Author:
Pier Paolo Raimondi
Research Fellow, Istituto Affari Internazionali and PhD Candidate, Catholic University of Milan
Michel Noussan
Assistant Professor, Energy Department, Politecnico di Torino and Visiting Professor, Paris School of International Affairs, SciencesPo
Date: 30.11.2023
Reading: 11 min.
Introduction
While many national strategies aim at decreasing carbon emissions, transport remains among the hardest sectors to decarbonize, due to its strong reliance on oil products and the need for high-density energy carriers in many applications. Moreover, mobility demand increase is correlated with economic growth, and this will represent an important trend in most countries in Northern Africa in the next years. An additional aspect is the continuous urbanization rate, with increasing shares of the total population moving from rural areas towards large city centres. This tendency requires coherent and effective urban planning strategies, to ensure all citizens an equitable access to workplaces, healthcare, education and, in general, opportunities.
In addition to mobility demand, an important driver of energy consumption, and thus climate emissions, is the choice of specific transport modes by the users, and in particular the reliance on private vehicles instead of more sustainable alternative modes, including public transport, cycling and walking. While carbon emissions are the main goal of the current energy transition, it is important to remember that the use of private cars has also additional impacts on local pollution, congestion, safety, health and noise (Essen et. al., 2020).
In this perspective, a general framework to evolve towards a sustainable transport system is the Avoid-Shift-Improve (ASI) approach (Bongardt et. al., 2019), which suggests starting by avoiding unnecessary trips, then shifting towards more sustainable modes and solutions and only focusing on improving the situation for the remaining trips.
However, after reducing unnecessary mobility demand and maximizing active mobility, an important part of everyday demand will continue to rely on motorized modes. Electrification is increasingly being seen as an effective solution to decarbonize urban transport, especially for light-duty vehicles such as private cars, and two- and three-wheelers (which are the most electrified transport segment worldwide (IEA & EVI, 2023)). EU West Med countries show electrification rates that are below Northern EU countries, as only 9% of total car sales are electric in Italy and Spain, and around 22% in France and Portugal (compared to 31% in Germany, 39% in Denmark and 56% in Sweden (ACEA, 2023)). Electrification rates remain near zero in South West Med countries. Nevertheless, the global trend in car manufacturing is clearly heading towards electric solutions. This in turn leads to an increased integration between the transport and electricity sectors, calling for the need to develop integrated strategies and policies by exploiting potential synergies.
Road transport electrification
Electric vehicles (EVs) can represent an effective solution compared to vehicles running on fossil fuels, both in terms of climate emissions and local pollutants. A key aspect for their successful contribution against climate change is the need to guarantee the use of electricity produced from low-carbon sources. Thus, in parallel to EV deployment, it is of utmost importance to guarantee a parallel development of electricity generation from low-carbon sources, charging infrastructure but also power distribution network (and to a lesser extent transmission network).
Electric vehicles
Electric vehicle technology is gaining momentum worldwide, and automotive companies are adapting their business models and production strategies to provide a range of electric models. The European Union (EU) is among the regions that are showing higher levels of electrification, especially due to ambitious climate policies aiming at an important reduction of emissions (especially since 2021 with the Fit for 55 package and the ban of new ICE vehicle sales by 2035). The technological development of li-ion batteries is improving the range of vehicles and reducing their cost, and also gradually allowing for shorter recharge times, addressing the three main issues that still undermine their wide adoption by the population.
While most interest is put on passenger cars, due to almost 2 billion cars on the streets worldwide (and figures in the West Med region as high as 675 cars per 1000 inhabitants in Italy (Eurostat, 2023)), it is interesting to remember that two- and three-wheelers also account for an important share of the total mobility demand, and they represent an interesting option for electrifying urban transport in an effective way.
Finally, while urban public transport has historically relied on electricity-based solutions, such as underground, trams and trolleybuses, in the last decade many cities are looking with interest to electric buses. Compared to light rail, they require fewer infrastructure investments and provide better flexibility, although the maximum range remains sometimes a barrier to their effective use in all the different transport routes on which urban buses are operated.
Finally, freight transport can be electrified via railways or potentially battery electric trucks, especially for short-haul operations. Long-haul trucks are especially hard to be operated on batteries, due to the high weight and the space that would be required onboard to accommodate the batteries, which would reduce the available room for goods to be transported. Some countries are testing the possibility of implementing electric highways, by equipping motorways with catenary power lines to supply the trucks for at least a part of their total mileage and reduce the needed battery size.
Charging infrastructure
An important critical point remains the availability of an effective and distributed charging infrastructure. While in many cases electric vehicles will be charged at home or at the workplace, public charging represents an important infrastructure, especially in urban environments where most of the cars are parked outside overnight. In addition to the issues of important investment costs and the need for space, an additional issue is the impact on electricity distribution grids, which are often already undersized in some dense districts. Thus, proper strategies should be in place for effective planning of charging infrastructure, taking into account charging speed and available electricity supply, but also encouraging the users to adopt charging behaviours that are in line with the availability of low-carbon electricity.
Vehicles as additional grid storage options?
From this perspective, vehicle charging could also represent an opportunity to balance the variability of electricity generation from renewables such as wind and solar. Smart charging and vehicle-to-grid are two strategies that may play a key role in supporting increasing renewable shares in the power grid. Smart charging is the possibility of choosing the best timing for electricity supply to EVs, while vehicle-to-grid also allows EVs to discharge a part of the stored electricity if the grid needs it. Their implementation requires additional charging infrastructure because each vehicle needs to remain connected to the grid for a longer time slot, and also an effective optimization tool to coordinate charge and discharge operations. Moreover, the effect on the lifetime of batteries remains to be clarified, to avoid decreasing their lifetime.
Indirect electrification: is there a role for hydrogen and e-fuels?
A final point to be addressed is the potential role of e-fuels to indirectly electrify some transport segments that appear to be hard to run on batteries, including maritime applications or long-haul road transport (the so-called ‘hard-to-abate’ sectors). E-fuels are synthetic fuels produced via low-carbon electricity, and they generally rely on hydrogen produced via electrolysis powered by renewables (or nuclear), which can also be combined with a source of carbon. These fuels can be used in traditional engines, and they can represent one of the few viable options, together with biofuels, for applications that cannot be directly electrified. However, it is worth noting that the production of e-fuels requires high amounts of electricity, due to the complex supply and the losses in the different processes that are involved (including – and especially – in their final use in internal combustion engines).
The highest share of electricity consumption for e-fuel production is due to electrolysis to produce green hydrogen. Thus, effective solutions to produce green hydrogen at low costs are fundamental to support the potential development of e-fuels. Countries with high solar and wind potential, such as the West Mediterranean countries, could benefit from large-scale green hydrogen production, provided that effective ways to supply it to the final users can be implemented, both from an economic and environmental perspective. Maritime and aviation sectors could be the most interesting applications, although e-fuels may also complement direct electrification in long-haul road transport (Prussi et al., 2022).
Policies and strategies
Alongside the technological developments, national public policies and decarbonization strategies represent a key component in shaping the energy systems and the transport sector. Possible policies can either favour a reduction and/or a modal shift of transport demand or promote the spread of cleaner vehicles (Noussan, Hafner & Tagliapietra, 2020).
Although Western Mediterranean countries have joined the Paris Agreement and set climate objectives, there is a clear cleavage between Northern and Southern West Med countries regarding decarbonization strategies and policies – especially in the transport sector. North Med countries have increasingly undertaken measures to decarbonize their transport sector, which plays a significant role in their total emissions, mainly driven by the European Union (EU) climate strategy. Already in December 2020, the EU released its Sustainable and Smart Mobility Strategy, which proposed several policy measures that could deliver a 90% reduction in the transport sector’s emissions by 2050 (EC, 2020). In 2023, the EU has undertaken additional measures to set higher fuel standards, which is a crucial factor in favouring a shift towards cleaner solutions. An example is its decision in 2023 to ban new ICE vehicles by 2035. As a result, Europe is currently the world’s second-largest market for EVs after China. Both in terms of share of EV sales and volumes, the North West Med countries have experienced an upward trend, although with some differences, especially with other EU countries. In 2022, sales share of EVs was around 9% in Spain and Italy, while around 21% for France (21%) and Portugal (22%). Italy is the only market that experienced a reduction in terms of share of sales from 9.5% in 2021. In terms of volumes, considering the EU West Med countries France stands out with 330,000 EVs sold in 2022, while Spain exceeded 80,000 and Italy 115,000 (down from 140,000 in the previous year) in 2022 (Global EV Data Explorer, 2023). A key factor for the decline of EV sales in Italy, despite relevant subsidies, is the challenging economic context due to rising interest rates and the energy crisis, which erodes households’ income.
Although Southern Med countries have set renewables targets and hold abundant renewable potential, the countries have largely experienced a slow development in the power sector (Hafner, Raimondi & Bonometti, 2023). This is obviously more aggravated in the transport sector, which depends entirely on oil, meaning further developments are needed. An initial step could be to encourage more efficiency and decarbonization in the sector through fuel standards. For example, most of these countries import a large number of used cars. By imposing stricter regulation on imports, they could reduce the total fuel consumption.
Besides fuel standards, policymakers can incentivize fuel switching and more efficient transport modes through pricing mechanisms. This is particularly relevant for South Med countries, where low energy prices are key barriers to the development of decarbonization measures in the transport sector. Reforming energy prices can be quite challenging for governments as they are a key element of the current social contract. Nonetheless, energy price reforms yield several positive consequences in terms of energy consumption, fiscal and environmental benefits as well as encouraging investment in cleaner solutions. While North West Med already experience higher fuel prices compared to their Southern neighbours, they are expected to further increase transport prices as the EU decided to include the transport sector in its Emission Trading System, to further reduce emissions of the transport sector and to reach its 2030 and 2050 targets according to the EU ETS revision.
Alongside prices and targets, governments need to address other key issues regarding the decarbonization strategy, such as infrastructure. To support a wide use of EVs, governments need to deploy charging infrastructure through regulatory frameworks that enable public and private investments. In 2021, Europe had an estimated 375,00 charging stations (Conzade et al., 2022). In the expansion of the infrastructure, EU countries need to ensure a wide network including also rural areas (Falchetta & Noussan, 2021). By contrast, South Med countries may face more challenges as they traditionally have limited financial capabilities and often a lack of affordable financing, which could only delay the deployment of a solid network that incentivizes EV demand. Furthermore, power grids should be strengthened to accommodate increasing amounts of charging points, especially at the distribution level.
Regarding other transport modes, such as maritime, West Med countries’ efforts can be further driven by international developments, such as the creation of an Emission Control Area (ECA) in the Mediterranean aimed at reducing air pollution by approving a 0.1% sulphur emission control area for ships in the Mediterranean. Moreover, the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) revised the GHG emission reduction strategy in 2023, which aims at reducing carbon intensity of international shipping by at least 40% by 2030. It includes a new level of ambition relating to the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources which are to represent at least 5% striving for 10%, of the energy used by international shipping by 2030(IMO, 2023). These developments can represent a positive breakthrough for the deployment of cleaner solutions in the maritime sector as well as a better and more coordinated strategy between countries in the area. This is particularly relevant for Med countries, as the Mediterranean Sea hosts major ports that have important economic and environmental consequences for each country and the entire region (Prussi & Chiaramonti (2023). Indeed, the region is currently warming 20% faster than the rest of the globe. Regarding the decarbonization of shipping, the European Council adopted a new law to decarbonize the sector in July 2023. The Fuel EU Maritime initiative, which will come into force in January 2025, includes measures to ensure a gradual reduction of the greenhouse gas intensity of fuels by 2% in 2025 to as much as 80% by 2050 (Council of the EU, 2023). At the same time, the EU should promote a EuroMed approach to this issue to prevent a loss of competitiveness of its sector. Furthermore, it also envisages a special incentive regime to support the uptake of the so-called renewable fuels of non-biological origin (RFNBO) with a high decarbonization potential. In this sense, hydrogen can be relevant for the region to decarbonize hard-to-abate sectors. Many West Med countries have launched and presented their own national hydrogen strategy and the two shores present a complementary nature with South West Med being especially on the supply side while EU West Med countries are on the demand side.
Conclusions and recommendations
As political commitment increases, climate policies will broaden their scope. The role of clean energy sources will need to be expanded not only in the power and residential sectors but also in other key sectors, notably transport and industry. Technological developments and legislative pressure are set to increasingly shape the energy and transport sectors. The availability of credible and reliable technologies to reduce emissions in the transport sector requires adequate and clear political support in designing strategies, investment and public support. While the current state of transport decarbonization highlights a clear cleavage among North and South West Med countries, cooperative measures could unleash investments and foster decarbonization. The EU can support South West Med regarding system integration practices, which will become essential as power systems accommodate higher shares of renewables. Furthermore, the EU Med countries could improve affordable financing to South West Med countries to harness their renewable potential. A key area of common cooperation is certainly the decarbonization of the maritime sector, given the recent international regulatory developments and the common interests in the shipping sector.
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