Overview of cold chain development in China and methods of studying its environmental impacts

Abundant cold chain resources is a sign of a high standard of living (Yuan et al 2015). Figure 2 illustrates the GDP per capita and cold warehouse capacity per person of nine countries in 2018. The trend shows that a country tends to have more cold warehouse resources if its GDP per capita is higher. The average cold warehouse capacity in developed countries is significantly higher than that in developing countries, which indicates that the level of economic development has a strong correlation with the standard of cold chain development. The rapid economic growth in China in the past decades has brought about increased urbanization and rising incomes that drive cold chain development. As a result, the cold warehouse capacity in China increased from 54 million m³ in 2010 to 105 million m³ in 2018 (Salin 2010, 2018).

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The cold chain development is coupled with the changes of food production and consumption, supply chain, and food quality demand (McLoughlin et al 2012, Garnett and Wilkes 2014). In China, consumption of grains has declined and the structure of food production leans toward high-value agricultural products including fruits, vegetables, livestock products, and aquatic products (Garnett and Wilkes 2014). The high-value products account for 64.1% of total agricultural production in 2018, which is 6.3% greater than that in 2000. The increase of high-value products and the expansion of cold chain are developing reciprocally. It is found that the food supply chains in China are lengthen (Garnett and Wilkes 2014). The cold chain extends the supply chain of fresh fruits, vegetables, meats, and aquatic products, which have a relatively short shelf life. In return, horticultural crops, aquatic products, and meats contribute to 44.8%, 29.9%, and 12.6% of the total market value of the cold chain industry in China (Li 2016). Moreover, the demand for high-standard food safety and quality is another crucial driver for cold chain development. Due to the strict control of the supply chain environment, the cold chain has the natural advantage of improving food safety and quality to some degree. In summary, economic development and people's demand for safe and high-quality food products drive the cold chain market growth in China.

Regulations and industry standards are issued for the cold chain industry in China, and the purpose is to maintain the quality and safety of food products. Food safety is the primary concern of the food industry. In 2008, the melamine contaminated milk power scandals caused profound public concern about food safety (Yu and Huatuco 2016, Kang 2019). In 2015, China started to implement the amended Food Safety Law to the 2009 version, which strengthened the inspection of the food market and specified the rules from production to consumption (National People's Congress (NPC) of the People's Republic of China 2015, Zhao et al 2018). The current Food Safety Law is the amendment version in 2018 (National People's Congress (NPC) of the People's Republic of China 2018). Regarding cold chain regulations and standards, Zhao et al (Zhao et al 2018) found that there are over 200 standards about production, handling, storage, and transportation of agriculture products. However, most of those standards merely cover a certain stage of the food logistics and there are less than 20 national standards specifically for the cold chain (Yuan et al 2015, Zhao et al 2018). Moreover, most of those standards are recommended and are regarded as difficult to implement; hence they have limited effects on the cold chain industry (Zhao et al 2018). The first mandatory national standard (GB31605-2020) is passed in 2020 and will be implemented in the cold chain market in March 2021 (National Health Commission of the People's Republic of China 2020). This mandatory national standard regulates the whole cold chain process including management and records rules, temperature level, and policies of storage, distribution, and transfer between cold chain stages. With more complete regulations and standards, the growth of the cold chain industry is expected to stay in a managed fashion.

Additionally, to respond the Montreal Protocol and the Kigali Amendment to the Montreal Protocol, China took measures to reduce the production and consumption of R22 (the most popular HCFC refrigerant). In 2015, Chine reduced 10% of R22 production and consumption from the 2010 level, which is a success of the first stage R22 phase out plan (Zhang et al 2019a). In the second and third R22 phase out stage, China targets at 35% and 67.5% of reduction from the 2010 level, respectively. By 2030, China merely plans to have 2.5% of R22 production and consumption from the 2010 level for maintenance (Zhang et al 2019b). Regarding the energy efficiency of cold chain equipment, China aims to improve 20% market share of green and high-efficiency refrigeration systems by 2022, and improve 40% of that by 2030 according to (National Development and Reform Commission of People's Republic of China 2019). Particularly, the energy efficiency of refrigerators and display cases are required to improve 20% to enter the market by 2022, and additionally 15% energy efficiency enhancement is required by 2030 (National Development and Reform Commission of People's Republic of China 2019). In 2030, 20%–30% low efficient equipment will be phase out (National Development and Reform Commission of People's Republic of China 2019).

Discussing the variation of population, food production, and consumption in different provinces are helpful to understand the geographical distribution of cold chain resources in China. In China, more than 90% of the Chinese population lives in ∼45% of the country's total area, mainly in provinces surrounding Beijing, as well as central China and the southeast (National Bureau of Statistics of China 2020). The population in Western provinces such as Xinjiang, Tibet, Gansu, and Qinghai are sparsely distributed.

Regarding food production, it is worth mentioning that high-value perishable products demand more refrigeration conditions than grain, which has influences on the cold warehouse distribution in China. Figure 3 shows the food production of each province and the size of the pie indicates the production quantity. The regional differences are clearly shown in figure 3. Generally, if a province has a larger population, it tends to have a higher quantity of total food production.

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The Northern and Central provinces produce the majority of the grain of the whole country. Heilongjiang and Henan contribute to approximately 20% of total grain production in 2018. By contrast, aquatic products are mainly from coastal provinces. Shandong, Guangdong, Fujian, Zhejiang, and Jiangsu produce more than 50% of aquatic products' yield. Additionally, the production of meats and horticultural crops spreads all over the country. Tibet and Qinghai province rarely produce grains, vegetables, and fruits due to their altitude and climate. Fresh vegetables and fruits have relatively short shelf time and a daily 'farm to local market' business model is established (Gong and Liang 2006). Although agricultural products have variations in different provinces, Chinese consumers are served with sufficient and diverse food categories in the whole country. With the development of the cold chain, cross region and global fruits and vegetable supply chain are also established in China (Gong and Liang 2006). A long-distance food supply chain requires refrigeration systems to preserve the value of products; the cold chain logistics is expected to play a more important role in the food distribution networks.

On the consumption side, the purchasing habits of customers are changing gradually. Although the traditional wet market still accounts for a considerable portion in the food retail sector, larger retailers and branded supermarkets are gaining market shares gradually (United States Department of Agriculture 2018). E-commerce is also reshaping the food retail industry through food delivery services. E-commerce increases the convenience of accessing food, which is an important factor for Chinese consumers (Gale and Huang 2007, United States Department of Agriculture 2018). The growth of branded supermarkets and e-commerce also favors cold chain penetration. Compared with the traditional wet market, branded supermarkets and e-commerce normally have integrated upstream-downstream cold chain services and strict quality control making the cold chain easier to implement and necessary for perishable products distribution. Overall, the food production characteristics and the changes in the retail market creates promising conditions for the cold chain industry to grow in China.

As we discussed before, although the cold chain industry is still at the initial stage, the number of cold chain facilities are increasing dramatically with the growth of economy and high-quality food demand. As shown in table 1, the refrigerated warehouse capacity increased from 76 million m³ in 2014 to more than 100 million m³ in 2018, and the number of refrigerated vehicles reached about 180 000 in 2018 (Salin 2018, Zhao et al 2018). In 2018, the refrigerated warehouse capacity in China is only behind the US and India (Salin 2018).

Despite its rapid growth, the development of cold chain is facing several challenges. First, cold chain resources per capita are still relatively low. In 2018, the cold warehouse per person in China was 0.075 m³, while that data for India was 0.111 m³ and for the US was 0.40 m³ (Salin 2018). Those data suggest that the capacity of cold chain facilities in China still have a large room to expand. Moreover, cold chain facilities are unbalanced in different regions in China (Shou and Bao 2017). As shown in figure 4, more developed regions tend to have higher cold warehouse capacity. Central China (e.g. Henan) owns 15% of total cooling capacity, presumably because it has the most fruit and vegetable production. Coastal provinces also own more cold warehouses due to higher population and demand. Moreover, fifteen provinces in northern, eastern, and central China own 87% of refrigeration vehicles (Gao 2019). Hence, it suggests more developed regions where has dense population tend to have more cold chain resources. However, it should be noted that Shou (Shou and Bao 2017) argued that the cold chain demand in the northwest is not satisfied. Northwestern provinces have high-quality and quantity meat production, but the cold chain facilities are not sufficient in those regions. The unbalanced resources result in a cold warehouse vacancy in some regions. The vacant rate in 2019 increased from 8.2% in January to 10.6% in June. Particularly, the vacant rate in Nanjing, the provincial capital of Jiangsu, is 37% (50yc.com 2019).

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Regarding the business aspect of the cold chain in China, the cold chain market is fragmented, and the largest one hundred companies contribute to less than 10% of total market revenue (Teng and Chen 2017). As a result, the segmented market and unbalanced cold chain facilities distribution lead to cold chain scission between cold chain stages. In other words, the food delivery is not guaranteed to be covered by refrigeration facilities through the food logistics. Traditional cold chain services include renting cold warehouses, offering refrigerated ground transportation, and urban distribution. An integrated solution connecting the cold chain upstream to downstream is also developed, and third-party logistics (3PL) offers refrigeration services during the whole supply chain service. Additionally, the significant expansion of information technology fosters the advanced fresh food e-commerce service and the internet of things (IoT) model for cold chain services, which integrates the regional cold chain hierarchy and increase the operation efficiency (Yuan et al 2015, Li 2016, Wang and Yip 2018).

The environmental impacts of the cold chain can be evaluated by various frameworks and metrics. They are intrinsically similar but are distinct in the research scopes and boundaries (Li 2017, Mota-Babiloni et al 2020). The total equivalent warming impact (TEWI), lifecycle climate performance (LCCP), and lifecycle assessment (LCA) will be briefly compared, and then we will focus on the LCA framework to extend our discussion.

The TEWI framework considers direct emissions of refrigerant leakage and indirect emissions from energy consumption through the lifetime of the refrigeration equipment (Wu et al 2013, Mota-Babiloni et al 2020). It measures the GHG emissions in kg CO₂-eq. The TEWI has the narrowest research boundary among those three frameworks and it is recommended to use to compare a specific application (e.g., air conditioners, refrigerators, heat pumps) (Mota-Babiloni et al 2020). The LCCP framework extends the boundary of the TEWI and additionally includes embodied energy consumption and emissions of manufacturing refrigeration equipment and refrigerants (Wu et al 2013, International Institute of Refrigeration 2016). The LCA estimates the lifetime environmental impacts of an object from production to consumption and disposal, as well as other support manufacturing activities (Pennington et al 2004, Rebitzer et al 2004). It shares the same system boundary as the LCCP and Li (Li 2017) concluded that if only estimate the GHG emissions the LCCP and LCA should return the same results. The advantage of LCA is that it can estimate the particulate matters, abiotic depletion, photochemical oxidation, acidification, and eutrophication besides GHG emissions. Additionally, LCA is guided by the ISO 14044 standard that outlines the main processes including the definition of goals and scopes, lifecycle inventory (LCI) analysis, lifecycle impact assessment (LCIA), and the results interpretation (International Organization for Standardization 2006, Hoang et al 2016, Li 2017). In the following discussion, we will focus on the LCA framework, as it provides a broader scope.

In the LCA study, it is critical to specify the functional unit and the research scopes. The functional unit defines the services that need to be accomplished by the product or service associated with research questions (Frijia et al 2012). For instance, Heard selected 'one prepared meal' (Heard et al 2019), Wu used 'one kg of orange at the retailer' (Wu et al 2019), and Hoang measured 'one kg of consumed salmon' (Hoang et al 2016) to assess the corresponding cold chain's environmental impacts. Selecting an appropriate functional unit makes it possible to compare the environmental impacts of different products or services. Owing to specific research goals, the system boundary and functional unit of existing LCA studies vary significantly even within the cold chain context. Table 2 summarizes the research scope and functional unit of six reviewed publications and they can be divided into two categories: (i) evaluate the GHG emissions based on the lifetime of refrigeration technology (Bovea et al (Bovea et al 2007), Li (Li 2017), Wu et al (Wu et al 2013)), and (ii) evaluate the GHG emissions based on the lifetime of food products delivered by cold chain (Hoang et al (Hoang et al 2016), Wu et al (Wu et al 2019), Heard et al (Heard et al 2019)).

In the first category, researchers evaluate the lifetime emissions of refrigeration technology at a certain stage of the cold chain. Bovea et al (Bovea et al 2007) compared lifetime emissions of using HFC refrigerants and natural refrigerants (R744 and R717) in the commercial refrigeration systems. They concluded that it is environmentally feasible to substitute conventional high-GWP HFC refrigerants in the long-term. Li (Li 2017) studied the LCCP of the refrigerated transportation stage and defined the lifecycle from the installation to retirement of the refrigeration systems. Li (Li 2017) considered emissions from refrigerant leakages, energy consumption, and refrigerant manufacturing. Wu et al (Wu et al 2013) also investigated the GHG emissions of the refrigerated transportation stage and additionally included the emissions from refrigerators manufacturing. By comparing the performance between refrigerants, they found that the GHG emissions of refrigeration systems using low GWP refrigerants (e.g. CO₂) tends to be lower. However, when the ambient temperature increase, the coefficient of the performance of CO₂ systems need to be increased to achieve lower emissions (Wu et al 2013). In the second category, researchers focus on the lifecycle of food products from its production to disposal and track each cold chain stage. Hoang et al (Hoang et al 2016) conducted the LCA study for the salmon cold chain from Norway to other European countries and compared the differences between chilling and superchilling technologies. In this study, they not only presented the results of GHG emissions but also included the emissions of other chemical substances. In a similar fashion, Wu et al (Wu et al 2019) coupled the LCA study with the thermal information to investigate the orange cold chain from South African to Switzerland. They also studied the tradeoff between using cold chain technologies and preventing food spoilage. Heard et al (Heard et al 2019) conducted a comparative LCA study for meal kits and grocery store meals delivered by the cold chain. They found embodied emissions from food production contribute to a significant proportion.

There are several challenges to apply the LCA framework on evaluating the environmental impacts of the cold chain system. Firstly, it is difficult to define an appropriate functional unit and research scope to characterize the entire cold chain. Particularly, it is challenging to define the research boundary of the 'cold chain system'. It is worth reminding that the cold chain involves primary activities (refrigerated storage and transportation) and support activities (e.g., equipment manufacturing, logistics management), which carries the food product from production to consumers (figure 1). Hence, the cold chain involves multiple coupled components including food products, refrigeration facilities, and logistics services.

However, considering the two categories of LCA study analyzed in section 4.1, neither of them captured the entire lifecycle of all cold chain components. Specifically, in the first category of LCA study, although researchers investigated the lifetime of refrigerated vehicles and commercial refrigeration systems, the emissions embodied in the food products are not considered and the whole cold chain logistics is not covered (Bovea et al 2007, Wu et al 2013, Li 2017). In this category, the functional unit is normally 'kg CO₂-eq emissions of the lifetime of the given facility'. In the second category of LCA study, although researchers considered the emissions generated at each stage along the food lifetime, merely the operation emissions of the cold chain facilities are considered instead of the lifecycle of refrigerated warehouse and vehicles (Hoang et al 2016, Heard et al 2019, Wu et al 2019). 'One kg product consumed' is a common functional unit in this category. Each of those studies investigated specific circumstances and particular questions; however, it demonstrates that when targeting all aspects of the cold chain, it is challenging to find an appropriate functional unit to unify each fragment of the cold chain.

Secondly, it is challenging to evaluate the interactions between the cold chain, food, energy, and water, which is related to the system boundary definition. Many researchers consider the environmental impacts of the cold chain beyond its functional boundary (figure 1) and argue a nexus concept should be used (Heard and Miller 2016, Heard et al 2017, Zhang et al 2019b). This argument is reasonable because food products carried by the cold chain embody considerable invested energy and water from the agriculture sector. It is estimated that China losses 14.5% to 30% of the total produced food which is corresponding to 10 to 20% of total water consumption (70 to 135 billion m³) and 5 to 6% of total GHG emissions due to energy consumption in agricultural activities (Liu et al 2013, Ma et al 2015, Sun et al 2018). Regarding the tradeoff between preventing food losses and increased refrigeration emissions during the cold chain logistics are investigated. In the study of Wu et al (Wu et al 2019), they found using renewable energy to power the cold chain facilities, the cold chain emission can be reduced by 8.5%. So far, most of the discussed studies are based on the single-unit level (e.g., one kg product, one particular refrigerated warehouse). The study of Hu et al (Hu et al 2019) investigated the tradeoff between the expansion of the cold chain for meat, milk, and aquatic products and the reduced emissions from food losses at the industry level in China. However, Hu did not include the emissions associated with refrigerant leakage and transportation emissions. Hence, it is questionable to conclude that increasing the cold chain capacity would result in the total emission reduction in the cold chain. The attempt of evaluating the total GHG emission in China lead to the third challenge of the cold chain LCA study.

Existing studies did not reflect the big picture of the cold chain environmental impacts at the industry level and it is challenging to answer the question such as 'What are the overall GHG emissions from cold chain expansion in China?' It is critical to investigate such questions and have broad understandings of the environmental impacts of the cold chain, which is required when making high-level decisions of the cold chain industry. For instance, China produced more than 240 million tons of fruits and Japan produced 3 million tons of fruits in 2018, so the cold chain capacity required for China and Japan would be different (Jiang and Jiang 2015). The same GHG emissions based on single-unit leads in China would lead to more severe overall emissions than that in Japan.

Hence, the question is how to aggregate the single-unit based estimation (e.g., one kg product, one particular refrigerated warehouse) to a large geographical boundary (e.g., in China). In this paper, we propose two perspectives to potentially estimate the overall GHG emissions of cold chain in China: (i) cold chain facilities oriented perspective and (ii) food products oriented perspective. Both perspectives are extended from the two categories of existing LCA study discussed in section 4.1.

The first perspective is to conduct LCA on refrigerated warehouse and refrigerated vehicles, and aggregate up based on each type of those facilities to match the total capacity in China. According to the UN Environment, the size of refrigeration facilities have different refrigerant charge, leakage rate, and energy efficiency. Hence, the aggregation is not linear but the weight of each size category of refrigeration warehouse should be considered (United Nations Environment Programme 2018a). In contrast, the estimation of the simple top-down approach based on the total capacity of cold chain facilities in China could only return a much coarser result. The function unit of this perspective could be kg CO₂-eq/warehouse and kg CO₂-eq/vehicle. This approach considers emissions from the manufacturing and operation of refrigeration facilities at each cold chain stage. By estimating the GHG emissions of each cold chain stage, this approach could directly reveal how to reduce the GHG emissions of a particular stage. For instance, if refrigerant leakage constitutes a significant portion of total emissions, the lower GWP refrigerant will be preferred.

Eventually, this approach is a static accumulation and does not consider the nature of the supply chain process. It is worth noting that food production is not included in this perspective. It is justifiable to exclude the agriculture sector from the cold chain system because fundamental cold chain facilities are refrigerated warehouse and refrigerated vehicles. However, the downside of this perspective is that drawing the boundary in this way will not capture the environmental impacts of any reductions in food loss for which the refrigeration technology is responsible. At the same time, the focus of the analysis is on the technology itself and does not need to take into the additional complexity of agricultural systems and food loss throughout the supply chain.

The second perspective is to conduct LCA on the food products and aggregate up based on the food quantity been delivered by the cold chain in China. The functional unit of this perspective could be 'delivering singe-unit (e.g., one kg) of food product'. In the second perspective, food products play a central role and link a series of activities from the agriculture sector, cold chain logistics, to consumers. Agriculture activities consume a large quantity of water and the environmental impacts of water resources should be included in this approach (Guan et al 2019). Hence, one can study a variety of elements including agriculture, food system, refrigeration technologies, and consumers in a large ecosystem under this perspective. The tradeoff between increasing the cold chain facilities and preventing the food losses can also be studied from this aspect.

The key challenge in this approach is how to capture the food distribution network in China? GHG emissions corresponding to one kg of food products at the refrigerated warehouse and retail stage can be aggregated up to match the total food quantity. However, in the food distribution stage, GHG emissions are normally measured in kg CO₂-eq per kg food per km traveled (Rai and Tassou 2017, Heard et al 2019), and it is difficult the capture the dynamic movement characters of food products in the distribution stage. Explicitly, the distance of food products traveled is normally unknown and researchers generally assume a static travel distance. For instance, Heard assumes the travel distance from the processing factory to the distribution center to be 976 km by the common average in the study of comparing the GHG emissions of meal kits and grocery store meals (Heard et al 2019). When it comes to estimating the cold chain network in China, it is challenging to find such a common average value to represent such a complex network.

Overall, whatever perspective is selected, estimating the total GHG emissions of the cold chain in China could be divided into two connected problems. Estimating the single-unit level GHG emissions (i.e. kg CO₂-eq/warehouse or kg CO₂-eq/kg food), and aggregating up to the national level by different rules. However, the accuracy of those approaches is uncertified and future investigations are needed.