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Transport

Sectoral overview
Not on track
Robert Ruggiero 3ci1ysp1e7w Unsplash

About this report

With the world emerging from Covid-19 restrictions, rebounding transport activity led to an 8% jump in CO2 emissions from transport in 2021 over the previous year. Transport emissions grew at an annual average rate of nearly 1.7% from 1990 to 2021, faster than any other end-use sector. To get on track with the Net Zero Emissions by 2050 Scenario, CO2 emissions from the sector must fall by about 3% per year to 2030. Strong regulations and fiscal incentives, as well as considerable investment in infrastructure enabling zero-emission and low-carbon vehicle operations will be needed to achieve these emissions reductions. 

CO2 emissions

In 2021 global CO2 emissions from the transport sector rebounded, growing by 8% to nearly 7.7 Gt CO2, up from 7.1 Gt CO2 in 2020, as pandemic restrictions were lifted and passenger and goods movements began to pick up following their unprecedented decline in 2020.

Even with anticipated growth in transport demand, following the Net Zero Scenario requires transport sector emissions to fall by about 20% to less than 6 Gt by 2030. Achieving this drop would depend on the rapid electrification of road vehicles, operational and technical energy efficiency measures, the commercialisation and scale-up of low-carbon fuels, especially in the maritime and aviation sub-sectors, and policies to encourage modal shift to lower carbon-intensive travel options.

Global CO2 emissions from transport by sub-sector in the Net Zero Scenario, 2000-2030

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Energy

Motorised transport remains dependent on oil, and more generally, on internal combustion engines that run on liquids or natural gas. Decades of policy support at the national and regional levels have successfully increased the share of biofuels consumed by such vehicles from less than half a percent in 1990 to nearly 4% in 2021, although the greenhouse gas emission implications on a well-to-wheels basis of these vary considerably, depending on the feedstock and conversion technologies.

As with other end-use technologies, the electrification of road vehicles is the most promising pathway to increasing conversion efficiencies and reducing greenhouse gas emissions. Life cycle efficiency and emission reductions compound as the share of renewables in power generation continues to grow.

Energy consumption in transport by fuel in the Net Zero Scenario, 2000-2030

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Activity

- Direct reductions in mobility resulting from lockdowns.

- Disruption to global supply chains and trade flows.

- The perceived need to find alternatives to public transport during periods of contagion, the resulting impacts of reduced ridership on the economics of public transport, and responses by public transport authorities to make their services more convenient, robust and resilient.

  • As such, the pace and scale of rebounding energy and emissions from transport will be determined by society’s successes and failures in preventing and coping with Covid-19 transmission.
Innovation

Continued research and innovation are required in battery technology, from the development of advanced cathode and anode materials through to development of scalable manufacturing processes for next-generation batteries, to improving and scaling both end-of-life battery management and recycling. Innovation continues to make progress in improving energy density, reducing cost and improving safety. Priority should be given to reducing the intensity of critical metals in batteries, such as nickel and lithium, where supply challenges already exist. 

Efficient technologies are being developed that can reduce the fuel requirements of ships and aircraft. Options for ships include wind propulsion and assistance, for which many designs can be retrofitted onto existing ships. In aircraft, entirely new airframe and engine designs, such as blended wing-body aircraft or ultra-high-bypass ratio jet engines, can reduce fuel burn by more than 20%. Innovations enabling ships and planes to run on alternative fuels will also play a role in reducing emissions. Promising demonstrations have included ships capable of running on hydrogen, ammonia and methanol, while hybrid electric aircraft and aircraft running on hydrogen – including via direct combustion, via onboard fuel cells, or a hybrid of the two – are at various stages of conceptual design and prototyping.

Policy

More than half of the world’s population lives in cities. With urbanisation on the rise, cities should take advantage of various transport strategies now to induce modal shift and travel reduction to get in step with the Net Zero Scenario.

The resurgence in active modes of transport has provided governments a policy window to improve and expand infrastructure (e.g. bicycle lanes and car-free zones), and make road reallocation permanent.

Transit-oriented development that integrates high-density living with urban rail should be promoted to achieve high passenger throughput on urban rail networks. Bus networks as well as walking, cycling and other last-mile solutions should be integrated.

Cities can also employ measures to stem the uptake of larger, less fuel-efficient vehicles, including allocating a greater share of parking spaces to smaller cars, and/or basing parking fees on vehicle size. 

Rapid and continuing progress in the electrification of road transport has been one of the bright spots of the clean energy transition. Policy support has been instrumental to the progress made thus far. In 2021 electric cars made up more than 8.5% of global car sales, up from almost none only a little over a decade ago (for data on the evolution of the sales and stock of electric vehicles and their charging points, see the Global EV Data Explorer). Momentum has only been building, and a recent milestone is the European Union’s agreement on a regulation stipulating that all cars sold from 2035 onwards must emit zero tailpipe emissions.

Electric trucks have so far been substantially deployed only in China, thanks to strong government support. In 2021, however, several other countries announced support for heavy truck electrification. Electric trucks accounted for just 0.3% of global truck sales in 2021, a sales share that reaches around 30% in the Net Zero Scenario by 2030. Rapid deployment will be needed to keep pace with government announcements, and further efforts will be needed to get on track with the Net Zero Scenario.

Policies

Policy
Country
Year
Status
Jurisdiction
Investment

Worldwide consumer and government spending on electric cars continued to increase in 2021. Consumer spending doubled over 2020 to reach nearly USD 250 billion. Government spending also doubled to nearly USD 30 billion. The resulting government share of total spending on electric cars remained at 10%, down from about 20% five years before.

As the electric car market matures, reliance on direct subsidies must decrease and eventually disappear. Budget-neutral feebate programmes – which tax inefficient internal combustion engine vehicles to finance subsidies for low-emission vehicle or EV purchases – can be a useful transition policy tool.

Levels of fuel taxation that reflect the societal and environmental impacts of driving internal combustion engine vehicles, together with stringent vehicle efficiency or CO2 standards, have helped leading markets achieve rapid adoption of electric vehicles and should be implemented by countries seeking to hasten the transition to electromobility.

International collaboration

Internationally aligned standards, regulations and targets will be critical in particular to reducing CO2 emissions from international aviation and shipping, as these sectors are outside the scope of all countries’ UNFCCC pledges. As such, agreements on stringent and binding regulations will need to be agreed by the UN agencies that co‑ordinate such actions for these sectors: the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO). An outline of the targets and initiatives of these and other organisations for aviation and international shipping are provided in these two sectoral topic sites.

Road sector initiatives, both for light- and heavy-duty vehicles, either focus on both efficiency and promoting zero-emission vehicles, or exclusively on electrification (which tacitly includes fuel cell electric options, in many cases). Initiatives focusing on zero-emission vehicles and/or electric vehicles include:

  • The ZEV Transition Council, led by the UK COP26 presidency and supported by the International Council for Clean Transportation, under whose auspices various signatories have set pledges under the International ZEV Alliance.
  • The Electric Vehicle Initiative, under the Clean Energy Ministerial, with 16 member countries and the International Energy Agency as the secretariat.
  • EV 100, led by ClimateWorks, which has launched a Drive Electric Campaign, under which over 100 companies have committed to 100% electrification of road transport by 2030.

Other initiatives focusing on more sustainable road transport include the ZEV Community, C40’s Green and Healthy Streets campaign, and many others. The major initiatives and pledges to promote and deploy zero-emission heavy-duty vehicles include CALSTART’s Global Commercial Drive to Zero Campaign and the ACEA-PIK Joint Statement on the transition to zero-emission road freight transport.

In addition, the five members of the Global Fuel Economy Initiative focus their activities both on vehicle efficiency and promoting zero-emission vehicles.

Recommendations for the public and private sectors

Aligning the transport sector with the Net Zero Scenario will require a co-ordinated policy approach that facilitates decarbonisation across all transport modes and expands supporting infrastructure. Measures at various levels of jurisdiction – national, subnational, within cities and in multi-country regional blocs – must support progress in:

  • Defining clear R&D priorities for all transport technologies.
  • Improving the efficiency of all transport modes.
  • Stimulating the uptake of zero-emission vehicles.
  • Increasing the availability and use of sustainable low-carbon fuels across the entire sector.
  • Managing travel demand, distances travelled and car dependency; sustaining active modes of travel; and supporting the recovery of public transport.

In countries where high fuel taxes are levied, light-duty vehicle fuel consumption (measured in litres of fuel consumed per vehicle-kilometre) is among the lowest in the world. Other fiscal measures, including elevated taxation of large, heavy vehicles and/or lower taxation of small, lightweight vehicles can accelerate fuel economy improvements.

At the subnational level, measures such as congestion charges, parking fees, road pricing and tolls can encourage a shift towards rail, public and active transport modes by reducing the appeal of private vehicle use.

By coordinating their policies and decision-making, governments can more rapidly get on track with the Net Zero Scenario in the transport sector. These areas are a priority:

  • Phase out internal combustion engine vehicles, or set sales targets for zero-emission vehicles. Targets provide a clear signal to all market and industry players. By doing so, they drive investment across the new electric vehicle ecosystem – from the supply chain for batteries, to automotive-grade steel and aluminium, to components makers, to OEMs, and even to grid planners and charging infrastructure installers and operators. Further, announcements build momentum in a self-sustaining “virtuous cycle”.
  • Provide practical and financial assistance for zero-emission vehicles. Technical assistance, including best practice sharing, can ensure that proven policies are able to diffuse effectively across countries where electric vehicle adoption has been limited to date. Technical and financial assistance is especially pressing to mobilise investment in grids and charging infrastructure.
  • Introduce harmonised standards for battery supply. These are needed to ensure to ensure the sustainability and social responsibility of battery constituent minerals, components and supply chains. They should minimise battery life cycle emissions and the environmental impacts associated with their production, and enable reuse and recycling of their components. Such standards are a prerequisite for regulations mandating extended producer responsibility.

Reducing CO2 emissions from aviation and shipping calls for a focus on research, development and deployment of low-carbon fuel supply chains. Policies such as those proposed by the European Union – namely ReFuelEU Aviation and FuelEU Maritime – set the right example by proposing ambitious targets based at least in part on the performance metric that matters: the emissions incurred by producing, delivering and using the fuel.

Policy instruments will be central to incentivising low-carbon sustainable aviation fuel – and to other measures that can catalyse emission reductions in aviation. A recognition of this fact underpins ICAO’s soliciting analysis (including from the International Energy Agency) to inform the eventual long-term global aspirational goal of decarbonising international aviation. This will inform future discussion on how in-sector emission reductions can be realised, updating policies and targets for sustainable aviation fuel, technical and operational efficiency, and introducing other measures to decarbonise aviation.

In shipping, operational carbon intensity standards must be tightened immediately to facilitate decarbonisation and enhance the competitiveness of zero- and low-carbon fuels. Low-carbon fuel standards and blending mandates, as well as offtake agreements to purchase biogenically derived or synthetic (power-to-liquid) alternatives to fossil-derived fuels, will play an important role in steering investment to enable long-term decarbonisation.

Acknowledgements
  • Sonia Yeh, Chalmers University of Technology, Reviewer

Analysis