Fully decarbonizing transportation is desirable, but how likely is it? That’s the question legislators, urban planners, and transportation companies alike have been asking ever since net zero targets were announced.
Tech investments, business model transformation plans, legislation, and regulations have been set in motion to create a new paradigm for green mobility. Yet, despite the initial flurry of action, CO2 emissions aren’t going down as fast as we need them to.
Even with anticipated growth in transport demand, the Net Zero Emissions by 2050 Scenario requires transport sector emissions to fall by a further 20% to 5.7 GT [gigatons] by 2030. In 2020, global CO2 emissions stood at 7.2 GT.
So how can we accelerate transformations?
From the operational and technological perspectives, we examine what stands between the present-day mobility ecosystem and the sustainable transport system of the future.
What’s slowing down the shift to CO2-neutral mobility?
For CO2-neutral transportation to become a reality, we’ll have to address blockers on three major levels: policy, markets, and technology.
On the policy level, governments worldwide have had admirable ambitions for reducing CO2 emissions. However, far fewer countries are as committed to
- Pushing for harder policies that might upset the industry lobby and the electorate in general. For example: introducing extra taxes for diesel vehicles.
- Modernizing legacy transportation systems, electrifying public transport fleets, and developing better EV charging infrastructure. These are projects with high capital expenditure and uncertain ROI.
- Accelerating investment in renewables: net-zero, low-carbon fuels; renewable hydrogen; and fuel cell technology that would power future fleets.
However, the above actions are critical for decarbonizing transportation. To achieve net zero emissions by 2050, governments and industry players must ensure that:
- No new internal combustion engine vehicles are sold past 2035
- Electric vehicles make up 20% of the vehicle stock by 2030
- Electric and fuel cell vehicles make up 30% of heavy trucks sold by 2030
Is the above a likely scenario? Ask me again in eight years. ?
Criticizing the government is easy, but what can the industry do to tilt the scales? Join forces, as green transportation will be a collaborative, cross-sectoral effort.
The race towards net zero targets will speed up in 2030 and onward. That’s when sustainable mobility technologies (long-range EVs, low-carbon fuels, hydrogen refueling, etc.) will become widely available. Once that happens, governments will press the private sector for faster action — and those companies standing at the forefront of innovation will capture the most new business.
Source: ICT — A Strategy to Decarbonize the Global Transportation Sector by 2050 Explained
Decarbonizing mobility: Defining trends for 2022–2030
We’ve got slightly less than a decade to create a new baseline for sustainable transportation.
When such substantial change happens, plenty of new opportunities emerge at different levels. Governments and private companies alike are actively assessing strategies for achieving carbon neutrality with existing and emerging technologies.
Listed below are our predictions of how the transportation market will evolve within the next eight years and where new value will be generated.
Ramped-up ground transport electrification
Decarbonization of passenger vehicles and road freight decarbonization are crucial priorities, as ground transportation remains the biggest source of CO2 emissions. The transition to electric mobility and future hybrid models is imminent.
To get on track for a net-zero global fleet by 2050, zero-emission vehicles need to represent 61% of global new passenger vehicle sales by 2030, 93% by 2035, and the last ICE vehicle of any segment needs to be sold by 2038.
Consumers are on board. Globally, 52% of those who intend to buy a car in 2022 say they will choose either an electric, plug-in hybrid, or hybrid vehicle. That’s a first!
Bloomberg forecasts that EV sales will increase from 6.6 million in 2021 to 20.6 million in 2025 — and make up 23% of new passenger vehicle sales globally in 2025.
Yet, interest in car decarbonization is uneven between regions. So far, high-income countries are driving the most demand for EVs. With government support, these countries are more likely to rapidly transition to a green mobility network, while lower-income countries will continue to battle the fumes.
Motorization and emissions from transport
Source: Weforum — Green transport and cleaner mobility are key to meeting climate goals
However, it’s still possible to prevent the green divide. Attractive fiscal measures for consumers (e.g. tax credits or rebates) paired with industry partnerships could help lower-income countries increase EV penetration.
A bigger locus of pressure is decarbonizing medium-duty and heavy-duty vehicles. That’s where the world collectively trails behind.
Road transport segment progress toward net-zero emissions
| Segment | Current share of road transport CO2 emissions | Current estimated global fleet size | Zero-emission vehicle (ZEV) fleet share in 2050 – Economic Transition Scenario | Level of policy Intervention needed to hit N\et Zero Scenario (100% ZEV share) by 2050 |
|---|---|---|---|---|
| Two and three wheeled vehicles | 5% | 1.1 billion | Two wheelers: 74% Three wheelers: 94% |
Almost on track: minor additional measures needed |
| Municipal buses | 1% | 3.8 million | 84% | Almost on track: minor additional measures needed |
| Passenger vehicles | 53% | 1.3 billion | 69% | Positive trajectory: moderate additional measures needed |
| Light commercial vehicles | 11% | 160 million | 75% | Positive trajectory: moderate additional measures needed |
| Medium + Heavy commercial vehicles | 30% | 80 million | 29% | Not on track: strong additional measures needed urgently |
Source: BloombergNEF — Net-Zero Road Transport By 2050 Still Possible, As Electric Vehicles Set To Quintuple By 2025
Long-haul heavy-duty vehicles (HDVs) will be particularly challenging to electrify, as these require longer target ranges for carrying heavier payloads.
Differences in country topology and typical road conditions will also affect the success of decarbonizing trucking.
A recent study found that 71% of Swiss road freight transport ton-kilometers can be electrified using battery electric trucks. However, due to greater reliance on long and heavy truck-trailer combinations, only 35% of Finnish road freight can be electrified unless we come up with better battery technology.
That said, new tech for zero-emissions trucks is underway. Nikola Motors has been upgrading its hydrogen fuel cell semi-trucks with “extenders” to increase its target range. Toyota is also working on long-range hydrogen fuel cell trucks with a Japanese market release date set for 2023. Tesla and Chinese manufacturer BYD are also in the game for better electric trucks.
Ultimately, electric trucks will cost less to operate according to research estimates — and growing demand will accelerate innovation in the sector.
Total cost of ownership of long-haul diesel versus battery electric trucks
Source: Transport & Environment — Analysis of long haul battery electric trucks in the EU
Charging infrastructure for heavy freight trucks
The speed and magnitude of road freight decarbonization will also depend on how soon more advanced EV charging infrastructure will be required.
Long-range and heavy-duty trucks will require fast and regular charging, yet this will increase the load on energy grids. Increasing renewable energy production will be necessary to meet this demand (which is another complex conversation for another time).
For now, government agencies and private actors will need to focus on building a new EV charging network to support:
- Overnight fleet charging
- Opportunity charging during driver rest times
- Mid-route charging (via fast chargers or with overhead lines)
- Refueling options for hydrogen-powered fuel cells and hybrid models
For the trucking industry, most of the above options are still at the proof of concept stage, though some companies are making rapid progress.
British medium-duty truck manufacturer Tevva has recently released a 7.5-ton BEV whose range can be increased by 500 kilometers with hydrogen as a backup energy source. Such a dual-energy system increases range confidence among fleet drivers without increasing charging costs or complexity.
Volvo, on the other hand, is putting more faith (and money) into hydrogen fuel cell technology. Its latest long-distance model, unveiled in June 2022, compares to diesel trucks in range (1,000 kilometers on one charge) and can be refueled in 15 minutes.
Bosch North America recently announced a $1.3 billion investment in hydrogen fuel cell and electrolyzer technology. As one of the leading OEMs, this will likely translate to further breakthroughs in the sector.
However, hydrogen is unlikely to cancel the demand for fast and slow EV charging stations — and the future net zero emissions fleets will combine BEV and hydrogen-powered models.
A rollout of both HRS [Spell Out Word Here] and battery electric vehicles (BEV) charging infrastructures will be cheaper than relying solely on one type of infrastructure or restricting specific technologies to specific road transport segments.
Wider EV charging station development, paired with new hydrogen refueling infrastructure, will be critical to encourage the adoption of EV trucks.
Sustainable energy grids integrated with transportation
To charge a European fleet of long-haul EVs, Europe will need an estimated 324 TWh of electricity, or over 10% of total EU energy generation in 2015. This estimate excludes energy consumption by passenger EVs, light-duty urban EVs, and public transportation.
Transport decarbonization will also assume wider energy sector transformation.
In the US, the National Renewable Energy Laboratory (NREL) is developing new types of fully integrated energy systems that would connect EVs, transportation infrastructure, power grids, buildings, and renewable energy sources. Tighter integration could help to better balance upcoming increases in energy demand, improve risk management, and encourage wider customer participation in grid load management and energy generation.
Separately, better demand side management (DSM) software, integrated with grids, would be required for fleet operators. DSM software could help create smarter charging plans for larger fleets and optimize charging times to reduce peak demand.
One promising element of DSM is vehicle-to-grid (V2G) technology.
V2G treats an electric vehicle as a moving battery that can perform bidirectional energy exchanges with the grid. For example, it can sell back energy to the public grid during peak demand or exchange stored energy with the home power grid for cost optimization.
V2G offers several attractive benefits:
- Relieve peak demand
- Help prevent network overloads
- Manage voltage levels and frequency
- Absorb surplus energy to prevent waste
Energy groups worldwide are now calling on governments to create favorable policies for promoting V2G adoption. SAFE and the Electrification Coalition, for example, have issued a proposal for developing a pan-American V2G roadmap and incorporating V2G make-ready capabilities into energy infrastructure planning processes.
Modal shifts in transport
Zero mobility will also assume shifts in transportation modality usage.
On the passenger side, between 20% and 50% of car trips will have to shift to public transport, cycling, or walking to achieve the necessary carbon reductions. Is this feasible?
During the pandemic, the use of personal mobility (biking, micromobility) went dramatically up — and many people are keeping their new mobility habit. Cities like Singapore and Amsterdam are also increasing the number of car-free zones, nudging citizens to use well-planned public transport networks instead. Also, free public transport policies in Europe have proven to be effective in getting more people on board.
However, to make these shifts permanent, urban planners will need to set up convenient multimodal transportation networks. A viable green transport plan has to promote balanced use of public transport, on-demand rentals, shuttle services, ride-hailing apps, and other modalities. To curb car ownership and use, passengers will need to have a solid set of mobility opportunities.
At the freight level, modal shifts are also happening. Yet the dynamic isn’t always positive. Over the past decade, demand for freight transport has been rapidly increasing in OECD countries.
External trade by sea and air, percentage change from 2008
Source: International Transport Forum — Key Transport Statistics 2022
This is problematic because trade by air and sea account for about 75% of transport demand and emissions today. Yet, creating marine and aerial fleet zero is even harder than decarbonizing ground transportation, as most technologies are still in the research phase.
Trends in shipping decarbonization
Source: DNV – Maritime Forecast to 2050
Wider adoption of alternative fuels will be critical for decarbonizing maritime transportation. Shipbuilders have already pioneered dual-fuel engines, which can be powered by methanol and fuel oil or liquified natural gas (LNG) and fuel oil. By 2030, over 50% of new vessels ordered will be dual-fuel.
Additionally, researchers are working on new zero-emission fuel types such as green LNG, green methanol, green ammonia, and green hydrogen. These will be critical for decarbonizing marine freight.
Trends in airfreight decarbonization
Source: Shell — Decarbonising Aviation: Cleared for Take-Off
Decarbonization of airfreight is an even longer-term target. The aviation industry agrees that sustainable airline fuel (SAF) is the only realistic measure that can be implemented at scale before 2050. Yet, fewer than 200,000 metric tons of SAF were produced globally in 2019 — that’s less than 0.1% of jet fuel commercial airlines consume.
We’ll likely see research accelerate in this field in the coming years, especially as jet fuel prices continue to rise. If pressed by regulators, shippers might also decide to shift some air freight to alternative transportation modes to meet decarbonization targets.
Equitable and sustainable public transportation planning
Evolving public transport systems to serve growing urban municipalities is another pressing priority.
In order for people to ditch personal vehicles, public transport must be safe, green, readily available, and well-integrated with other transportation nodes. At present, effective public transportation is primarily available to urban dwellers and is hardly present in suburban and rural areas. This (understandably) encourages personal vehicle use, which not only increases carbon emissions but also affects residents’ safety.
American rural residents travel about 33% more than urban residents, and although rural areas only make up 19% of the population, they account for around 49% of traffic fatalities.
Reaching mobility equity is a new target for global planners — and they tackle the issue from various angles.
Some municipalities partner with private mobility companies to operate on-demand shuttle routes to underserved communities. To improve transport service, the city of Monrovia, California, created a subsidized on-demand ride-hailing and bike-sharing services program together with Lyft.
In Hamburg, Germany, the authorities established strategic collaboration plans with Volkswagen. Its focus was creating a supporting ecosystem for eMobility, intelligent transport networking, and the future use of self-driving vehicles. To date, VW has supplied Hamburg with new electric buses and covered some routes with an e-shuttling MOIA service. MOIA shuttles are set to go autonomous by 2025.
On top of that, VW operates a fully electric carsharing service, WeShare, and plans to further expand its fleet. Hamburg authorities, in turn, have significantly expanded available EV charging infrastructure to over 1,000 points and now plan to test VW’s autonomous trucks at the Altenwerder Container Terminal.
To support rapidly sprawling mobility ecosystems, municipalities will need to replace legacy transport management solutions with intelligent transportation systems (ITS) — algorithm-driven, predictive systems for effectively managing transport across modalities.
By 2030, the size of the global ITS market will reach $55.6 billion, growing at a CAGR of 10.5% from 2022 to 2030. Adoption of better transport management software, in turn, would accelerate the growth of the mobility as a service (MaaS) sector. Instead of solely relying on its own fleets, public transport competitors will be sharing mobility customers with carbon-neutral, (semi-)autonomous private players, as we already see happening today.
Connected road infrastructure will also play a defining role in the emergence of sustainable transportation. To achieve a carbon footprint reduction in fleets, municipalities are installing affordable IoT sensors to capture emission levels, temperature changes, and other real-time environmental data. Then they’re leveraging these insights for modeling new transport management scenarios.
The next step is the development of intelligent infrastructure solutions such as smart traffic lights, connected CCTV cameras for accident/road traffic monitoring, smart parking systems, and more ubiquitous connectivity between road actors, physical infrastructure, and digital transport management systems.
Technology-led transport decarbonization plan for today
To arrive at the greener future, industry players must act now.
Similar to governments, transportation providers (and tech companies catering to them) need to establish a net-zero baseline to understand where they currently stand. Then evaluate different fleet management sustainability initiatives to bring them to new targets.
In this section, we describe what technologies you can prioritize today to secure a winning (and profitable) market position in 2030 and beyond.
Telematics
A telematics system allows for the collection and transmission of vehicle data including asset location, driver behavior, and engine diagnostics. By integrating this data into your fleet management software, you can learn more about fuel consumption levels, estimated emission volumes, and driving behaviors affecting both. Then you can proactively optimize your fleet’s performance.
Intellias recently helped one of our clients build a cloud platform for optimizing fleet performance with telematics data. The new platform can handle fleets of up to 100,000 vehicles and years of fleet history with new data points collected every 30 seconds. It includes real-time mapping features to analyze asset movements and provides advanced reporting functionality to get an in-depth view of vehicles’ idle times, maintenance statuses, fuel consumption, and CO2 emissions.
Telematics will also play a major role in EV fleet management. Today, you can already collect granular data on how your e-fleet performs in real-life settings (e.g. under different payloads, weather conditions, and routes) to better estimate feasible ranges across models. This data can help you plan for wider-scale deployments in the future and better estimate the costs of transitioning.
Intelligent battery management
Better EV battery analytics, diagnostics, and management solutions are required today to enable longer-range EV models in the future. To replace combustion engine cars, EVs and their batteries must perform reliably for 10 to 15 years in a variety of climates and over many charge cycles.
Data collection and advanced modeling can help to improve the longevity of batteries already in use, plus help to advance research into new battery types. TWAICE, for example, has already pioneered a predictive battery management solution based on digital twin technology. The company captures data from the vehicle’s battery management system (BMS) to assess its performance. Then it creates a battery digital twin you can use to simulate battery performance under different conditions.
TWAICE recently teamed up with Sycada — a Dutch zero-emission telematics and fleet management company. Jointly, the two can provide a comprehensive range of insights on e-fleet battery health, journey data, energy consumption, vehicle statuses, and more. Similar EV analytics solutions will be critical for the wide-scale adoption of electric fleets.
Real-time route planning
Proactively curbing your fuel usage and emissions is the shortest path to road freight decarbonization. An effective way to do so is by investing in real-time route planning features.
For diesel fleets, such software can design eco-driving modes, which reduce emission volumes by adapting route layouts and moderating driving styles and behaviors with video telematics.
New route planning approaches are also required for e-fleets, as EVs are dependent on timely recharging. Trip planners for passenger cars and large-scale e-fleet management solutions for commercial and public transport fleets are equally in demand. The availability of such software can dramatically accelerate EV adoption by providing users with range confidence and TCO data.
Our team recently helped develop an EV navigation system with multi-stop route planning. The trip planner calculates the most feasible route, considering necessary stops at charging stations. The app also provides ETAs and estimated charging times (ECTs) for convenience. The platform also verifies that there are enough fast charging stations en route to prevent no-return scenarios.
Smart traffic management
Transport decarbonization can be aided by more vehicles that can connect to smart city solutions. As connected cars go mainstream, urban managers can leverage their connectivity features to better manage traffic flows, optimize congestion levels, and minimize accident rates, thereby reducing fuel consumption at present and battery consumption in the future.
The rapid growth of the smart road market, set to surpass $110.5 billion by 2030, will further increase the granularity of traffic management controls that urban planners could use to improve urban transportation.
Source: IEEE — Smart Town Traffic Management System Using LoRa and Machine Learning Mechanism
Today, many components of future-ready intelligent traffic management systems are already becoming available. These include:
- Cloud-based traffic control systems connected to road sensors, CCTVs, and geographic information systems (GIS)
- Video traffic detection systems with edge processing capabilities
- Advanced carbon emission analytics platforms
- Connected traffic light systems for smart junction management
- Smart parking management systems
- Multimodal transport management systems integrated with MaaS players
For example, Intellias recently helped a shared mobility player integrate public buses into its carpooling platform. The company’s Global Distribution System (GDS) platform can now offer convenient rides to passengers in 22 countries. After integrating bus trips, the platform’s user base in Central and Eastern Europe and Latin America increased by 80%.
Predictive carbon calculators and reporting tools
Tools for measuring, recording, and understanding emissions data are equally important to urban planners, fleet operators, and consumers. After all, how can you offset your carbon footprint if you don’t know its size?
There’s no shortage of carbon calculators available to fleet owners. Yet, most of them are based on historical data and mathematical estimates alone rather than on real-world data. Additionally, many have a high margin of error because they only estimate your average miles per gallon rather than providing estimates by vehicle type. Also, as every fleet manager knows, fuel consumption can drastically depend on the routes traveled, weather, and road congestion.
Vehicle telematics data can provide reliable data based on actual vehicle performance. By applying data science and big data analytics, you can determine dynamic carbon emission volumes by vehicle type, route, or other dimension. Then you can model different carbon reduction scenarios by tweaking the input parameters.
When connected to a fleet management platform, such predictive carbon calculators can also help you design more carbon-efficient routes and moderate drivers’ behavior to further reduce your carbon footprint.
Intellias recently helped create a carbon analytics platform for fleet managers with advanced reporting functionality and compliance reporting tools. The platform helps fleet managers estimate their CO2 and corporate carbon footprint (CCF) on a car by car basis, aggregate accurate data on carbon emissions from fuel to efficiently calculate climate neutrality offsets, and generate comprehensive reports on progress towards sustainable transportation.
Igniting green growth
The green race is on. Companies that could gain a green advantage in the first few laps will get a better chance of winning this race. That said, current underdogs still have time to make critical business model changes to overtake the competition within the next eight to ten years.
What’s certain is that to get to the finish line, transportation companies will need reliable partners from different sectors — automotive, oil and gas, telecom, technology, and public administration. Remember: behind every Formula 1 race driver stands a supporting team of anywhere between 300 and 1,200 people. So choose your partners and unite to win.
Intellias is a technology consulting partner to some of the world’s fastest-moving transportation companies and logistics service providers. Leverage our cross-sectoral expertise in cloud computing, location-based services, big data, and AI solutions to create your path to decarbonization.
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