Electricity is continuing to gain traction in previously thought to be hard-to-electrify sectors, including heavy trucking and aviation, leading to a drop in demand for oil in the transport sector of up to 50 per cent by 2050. Additionally, electricity’s share in transport is expected grow from one per cent today to 23 per cent in 2050, according to DNV’s latest ‘Transport in Transition’ report.
The report is a deep dive into the energy transition of transport – the most dynamic of the energy demand sectors through to 2050, drawing on DNV’s system dynamics-based Energy Transition Outlook model and exploring the vast changes in fuels, electricity and infrastructure needed to transport ever-larger numbers of people and volumes of freight, while at the same time decarbonising the sector.
Despite oil demand in the transport sector forecast to halve by 2050, the present pace of the transition still falls severely short of the goals of the Paris Agreement. According to DNV, opportunities to accelerate change through pilot projects and uptake of alternative energy need to be seized as soon as possible. Today, transport of passengers and goods accounts for about a quarter of global energy-related CO2 emissions, a share that will grow to 30 per cent by 2050.
“Our ‘Transport in Transition’ report highlights the challenges facing the industry and where further policies and investments are urgently needed to fast-track decarbonisation of the transport sector,” says Remi Eriksen, group president and CEO at DNV. “There is a pressing need for reliable non-fossil fuels to support emission reductions, particularly in the maritime and aviation sectors. It is essential that policy makers accelerate efforts to incentivise research and development, pilot projects and commercial uptake of carbon-neutral and zero-carbon fuels across the transport sector to support mid-century net zero goals.”
This tracks with the latest analysis on transport decarbonisation released by the International Energy Agency. They say that rebounding transport activity post-Covid led to an eight per cent jump in CO2 emissions from transport in 2021 over the previous year, and that transport emissions grew at an annual average rate of nearly 1.7 per cent from 1990 to 2021, faster than any other end-use sector.
To get on track with the Net Zero Emissions by 2050 Scenario, CO2 emissions from the sector must fall by about three per cent per year to 2030. Strong regulations and fiscal incentives, as well as considerable investment in infrastructure enabling zero-emission and low-carbon vehicle operations will be needed to achieve these emissions reductions.
DNV’s report states that road transport will lead the way in reducing reliance of fossil fuels, falling from 38 million barrels per day (bpd) today, to 19 million bpd in 2050, reducing share from 91 per cent to 57 per cent. Conversely, the consumption of oil within aviation will be virtually flat to 2050, with hydrocarbons set to have a 60 per cent share in the sector in the same year.
Driven by the decarbonisation push, the fuel mix in the maritime sector will also change significantly over the coming decades. By 2050, it will likely transition from being almost entirely oil-based to an energy mix comprising of 50 per cent low- and zero-carbon fuels, 19 per cent natural gas and 18 per cent biomass. Electricity will obtain only a four per cent share, from short sea shipping and port stays for larger vessels.
Regions such as Europe, North America and Greater China are frontrunners in the uptake of battery electric vehicles (BEVs). In parallel, those regions are investing in hydrogen and hydrogen-based fuels as the most promising option for moving heavy goods over long distances. At the other end of the spectrum, regions including Sub Saharan Africa and North East Eurasia remain far away from establishing the infrastructure and producing the quantities of renewable electricity required to decarbonise road transport.
The report also underlines the clear challenge in deriving a single solution for the decarbonisation of transport with a number of constraints associated to the adoption of biofuels, renewable electricity and CO2. There is no ‘one size fits all’ with a variety of energy sources needed to tackle the challenge in each sector, such as BEVs for passenger vehicles and trucks, fuel cell electric vehicles for the heaviest long-distance trucks, and bio- or hydrogen-based synthetic low or zero-carbon fuels for maritime and aviation.
Encouragingly, as the aviation sector strives to support decarbonisation efforts, the results highlight that biofuels are set to supply a quarter of aviation demand by 2050. However, the report emphasises the importance of governmental and industry back-up to manage the rise in advanced biofuels for aviation and maritime, with the sustainable fuel expected to be more expensive than fossil fuel counterparts. On the other hand, for sectors that can use direct electrification, future users will gain from superb efficiency in electric drivetrains and experience cheaper transport.
