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Investor Presentaiton

50 51 Decarbonising our transport - a material shift in our scope 1 and 3 emissions Global transport activity is expected to more than double by 20501, yet emissions in this sector need to decrease at least 3% annually to align with net zero by 2050. Transport is Australia's third largest emissions source, and government projections forecast an emissions increase of approximately 5-10% in this sector by 2030.2 The challenges and opportunities of a large, complex transport fleet Woolworths Group's transport network is one of the largest business supply chains in Australia and New Zealand, with approximately 1.6 billion cartons moved annually through Primary Connect, and 19% growth in online delivery volumes in the past year. Our directly managed fleet - scope 1 transport emissions - comprises some 3,500 assets, from light vehicles to semi-trailers. As with the rest of our value chain (described below), scope 3 emissions represent the larger part of our transport footprint, which is outside of Woolworths Group's direct control. Tackling transport decarbonisation will therefore require significant effort due to the size and complexity of our own fleets and those of our logistics partners. We work with existing partners to drive efficiency, and explore new industry solutions (e.g. hydrogen). Our transport fleet Delivering food to our customers every day is made possible through international freight movements via air and sea, interstate connections via rail and road, and movements between DCs and stores. These emissions vary between direct scope 1 and indirect scope 3 emissions. Our transport decarbonisation strategic priorities Transport currently makes up less than 5% of the Group's scope 1 and 2 emissions which is the equivalent of approximately 100,000 tonnes of carbon dioxide. However, our internal modelling shows that following our transition to renewable electricity by 2025, if no action is taken, transport emissions will represent approximately 40% of our scope 1 and 2 emissions by 2030. In light of this, we launched Woolworths Group's transport decarbonisation strategy in F23. This is anchored in our commitment that by 2030, we aim to convert our Australian and New Zealand home delivery fleet to zero-emissions vehicles. This goal, alongside changes to zero emissions technology in our heavy vehicle fleet, will reduce our scope 1 transport emissions by approximately 60% compared to a 2023 baseline. It has three pillars: 1. transitioning to a zero-emissions fleet and delivering cleaner, quieter neighbourhoods 2. leading low-carbon practices through efficient operations, such as offering customers the choice of Green Delivery windows that minimise grocery delivery emissions 3. developing zero emissions transport infrastructure (e.g. EV chargers) across our network. Annual Report 2023 Woolworths Group 1 highlights Performance 2 International freight International movements to Australia and New Zealand Inbound delivery Inbound transport from suppliers to distribution centres Distribution centre operations Product storage and yard operations ooo PRIMARY CONNECT Store delivery Transport from DCs to stores and CFCs Transition readiness assessment for decarbonisation (F23) With the limited current availability of zero-emissions vehicles for a fleet of our size and operational complexity, we have gained valuable insights through trialling and testing a small number of low-carbon vehicles. In June 2023 Woolworths Supermarkets added 27 electric vehicles to its home delivery fleet. The new electric vehicles will start delivering groceries to customers in Sydney and will operate out of the Mascot and Caringbah customer fulfilment centres, which are dedicated to picking and packing online supermarket orders. Over 1,000 electric vehicles will be added to the existing fleet over the next seven years as part of this commitment with the aim of reducing overall transport emissions by around 60% by 2030. Across international shipping and national logistics, we are exploring where we can support trials of lower emissions fuels. These have the same challenges as our own fleets, requiring a combination of improved fuel, new propulsion technology, and supporting infrastructure. Shipping lines run by others, importing internationally- sourced products Scope 3-50,000t Carrier transport partners supplying Woolworths Group ecosystem of companies Scope 3 included in category 1 (see page 49) DC yard operations by Woolworths Group. These are support vehicles that stay on site Scope 1-1,000t Refrigerated trailers owned by Woolworths Group, trucks owned by carrier transport partners. Includes delivery into BIG W Scope 3-300,000t B2B delivery Wholesale delivery including PFD Last mile delivery Online delivery from a store or CFC to customer Customers and team End customer pick up and team transport B2B including third party logistics, PFD-owned delivery fleet Scope 1-30,000t Scope 3 to be estimated Commence transition Home delivery Transition now Monitor and engage International freight Test and trial DC operations Trailers Light vehicles PFD vehicles Trolley collection Store delivery Home delivery fleet owned/leased by Woolworths Group Woolworths Group team and trade vehicles, trolley collection, vehicles Scope 1-45,000t Scope 1-5,000t; Scope 3 included in Category 9 (see page 49) High Technology Maturity (vehicle availability) Key: Scope 1 emissions Scope 3 emissions Size of circle = size of emissions 1 OECD International Transport Forum. 2 Commonwealth of Australia (Climate Change Authority) 2022. First Annual Progress Report, November 2022. High review Low Transition Complexity Low Business 3 Report Directors' 4 Financial Report LO Other information
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