Electricity Alone Won’t Solve Transport’s Emissions Problem. So What Will?

Decarbonising the transport sector requires a systematic approach of electrifying what can be electrified and scaling up biofuels and hydrogen for what remains.

Transport has an emission challenge. The sector’s share of global emissions is set to grow from one-quarter today to one-third by mid-century as transport services grow. There is no doubt that electricity is revolutionizing road transport. DNV’s forecast is that half of all passenger vehicle sales will be electric in ten years, that is 2033, and electricity is even gaining share in subsectors previously thought to be hard-to-electrify such as heavy trucking.

But electrification alone will not solve transport’s severe, growing emissions problem. Current and emerging battery technologies simply don’t allow us to Tesla-fy a Boeing 787 or a container ship – and the present emission trajectory is far too slow to meet global 2050 net-zero ambitions.

DNV’s new Transport in Transition report points to a clear route for transport to accelerate its emissions reduction. With the relative contribution of transport to global emissions growing, the sector must act with a greater sense of urgency to decarbonize and fight dangerous levels of global warming.

Electrification is not a fait accompli

The first step on the route to decarbonization is to electrify everything that can feasibly be electrified. Electricity’s share in transport will grow from just 1% today to 4% in 2030, and will be 23% by 2050. In terms of road transport, 80% of vehicles will have an electric drivetrain by 2050. Not only is electrification the most effective route for decarbonization for many transport subsectors, it will also lead to a dramatic fall in operating costs which will increasingly offset associated capital spending. Electrification is not a fait accompli though. Even for the “easy-to-electrify” subsectors, electrification is a mammoth undertaking requiring huge up-front investments, and grid and infrastructure development to ensure enough clean electricity can be produced and distributed where and when it is needed.

Only 2% of aviation and 4% of maritime transport will be electrified by mid-century, so step two is to switch that which cannot feasibly be electrified in the near term to biofuels. These are ready-now drop-in fuels, but there is a caveat here. First-generation, crop-based biofuels have challenges from an overall carbon accounting perspective and are at odds with other sustainable development goals. Advanced, sustainable biofuels, derived from waste or algal feedstock for example, will remain relatively costly so their uptake will rely on these higher costs being absorbed into value chains. Uptake should also be incentivized by wise policy choices, such as the European Union’s recent agreement on the ReFuelEU Aviation proposal to introduce minimum sustainable aviation fuel requirements.

The third step is to prepare for the new generation of fuels that come with a growing hydrogen ecosystem. These are energy intensive to produce, and as renewable electricity should be prioritised for direct electrification first, they will only scale in maritime and aviation from the mid-2030s. By that time there should be sufficient surplus renewable energy for hydrogen production at certain locations. Scaling hydrogen will require investment and cooperation to repurpose existing infrastructure, facilitate new infrastructure, and incentivize uptake through local and regional hydrogen ecosystems such as green shipping corridors.

Collaboration is the fuel of a net-zero future

Underpinning the three steps for the decarbonization of transport is the need for collaboration on a scale not seen before in the sector. Governments must work together on multilateral regulatory frameworks to provide the stability and multicycle funding needed to decarbonize. Business must contribute with what it does best, namely innovation, speed, and efficiency. Industries must collaborate with each other, sharing their expertise and technologies, and improving them together, along with governments.

Decarbonizing transport is an immense challenge, and too much is at stake for hesitation or wishful thinking. But with collaboration, a sense of urgency, and a clear focus on the right priorities, it is possible to transition to a decarbonized transport future.

Read the full Transport in Transition report on the DNV website.