Can We Decarbonize Heavy-Duty Trucking & Get Away from Diesel?

Somewhat and not in the foreseeable future would be the answers to those questions from my perspective. Goods transport by road (heavy-duty trucking) consumes around 50% of all diesel fuel and accounts for 80% of the global net increase in diesel use since 2000. As I have recently shown (slide 43), road freight activity is expected to at least double by2050, offsetting efficiency gains and increasing road freight CO2 emissions. Estimates put road freight transport in first place for total energy consumption and emissions growth. Trucks are the fastest growing source of global oil demand,accounting for 40% of the oil demand growth by 2050 and 15% of the increase in global CO2 emissions. Trucks will even surpass passenger cars as the major oil consumer sector. Zero emissions alternatives do need to be in general use by 2050 or earlier if climate change targets are to be reached, according to the International Transport Forum (ITF).

What to do about decarbonizing this sector? It’s not an easy task, but some measures (some with lower barriers to adoption) can be implemented, says the ITF. Net zero is a big stretch, and in my view, the sector will remain largely dependent on diesel, at least through 2030. One of the biggest issues is that decarbonizing road freight needs to become a higher policy priority among governments. Right now, it’s not. The ITF held a workshop on this topic and conducted a survey with over a hundred experts, releasing the results in a recent report. Key findings follow below:  

• Measures with low barriers to adoption that have already been tested should be focused upon in the short-term, including improved aerodynamics, reduced-rolling resistance of tires, weight reduction, increased engine efficiency, hybridization and eco-driving.

• Policy should foster the adoption of alternative fuels in cities with pricing mechanisms and incentives, stricter emission standards,zero emission zones, promoting common standards for equipment, supporting recharging infrastructure or adopting alternative fuels for public institutions vehicle fleets or other large fleets.

• Encouraging fleet turn over and improving diesel fuel quality (especially reducing sulfur) in emerging economies as a first step.

• Given the current state of research and commercial deployment no zero emissions solution in widespread use is foreseeable in the short- to medium-term for long-haul heavy freight trucks. Nonetheless,these alternatives need to be in general use by 2050 or earlier if climate change targets are to be reached.

• Although scaling up solutions implies prioritizing,at this stage some flexibility should be considered. There is still some uncertainty associated with the feasibility of widespread adoption of alternative fuels, particularly for long-haul heavy trucks. Many of these technologies and processes are at early stages of development and deployment. ITF notes, “To some extent, trial and error should be allowed and encouraged.Even if not foreseeable now, breakthroughs in advanced biofuels or carbon capture and sequestration (CCS) cannot be ruled out.”

• It is highly unlikely that one single option will be able to replace ICE diesel or gasoline engines.

• Alternative fuels and fuel efficiency improvements need to be attractive for fleet owners. High initial costs and risk aversion dissuade companies from these investments even when the total ownership costs (TOCs) are lower and payback periods are short. Addressing this question involves tackling other barriers such as: lack of strict fuel and emission standards, the lack of incentives and understanding that small companies with limited resources play a very important role in this market. Zero emission technologies, particularly for the long-haul, will require substantial investments in the supply infrastructure whatever alternative is scaled up. The business models to construct and explore this infrastructure are not yet developed, but whatever the form a significant part of the funding will likely need to come from governments.

The ITF focused on biofuels, gas, hydrogen, electric batteries and electric road systems (ERS). Survey respondents rated the cost-effectiveness of these options in urban, regional and rural settings, shown in the figure below.It was clear that there is no “one-size-fits-all option”, though battery electric vehicles were favored in urban settings. ITF notes, “There is a wide consensus that current technology and expected developments will make this option ever more attractive for the vehicle sizes, ranges and operational patterns involved in urban distribution. But this same solution ranked last when it comes to long-haul operations.”

In terms of availability of these fuels, hybrid vehicles have the fastest adoption according to the survey results. More than 50% of the respondents also think electric battery vehicles will be in widespread use by 2030. The same happens for gas and biofuels, but opinions are more divided regarding these fuels. Compared to electric batteries, there are more respondents that think gas and biofuels will already be in widespread use by 2020.

The difficulty in scale up of biofuels was a major factor for some respondents, as well as high lifecycle well-to-wheel emissions. That was also an issue for gas (LNG and CNG).

Stricter fuel efficiency and emission standards coupled with tax incentives can be policy tools employed to overcome cost barriers, according to the ITF. As members know, only a few countries have set such standards currently, but I expect this will change dramatically over the next 5-10 years. Mitigating climate change and air pollution will be the primary drivers.

Notably, electric road systems (ERS) can play a role in the deep decarbonization of heavy road freight, according to the ITF. In the short-term additional trials and pilot projects are advised to further test the technology, business models and other operational aspects. This will also provide some time to assess developments in other fields and have a more informed comparative analysis before deploying ERS on a large scale, which in the most advanced cases will never happen before the mid-2020s. The figure below shows survey respondent views on the potential impacts of ERS.

Finally, in terms of future emerging trends, survey respondents rated e-commerce as a top trend, which is already changing logistics  and is likely to play an increasingly dominant role. ITF notes this can brings some opportunities to decarbonize (e.g. gains with scale economies), but if unchecked is more likely to lead to increased emissions and congestion. Policy can play a role in shaping these developments (e.g. fostering the use of collection points and zero emission vehicles for deliveries, which can include zoning restrictions for emission intensive vehicles in urban areas). It will be governments and companies such as Amazon that will lead the way, survey respondents said.

Fuel efficiency and emission standards are a key policy priority in all country groups, as the figure below shows. Particularly for the high-and middle-income where it is the number one priority, but even for low-income countries it ranks in the top three policies. Pricing mechanisms are number two on the list for the high and middle groups, this can include a carbon tax,distance-based charges or other toll systems that promote cleaner technology vehicles and greater efficiency. Total or partial bans of certain vehicles(e.g. ban diesel vehicles from making deliveries in city centers) is the third on the list of priorities for high-income countries, reflecting the drive and future policy commitments that are taking place in several cities and countries around the world (mostly in OECD countries).