The Future of Transport Between Digitalization and Decarbonization

Front matter

SPRINGER BRIEFS IN ENERGY

Michel.Noussan

Viantred AaTne

Foreword

We are at the dawn of a new transport era, characterized by accelerated innovation— particularly digital—and a growing pressure to reduce our CO, emissions from all sectors of the economy, including transport. This new era is alive with exciting opportunities, as well as challenges.

Swift policy action is required all across the globe to define and revise as appropriate legislative frameworks to put the sector on a sustainability path. Such frameworks must comprise policy measures to increase the efficiency of transport systems and the share of more sustainable modes to boost the uptake of clean vehicles, vessels, and aircraft, and replace fossil fuels with sustainable alternatives. Countries have also the duty to incentivize the right consumer choices and increase investment.

Digitalization will drive the transition toward a more efficient transport system. It is important that all countries step up efforts to create a functional mobility data space. Policies must support the development of innovative, fully interoperable solutions, and incentivize their uptake. For example, countries need to deploy smart traffic management systems enabled by digitalization in order to increase and better manage the capacity of railways and inland waterways, to make best use of airspace, to reduce congestion, to introduce shared and automated mobility solutions, and to facilitate multimodal transport.

On its side, the European Commission is tackling these challenges head-on, guided by the European Green Deal, which sets the target of making Europe’s economy climate-neutral by 2050. Transport is, rightfully, at the core of the European Green Deal and must reduce its emissions by 90% by 2050. Our strategy for sustainable and smart mobility addresses all of these areas and will guide the EU as we seek to reduce the environmental footprint of transport in the coming years and guide it toward climate neutrality by 2050.

vi Foreword

This unique volume offers a comprehensive analysis of all these decarbonization and digitalization transformations that are faced by the transport sector globally, shedding light on the key factors shaping the transition toward a global sustainable transport system.

Brussels, Belgium Adina Vălean European Commissioner for Transport

Preface

Transport includes a wide range of subsectors, which are characterized by different features and trends. Passenger and freight mobility demand is fulfilled with different transport modes and solutions depending on the purpose of the trip, the distance, the location, the cost, and other aspects related to specific constraints. The global share of urban population is continuously increasing, and the rising mobility demand in cities is calling to effective solutions to limit the impacts of local pollution, congestion, and land use. In parallel, long-haul transport demand is reaching historical highs for both passengers and goods, driving increasing energy consumption. Transport is currently heavily relying on oil, which represents more than 90% of the final energy consumption of the sector. Low-carbon alternatives are available, but given the complexity of the sector, these solutions need to be supported by well-planned policies and strategies that are able to tackle the externalities caused by different transport modes and fuels.

The aim of this book is to provide a complete overview of the current situation of the transport sector, focusing on the ongoing decarbonization and digitalization trends, which are shaping the transition toward a sustainable transport system. An additional focus is given on transport policies, which will be a necessary tool in supporting efficient and effective transport solutions.

Chapter | of this book provides an overview on the main aspects related to transport, highlighting the complexity of the sector and the high variability of mobility demand and supply with respect to multiple dimensions, including geography, demography, sectors, technologies, and transport modes. Both passenger and freight transport are at the basis of an effective development of countries and societies, and the sustainability of transport is becoming more and more necessary, due to the rising concerns related to climate change, local pollution, congestions, and safety, especially in large cities all over the world. However, significant differences exist among world regions, since cultural, economic, historical, political, and geographical aspects are crucial in the development of transport modes and infrastructures.

Vii viii Preface

Chapter 2 is focused on the available solutions to decarbonize the transport sector, considering both the powertrain technologies and the issues related to the energy supply chains. Electricity, hydrogen, and biofuels are the main alternative sources for transport systems, and they will be analyzed and compared by considering the state of the art of the technologies of each pathway and the potential future development. Passenger and freight transport have specific features, and so does each different transport mode, resulting in the need to evaluate dedicated applications based on the technical and economic conditions of each technological solution. Moreover, variable conditions across world regions may impact the sustainability of each pathway, particularly in relation to the current and expected power generation mix that varies from a country to another. Opportunities and challenges will be discussed to provide to the readers a clear vision on the strengths and weaknesses of each solution.

In parallel with the policy-driven trend of decarbonization, there is a bottom-up trend related to digital technologies, which are the subject of Chap. 3. Potential game changers include Mobility-as-a-Service, shared mobility, autonomous vehicles, and other effects of extra-sector digital technologies (e.g., online platforms, virtualization, e-commerce). At the same time, digitalization interacts with other mobility trends, and the future effect on the demand for transport and the modal share of travelers is far from being clear. The adoption of various solutions will have a large variability from a country to another, and their success will be based both on their capacity to deliver convenient and reliable services to customers at a lower cost, and on their sustainability in terms of environmental impact at local and global scale, urban traffic, and safety aspects. Policies and regulations will have a crucial role in fostering the deployment of effective solutions based on available technologies.

For this reason, the last chapter of this book Chap. 4 is devoted to present different transport policies worldwide, to describe the different solutions that are available to support the transition toward a sustainable transport system. A specific focus has been given to decarbonization solutions, while at the same time discussing also other critical aspects in transport planning, including local pollution, congestions, and land use. Individual countries will have particular and specific advantages and disadvantages with regards to the implementation of each individual measure. There is therefore no perfect policy combination for ensuring effective decarbonization of the transport sector, but the different policies are focused on the key areas in which countries have tried, are trying, and must continue to try to tackle the ongoing climatic change.

Presenting a comprehensive overview of the issue, this book aims to be accessible to a wide readership of both academics and professionals working in different domains dealing with energy and transport, as well as to general readers interested in the subject.

Support from the Fondazione Eni Enrico Mattei (FEEM) in realizing this book and financing its open access is gratefully acknowledged. Founded in 1989, FEEM is a nonprofit, policy-oriented, international research center, and a think tank producing high-quality, innovative, interdisciplinary, and scientifically sound research

Preface ix on sustainable development. It contributes to the quality of decision-making in public and private spheres through analytical studies, policy advice, scientific dissemination, and high-level education. Thanks to its international network, FEEM integrates its research and dissemination activities with those of the best academic institutions and think tanks around the world.

Within FEEM, the Future Energy research Program (FEP), where this book has been conceived and elaborated, aims to carry out interdisciplinary, scientifically sound, prospective, and policy-oriented applied research, targeted at political and business decision-makers. This aim is achieved through an integrated quantitative and qualitative analysis of energy scenarios and policies. This interdisciplinary approach puts together the major factors driving the change in global energy dynamics (i.e., technological, economic, financial, geopolitical, institutional, and sociological aspects). FEP applies this methodology to a wide range of issues such as energy demand and supply, infrastructures, market analyses, socioeconomic impacts of energy policies.

The authors are thankful to Paolo Carnevale and Luca Farinola, respectively, Executive Director and Financial Director of FEEM, for their strong support in the realization of this book.

Milan, Italy Michel Noussan March 2020 Manfred Hafner Simone Tagliapietra

Contents

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2.3

Chapter 1 A) The Evolution of Transport Across geai World Regions

Abstract This chapter aims at providing an overview of the multiple aspects involved in passenger and freight transport, which are the base for the understanding of the energy consumption of the sector, as well as for the current trends and prospects related to digitalization and decarbonization. A brief historical discussion and some trends will be presented, followed by a description of the main modes and technologies, both for passenger and freight transport, and a final focus on the differences across world regions in mobility patterns and behaviors. The evolution of transport systems has led to very different situations worldwide, depending on different strategies related to economic development, geographical limitations and cultural, political and social aspects. Proper sustainable mobility plans need to be based on the specific characteristics of each location, and the integration between different governance levels is of utmost importance to improve the reliability, affordability, and energy performance on the entire transport system.

Transport has evolved in history, following a wide range of drivers, which changed how, how much, when, and why people moved and transported goods between places. Mobility demand has always been driven by the need to access opportunities, related to work, services, shopping or leisure, depending on the specific historical and cultural context.

1.1.1 A Brief Historical Perspective

The history of transport has seen a significant evolution over the centuries, both on the causes of mobility demand and on the available modes, that in turn had an impact on the distance that people and goods could travel. People travel to access opportunities, and the share of each activity has evolved in time, with significant differences across societies worldwide, as well as between urban and rural contexts.

© The Author(s) 2020 1 M. Noussan et al., The Future of Transport Between Digitalization

and Decarbonization, SpringerBriefs in Energy,

An example of the evolution of passenger transport modes can be seen in Fig. 1.1, which depicts the average daily distance travelled by the US citizen in the last century. It is interesting to notice how the availability of different technologies has led to a significant and continuous increase of the average distance travelled, and at the same time, new technologies have led to a decrease in the need of walking. Moreover, average daily travel times remain more or less constant, around a total average of one hour per day, leading to the increase of the distance and area to which people have access to in their daily activities. As a result, cities become larger and continue to attract more and more people worldwide, leading to an urbanization trend for which transport will become crucial.

One of the main impacts of transport is related to the energy required to satisfy the mobility demand. The transport sector currently accounts for almost 30% of the world final energy consumption (IEA, 2018b), reaching 32,494 TWh (2794 Mtoe) in 2017, with a 43% increase from the 22,771 TWh (1958 Mtoe) of 2000. At that time, oil represented almost 97% of the transport energy mix, and today, it slightly decreased to 92% thanks to an increased penetration of electricity (mainly in rail services), biofuels, and natural gas. Still, the transport sector remains today the less diversified, and therefore, there are increasing efforts to try to enhance the use of different low-carbon alternatives to oil products.

A closer look at the evolution of transport energy consumption in the last decades (see Fig. 1.2) highlights its continuous increase, with almost a threefold growth from 1971 to 2015, higher than industry consumption (around +80% increase) or residential consumption (roughly +90%). The chart shows also the clear increase of the share of diesel, which is slowly reaching gasoline in the share of consumption by fuel.

Daily km per person (log scale)

0.01 1880 1900 1920 1940 1960 1980 2000 eHorses Walking -—Cars/Buses/Motorcycles -—-=Trains -Air

Fig. 1.1 US travel per capita per day by all modes. Authors’ elaboration from Ausubel, Marchetti, and Meyer (1998)

World energy consumption for transport by source 30,000 -

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Energy Consumption (TWh) (ao) uondwnsuon ABseuQ a S 3 eS FF DS SF DS S g cS FP Fe HF EEE E SSA

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Fig. 1.2 World energy consumption for transport by fuel. Authors’ elaboration from IEA (2017)

Transport includes a large variety of subsectors that have peculiar characteristics, as will be described in detail in the following sections. Also, the evolution of transport is tightly related with the urbanization trend worldwide, and mobility planning in cities includes additional aspects related to local pollution, congestions, and safety. It is not trivial to analyze the difference between extra-urban and urban transport, since there are few data specifically related to urban transport at world scale. However, some research has been performed on a limited number of cities, to estimate the transport energy consumption per person in cities related to the population density [see Fig. 1.3, authors’ elaboration from WHO (2011)]. Although the data refer to some years ago, the hyperbolic relation among these two quantities appears very clearly. An interesting aspect is the strong clustering of the world regions, which in turn can be correlated to multiple factors including political, economic, cultural, and social behaviors. The cities in the US show generally a low density coupled with the highest per capita energy consumption, which is mostly caused by the diffused use of single-passenger large cars and the low use (and often availability) of public transport. Western European cities lay in the middle, while the bottom right part of the chart is showing mainly high-density cities, whose low per capita energy consumption is a result both of relatively low transport needs due to higher density and low income of the citizens leading to lower access to opportunities. At the same time, in densely populated areas, an excessive use of private vehicles would lead to severe congestions, limiting the speed and flexibility of the private car.

Urban energy consumption for transport vs population density

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Urban density (person/ha)

Fig. 1.3 Urban transport energy per capita versus population density. Authors’ elaboration from WHO (2011)

1.1.2 Current Situation and Prospects

As discussed above, the evolution of transport demand is related to a number of factors, including the population, the level of GDP, as well as the urbanization. On the other hand, available technologies may unlock additional demand potential, thanks to the availability of mobility solutions at a lower cost for the users or with other advantages, including speed, convenience, and flexibility.

As long as energy consumption is concerned, transport modes can be compared by considering their average specific energy consumption, which can be parameterized on passenger-km (pkm) for passenger transport and on tonnes-km (tkm) for freight transport. Table 1.1 shows some average values for energy consumption of different transport modes, together with their range of variation. These values should be considered with care, since they are affected by a large number of parameters, including type of fuel, vehicle conditions, vehicle load, etc. Moreover, since these figures relate to the final energy consumption of the transport modes, primary energy consumption may differ. For example, transport modes based on electricity show lower specific energy consumption, but the electricity generation may involve additional energy losses in comparison with fossil fuels, depending on the energy source from which it is generated.

Taking in mind these limitations, the values reported in Table 1.1 still provide some interesting evidence: cars and trucks remain among the worst performing transport modes for passenger and freight transport respectively, while the best performing

Table 1.1 Average consumption for transport modes and variation ranges

Average Range of variation

Authors’ elaboration on IEA (2019c)

modes are rail and shipping. Large cars have higher specific energy consumption than aviation, which is generally referred to as the transport mode with the highest environmental impacts. The good performance of rail is partially due to its high electrification, while shipping benefits from the larger volumes, the lower speed, and the lower friction in comparison with land transport.

Besides energy consumption, each transport mode has its own advantages and weaknesses, and the choice of a mode over another may be caused by different reasons. Thus, the transport sector is a complex mix of different modes, and multimodal trips are a common solution for both passenger and freight transport.

The future development of transport needs to be contextualized in an increasingly urbanized world, which will be inhabited by 9.2 billion people by 2040, with 43 megacities of more than 10 million people already in 2030, mainly in Asia and Africa (United Nations, 2018). At the same time, an increasing share of the world population will have access to more services, including private and shared mobility options.

The IEA’s World Energy Outlook 2018 presents different future scenarios for the world energy consumption (IEA, 2018b). As far as transport is concerned, its share in final energy consumption by 2040 will still remain similar to the current situation, ranging from 26 to 29%, while the total consumption of the sector will show a higher variation depending on the policies that will be deployed in the future. According to the IEA, while the current policies may lead to an increase of 42% by 2040 compared to the current consumption, with an oil share still locked to 88%, the Sustainable Development Scenario presents a 6% decrease of energy consumption in transport, with oil representing 60% of the 30,703 TWh (2640 Mtoe) estimated for 2040.

The future trends for transport are strongly related to the effectiveness of several policies that may be deployed at different governance levels, as will be better described in Chap. 4. The efforts required for the decarbonization of transport will likely include multiple technological solutions, since no silver bullet appears to be able to tackle the diversified challenges related to the complexity of this sector.

Passenger transport includes a wide variety of activities that range from work commuting, to business trips, tourism, everyday activities, etc. For most trips, there are different potential alternative modes, which may be chosen by the passengers by considering different aspects including price, travel time, comfort, and safety. Passenger transport demand is usually quantified in passenger-km (pkm), which accounts for the transportation of a passenger over a distance of a km. A reliable estimation of passenger transport demand is crucial to perform proper mobility planning strategies at different levels. Figure 1.4 reports the estimations of the International Transport Forum for passenger transport in the world, by highlighting some categories related to modes and distances, as well as the contribution of OECD and non-OECD countries.! The chart highlights the very strong increase in transport demand, which is expected to almost triple by 2050, with the strongest contribution coming from

Fig. 1.4 Estimated future demand for passenger transport by type, billion passenger-km. Authors’ elaboration on ITF (2019)

'The Organization for Economic Co-operation and Development (OECD) was established in 1961 as a forum for governments to share experiences and seek solutions to common economic and social problems. As of 2019, the OECD is composed by 36 member countries (https://www.oecd. org/about/members-and-partners/).

developing countries (especially in nonurban road and aviation, i.e., on medium and long distances). The main drivers will be the growing population and the increased well-being, allowing a larger number of people to access different mobility options, especially private cars.

However, attention must be paid to the fact that there is no single categorization for passenger transport, leading to the difficulty of comparing scenarios from different sources due to the different aggregation levels that are used.

This section will present the three main groups that are generally considered (road, rail, and aviation) together with a brief description of the aspects related to active transport (i.e., walking and cycling), which are usually not considered in world statistics but they may be more and more important to develop sustainable alternative to private car in urban contexts. Furthermore, last-mile active solutions may be integrated by micro-mobility electricity-based services, including scooter sharing as well as electric bikes.

1.2.1 Road Transport

Road transport includes all the different motorized vehicles that are available for passengers, including cars, buses, and motorcycles/mopeds. Although with some differences related to the world regions, private cars currently remain the most diffused mode, thanks to their high flexibility and reliability, together with their relatively low cost.

The evolution of private vehicles across countries still shows large inequalities, mostly related to the average income of the citizens. The relation between the vehicle ownership and the gross national income across world countries emerges quite clearly in Fig. 1.5.

It has to be highlighted that the data in the chart are related to the total number of vehicles, including different modes. As a result, for some countries, cars are predominant (in the US, they represent more than 92% of the total registered vehicles), while in other countries, especially in Asia, two- and three-wheelers are the most diffused road transport mode (94% in Vietnam, 73% in India, 54% in Thailand). Similar figures come from research activities based on surveys: Poushter (2015) compared ownership rates of cars, motorcycles, and bikes in 44 countries worldwide, finding large differences from a country to another, as well as depending on the citizens’ incomes inside countries.

All road transport vehicles are currently heavily relying on oil products, especially gasoline and diesel. While the latter is generally the most diffused option for heavy-duty vehicles (trucks and buses), for light-duty vehicles the competition is more pronounced, especially in European countries (the US cars almost totally run on gasoline). While diesel engines are generally more efficient, they usually have a higher investment cost and are therefore preferred for users that have a high car usage. Alternative fuels, such as natural gas, LPG and biofuels, are being used in

Registered Vehicles in World Countries

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Registered Vehicles per capita ®

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* South America

GNI per capita (2016USD)

Fig. 1.5 Registered vehicles as a function of gross national income. Authors’ calculation on WHO (2018)

some countries, but they are still representing a marginal share of the total energy consumption of the passenger transport.

The energy consumption required for passenger transport on road can show a significant variation based on multiple parameters, including the type of vehicle, the load factor, the average speed, the type of driving, the technology and aging of the vehicle, etc. While average numbers from country statistics are used to estimate the energy consumption of the sector, it has to be noted that the potential variability is significant, especially across countries and in different groups of users inside each country.

There is a significant debate on the road transport total costs considering externalities (Litman & Doherty, 2009), since the vehicle ownership and the operational costs paid by the users are only representing a limited share of the total costs. Other aspects, both internal and external, include the risk of accidents, the cost of congestions (related to the cost of the time that is wasted), energy security, GHG emissions, air pollution, noise, impact of infrastructures, etc. The current taxation system hardly compensates for the external costs of road transport, resulting in an inequitable distribution of costs and benefits. Part of these costs are currently compensated by fuel taxes in some countries, but some alternative solutions are being evaluated, mainly to compensate the decrease of revenues due to the improved efficiency of vehicles and the gradual introduction of electric vehicles. Some US states are considering the possibility of taxing the vehicles based on their usage rather than on fuel consumption, although this would not reflect the issues related to congestion, that would require a pricing both location and time based. The development of digital technologies (onboard sensors, GPS, connectivity, etc.) may support in the future the possibility of dynamic taxation for road transport.

While road transport analyses are generally focused on vehicles, both for economic and energy evaluations, another important aspect that needs to be accounted for is the infrastructure. In fact, road transport needs a proper infrastructure, which in turn requires significant investments and a proper maintenance. The road network has seen a significant evolution in the last centuries, especially in developed countries, in parallel with the development of both passenger and freight transport. The possibility of exploiting a very large and distributed network of roads, from local to highways, makes road transport the only solution that can almost always guarantee a door-to-door service without the integration with other modes. This enhanced flexibility is one of the most important aspects that lead to the success of road transport over other modes (notably railways).

1.2.2 Rail Transport

Rail transport is a significant alternative to road for land transport, thanks to the availability of a separate infrastructure that is not affected by the road network congestions, although it needs a careful planning and management for its optimal operation. Additional advantages of rail over road transport include the higher average speed, especially in urban contexts and in high-speed rail networks, the lower fatality risk for passengers, the better energy efficiency, and lower environmental impacts.

Rail services are generally provided to the users by public or private companies, which allow passengers to travel between specific locations. Competition is possible, but there is the need of a third-party management of the infrastructure to avoid potential collisions or congestions and to optimize the operation and scheduling of the trips. The flexibility of the system is lower than for road transport, although in some countries well-developed rail networks ensure a redundancy that enhances the system flexibility, especially over long distances. However, rail transport is generally part of a multimodal trip that includes other modes for the first- and last-miles.

Rail transport includes different segments that are generally divided into urban railways (i.e., trams and subways), extra-urban conventional railways, and high-speed railways. These segments have different features, targets, and competing transport modes. Urban rail has the potential to support the current urbanization trend by providing an effective alternative to private cars with benefits on local pollution, GHG emissions, congestions, and land use, especially in densely populated districts. High-speed rail, if well planned and operated, can provide an effective substitute for short-haul flights, being aviation one of the most challenging modes to decarbonize.

Globally, around three quarters of conventional passenger rail activity are based on electricity, and the remaining quarter relies on diesel (IEA, 2019c), while high-speed rail and urban rail are totally powered by electricity. According to (IEA, 2019c), the total share of passenger rail transport on electrified tracks is expected to rise to 97% by 2050, with the global activity becoming 2.7 times higher than the current levels.

Globally, rail represented 8% of passenger transport in 2016 (IEA, 2019c), but with an uneven distribution across different world areas. The highest share of passenger transport on extra-urban conventional railways is in Asia, with India accounting for 39% of the total, followed by China with 27% and Japan with 11%. China accounts for about two-thirds of high-speed rail activity, having overtaken both Japan (17%) and the European Union (12%) in the last years. The regional distribution of urban rail activity is more even; China, European Union, and Japan each have around one-fifth of urban passenger rail activity.

While conventional railways have not seen any disruptive improvements in the last century, the evolution of high-speed networks has reached significant penetrations in multiple countries, providing a fast, reliable, and cost-effective alternative for traveling from a city to another. This segment may be further improved in the future by the deployment of alternative technologies that have still a few applications, such as maglev (from “magnetic levitation”), or that are still in a research phase, such as Hyperloop.

Maglev trains are based on a well-known technology that has currently failed in reaching the strong expectations of the past decades, mainly due to the very high capital costs involved. Maglev trains are in commercial operation in six locations in Asia as of 2018 (Maglev.net, 2018), but the only application running at higher speed than normal high-speed trains is the one connecting Shanghai airport with the city center, reaching a top speed of 430 km/h over the 30 km of its length. Another project currently under construction in Japan plans to connect Tokyo and Nagoya, but the benefits provided by halving the travel time come at the cost of a four to five times higher energy consumption in comparison with the current high-speed train connecting those cities (Kingsland, 2018).

Conversely, Hyperloop technology is a new concept that has been proposed for the first time in 2013 by the CEO of Tesla Motors and SpaceX, Elon Musk (SpaceX, 2013). It is based on pressurized capsules that travel in low-pressure tubes at speeds similar or higher than air travel. Different feasibility studies have been developed in recent years, suggesting that this technology could be two to three times more energy efficient per passenger transported than conventional high-speed rail (IEA, 2019c). However, actual figures may vary, and commercial projects are not expected before the mid-2020s (Hyperloop One, 2019).