Trucking sector at a crossroads

The European trucking sector is at a crossroads and must make the choice between emissions climbing 10% over the next decade or taking a pathway towards lower CO2 emissions, stronger economic growth for Europe and better energy security.

A pathway towards zero carbon road freight would cut oil imports by 1bn barrels of oil equivalent by 2030, would strengthen GDP and would create around 120,000 net additional jobs across the economy.

These are some of the conclusions of a new report – “Trucking into a Greener Future” – released today by a consortium of stakeholders in the energy sector, trucking sector, and civil society, convened by the European Climate Foundation (1).

Carried out by Cambridge Econometrics, this report is the output of a constructive and transparent exchange of views on the main technical, social, environmental and economic impacts of reducing in the carbon content of fuel for heavy duty trucking in Europe. It takes into account fuel efficiency technologies that can be fitted onto trucks.

The EU’s transition towards clean mobility is already happening but it also needs to include heavy duty trucking (which accounts for 22% of the EU road transport emissions, while making up less than 5% of the vehicles on the road).

The European Commission estimated that CO2 emissions from heavy-duty vehicles would grow by 10% by 2030 and by 14% by 2040 compared to 2015 unless fuel efficiency standards are implemented after 2021.

It is one of the sub-sectors of the transport industry with the fastest growing CO2 emissions and fuel use. As such, it has a key contribution to make to decarbonising the European economy if Europe wants to fulfil its commitments under the Paris agreement.

However, the transition towards clean road freight has some challenges to overcome before these benefits can be fully realised. As the EU institutions are currently debating a proposal for the first-ever fuel economy standards for new trucks, national and European policymakers should start supporting forward-looking policies to help de-risk investments by hauliers. This would support a successful transition to zero emission technologies.

1 – Volvo, Tesla, Siemens, Geodis, DB Schenker, Michelin, Smart Freight Centre and the European Federation for Transport & Environment.

The information and conclusions in this report represent the contributions of the different stakeholders but should not be treated as binding on the companies and organisations involved.

The summary and technical reports are available here.

Key findings:

• Energy dependency: Europe could cut its spending on oil imports by around 11bn barrels of oil equivalent cumulatively by 2050:
  At present, the European Union imports 89% of its crude oil, the vast majority of which is used for transport fuel. By 2030, using more efficient diesel trucks, combined with the gradual integration of new electric and hydrogen vehicles and infrastructure, would lead to a cumulative reduction in imported oil and petroleum products of 1bn barrels of oil equivalent. The zero emission heavy vehicle scenarios in this study can save much higher quantities of oil: around 11bn barrels of oil equivalent cumulatively by 2050. In comparison, the energy consumption of petroleum products across the EU28 was 1.98bn barrels of oil equivalent in 2015 (according to Eurostat data).
  Replacing imported oil with domestically- produced energy will improve Europe’s energy trade balance, also limiting exposure to the price volatility of crude oil.
• The EU economy will be strengthened:
  Improving the efficiency of diesel engines will lead to a small increase in GDP, which levels off as technologies reach the limits of their potential and as oil import reductions stabilise. Only the transition to zero emissions vehicles (ZEV)’ technologies will lead to a consistent increase in GDP over the period studied. By 2050, GDP is around €52bn – €58bn higher in all ZEV scenarios than in the reference case.
• More European jobs: By 2030, switching to low carbon trucks would create over 120,000 net jobs in Europe:
  Analysis shows revenues will be reduced in the oil and gas sectors, but these will have low employment intensity, so job losses will be relatively small and they will be spread over several decades. In the automotive sector, due to the greater complexity of more fuel-efficient diesel vehicles within the fleet mix, there will be more jobs until 2030. At the same time, the deployment of infrastructure will lead to more jobs in the electrical equipment, construction sectors and in services.
• The transition will help tackling climate change and air pollution:
  Expected improvements in the efficiency of diesel engines would bring about some reductions in the next 5-10 years, amounting to a 30% fall in CO2 per kilometre driven by the late 2020s. Beyond 2030, only electric or fuel cell vehicles will significantly reduce emissions further. The reduction will come from the expected changes in the way energy is produced and the increased importance of renewable and carbon-free energy sources.
• The overall cost of road freight services will be decreased:
  The gradual introduction of fuel efficiency technologies and electric and hydrogen-fuelled propulsion systems will increase the upfront capital costs for hauliers, this will quickly be offset via lower spending on diesel, reducing the overall cost of road freight services. Even for advanced systems such as Battery Electric Vehicles (BEVs) and Fuel-Cell Electric Vehicles (FCEVs), the Total Cost of Ownership (TCO) can be very competitive compared to diesel vehicles over 5 years.
• There are many challenges to be overcome before these benefits can be realised:
  The analysis brings to light a need for spending on new energy infrastructure – a cumulative sum of between €80bn and €140bn by 2050, depending on the pathway followed. There will also be a change in the skills needed for manufacturing ZEV trucks and the energy needed to power them. This highlights the need to invest in training or re-training in the fuels and automotive sectors.

Quotes:

Pete Harrison, Transport Programme Director, European Climate Foundation:
“Zero-emissions technologies are evolving fast, and as this study shows, could become extremely cost-competitive within a few years. Businesses and politicians alike will need to decide whether they are investing their political and financial capital in the diesel legacy, or whether they will be part of this new global technology race.”

Erik Wirsing, Vice President Global Innovation at DB Schenker:
“Transport is the only sector in which Europe’s CO2 emissions are now higher than in 1990, and is becoming a significant burden as Europe strives to meet its climate obligations to the Paris Agreement. Policy is increasingly focused on transport emissions and cities are implementing bans on fossil fuel vehicles while increasingly conscious consumers are demanding low-carbon services, making diesel truck delivery a burning platform. The logistics business needs to reinvent its value chain to cut local and global emissions and take advantage of new business models presented by an electric fleet and smart charging networks.”

Dr. Anders Berger, Director Public Affairs Volvo Group:
”Electrification of trucks in Europe will be paramount for reaching the Paris agreement and it is reassuring to find that this change will not only bring about great environmental benefits but also gains in GDP and jobs. Policy makers must however address the barriers of infrastructure roll-out, standards and financial risks to make it happen sooner rather than later.”

Lucien Mathieu, Transport & Emobility Analyst with NGO Transport & Environment:
”This study shows that the future of trucking is electric. Battery electric trucks are by far the cheapest solution for truck users. The infrastructure costs over the next 30 years are no higher than what the EU spends on transport infrastructure in one single year. The bottom line is clear: CO2 targets for trucks currently discussed is the opportunity to kick start zero-emission trucking by introducing a mandatory zero-emission trucks sales target. Delaying electrification by just focusing on incremental efficiency gains will only make the shift more onerous and laborious.”

Jon Stenning, Associate Director, Cambridge Econometrics:
“This analysis demonstrates that the shift to low-carbon freight transportation has benefits for the European economy, alongside the clear environmental benefits of the transition. Reducing oil imports and increasing demand for domestically produced fuels will create European jobs. However, it is clear that the transition requires support, to ensure that suitable infrastructure is developed, common standards are developed, and the challenges posed to hauliers are overcome.”

Valerie Bouillon-Delporte, Hydrogen Strategic Leader, Michelin and President of Hydrogen Europe:
“This report demonstrates that decarbonizing road transport is key in achieving the two-degree scenario. Decarbonizing the trucks segment is particularly important as they consume a large share of total energy. As an active player and a true insider within sustainable mobility, Michelin intends to continue to act like one. Within Michelin we truly believe that among solutions for low carbon mobility, we need game changers and that batteries and fuel cells technologies are essential in this respect. Our efforts in research and development for the tyres of the future and our investment in fuel cells, demonstrate this commitment.”

Bas Eickhout, Rapporteur of trucks and CO2 regulation, Dutch Member of the European Parliament:
“Time and time again, history shows that it is regulation that drives innovation. This report shows that ambitious legislation is not only good for climate and air quality but needed for European economy and jobs. The shift to a zero and low emission transport system can bring European industry back at the forefront of innovation.”

Sophie Punte, Executive Director, Smart Freight Centre:
“It is critical that leading companies inform themselves on the different scenarios for low-carbon trucks and the associated economic and environmental implications. Given the significance of road freight in the global logistics supply chain, a successful strategy to decarbonize freight depends on the choices made now.”

Marie-Christine Lombard, CEO of GEODIS:
“A complicated universe, the world of transport and logistics is an ecosystem which needs to address complex challenges in terms of sustainability. Ranking among the industry leaders, GEODIS takes its responsibility very seriously and is fully committed to contributing to the decarbonization of its industry. As such, we have announced our commitment to a 30% reduction of our carbon footprint by 2030. We are proud to participate in the European Climate Foundation’s study which highlights the full benefits the European economy could reap by accelerating the switch towards greener trucking.”

Roland Edel, Chief Technology Officer, Siemens Mobility:
“This scenario study constitutes a thorough and valuable contribution to our understanding of how zero emission trucking solutions (vehicles and infrastructure) can be profitable. Complemented with additional aspects, such as how to best manage grid integration or the role of automated vehicle technologies, this study is a good basis for Europe to find the best path towards greening road freight.”