Grand Design of Mobility and CO2 Reduction
Balancing the Energy Crisis and Climate Crisis
When considering transportation, the issue of energy that powers it is closely related to the climate crisis. As of March 2022, the social situation related to the Ukrainian invasion also affects the future of the energy system.
Let’s first look at the numbers concerning maritime transport, a macro-level means of transportation.
- Approximately 518 million yen: The cost of fossil fuels used in the shipping industry per day.
- 50,000 vessels: The number of commercial ships worldwide (almost all of them operate on marine fuel oil).
- Approximately 200 trillion yen: The total cost over the next 20-30 years to decarbonize global shipping.
As the world’s economy recovers from the pandemic, the demand has exceeded supply, and since February this year, there have been signs of soaring oil prices. However, due to Russia’s invasion in late February, the price of crude oil skyrocketed. This week, it is approaching 130 dollars per barrel. The United States, as well as Europe, which relies on crude oil imports from Russia, is urgently in need of transitioning to non-oil-based energy production.
In the United States, the “Build Back Better Act,” a major bill to accelerate the transition to clean energy, has been proposed. The bill includes $550 billion in spending to introduce low-carbon technologies such as wind, solar, and geothermal, tax credits for EV buyers, and changes to building energy efficiency and power sources.
According to the analysis by the think tank EnergyInnovation, through the supply of electric vehicles through the bill, US oil consumption is expected to be reduced by 180 million barrels per year by 2030, and the provisions for buildings are expected to reduce US natural gas consumption by 4.7 trillion cubic feet annually by 2030. This is equivalent to 85 percent of the energy Europe imported from Russia last year.
In Europe, various countries are transitioning to cleaner energy sources such as wind, solar power generation, and electric vehicles, which is expected to significantly reduce vulnerability to volatile oil and gas markets. However, a complete transition may take a little more time.
"Elegant Air Travel" and Energy Issues
“When it comes to travel, trains are more sustainable than airplanes.”
This is a phrase I often hear when talking about travel with local students during my study abroad in Denmark.
According to The Economist, the aviation industry that supports the movement of people and goods in the air accounts for about 3% of the world’s total carbon emissions. It has the worst emissions per kilometer traveled. With the ease of travel and the decline in costs, and the lack of regulations to curb emissions, it could increase to 9% of the total carbon emissions by 2050.
In such a situation, KLM Royal Dutch Airlines is accelerating its advanced efforts. It has added 0.5% sustainable aviation fuel (SAF) to flights departing from Amsterdam and offers passengers the option to purchase additional sustainable fuel.
The CO2 emissions of SAF are more than 75% lower than fossil kerosene, but sustainable fuel costs at least four times more and production is also lagging. In fact, the share of SAF in 2019 was only 0.18% and accounted for less than 1% of KLM’s total fuel consumption.
To expand the share, it is necessary to consider the trade-off between “convenience” and “sustainability.” However, when considering the “sky” as a whole, it is difficult for consumers to personally internalize energy issues.
However, since living in Northern Europe, I have come to rethink the significance of my consumption, as I feel closer to initiatives in civil society. When I hear such voices, the statement of “flying around all over Europe by plane” does not sound elegant at all.
In order to address the energy challenges of industries, it is essential to reform the efforts of large organizations, namely corporations, and at the same time, we must pay attention to how much we can simplify the energy issues for consumers.
Starting Logistics Reform from Empty Trucks
In the midst of various challenges surrounding logistics, such as global supply chain disruptions and environmental burdens, the use of AI is gaining attention.
According to Analytics Insight, the AI market in the logistics sector is expected to reach up to $3.8 billion by 2025.
A well-known fact is that passenger and freight transportation account for 28% of greenhouse gas emissions (as of 2018). The optimization of logistics networks through AI can be a game-changer in achieving more efficient and less polluting transportation.
One example is matching empty trucks with cargo. This is an attempt to make effective use of trucks that return empty after delivering goods. Various services such as Uber Freight are assisting drivers in this regard.
When it comes to reducing CO2 emissions in logistics, the focus is on the transformation of mobility, but the key may lie in how much waste we can reduce in the larger system.
Gas Prices and the Spread of EVs
Due to the Ukrainian situation, gasoline prices have been soaring in countries around the world. As of March 7th, Japan’s regular gasoline price is at 174.6 yen per liter, the highest level since the Lehman shock in September 2008.
In such circumstances, electric vehicles (EVs) are once again attracting attention. According to data from AutoPacific, the percentage of American drivers considering purchasing an EV has risen from 4% in 2019 to 11% in 2022. While the increase in EV model lineups by various manufacturers has had an impact, it is clear that gas prices are also related to the rise in interest. In fact, 83% of those considering purchasing an EV cite “cheaper charging costs” as the reason.
Tesla’s CEO Elon Musk stated in a blog post in 2006 when unveiling the first Tesla car, Roadster, that “Tesla’s goal is to move the world from a mine-and-burn hydrocarbon economy towards a sustainable energy future.” Although there are concerns about environmental impact from various perspectives such as power grids, raw materials, and recycling, most EVs tend to have significantly lower greenhouse gas emissions compared to gasoline vehicles.
However, as the survey shows, the impact of incentives is significant for consumers. Looking at Norway, an EV leader, tax reductions and subsidies have made EVs cheaper to purchase than gasoline cars. (Norway has some of the highest taxes on luxury items like cars in the world). Although it is difficult to be a role model due to its situation with 90% of electricity coming from hydropower and being a major oil-producing country, the effectiveness of carrots and sticks can be seen.
Adding Playfulness and Flexibility to Mobility
Have you ever used sharing services for scooters or electric bicycles? These compact and nimble vehicles have excellent environmental performance and are more convenient for short trips compared to larger vehicles like cars.
The micro-mobility market has exploded in recent years as business trends shift from “ownership” to “sharing.” The market is projected to reach $14.29 billion by 2028. The growing awareness of flexible transportation options between consumers and the demand for broad solutions to reduce CO2 emissions contribute to the popularity of micro-mobility.
The pioneer of electric scooters in Europe, “TIER,” recently acquired a micro-mobility operator in North America and expanded its presence there.
One of the reasons for the widespread adoption of micro-mobility is the ability for consumers to drop off vehicles anywhere within a designated area, which is not the case for station-based sharing services. The system allows for more freedom in mobility and does not burden consumers financially or environmentally.
Buses and cars are not necessarily the most efficient means of transportation. They often involve detours and traffic congestion. Mobility that is more free and flexible, without such restrictions, can provide cost-effective and environmentally friendly transportation options. Added with the playfulness of scooters, it becomes a tempting choice for consumers.