport in the Republic. 

Then James Leder, director of transport of the Asian Development Bank, who participated in the event, spoke about the initiatives taken in the direction of decarbonization of railway systems on a global scale, and noted the benefits of its implementation in ADY.

Later, with the participation of Rustamov and Leder, a mission document on cooperation in the field of decarbonization in railways was signed between the two institutions.

Besides, ADY unveiled mid-term ambitions to become a fully carbon-neutral, inclusive, eco-friendly, and modern railway network. For example, with the new sustainable development plan, ADY sets a goal to offer greener transportation by transitioning railway operations entirely to an AC system and shifting away from diesel fuel. Such an approach will significantly reduce greenhouse gas emissions and air pollution, directly addressing two of the most pressing environmental concerns associated with the transportation sector.

A major oil and gas producer, Azerbaijan is seeking to transition away from its reliance on fossil fuels and is investing heavily in green energy technology in the hope of becoming a major source of renewable power export to Europe.