Decarbonising road freight: Getting into gear

The drive to decarbonise

The 2015 Paris Agreement set an ambition to limit global warming to well below 2°C and pursue efforts to limit it to 1.5°C. In response to that ambition, many governments and business leaders have started to set targets and make commitments to reduce carbon emissions. Pressure is also increasing from investors, consumers and employees who are beginning to demand greater action be taken. While progress is being made, recent estimates suggest we are not on track to meet the Paris targets, and more must be done.

The challenge is particularly difficult in harder-to-abate sectors, which account for 31% of global CO2 emissions. These sectors will be more difficult to decarbonise given structural factors like high energy dependency, relatively long asset lifespans, and complexity of electrification.

Road freight: Where are we today?

Road freight is fundamental to the global economy as the most flexible mode of transport, and the primary mechanism to bring goods to our stores and homes. It currently accounts for around 9% of global CO2 emissions, the majority of which comes from medium and heavy freight trucks, the focus of this report.

In order to achieve the goals of the Paris Agreement, the sector will need to realise an emission intensity reduction of over 80% in less than 30 years. More pressingly, the sector’s emission intensity should decline by around 30% before 2030. On its current trajectory, the Paris targets will not be met. This is a challenge, but also an opportunity for first movers to redefine the energy mix, claim market share, and introduce new products and business models.

Report findings

Through interviews with over 150 executives and experts across 22 countries in the global road freight sector, we have identified manageable components to address this challenge. Highlights from the research include:

• The sector is facing several barriers to decarbonisation, especially insufficient regulatory incentives, lacking infrastructure and limited demand from shippers.
• Road freight decarbonisation is close to an inflection point due to increasing regulatory and market pressure, and will evolve faster than many expect.
• To converge on a viable low- and zero-emission technology, the sector needs to adopt a duty cycle perspective.
• Through collaboration around a catalogue of 22 solutions, the sector will be able to reduce emissions now and accelerate a shift to low- and zero-emission trucks.
• The sector has defined a decarbonization roadmap, which allows it to start deploying low-and zero-emission trucks at scale by the late 2020s.
• Achieving significant emissions reduction requires a concerted global effort, with leading regions and companies sharing knowledge and supporting others to leapfrog ahead.

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Connected for a new energy future

Energy is the pulse of our day-to-day life and how we create and use it is evolving rapidly. At Deloitte, we understand the opportunities the Future of Energy brings and the importance of connecting ecosystem players, innovators regulators and thought leaders to create a new energy world that is sustainable and abundant. In collaboration with Shell and working closely with many leaders of the road freight industry, Deloitte explores the promise of decarbonising the industry. We truly believe that as ecosystem players connect and adopt the right mind-set, the positive impact we make can be accelerated.

This report was produced in collaboration with Shell.