Ripples from the sudden and dramatic shift towards zero-emission vehicles will cause a huge transformation of global transport and the broader energy system, according to a new research paper from Rethink Energy. Once the dominoes start to fall, stakeholders in ICE infrastructure will be left with stranded assets across manufacturing and services. The age of the abandoned forecourt is coming.
When pollution is mentioned, the first picture to rush to mind is often a hazy cityscape crammed with swathes of cars, pumping out fumes. The world of the future will not look like this. As one of the most consumer-led sides of the energy transition, global transport emissions will fall by at least 65% by 2050, with fuel cells and batteries battling it out across vehicles of varying size and purpose.
Before Covid-19 locked us down in our homes, the transport sector accounted for around 20% of global emissions. While personal mobility patterns may have changed for good, global travel will continue to rise through to 2050, presenting a huge need to decarbonize.
This decarbonization is inevitable. Like in so many industries, laggards will be left to crumble. Drivers of ICE vehicles will today hope that the inflation of prices due to a shortfall in Russian oil will be temporary. While it is true that too much oil will soon be chasing too few customers, the need for these companies to pay bills for their underused infrastructure, as well as their own carbon emissions, will not see oil held at a sustainable price point for customers that could simply shift to electric.
Piggybacking off the dramatic price drop for lithium-ion batteries over the past decade (-90%), electric vehicles are already showcasing the irreversible force of this transition; when was the last time you saw an advert for a car that wasn’t electric? Now cost competitive with their ICE counterparts, drivers – satisfied with the 300-mile range of some batteries – are noticing the broader benefits of owning an EV (less noise, at-home charging, etc.). In many markets, the three conditions for mass adoption are now being met: “I want one, I can afford one, and I know someone who has one.” As the second-hand EV market starts to grow, some markets will see electric passenger vehicles outnumber petrol and diesel cars on the roads by 2034.
But consumers are only half the problem. Public transport (trains and buses), heavy duty trucking, shipping, and aviation, all need to find a route net zero emissions. Scaling batteries to provide sufficient power and range to these larger vehicles poses significant logistical challenges, and in some cases is outright unfeasible. Emerging hydrogen and e-fuel technologies – providing already accepted refueling times and range capabilities – will be needed but will need support and subsidy through their early route to market, and to establish the broader infrastructure needed for their wide-spread adoption.
The light commercial vehicle space, like passenger vehicles, is likely to show a preference towards battery-electric, with a similar market structure to the passenger vehicle segment. The need for high utilization rates, and short and infrequent refueling, however, will see hydrogen take a significantly larger role in heavy-duty transport fleets.
Public transport will see a similar mixture and will likely be defined by the direction regional governments take with their early pilot projects. The electrification of rail-routes is already established in many markets, although hydrogen will find space in long-distance, low-utilization routes, where capital-intensive electrification projects are uneconomic. Buses, like trucks, will be selected based on a lifetime cost analysis, depending on utilization rates and the average distance travelled per day; more distance and utilization will lend itself towards hydrogen.
In the seas and skies, aviation and shipping – which account for 2% of global emissions each – will see only see batteries used in niche scenarios. The difficulty to store hydrogen, the world’s lightest gas, will see ammonia used as a hydrogen-carrier in the shipping sector, at least before liquid hydrogen technologies are developed for storage at minus 250 degrees Celsius. Liquid hydrogen will also be watched closely by the aviation industry, as it develops its own decarbonization methods, with synthesized fuels using hydrogen and biofuels offering an alternative route, which is somewhat constrained by the crop yields serving a growing global population.
These technologies will be accelerated into the market rapidly over the coming decade, with global transport emissions set to peak in 2032, before falling to 35% of 2022 levels in 2050. Relying on electricity, for the charging of batteries, production of hydrogen, and production of e-fuels, the sectors demand for power will rise 13-fold between now and 2035, and 60-fold by 2050. Global demand will hit 13,095 TWh – more than half of today’s current electricity demand across all sectors. Demand for green hydrogen will hit 72.5 million tons by 2050, more than the entire global supply in 2022.