ICCT: cost-effectiveness of CO2 reduction strategies for heavy trucks

A new paper by the International Council on Clean Transportation (ICCT) assesses the cost-effectiveness of different CO2 reduction strategies for the heavy-duty vehicle (HDV) sector. It examines the required HDV technology market share to meet mandated CO2 reduction targets and the corresponding decarbonization cost. The report also proposes HDV CO2 reduction targets up to 2040.

The ICCT study finds that battery-electric trucks are the most cost-effective technology for meeting CO2 reduction targets. The cost-optimal technology market share to meet a 60% CO2 reduction target by 2030 involves transitioning to battery-electric technologies for most truck segments without fully exploiting the CO2 reduction potential of diesel trucks. The ICCT study focuses on four leading truck technologies: diesel, liquified-natural gas, battery-electric, and hydrogen fuel-cell trucks.

Compliance cost

A CO2 reduction target of 100% by 2040 would allow only the registration of zero-emission trucks. (battery-electric and hydrogen fuel-cell). From a compliance cost perspective (the average additional direct manufacturing cost per vehicle), battery-electric trucks will be the cheaper technology for most segments, including long-haul trucks with driving mileages up to 500 km.

Total cost of ownership

A CO2 reduction target of 60% by 2030 will result in a compliance cost of €12,473 per vehicle. Still, it can provide total cost of ownership (TCO) savings in the range of €50,000–€120,000 in TCO per vehicle for the first and second users, depending on the diesel fuel prices. This is significantly higher than the cost savings obtained under the currently adopted policies, which range between €30,000 and €60,000 per vehicle.

With a CO2 reduction target of 100% by 2040, compliance costs will increase slightly to €12,487 per vehicle, mainly driven by a reduction in the prices of zero-emission technologies.

The compliance cost curves peak in 2030 or 2035, depending on the reduction targets, and decline onwards due to the expected reduction in the ZE technologies costs, mainly due to battery and fuel cell stack costs.

Cost savings for users are expected to increase under a 100% CO2 reduction target, ranging between €100,000 and €200,000 per vehicle.

Societal cost

Ambitious CO2 reduction targets will increase the average direct manufacturing costs of trucks; the resulting cost savings for the users and society are substantial and larger than the necessary investment. Societal cost savings are two to three times higher under the proposed CO2 reduction scenario than the currently adopted policies. In addition to the significant savings from a TCO perspective over the vehicle lifetime, the CO2 avoidance cost to society further increases the societal cost savings under more ambitious CO2 reduction targets.

Develop contingency plans

The ICCT paper does not look at the CO2 reduction potential of biofuels and potential improvement in fleet efficiency. The paper assumes all electricity is produced cleanly. By 2050, grid electricity in Europe is assumed to be 100% renewable. The future TCO is complex and uncertain with the introduction of EU ETS in transport, fluctuating fuel and energy prices, local subsidies, and fiscal rulings. The ICCT-report is relevant for transport companies preparing to invest in zero-emission trucks and developing financial contingency plans.

Source: ICCT

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Walther Ploos van Amstel  

Passie in logistiek & supply chain management