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How Close is the Trucking Industry to Reaching Net Zero?

First, let’s answer a question. What is net-zero? Well, it isn’t an old defunct internet company. Net-zero refers to removing an equal amount of CO2 from the atmosphere as is released into it. Yet despite the growth of sustainable technologies in recent years, carbon emissions continue to increase. According to many scientists who study climate change, current climate change commitments are not enough to keep the planet within 1.5℃ above pre-industrial times.

Therefore, calls for governments, companies, and other interested parties to reach net-zero emissions, they need to get creative. While sustainability efforts are increasing around the world, some sectors are harder to decarbonize than others. Heavy industries like iron and steelmaking, for example, and transport like aviation, shipping, and trucking are particularly hard to electrify. And yet, that electrification is happening.

Could Regional Trucking Companies Electrify Now?

With California already setting the stage for an electric vehicle future, companies are taking note. In fact, roughly half of all U.S. and Canadian big rigs engaged in regional-haul applications could switch to battery-electric technology today with minimal or no impact on operations, productivity, or efficiency, according to a North American Council for Freight Efficiency (NACFE) report.

In the report, NACFE evaluated the performance of various light-, medium-, and heavy-duty electric trucks in real-world operations around the country to gain insights into how well the trucks performed compared to conventional diesel-powered units. These trucks have a range of about 200 miles and improve the total cost of ownership when monetizing all benefits, despite about 3,000 to 4,000 pounds of freight capacity penalty compared to diesel.

According to the report, battery-electric tractor models available today could meet the needs for around half of the regional trucking market segment. Were these companies to switch to electric trucks right away, this would equal over 468,000 commercial motor vehicles. Since these trucks return to base every night, which is what truck drivers want, they can also be quickly charged and ready for the next day. As a result, the trucking and transportation sector is seeing a lot of technology converge around electric applications for regional haul trucking companies.

Why is electrification so important? Simply because regional electrification goals will help the trucking and transportation sectors reach net-zero goals. As a result, fleet use of clean fuels and advanced vehicle technologies is rapidly progressing. A lot of fleets are already switching to clean fuels and vehicles, including propane, compressed natural gas, battery-electric vehicles, or fuel-cell-electric vehicles.

What Will Companies Need to Reach Net-Zero Goals?

Reaching net-zero will not be easy. There’s no easy solution for trucking companies to utilize to get to net zero. There are so many different use cases out there and so many fuel options. Trucking companies need to be actively involved in pursuing all the available options. The fact is we are in a time of energy transition, and it is a pathway that is not always clear today. The trucking industry is on a glide path to net zero, but it will take some time to get there.

What will companies and governments need to do if they want to meet net zero-emission goals?

  1. The switch from fossil fuels to clean energy and clean energy products needs to accelerate to achieve net-zero. Policymakers must shift subsidies and financial support away from fossil fuels to clean energy and low carbon technologies, cut tariffs on climate-friendly practices and goods, and take adequate measures to ensure a just transition.
  2. Policymakers must support and incentivize first-movers in the fight against climate change, to help scale existing proven solutions and develop new sustainable technologies. Universally harmonized laws and regulations can help accelerate key technologies and sustainable best practices and encourage public adoption of low-carbon products.
  3. Public and private investment is a crucial part of creating resilient supply chains and infrastructure that can help advance climate resilience, sustainable food production, and secure water supplies.

There will need to be multiple infrastructure systems being developed for any number of new fuels — natural gas, biodiesel, hydrogen, etc. We will also need to develop different pricing models. It is likely we’ll see different fuels used in different applications where they are a better fit for the job the truck must do.

Are Clean-Truck Regulations Necessary?

It is important to note that many trucking companies are put on the spot by California Air Resource Board regulations. But are these regulations helping or hurting the industry in its race to net-zero? Regulations provide motivation — and we all need some of that sometimes. It’s always easier to just do what you’ve always done.

So, many believe the trucking sector needs things like California’s Advanced Clean Trucks Rule to help us along. OEMs are building trucks and plan to sell them. But ultimately, the customer must want to buy those trucks. So, OEMs want them to have fantastic TCO. But just requiring OEMs to sell more sustainable units does not get the industry across the finish line to net zero. And yet, many trucking companies are against additional regulations. But are they needed?

In some ways, new regulations are frightening, and in some ways, they help trucking companies take advantage of new opportunities.  Trucking companies are in the early phase of an energy transition, and a lot of things that are out of their control still need to come together. Trucking companies are essentially moving from one fuel feedstock to dozens of feedstocks, and each one will have its own set of regulatory mandates.

Any fleet operating today is in a daily battle. From paying truck drivers, cost of equipment, fuel, and more — all that stuff costs money and takes time. It’s really hard for trucking companies to think about a rule that’s coming up in a couple of years. They know it is out there. But they have too much to do to keep the business running satisfactorily. Their instinct is instead to focus on it later.

Sustainable Fleet Efforts Increase by the Day

In the past ten years, there has been an incredible acceleration in the investment being made from all sides of the alternative-fuel vehicle market. These investments are driven by increasing commitments to environmental sustainability and carbon reduction. And to find more cost-effective transportation options given today’s record-breaking gasoline and diesel fuel prices.

A key to increased adoption of near- and zero-emission transportation across the public and private sectors, including accompanying fueling and charging infrastructure, is record-setting government funding and legislative support at both the state and federal levels. While California continues to lead in-vehicle and infrastructure funding as well as progressive zero-emission regulations, five other states are following suit with regulations of their own.

Oregon, Washington, New Jersey, New York, and Massachusetts have all adopted rules based on California’s that require automakers to sell increasing numbers of zero-emission trucks. With such large states following California’s lead, expect to see big changes coming out of the truck manufacturing sector.

Current Conditions Accelerate the Trend to Net Zero

From a global pandemic to war and supply chain snarls, there are problems aplenty. There are many reasons why trucking companies and others in the transportation sector. Diesel fuel prices are at an all-time high, further improving economics for alternatives. National average prices at the pump were 19% higher in 2021 than in 2020.

As a result, battery-electric vehicle demand is ramping up despite supply chain delays and high costs. Scheduled medium- and heavy-duty battery-electric vehicle deployments will go from dozens to hundreds across this year and next. And there is a good reason for this change. Fleets are placing record-setting orders. Certain sectors have already seen huge growth. This includes nearly 1,800 battery-electric school buses ordered or deployed. And it represents more than 350 school fleets in the U.S. to date.

A few hundred more grant-funded Class 8 battery-electric vehicle orders from major manufacturers are on the way. Orders still far out-pace vehicle deliveries and battery prices remain stubbornly high. OEMs are more involved in the battery-electric ecosystem than ever before. They provide value-added services to fleets learning to operate in this new and unfamiliar space.

The world is moving towards a net-zero and electrified future. Trucking companies who embrace this change early will set themselves up for success. In a world where their competitors are also jumping on the electric truck bandwagon, competition is tough. Will your trucking company be right there with them, or will it be left behind?

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