Rip Up the Golden Ticket Theory

Hosted by Jakob Muus, Director of Transporeon's Sustainability Tribe and joined by David Cebon, Professor of Mechanical Engineering at the University of Cambridge, Pieter Leonard, Chair of Efficient and Low Emission Assets and Energy at ALICE, and Thomas Fabian, Director Commercial Vehicles at the European Automobile Manufactures’ Association (ACEA), this special edition masterclass answered questions like: What can we expect from the electrification of fleets and when can we expect them? What else needs to be considered to reach net zero? How can we reduce CO2 emissions based on the knowledge derived from CO2 accounting and alternative fuel sources? 

Takeaway 1: The Golden Ticket theory is a dud

The so-called ‘Golden Ticket’ theory claims that the transport industry can sit back, do nothing and relax in the pursuit of emissions reduction, because as every vehicle will soon be electric anyway, the problem will thus soon be solved.

The Masterclass experts were united: wrong.

Pieter Leonard, of Colruyt Group (a Belgium-based €10-billion p.a. retailer with over 700 stores and 250,000 km of transport journeys every day) and European logistics trade body ALICE, pointed out that electric vehicles on their own simply cannot solve the problem for two important reasons.

First, the costs are simply too prohibitive and require huge efficiency savings alongside the introduction of electric vehicles. Second, there is simply not the time available to us if we are to meet the 1.5° Paris Accord requirements on schedule.

No current graph – and all three panellists showed versions from different perspectives to demonstrate this – however optimistic, has the required target being hit without a major sea change in our vision and our execution. Yes, the vehicles are being tested and manufactured, but the fuel/energy question has not been fully answered, and the required infrastructure is neither in place nor, at current projections, likely to be. 

Takeaway 2: Don’t focus on the shiny objects

Pieter Leonard expanded on this theme, pointing out that even if we electrify every traffic flow on the road today, we would still have to tackle the issue of systems inefficiencies, which currently make the transition unaffordable for logistics companies, retailers and shippers – indeed, the whole sector. 

Alongside the transition to electric fleets, efficiency strategies must play a central role. In essence, that means ‘Avoid and Shift’ rather than buying shiny new objects. Use other modes where practical – maybe inland waterways might be appropriate in some relevant territories, for instance – share facilities and assets, avoid peaks, optimize loading to make processes more affordable. Colruyt has made gradual changes to its logistics flows, with the overall aim of cutting the total number of movements. 

That applies to incoming flows, too. Colruyt is applying its experience in the field of ‘avoid and shift’ to help suppliers and partners to make this transition affordable.

“Make your existing transport flows as efficient as possible before you prioritize electrification,” he recommends. 

Takeaway 3: TCO will be the game-changer

Thomas Fabian explained why the drive to Net Zero via electrification is simply not going to happen naturally. While we are seeing slow but steady improvements in vehicle fuel efficiency of roughly 1% p.a., the reduction is cancelled out by huge increases in transport demand, which is up by 25% over the past 20 years. 

Total cost of ownership (TCO) is therefore going to be the game-changer. As soon as it becomes more attractive to operate more cost-effectively with a non-emitting vehicle, any business still operating an emission-unfriendly vehicle is going to lose money. This is a scenario the industry needs to create.

To decarbonize effectively, three factors need to be in place:

1. The vehicles have to be available, and clearly the industry is already working hard on that. 
2. Fuel, energy and infrastructure also have an essential role to play, because without the ability to charge and recharge or refuel at will, no transport operator will be able to invest in a vehicle, no matter how strong the TCO on that vehicle. 
3. TCO: zero-emission vehicles have to become the best option and the preferred choice of transport operators. Again, this won’t happen by itself.; iIt needs an ambitious carbon pricing framework, which can consist of different policy elements, but which needs to push operators away from conventionally fuelled and towards zero-emission vehicles. 

Decarbonisation will happen in earnest once these factors are in place. 

Takeaway 4: Vehicles will not be the bottleneck

We need to be fossil-free by 2040, but there is a corridor of uncertainty around delivery date and our ability to meet it. The speed of transition will depend on the enabling factors of infrastructure and TCO parity. 

Robust carbon pricing is going to be key, while the charging and refuelling infrastructure for HDVs requires a very different set of criteria to that needed for passenger cars. Locations, space requirements and minimum power output levels are all essential considerations. 

The numbers are sobering. Current HDV targets require at least 230,000 battery-electric vehicles (BEV) on the road by 2030, with 180,000 long-haul capable, requiring Megawatt Charging System (MCS) capability. 

By 2030, 40,000-50,000 truck suitable, publicly accessible chargers will be needed. Alternative Fuel Infrastructure Regulation (AFIR) targets therefore reveal a significant infrastructure gap in this area until at least 2030. 

In the event that Net Zero targets require an even higher BEV/FCEV share, that of course means an even higher infrastructure demand. 

In short, it’s about a lot more than ‘just’ CO2 standards: vehicles, cost parity, fuel/energy, and infrastructure need to be up to speed.

Takeaway 5: Hydrogen – yes, no, maybe...

For Pieter Leonard and Thomas Fabian, hydrogen combustion and Fuel Cell technology (FCEV) have a role to play as the industry looks for alternative solutions to fossil fuels. Yes, the technology is expensive, but they can see where it might plug some holes as grid capacity is stretched, particularly given the speed with which the industry needs to act. 

Not so, says David Cebon. For him, hydrogen is not only ruinously expensive, it also fails as a low-emissions solution because it requires high carbon emissions in the manufacturing process. For Professor Cebon, we need to look at charging infrastructure first and foremost. 

Takeaway 6: It’s about the infrastructure, not the vehicles

There are two ways to improve efficiencies in the road freight industry – either via vehicle or via road freight operations. For David Cebon, the latter is where the real wins – and therefore the future for long-haul road freight – will emerge. 

While there are technologies for reducing consumption, with many easy to adopt, the problem is that the resulting efficiencies are low. They include driver training, improved transmissions, vehicle aerodynamics, better tyres, tyre pressures; smoother roads. With CNG/LNG facing infrastructure challenges, biogas availability limited, hydrogen a challenge (for the reasons above), the only serious wide-use energy on the table for long-haul is electrification. 

We are already seeing the rapid electrification of vehicular delivery transport in urban areas, so we know the technology can work. The challenge is to build the technologies and supply chains for the much higher capacity electric vehicles needed for long-haul. 

With data-based evidence from thousands of long-haul HDV journeys in the UK, the Centre for Sustainable Road Freight conceived an Electric Roads System (ERS) for main trunk routes, with high-capacity fast chargers situated in remoter areas unlikely to receive heavy traffic. On the main trunk routes, HDVs would be charged by the electric system within the road itself (concepts currently in testing include both overhead pantograph-wire systems and induction systems by which the charging system is embedded in the road surface). 

Without such a charging system, HDVs would require enormous battery sizes, far bigger than anything currently contemplated by OEMs. However, with the appropriate road charging system in place, Professor Cebon’s team established that battery sizes can be reduced dramatically to levels much more in line with those currently in production and being proposed. Battery size is no longer a hurdle to both efficiency and lower costs in these circumstances.

Projected TCO figures showed a strong advantage for an ERS model over both fossil-fuel and electric (without ERS) futures. Indeed, one where instead of subsidising to make TCO affordable, governments might have the scope for taxation and revenue-raising opportunities.