DHL Supply Chain is set to begin operating biomethane fuelled trucks.
It has announced an investment worth €80 million into a dedicated biomethane production facility in Cork, run by Stream BioEnergy.
Biomethane is a renewable gas with the capacity to be carbon neutral.
The company said the new facility will provide fuel for up to 150 trucks, resulting in an annual carbon reduction of 15,000 tonnes - the equivalent of more than 38 million miles driven by an average petrol-powered passenger vehicle.
DHL has joined forces with grocery retailer, Tesco Ireland, and once the new facility is fully functioning, it will operate 92 locally fuelled biomethane trucks across Tesco's country-wide network.
In the meantime, to support the initial vehicle roll-out and whilst production ramps up, DHL will subsidise the biomethane from other sources.
DHL said it plans to continue to roll this out to all the other sectors in which they operate - consumer, technology, aviation, life sciences and healthcare.
It said the biomethane production site at Little Island, Cork, owned and operated by Stream BioEnergy, will process 90,000 tonnes of industry and consumer food waste per annum which could otherwise have been sent to landfill.
"The deployment of biomethane at scale requires no infrastructural upgrades to Ireland's existing gas grid and given its capacity to be carbon neutral, biomethane is a flexible, cost-effective way to decarbonise commercial road transport," the company said in a statement.
"The deployment of biomethane trucks, as well as investment in domestic biomethane energy production will play an important part in helping the company achieve its target of net-zero emissions by 2050," it added.
"We are extremely proud to be enhancing renewable energy production here in Ireland and our collaboration with Tesco marks a significant step in our shared journey towards achieving net-zero emissions," said Managing Director of DHL Supply Chain, Ireland, Ciaran Foley.
"Our customers' transport networks are a vital focus area when looking at how they can achieve their overall sustainability goals so by making alternative fuels a reality we can really prove our value as a strategic partner," he added.
Tesco Ireland’s Retail and Distribution Director Ian Logan said moving to a cleaner fuel will play an important role in its journey to net zero.
"Our current HGV transport fleet makes over 2,000 trips weekly, serving our growing network of 166 stores nationwide, so moving to a cleaner fuel in our value chain will play a vital role in achieving this," he said.
