Royal Dutch Shell (NYSE: RDS.A) and Deloitte have released a joint report outlining a 10-year road map to decarbonize road freight using 22 strategic solutions.
The report, “Decarbonising Road Freight: Getting into Gear,” addresses economic, technical, regulatory and organizational factors as well as barriers to road freight decarbonization based on region.
A total of 158 CEOs, executives, logistic experts, sustainability experts, strategists and policy and regulation specialists representing 123 organizations across Europe, Asia and North America were interviewed for the report, released Thursday.
Barriers to decarbonization
Insufficient regulatory incentives are a current barrier to road freight decarbonization, the report stated. It also listed lack of infrastructure for emission reduction strategies such as charging stations as a barrier. The third main hurdle decarbonization faces is limited demand from shippers for low- and zero-emission trucks. Around 70% of interviewees believe a lack of market and customer demand to reduce emissions is an obstacle, the report said.
According to the report, the U.S. road freight market is focused on attaining the lowest cost per mile, so investments in more expensive technologies such as zero-emission trucks and fuels are slow.
The 22 solutions were broken down into four different categories: make impact now, create a snowball effect, build conditions for success and scale.
“Leaders throughout the road freight sector are clearly making this a priority and there are many reasons to be optimistic about the progress that can be made. It is important to collaborate and start making [an] impact now,” Tarek Helmi, partner at Deloitte Netherlands, said in the release.
Make impact now
This category of solutions centers around what players in road freight can do to reduce emissions now. The report said the U.S. should prioritize transitioning small and medium-size trucks to electric first. Another solution is strategically using transition technologies such as liquid natural gas (LNG) and bioLNG while expanding the LNG supply.
Operational and design efficiencies could reduce companies’ emissions by 30% if companies adopted existing technologies and paid more attention to truck operations, a technology company in the report said.
Create a snowball effect
This category includes solutions designed to move past the chicken-and-egg dilemma and increase production and demand for zero-emission heavy-duty trucks. The report said that joint truck-purchasing commitments and technology partnerships could reduce risk and unit price for fleet owners while increasing demand certainty.
Another solution is using partnerships to create clusters and corridors with the infrastructure and fuel supply needed for zero-emission trucks.
Build conditions for success
This category encompasses the largest number of solutions and focuses on incentives, shared information, regulatory pathways and zero-emission truck adoption. One proposed solution was expanding fleet emission requirements and production incentives for original equipment manufacturers. According to the report, the U.S. should start by developing regulatory pathways and expanding policies for energy providers.
“We have to change anyway to continue driving in California, so we could just roll it out nationwide,” one shipper said in the report. Another shipper said that federal regulations could smooth out the complicated operations that state-based regulations often cause.
Scaled solutions recognize the many benefits of mass production for OEMs and fleets alike. The four solutions here focus on increasing the scale of zero-emission fuel and truck production, infrastructure, maintenance capabilities and connecting technology.
The report mentioned that there will be many new or intensifying national emission requirements coming into play between 2027 and 2030.
The 10-year road map was split into three main sections:
- 2021-2023 includes solutions from the make impact now, create snowball effect and build conditions for success categories.
- 2023-2037 includes solutions from the create snowball effect and build conditions for success categories.
- 2028 and beyond includes solutions from the scale category.
This road map showed a focus on different solutions and strategies at various stages over the next 10 years according to priorities and what is most feasible.
Shell released its own report, “Decarbonising Road Freight: Shell’s Route Ahead,” alongside the other report, sharing the company’s views on emission reduction and goals for the future. The Shell report said it wants to achieve net-zero emissions by 2050 by reducing the carbon emission intensity of the products it sells and selling more low- and zero-emission products such as hydrogen, biofuels and renewable electricity.
“We believe that once produced at scale, hydrogen will likely be the more cost-effective and viable pathway to net zero emissions for heavy duty and long-route medium duty vehicles, and electric mobility will do the same for light duty and short-route medium duty vehicles,” Carlos Maurer, executive vice president of sectors and decarbonisation at Shell, said in a statement.
The release said that Shell’s budgets and operating plans do not currently coincide with the net-zero emissions ambition in its report, but the company aims to rectify that in the future.