How can we scale up the use of alternative fuels in transport?
In order to reduce the transport sector’s contribution to climate change, steps must be taken rapidly to shift the sector onto low-or-no-carbon forms of propulsion. A variety of alternative fuels have been proposed to help transport achieve this move to a low carbon future, including GTL, hydrogen, biofuels and electric propulsion. But a major challenge remains how to scale up nascent alternative fuel technologies in order that they are commercially viable and achieve widespread usage. What obstacles currently exist that prevent widespread adoption of alternative fuels in UK transport? What should policy makers be doing to help encourage the take up of these fuels? And how likely is it that we can overcome the scalability challenge?
To debate this important topic, the ITC welcomed a distinguished panel of experts at its Winter Discussion Evening on 12 February 2020. The expert panel included: James Lyon, General Manager for New Fuels Development at Royal Dutch Shell; Professor David Cebon, Director of Centre for Sustainable Road Freight and Professor of Mechanical Engineering at Cambridge University; and Mike Muldoon, Head of Business Development, Alstom UK. The discussion that followed was chaired by ITC Commissioner and Director of Social Research Associates Kristine Beuret OBE.
How can we scale up the use of alternative fuels in transport? Key issues from the speakers:
- James Lyon provided an introduction to alternative fuels from a producer’s perspective. He explained that the scale of change required to meet carbon reduction targets was huge and required a range of solutions tailored to local circumstances. Shell’s latest future energy scenario had indicated that to meet the Paris carbon reduction targets all personal vehicle sales would need to be electric by 2050 and heavy transport would require a range of alternative fuel sources. Low carbon solutions under development included biofuels, synthetic fuels, electric-powered mobility, hydrogen fuel, and nature-based decarbonisation. The main challenges faced in scaling up usage of these alternatives were increased cost and reduced convenience. Two essential developments were required to acheive change. First, Government support would be necessary by providing incentives and clear policy directives to encourage long-term investment. These could include a carbon pricing mechanism, national as well as city-level financial incentives, and a drive to rescale infrastructure and energy to support alternative fuels in transport. The second crucial development would be greater industry collaboration in order to ensure solutions are brought to bear by coordinating in time and space. Not only should producers work more closely together, but the whole transport supply chain should collaborate, including fuel suppliers, manufacturers, customers and infrastructure providers. A good example was the German hydrogen mobility scheme called Hydrogen Mobility which had enabled rapid development of refuelling stations through a joint public-private venture. In addition, consumers had a crucial responsibility to understand their role in helping scale up low carbon transport.
- David Cebon explored the use of alternative power systems for heavy road vehicles. He pointed out that decarbonising road freight would be challenging, since on current trends freight was expected to account for 30% of global emissions by 2050. In urban areas, road freight could be decarbonised through the use of lightweight battery-powered vehicles, operating out of local hubs. However, for long-haul road freight on the strategic network, where energy requirements were higher, the road network should be electrified using overhead wires to power heavy goods vehicles. He predicted that the cost of converting the UK’s Strategic Road Network would be in the region of £25-£40 billion (at costs of approx. £1m/km). This fits with existing arrangements where logistics hubs are mostly located near motorways and the payback time for investing in new electric vehicles would be about 2 years. Professor Cebon noted that trials of e-highways were already ongoing in Germany and Sweden. He was sceptical about the value of hydrogen fuel cells to power road freight, as the energy efficiency of such systems is about one third of that when using overhead electric lines. This was not only wasteful, he argued, but would result in higher costs and require substantially greater investment in clean energy generation.
- Mike Muldoon offered insights on the future for hydrogen trains. He explained that the rail industry faced a major challenge to decarbonise, and needed to remove all diesel trains from use by 2040. The primary route, he observed, would be through electrification, but this would only be feasible for the mainline network, since it was not economically or physically viable to install overhead wires on all local lines. The second route, therefore, would involve replacing diesel trains on non-electrified lines with hydrogen fuel cell trains. He pointed out that batteries did not have the energy density necessary for longer-distance rail use, whereas hydrogen fuel cells offered both the necessary power and range for such services. Prototypes were now in development for the UK network, and hydrogen trains were already being used in Germany. He added that it would be important that the energy used in the production of hydrogen was low-carbon. To scale up this technology promptly, the Government needed to take an active role, allowing hydrogen trains to qualify for schemes such as RTFO status, and making investments in the necessary hydrogen production infrastructure. This would help to give confidence to rail operators to order and use hydrogen trains across the network.
Key themes raised in the discussion:
- There were calls for government to take a stronger lead in supporting alternative fuels. Several guests suggested that central government needed to provide leadership through clear regulatory guidance, financial incentives, and the use of frameworks and targets. This would help provide certainty to investors and reduce risk. Different modes would require different approaches. For rail, central government had a strong role to play in supporting the replacement of diesel trains on the network. On the roads, where there were a large number of small independent operators it would be challenging to encourage the use of new fuels, and financial incentives would probably be required. Government would need to take the lead by investing in major initiatives like an electrified strategic road network. However, some scepticism was expressed that the UK Government had the competences necessary to build consensus and take challenging investment decisions.
- We need to understand better the role of the consumer and behavioural change in the scaling up of alternative fuels in transport. It was suggested that consumers had little role to play initially in the move to alternative fuels, and should not be blamed for slow progress. People would need to be directed by policy makers, but a culture of trust also had to be developed. Some pointed out that policy makers could take steps to encourage behavioural change in order to reduce the demand for high-carbon travel options alongside technological innovation. The failure of consumers to adopt low-carbon habits and modes was predictable if they faced a substantial cost in doing so, and if the overall transport system remained largely unchanged.
- Will change happen incrementally or through major schemes? There was a division of opinion over whether the best approach to scaling up the use of alternative fuels in transport would be through incremental measures or through massive public investment in major new schemes and infrastructure. Some suggested that incrementalisation reduced the pressure on policy makers to take big decisions on infrastructure and investment. Others noted that it was futile to expect transport to change overnight, and that a staged programme of changes was more realistic. It was pointed out that any steps taken to support alternative fuels now, even if on a relatively small scale, would be valuable in combating carbon emissions. An alternative view was that the easy solutions had already been implemented, and that major decisions were now required to move to the next stage.
- We need to be more aware of the wider factors arising from a shift towards alternative fuels. Some delegates observed that wider use of alternative fuels would bring into play other policy issues which would need to be addressed. For instance, these developments could require major changes to energy generation and supply, which would impact land use as well as transport. It was also suggested that it would be important to keep regulation on issues such as safety proportionate in order that this did not hamper the adaption of low carbon transport alternatives.
- Pilot studies can be useful in showing the way forward. It was noted that the use of pilot schemes could be useful in demonstrating the feasibility of alternative fuel technologies in transport and in giving policy makers confidence to take major decisions on supportive policies. Such schemes would be cost-efficient, and could be used to trial initiatives such as electrified strategic roads.