Transport accounts for around a third of global carbon dioxide emissions, with about 3/4 of transport emissions come from road transport[1]. Since 1990, transport emissions have been growing at around 1.7% per annum. Clearly, this trajectory needs to change to achieve net zero by 2050.
Vehicles used for transporting goods are a significant part of this problem as they account for around a third of all road transport emissions[2]. Whilst logistics systems continue to be made more efficient, the volume and value of goods being transported continues to increase in many countries. Therefore, the principal option for reducing sector emissions is to decarbonise transport operations.
Several options exist for decarbonising vehicles, but they all come with implementation challenges compared to the diesel status quo.
Biofuels are one option. They are attractive to fleets because vehicle capability and acquisition cost changes are relatively modest. However, in most countries biomass supply capacity is very much less than potential energy demand from goods transport, even before other biomass use cases are considered. This makes them infeasible for delivering net zero at national scale.
Hydrogen and e-fuels are also frequently proposed. The relatively low production efficiencies of hydrogen-based fuels combined with the very high costs of fuel cell vehicle technology means that this will be a premium option, most likely to be applied in niche use cases in the cost sensitive logistics industry.
Electrification has emerged in US, European, and East Asian markets as the dominant option in light duty segments and in many countries, it seems likely to become the principal low carbon option for larger vehicles like trucks because of lower fuel and vehicle acquisition costs. Whilst power and charging infrastructure costs will be significant and delay early stages of uptake, in many countries substantial network investment requirements are taking place anyway to support increased renewable penetrations and growing demand for electricity to support heating and cooling.
Electric vehicles (EVs) are also beginning to enter the logistics industry in other markets too.
Increasing fleet penetration of EVs in East Asian and European markets will impact both new vehicle supply and second-hand supply chains in Sub-Saharan African countries. At the same time, governments are announcing policies to promote EV uptake. In Kenya, preferred VAT and duty rates are applied for electric vehicles along with reduced electricity tariffs for EV charging, leading to rapid growth in uptake (500% in 2023) from a low base[3].
In India, EVs are entering the logistics sector in the form of two and three wheelers performing last mile delivery operations. Around 14% of all three-wheelers funded under the FAME II mechanism are used for goods applications[4].
At the same time, cold chain development is moving rapidly in these countries with considerable scope for expansion. For example, whilst the cold chain is growing rapidly in India, less than 10% of agricultural produce passes through a cold chain.[5]
EV adoption and cold chain expansion are interrelated at multiple levels. There is a risk that without action, either the cold chain or the EVs that work in it will be mis-specified and unfit for purpose unless they are considered as part of a holistic whole. This is because:
- EV range and payloads impact network design – EV ranges and payloads are shorter and smaller than diesel equivalents. This impacts both the volumes of goods that can be transported by vehicles and the distances that can be covered. This has implications for the locations of warehouses and catchment areas for consolidation and last mile hubs. It also has implications for produce throughput rates at distribution and processing hubs.
- EV charging impacts power demand – EV charging demand can be a substantial power user. This has implications for both electricity network connections and scale of renewable generation that needs to be deployed at cold chain sites. Sites with insufficient power for charging cannot be easily serviced by EVs, creating a risk of stranded assets in the longer term.
- EV and cooling technology choices are interlinked – in high ambient climates, cooling loads can have a dramatic impact on EV range. Equally, appropriate cooling technology choices are impacted by vehicle and logistic network configurations so the two need to be considered together.
- EV solutions can require more active management – EV range constraints, electricity generation output and pricing volatility, plus limitations in charging infrastructure availability, can mean EV solutions need dynamic optimisation to be efficient and robust. To make this work. vehicles, chargers, and logistics systems require a high degree of interconnectivity and transparency to allow digital platforms to effectively manage this variability whilst maintaining efficiency and resilience.
Whilst EV adoption will not be immediate, the multi-year time horizons of cold chain roll out and EV deployment are very likely to overlap. So, it is critical these issues are understood so both policy makers and practitioners can ensure they are making no regret decisions.
To meet this need, FPS and the Clean Cooling Network are exploring these issues through a series of studies focused in Kenya and India. By modelling in detail the impact on current example cold chains of EV adoption, we aim to quantify the impact of EVs on the cold chain and assess mitigations. Learnings from the projects will be summarised in a collection of training materials aimed at policy makers and practitioners to fill this knowledge gap enabling optimal roll out decisions to be made in both the cold chain and EV arenas.
[1] Transport - Energy System - IEA, 2022
[3] Electric Mobility Association of Kenya, April 2024
[5] Assessment of the Cold Chain Market in India, Efficiency for Access Coalition, CLASP 2023 Assessment-of-the-Cold-Chain-Market-in-India.pdf