Northern Dimension Institute Briefing Note | October 2021
Dmitry Vasilenko, Saint Petersburg State University of Economics, email@example.com
Vasily Zinin, National Gas Vehicle Association, firstname.lastname@example.org
Natalia Sarakhanova, Saint Petersburg State University of Economics, email@example.com
This Briefing Note addresses drivers, obstacles and measures for decarbonization of road freight transport that is a timely issue both globally and in the Northern Dimension (ND) area. It also draws attention to the vocational machinery segment that has until now largely omitted as a source of CO2 emissions of transport. The authors conclude that policy-making in the area of decarbonization of transport should address decarbonization more broadly than in terms of transition to alternative fuels. Alternative fuels are an important part of the puzzle, but much can be done also by supporting actions that target to lower consumption of traditional fuels.
DECARBONIZATION OF ROAD FREIGHT TRANSPORT: A GLOBAL CHALLENGE
Decarbonization of transport is a key question that national governments need to address in order to meet their international commitments to decrease greenhouse gas (GHG) emissions. In 2018, the total amount of emissions caused by the transport sector accounted for 8bn tons of CO2 equivalent (CO2-eq). Meeting the goal of keeping global warming to below 20С would require reducing these emissions to 3bn tons of CO2-eq per year. Current forecasts, however, suggest that the annual amount of emissions is likely to vary from 5 to 12bn tons of CO2-eq. This means that even the most optimistic scenario does not meet the requirements of the below 20С trajectory. (IEA, 2017)
Although the share of freight vehicles in the total amount of emissions is relatively low, in absolute terms they account for 1.5 bn tons of CO2-eq. The share of road vehicles in the global freight turnover comprises 18% (Fig. 1) and it forms 29% of emissions caused by the transport sector (ITF, 2019). This represents 6% of the global CO2 emissions (IEA, 2019).
The demand for international freight traffic is expected to triple by 2050 in contrast to 2015 (ITF, 2019). Therefore, transport emissions growth may constitute approximately 60%, with highly emissive freight vehicles being the main sector of growth (IEA, 2020).
ROAD FREIGHT VEHICLE EMISSIONS INCREASE IN THE ND AREA
The ND area has a highly developed transport infrastructure, including a network of maritime, river and railway routes. However, ND countries have a very intense internal and transit road traffic. The number of registered road freight vehicles in the ND area is 16 million, consisting of 11 million light commercial vehicles and 5 million medium goods and long-haul vehicles (ACEA, 2021). Road vehicles are the most used transport mode in the internal logistics in most ND countries (Fig. 2).
Russia is an exception, with 94% of its freight turnover being facilitated by railway transport, pipelines, maritime transport. This is due to the structure of the Russian economy, significant haul distance and the considerable volumes of heavy hauls.
The average growth of cumulative freight turnover in the ND area between 1990 and 2019 formed 13% (Fig. 3). The growth trend was heavily influenced by the economic crisis in Russia between 1991 and 1998, and to a lesser extent by the global financial crisis in 2008. (Eurostat, 2019)
The largest contributors in road freight traffic are Germany, Poland, and Russia. Despite the general recapture of freight turnover in Russia, it has not yet reached the level of 1990. Incremental growth of 20% was witnessed in Estonia and Finland, which is much lower than in Denmark (38%), Sweden (46%), Germany (84%) and Iceland (86%). Road transportation in Latvia and Norway grew 1.5 times, while Lithuania and Poland experienced the largest growth of sevenfold and tenfold respectively. (Eurostat, 2019)
In addition to the growth in road freight traffic, the increase in emissions in most ND countries is caused by the use of carbon-intense oil types of fuel. Diesel is the most used type of fuel for both light commercial, medium goods and long-haul vehicles (Table 1).
VOCATIONAL MACHINERY SEGMENT AS AN OVERLOOKED SOURCE OF EMISSIONS
Besides road freight vehicles, decarbonization efforts should address the vocational machinery segment which is causing emissions due to its large fuel consumption. Vocational machinery includes cleaning equipment, special services vehicles as well as mining, port, agricultural and construction machinery.
Although the logistic routes of such machinery are rather limited, their operations imply a steady workload, mostly a low engine speeds. This causes a rather high level of exhaust emissions. Moreover, vocational machinery is often used either within the city limits or in the areas sensitive to the environmental profile such as agricultural areas.
However, there is neither comprehensive research data on the cumulative amount of emissions caused by vocational machinery, nor focused regulatory measures to reduce its emissions. The lack of research data may be explained by the difficulties in defining the segment due to its heterogenous nature. To develop such definition, the primary function of the machinery and the requirements of the freight can be used as criteria. Hence, vocational machinery would be machinery that performs primarily a production function in addition to the transport one, and is used to transport freights with specific delivery requirements.
A more rigorous definition of the vocational machinery segment would help in making sense of the specific nature of this segment and the respective ways in which its emissions could be reduced.
DECARBONIZATION OF ROAD FREIGHT AND VOCATIONAL TRANSPORT: NOT A SIMPLE ISSUE
Although the need for decarbonizing road freight transport is well-recognized, there are factors that deter decarbonization. The lack of common technology prevents from reaching a universal technological solution. Owners of freight vehicles are fragmented, in other words, the freight vehicles industry is represented by small and medium-sized companies which are independent from the governmental orders and less influenced by the public opinion. Moreover, individually each of them is not a considerable emitter of greenhouse gases. Lifetime of the vehicles is long, amounting in average to 10.4 years for a light commercial vehicle and two years longer for medium goods and long-haul vehicles (ACEA, 2021). Finally, transition to alternative fuels requires significant investments in the low-carbon filling infrastructure.
These factors imply that tight regulatory measures aimed to more ecological transport, including carbon taxation and different limitations, are more likely to lead to growing logistic expenditures rather than motivate the road freight transport sector’s transition to more environmentally friendly types of fuels.
In the vocational machinery segment, the nature of the operations with its large fuel consumption entails that operators already have economic stimulus to optimize their operational processes by, for example, elimination of downtime while the engine is on or integration of efficient driving. In competitive areas such as those of mining, construction, port and warehouse machinery use, optimization most likely takes place regardless of decarbonization goals and bases on economic considerations. Therefore, these areas are limited in terms of further optimization. On the other hand, decarbonization via modernization of engine technologies and fuel systems, and the transition to alternative types of fuel would incur significant investments from vocational machinery producers and hence meet resistance.
FUTURE DIRECTIONS FOR DECARBONIZATION OF ROAD FREIGHT AND VOCATIONAL TRANSPORT
Taken the challenges associated with decarbonization, emission regulation via carbon taxation and other policy measures that aim at switching road freight transport to methane, natural or biofuel technologies are not sufficient. GHG emissions of road freight and vocational transport can be also reduced by innovative approaches that aim at decreasing fuel consumption. These include improved organization of transport and logistics systems, as well as engine and vehicle technology development. Such approaches may provide for the 50% reduction of carbon intensity (ITF, 2021) and do not require transition to alternative fuels.
Tackling the challenges associated with decarbonization of road freight and vocational transport would need action on different levels and by different actors, including vehicle and engine manufacturing, infrastructure development and logistics operation planning.
Vehicle and engine manufacturing can contribute to decarbonization by
- Developing more efficient internal combustion engines which consume less fuel
- Improving structural design of vehicles, including better aerodynamics, longer trailers, lower weight, higher carrying capacity, better tyre quality
- Modernizing vehicle fuel systems to allow transition to less emissive alternative fuels, such as CNG, LNG, biofuel, hydrogen and methane-hydrogen blends, or electricity.
Infrastructure development should address issues such as
- Optimization of logistics routes and means of transport as part of urban planning
- Development of refilling infrastructure for alternative fuels
- Improvement of road surface quality in highways to decrease vehicle fuel consumption
- Railway infrastructure development as alternative to road transport
Emissions can be decreased by more efficient logistics operations planning, including
- Increased efficiency of freight flow logistics by measures such as intelligent data flow management or the reduction of empty runs
- Developing e-trade and 3D printing of products as alternatives to cargo movements
- Use of platooning in cargo transportation and promoting responsible driving culture
- Use of autonomous mobile transport robots
To conclude, policy-making in the area of decarbonization of transport should address decarbonization more broadly than in terms of transition to alternative fuels. Alternative fuels are an important part of the puzzle, but much can be done also by supporting actions that target to lower consumption of traditional fuels.
IEA (2017) Energy Technology Perspectives 2017: Catalysing Energy Technology Transformations. International Energy Agency, Paris. https://dx.doi.org/10.1787/energy_tech-2017-en
IEA (2019). IEA Global engagement: Marking a new era of international energy co-operation.
IEA (2020) Tracking Transport https://www.iea.org/reports/tracking-transport-2020
ITF (2019) ITF Transport Outlook. https://www.oecd-ilibrary.org/transport/itf-transport-outlook-2019_transp_outlook-en-2019-en
OECD (2020) OECD statistics database. https://stats.oecd.org
Eurostat (2019) Road freight transport statistics. https://ec.europa.eu/eurostat/data/browse-statistics-by-theme
ACEA (2021) ACEA report – Vehicles in use, Europe 2021 https://www.acea.auto/publication/report-vehicles-in-use-europe-january-2021/