Caution needed on climate change policy for heavy transport

Many of us are taking time to digest the Climate Change Commission’s draft report that was released almost two weeks ago.

The report lays out our nation’s challenges clearly – we all agree with the absolute need to reduce our emissions over the next few decades. The commission should be congratulated for holding to its clarity and purpose.

For the heavy transport industry however, things aren’t that clear. Our industry cannot accept the development of policy on a wing and a prayer. We can’t proceed into a future where the technology that powers our vehicles is imagined, rather than real. Policy should be about the possible, not the probable and frankly, too much is unknown about the kinds of future energy that will power heavy vehicles.

I was pleased the commission acknowledged that the vast majority of the freight task will remain on the road. Road currently has 93 percent of the freight task in New Zealand because it meets the challenges of our particular market.

The path the commission has recommended includes a modal shift of freight from road to rail and coastal shipping. However, their assumptions are that around only four percent of freight tonne kilometres can switch by 2030. That is a far more realistic position than what we hear from many political commentators and anti-road lobbyists and is backed up by the obvious time the commission has spent understanding New Zealand’s freight system and the practical reasons why road transport is the dominant freight mode.

I was also impressed with the commission’s acknowledgement that in the push for the decarbonisation of transport, medium and heavy trucks will be slower to electrify than our light vehicle fleet. Commissioners obviously recognise that current battery technology does not provide the range to deal with long-haul road transport. Their recommendation is that of the heavy vehicles imported in 2030, 15 percent of medium trucks and eight percent of heavy trucks would be electric. By 2035, this would increase to a much more ambitious 84 percent and 69 percent respectively.

The commission accepts that they can’t predict what the eventual solution for powering heavy transport will be. That won’t stop some others though, and we must guard against people who think they can lock in a solution for us so far in advance.

Richard Prebble, in an excellent column in the NZ Herald this week, noted that it was impossible to plan 35 years out in such a fast-changing world. He asked us to imagine going back to the 1980s in a pre-internet world, then asking us to think ahead to 2021 to conceive our economy of today. Impossible.

He also made an excellent point that we must guard against central planning our emissions reduction; where the Government will have a say in how and where we live, and in all facets of our lives.

There are people who wish to use the real and justified concern around climate change to exert political and economic control. Capitalism has always adapted and it will continue to do so to get the best results via a market and allowing people to choose. That, alongside appropriate Government regulation is the best way forward.  

So, beware of the so-called “futurists” in this discussion. They are sometimes political ideologues dressed up to look funky, but with an underlying agenda of control. “A world order as we dictate it,” is their goal. We can all be futurists by considering our lives and businesses and how we adapt to change and new technology in our daily lives to improve the condition of our planet, much like human beings have done for our time on this earth.  

Our focus must be high level; a focus on reducing our emissions as a country and as a world – net zero by 2050. That is the end goal here. Not more social engineering by walking and cycleways, or a massive reductive in private car ownership.

The means to the end we seek have not totally revealed themselves for the heavy transport industry. We must assist road transport businesses to be more sustainable and efficient in their business practices and preparing for the technology – whether it be hydrogen, electric, or some as yet unknown energy source.

I will blog again on our submission to the commission’s report. This is an ongoing discussion that will require operator and wider industry input indefinitely, so it’s important everyone starts considering their businesses part in the decarbonisation path. 

– Nick Leggett, CEO, Road Transport Forum

 

Driving lower greenhouse gas emissions

Before going on its extended summer break, the New Zealand Government declared a climate emergency; another crisis to add to the “to do list” for the year of delivery, when they return for 2021 from their long hiatus.

As the Covid-19 crisis drags on and New Zealand seems to move further down the line for any kind of vaccination action that will put us back into the world, it’s easy for all the focus to be on that and lack of performance in other areas to be hidden.

This Government has talked a big game on the climate change front, but on paper, its “accomplishments”, or lack thereof, put them in danger of being seen internationally as just blowing hot air. An article published this week by Stuff, noted: “New Zealand is one of the few countries in the OECD to have increased gross emissions since 1990, doing so at a rate higher than all nations except Turkey, Iceland, and Australia”.

When it comes to the climate change issue, the road freight transport industry has a lot of fingers pointed at it. But the hands connected to those fingers are ill-informed.

We are open to, and actively following, technology advances that will enable freight to be moved in volume, via the road, using affordable fossil fuel alternatives.

We are not interested in green-washing and run a watching brief on the progress on electricity, green hydrogen and biofuels to power heavy vehicles. To date, there have been issues in regards to electricity and green hydrogen and we want to be sure diesel isn’t being replaced, just for the sake of it, by another energy source that causes harm to planet or people. The issues in the Democratic Republic of the Congo with cobalt mining for lithium ion batteries have been well documented.

With the appointment of a new Transport Minister after the 2020 General Election, we sent his office briefing notes regarding road freight and the environment.

New Zealand does not manufacture heavy trucks and therefore, we are reliant on the global manufacturers to produce trucks that use alternative fuels that are affordable, can run in the New Zealand terrain, and would be supported by a re-fuelling infrastructure here.

This is actually a good thing, because most countries where trucks are manufactured are demanding high environmental standards. The international trucking industry has committed to reducing fuel consumption and thus CO2 emissions through technological innovation and energy-efficient driving.

We believe the Government should give serious consideration in this term to incentivising the purchase of lower emission or alternative energy trucks, as they have done with electric cars. This will assist in signalling to the market that change is expected and supported.

It will also allow for innovation. We won’t know what’s best until we try. There needs to be open minds and avoidance of rigid over-regulation to get change that meets the brief (zero net emissions by 2050). Technology development moves fast and solutions may be just around the corner.

In road freight transport we are sick of the illusional argument that a higher proportion of the freight task should be undertaken by coastal shipping and rail because of lower carbon footprints.

This is tired thinking, lacking in imagination, inspiration, or a fact-base.

Rail and coastal shipping cannot contest the current road freight task, that is, 93 percent of the goods moved around New Zealand. Road is faster, more efficient, more resilient, and door-to-door. There is a place for both, but investment should be in the future which is some form of road, not rail.

If we are to effectively transition to new fuels, significant capital investment will be required. The last thing we can afford to do is reduce productivity and add time and cost to transport via rail and ship, in the belief that will take us there. 

We have shown our commitment to the Government’s approach to reduce greenhouse gas emissions from road freight in New Zealand. We have put some suggestions on the table, and we look forward to the delivery beginning.

– Nick Leggett, CE, Road Transport Forum

Looking to a green freight future

One of the positive outcomes of the Covid-19 lockdown in New Zealand was it initiated a greater understanding by Government of both the necessity and the many inter-connected parts of moving freight.

Road freight transport presents a conundrum for this Government. They don’t like fossil-fuelled trucks on roads, but they need them. We have an economy based on exports and imports and 93% of the total tonnes of freight moved in New Zealand goes by road. This has possibly never been more important to the economy than it is now.

To the uninitiated, trucks don’t fit with the climate change narrative. But the Government can’t tax and regulate trucks off the road until there is some viable alternative to fuelling them and the infrastructure to support that.

The Ministry of Transport (MoT) has put its toe in the water to explore transitioning road freight to alternative green fuels in its recently released 2020 Green Freight Working Paper. The Road Transport Forum engaged with MoT as they gathered information for this project and it was an extremely worthwhile experience. It is always good to plan for the future and we can’t put our head in the sand and pretend we can run on diesel forever.

It’s not just the Government calling for greener solutions across all aspects of our lives. Many road freight transport operators will be finding customers wanting to deep dive into how they are running and measuring sustainable business practices.

We are all aware of the current limitations, but we also need to look at the opportunities. Another thing Covid-19 has taught us is you simply don’t know what’s ahead and global shocks have a way of changing things.

The MoT working paper looks at the three existing options as alternative fuels – electricity, green hydrogen and biofuels – but acknowledges a lot more work needs to be done for any of these to be viable at scale. It also notes that there is no one-size-fits-all solution and other options could emerge.

Alternative green fuels are a growing area of interest and investment globally but the passenger vehicle market has developed more than truck manufacturing. So, choices that can be made in New Zealand will be constrained by what is available. There also has to be the appropriate infrastructure to support any alternative fuel options. Freight companies are unlikely to invest in vehicles that cannot be easily recharged/refuelled throughout the country.

The working paper is a signal, if you like, to Government that there is a lot more work to do before finding viable green freight solutions. It takes a first look at the fuels, vehicles and infrastructure challenges and opportunities. We are pleased to see it notes there are sustainability concerns with batteries for electric vehicles, in particular their production and disposal. We feel in the rush to endorse electric vehicles, this has been somewhat overlooked.

Backing one horse will not be the way to go. Transitioning road freight in New Zealand to alternative green fuels has to happen, but it isn’t going to be overnight. That means there is time to thoroughly analyse the options.

The working paper says: “The Government should consider options that provide the freight industry with flexibility to transition to the alternative green fuels that are best suited to their organisations.”

We think that is sound advice.

If the Government really wants to go big on green freight, the opportunity is there to back ourselves as a smart, clean, green country and come up with the solutions ourselves.

We are known for our problem-solving and innovation, so let’s lead the way here if we can.

I recommend reading the MoT’s 2020 Green Freight Working Paper which you can find here.

– Nick Leggett, CEO, Road Transport Forum

Sustainability makes good business sense

Regardless of your views on climate change, having sustainable practices and goals is pretty much essential to a successful customer-facing business.

Customers are demanding good environmental measures through their supply chains and if you are in the business of trying to attract younger workers, they want to work for companies that take protecting the planet seriously.

Transport is responsible for about 18% of New Zealand’s total greenhouse gas emissions each year, and the race is on to reduce that. While plenty of car brands are developing light vehicles to run on “clean and renewable” alternatives to fossil fuels, there has not been the same progress in truck manufacturing, because the fuel alternatives available present some challenges when upping the size scale.

So, it was exciting to attend the launch of New Zealand’s first long-haul, electric-vehicle road freighter this week. Auckland-based laundry business Alsco put the Hino truck on display at Eden Park, with Energy and Resources Minister Dr Megan Woods and Climate Change Minister James Shaw speaking at the event.

Alsco’s Group General Manager Mark Roberts had a great story to tell about the company’s sustainability journey and he spoke about taking the gamble to pioneer intercity electric vehicle freight movement. He said it wasn’t about waiting for the production to be perfect, but on starting today, to focus on three important business aspects – people, planet and prosperity. He outlined Alsco’s “big, bold, meaningful goals” for 2030, including reducing water use by one-third (remembering they are a laundry business); generating zero waste; reducing CO2, including by eliminating coal as an energy source; and converting one-third of the vehicle fleet to electric energy.

It’s important to take a sustainability view across the business and to get staff buy-in. Those companies running heavy vehicles that haven’t thought about sustainability should start, right now. There is quite a bit that can be done, including adopting the current best technology to manage environmental considerations with fuel efficiency and reduced emissions. This will have an immediate positive impact on the environment.

The Energy Efficiency and Conservation Authority (EECA) runs a low emission vehicles contestable fund. This supports projects that encourage innovation and investment in electric and other low emissions vehicles in New Zealand. It offers up to $7 million a year to co-fund projects with private and public sector partners and Alsco sourced some of this funding to start electrifying its fleet.

Alsco’s EV truck will do the Rotorua/Tauranga and Rotorua/Taupo routes, travelling about 286km/day. Fully laden, it will be up to 22.5 tonnes in weight.

It is estimated to save at least 25,000 litres of diesel and 67,610 kilograms of CO2e per year. Roberts said there was in fact, a compelling argument that supported the higher investment for a heavy EV compared to a diesel equivalent, due to a swift payback on operational expense. He said operational savings would justify the higher capital expense by recouping the additional investment in less and six months, thereafter providing a consistent financial advantage over a similarly tasked diesel truck.

Climate Change Minister James Shaw said in his speech that “innovation is a function of constraints”. There is no doubt that the constraints on fossil fuel vehicles are tightening and for the wider heavy vehicle industry, Alsco’s journey will be one to watch.

You can find out more about Alsco’s EVs and sustainability plans here.

– Nick Leggett, CEO, Road Transport Forum

Let’s get practical about climate change

While politicians and celebrities gnash their teeth and shout to anyone who will listen that we are in the middle of a climate change “crisis” or “emergency”, a lot of others are looking at practical and workable solutions to stop the mercury rising.

None more so than those at the local government level, where they actually mop up after a real crisis or emergency, including those caused by dramatic weather patterns or natural disasters which generally impact at a local, rather than national, level.

So, it was interesting this week to present at and be part of a panel discussion at the Road Controlling Authorities Forum in Wellington, looking at the impacts of climate change in relation to transport.

Without question the freight and logistics sector will face increasing pressure from both government and our customers to reduce emissions. But we possibly aren’t as bad as people think.

The energy sector accounts for about 40 percent of New Zealand’s Greenhouse Gas emissions, with transport fuels about 17 percent of that total. About five to seven percent of emissions come from the heavy transport industry.

Road freight transport intersects with those controlling roads on the climate change front in areas such as delays due to extreme weather and storm events; infrastructure condition deteriorating faster with extreme heat or excessive rain; and bad roads causing delays and increasing safety risks such as, more road works, driver fatigue, and additional time-costs for end consumers.

In a real crisis or emergency, local and central government will be more reliant on roads than other parts of the transport network. With increased coastal inundation, or a natural disaster like an earthquake, many rail lines are quickly out of commission. Roads also suffer, as quite a lot of our main highways are vulnerable to such events, but there are usually alternate routes and events are localised, so other parts of New Zealand can supply an affected area, by road.

New Zealand is leading the way in looking at mitigating climate change and we support the principles of the Zero Carbon Bill, currently being considered by the Environment Select Committee.

But we  think that addressing climate change is more than focusing on net zero emissions by 2050. It is also looking at making our infrastructure network resilient and planning for events along the way.

On the emissions front, road freight is a sector that quickly adopts technology efficiencies. Noxious emissions from trucks have been slashed by 98 percent in the past 20 years, through use of technology. European emission standards are applied to much of the heavy vehicle fleet to reduce levels of harmful exhaust emissions, currently Euro Standard 6, which requires an additive to be used in fuelling heavy diesel trucks.

While there are electric options for car drivers, any real alternative fuel vehicle at the heavy truck level is still some way off. In the rush to remove reliance on fossil fuels, we need alternative energy sources in place. And we need to look at the whole picture, for example, the batteries that power green vehicles have been linked to human rights abuses in the mining of lithium and cobalt.

Our industry is keen to find solutions in New Zealand – we are known for our problem-solving and innovation, so let’s lead the way here if we can.

TIL Logistics has partnered with New Plymouth-based Hiringa Energy to develop hydrogen fuel cell technology for its transport vehicle fleet and they hope to begin their first hydrogen vehicle trials in 2020.

It will be interesting to see the results of the trials both here with Hiringa and overseas, where similar research and development is underway, as to whether hydrogen fuel cells and the complex infrastructure that comes along with that technology can displace the battery-based electric motor as the clean alternative for heavy transport.

I recently visited Tranzurban, in Wellington, and using their own ingenuity they have built the first full electric double-decker buses in the world, made up from components they have sourced and put together in a unique way.

There’s still a long way to go, but our industry is poised to take a bigger role in the movement to combat climate change in a global sense. At the same time, individual companies are looking at their sustainability obligations to meet their customers’ expectations and be good global citizens. And when the real crisis, catastrophe, or disaster happens, we’ll be there delivering the goods.

Please note: Being uncomfortable with changing the meaning of the words crisis and emergency does not make me a climate change denier.

– Nick Leggett – CEO, Road Transport Forum