Today India has about 4 million trucks on the road and these carry about 70% of the country’s domestic freight. With the freight activity of trucks projected to grow by more than two times by 2050 and trucks already responsible for about half the well-to-wheel CO₂ emissions from on-road transport, adopting zero-emission technologies such as battery electric and fuel-cell electric trucks is critical to decarbonizing the transport sector and achieving India’s climate goals.  

But a successful transition to zero-emission trucks will require extensive data, including about truck travel patterns and operations. In India, the data that’s currently available to the public has gaps and is not in a form that’s useful for researchers and policymakers. Fortunately, there are several ways to begin to fill these gaps. 

It’s not difficult to see where the data challenges come from. For one, trucking in India is largely unorganized: 80% of the operators have small fleets of fewer than 10 trucks. Beyond the sheer multiplicity of truck operators, small operators tend not to log data about their operations like larger fleets do. For another, there is limited data published by the national government. The Ministry of Road Transport and Highways (MoRTH) maintains the national register of vehicles registered by regional transport offices and it provides up-to-date information on the registration of different types of vehicles disaggregated by fuel type, vehicle classes, and region of registration. MoRTH also publishes an annual road transport yearbook that reports national-level freight activity in tonne-km estimated as a function of gross domestic product, but researchers find that these estimates are significantly overestimated. Furthermore, data on the age of vehicles, annual vehicle activity, load factor, and energy consumption is scarce. This results in a wide range of baseline energy consumption estimates and projections for India’s truck fleet.  

International examples offer ways to improve. The European Union implemented a regulation in 2012 that mandates the collection of various data on road freight transport through regular surveys about fleet operators, their operations, and goods transported. In addition, the EU-funded European Transport Policy Information System (ETISplus) project consolidated various datasets into a new reference dataset of road freight transport at various levels: major socio-economic region (NUTS1), states (NUTS2), and district or county (NUTS3). This was instrumental in estimating truck movement on the European highway network and developing recommendations for electric vehicle charging infrastructure deployment targets in the European Union for 2030.  

Similarly, in the United States, highway statistics compiled by the Federal Highway Authority contain annual average daily traffic count at different road sections from state transport agencies through the Highway Performance Monitoring System (HPMS), which uses equipment such as loop detectors and laser sensors. This dataset has supported research on county-level zero-emission truck charging and highway hydrogen refueling needs. 

With these in mind, here are some opportunities that we see for India. First, there are more than 1,000 toll plazas on national and state highways that already use FASTag, a Radio Frequency Identification (RFID)-based electronic toll collection system that was launched in 2014. Additionally, the MoRTH is conducting pilots for an automatic number plate recognition system and plans to introduce GPS-based toll collection to replace toll plazas in the long term. Toll tax collection regularly captures data on daily traffic disaggregated by different vehicle segments. The National Highway Authority of India (NHAI), under the MoRTH, is responsible for developing, managing, and maintaining national highways, and this data could potentially be captured and processed by the NHAI or an expert agency to estimate traffic counts disaggregated by vehicle types at different road sections and at different times of the day. The NHAI or MoRTH could then publish and maintain this dataset in the public domain. Figure 1 shows what the data flow process could look like. 

Figure 1. Traffic count data that already exists at toll plazas through FASTag and how it could be processed and published.

Second, India implemented an electronic way bill (e-way bill or EWB) system under the Goods and Services Tax (GST) regime and it essentially contains the details related to the shipment or consignment of cargo. The consignor generates the bill for transporting goods of more than INR 50,000 in value and it contains a great deal of information on the origin and destination, mode of transport, vehicle type, and goods transported. (The goods exempted from GST are also exempted from the e-way bill system.) More recently, the e-way bill system was integrated with the FASTag and Vahan (national vehicle registry by MoRTH) systems to facilitate the real-time tracking of truck movement to curb tax evasion. This data could be processed by either NHAI or an equivalent expert agency to estimate traffic volume counts and origin and destination matrices in a way that’s useful for researchers and policymakers. MoRTH can then manage the dataset and publish it at regular intervals. 

The Directorate General of Commerce Intelligence and Statistics (DGCI&S), under the Ministry of Commerce, already manages and publishes data on the interstate movement of goods via rail and air, and acknowledges the wide data gap on the interstate movement of goods by road. The data generated by the e-way bill system can help bridge that gap. Figure 2 shows a potential roadmap for such a data-collection system using e-way bills. 

Figure 2. Truck movement data that could be collected through EWB.

Third, as part of PM GatiShakti, the national master plan for multi-modal connectivity, a Unified Logistics Interface Platform (ULIP) was launched to enable seamless data sharing among government and private entities that are directly or indirectly involved in the Indian logistics eco-system. It enables real-time inventory management and monitoring of cargo movements for shippers, identifies demand for transporters, and serves as a planning tool for policymakers to improve logistics in India. Thus, there are already a few different avenues for road freight data collection in India and what’s left is to make the data available in the public domain.  

The future of clean trucking in India hinges in part on our ability to effectively gather, analyze, and leverage truck data from multiple sources. At present, independent research groups are carrying out small-scale surveys in select geographies to fill data gaps and inform policies. This is a highly inefficient use of time and resources.  

As India transitions to zero-emission trucks, truck travel patterns and operations data become critical for designing new vehicles, effectively deploying supporting refueling infrastructure, and crafting a variety of policies and programs for decarbonization. Government bodies and agencies could collaborate to address the information gap, and only once it’s bridged can we unlock the full potential of India’s trucking industry. 

In Germany, expanding the market for used battery electric vehicles (BEVs) is likely to play an important role in broadening access to these vehicles. As the purchase price of used BEVs can still be cost prohibitive to some groups, a larger supply of used BEVs may help to improve their affordability. So, what is the current state of the used BEV market in Germany and what can the government do to accelerate its expansion?

According to the Kraftfahrt-Bundesamt, or the Federal Motor Transport Authority of Germany, in 2022, used BEVs were around 69,000 of the 5.6 million vehicle ownership transfers that occurred in Germany, a 1.2% share (Figure 1). In comparison, BEVs were 17.7% of the over 3 million new vehicles that were registered that year. In 2023, the share of BEVs in used car transfers rose slightly to 1.6%, and for new vehicles, BEVs were an 18.4% share.

The number and share of used BEVs in vehicle ownership transfers rose through most of 2023. The highest recorded share of BEVs in the used vehicle market that year was 2.3% in September, when over 11,400 vehicles were transferred. The increasing number of used BEVs in the market is reflective of the higher number of BEVs that entered the stock starting in 2020, as the average holding period for leased cars is around 2 to 4 years for company cars and 6 years for privately owned cars. In 2020, BEVs were 0.3% of the nearly 48.8 million vehicles in the on-road stock in Germany and that share reached 2.1% in 2023.

As shown in Table 1, the growth of used BEVs from 2022 to 2023 (+40%) outpaced the overall markets for new and used cars, which both grew by 7% during that period. The only fuel types that had higher growth shares than used BEVs were used plug-in hybrid vehicles (PHEVs) and used hybrid vehicles, both of which saw higher year-to-year share increases with 45% and 44%, respectively. New hybrid vehicles also saw a higher growth rate of 43%. That new PHEVs shrunk by 52% from 2022 to 2023 was likely due to the phaseout of the PHEV purchase incentive at the end of 2022. Among internal combustion engine vehicles (ICEVs), the number of used gasoline car registrations grew by only 2% compared with new registrations at 13%. Used diesel cars grew by a larger margin of 10%.

In 2023, AutoScout24, the largest European online vehicle marketplace, reported that prices of used BEVs dropped substantially while prices of used gasoline and diesel vehicles stayed relatively constant (Figure 2). From January to November 2023, the index price, or the weighted average price over time, of used BEVs fell by 23%; for used gasoline and diesel cars, prices dropped by 6% and 2%, respectively, over the same time period. This is likely due to a growing supply of used BEVs for sale and a larger number of more affordable, non-premium BEVs being available for purchase.

• A BEV mandate for fleets would require that corporate fleets be made up of a specific percentage of new BEVs within a designated time frame. This would have broad climate benefits, as fleets in Germany made up roughly one-third of all new vehicle registrations in 2022. Beyond the environmental benefits, adding thousands of new BEVs to the on-road stock would be a boost to the secondhand market. The companies that purchase BEVs would also save money over time because of the lower total operating costs of BEVs when compared with gasoline and diesel ICEVs.
• A bonus-malus system would levy fees on the purchase of ICEVs and use the funds to provide financial incentives to purchase BEVs. If designed to be revenue-neutral, the system could be self-sustaining and would not require funds from the government budget. A staggered bonus based on vehicle size, with larger bonuses for smaller vehicles, would also promote affordability because smaller cars are typically less expensive.
• Interest-free loans for used BEV purchase for those with lower incomes can eliminate the additional financial burdens that come from traditional loans with higher interest rates. Some countries, such as Scotland and France, offer interest-free or low-interest loans for the purchase of used BEVs. A program such as this in Germany could be designed to benefit those with lower incomes by capping eligibility based on the applicants’ taxable gross income. It additionally could promote smaller, more affordable vehicle models by limiting loan eligibility based on vehicle size and price.

Continued development of the used BEV market will allow more Germans who are dependent on a car to participate in the transition from ICEVs to BEVs. Taking actions to accelerate the growth of this burgeoning market will also help bring the country closer to accomplishing its climate goals.

Now that there are millions of electric vehicles (EVs) on U.S. roads, close attention is being paid to public charging reliability and accessibility, including plug compatibility, charger functionality, and the mechanics of payment. On all three fronts there’s good news for current and prospective EV drivers in the United States.

Thanks to a few big developments, in the coming years, nearly all EVs will be able to charge at nearly any public charger. Additionally, a federal program is slated to help ensure that chargers operate properly and that payment processing gets a lot easier by allowing users to use a single app to pay at any charger.

First let’s talk about compatibility and a newly formalized standard. Last spring, Ford made a major splash by announcing that starting in 2025, it will manufacturer its EVs using the North American Charging Standard (NACS) inlet derived from Tesla’s charging standard. After that, most major automakers (except Stellantis) and all the major charging infrastructure networks, including Electrify America, EVgo, Blink, and ChargePoint, made similar commitments to adopt the NACS inlet and connector in their North American vehicles and chargers, respectively. Then engineering standards-development organization SAE International said it would expedite the standardization process for NACS to make it an independent standard available for all. In December 2023, SAE released a Technical Information Report developing a standard for the “J3400” NACS connector.

Industry cohesion around the J3400 NACS charging standard, a universal plug shape, is significant because historically the U.S. market has had a variety of different connectors. This is in contrast with the two leading EV markets, China and Europe, where automakers have been mandated to use a harmonized charging standard for several years. In the United States, for Level 2 AC charging, Teslas use NACS and all other EV models have used a different plug called J1772. For DC fast charging, Teslas also use NACS, but most automakers have used a plug called the Combined Charging System (CCS) and some others have used a third plug type called CHAdeMO. This variety of charging connectors has meant that EV drivers seeking public charging need to check (1) if there are chargers along their route and (2) if those chargers are compatible with their vehicle. This won’t be the case for much longer.

The standardization of the J3400 NACS connector means that soon nearly all new EVs will be able to charge at nearly all charging stations. And for the millions of EVs already on U.S. roads, most non-Tesla EV drivers will soon gain access to Tesla’s NACS charging stations using an adapter. Uncertainty remains about how adapters will be rolled out to consumers, but automakers and charging providers will play a key role in helping consumers work through this and better understand their expanded charging options. For example, Ford recently announced that it will provide free charging adapters to its customers.

The industry shift to NACS comes with additional benefits. The NACS connector is more capable than the CCS connector because it allows higher amperages in both AC and DC operation, which translates to more potential power and less time spent at a charger. The NACS connector is also lighter and more ergonomic than other standards. Under a single standard, there won’t be any need to install charging stations with multiple connectors, and hardware costs will be less. In addition, NACS supports higher-voltage Level 2 charging that aligns with the voltage supply at many commercial locations. This means that chargers could be installed at locations that otherwise would require transformer upgrades, such as many mixed-use apartments and workplaces. Cheaper hardware and installation costs for charging projects could mean cheaper charging rates and even more savings for EV drivers.

Now let’s talk about helping to ensure that chargers function properly and that payment options are simple, accessible, and consistent across chargers in the United States. Communication errors between the EV and the charger and payment processing issues are common reasons why chargers malfunction. Standard communication protocols would go a long way toward improving reliability and optimizing payment. The communication protocols for the J3400 standard differ from Tesla’s legacy protocols and there is still work to be done by Tesla, other automakers, and charging manufacturers to ensure that all EVs and all chargers are interoperable. Fortunately, the federal National Electric Vehicle Infrastructure (NEVI) program, which is to provide funding for the installation of hundreds of thousands of chargers over the next several years, requires the implementation of the latest OCPP and OCPI standardized protocols for charger to network communication, as well as ISO 15118 for EV-to-charger communication. Together these standardized protocols will, among other things, reduce malfunctions by having all EVs and chargers speak the same “language”; expand error message reporting to allow for timely, precise, and lasting troubleshooting of faulty chargers; streamline payment processing and charger operation by allowing users to operate and pay for any charger from any company using a single app; and eventually allow for plug-and-charge capability for all chargers and EVs.

NEVI funding also comes with requirements that charging operators provide contactless payment options and guarantee that chargers are fully functional at least 97% of the time. On the latter, the federal government has already invested $150 million to repair and replace broken and faulty chargers across the United States. Because the NEVI program was developed prior to the J3400 NACS connector becoming a universal standard, the program does not require that NEVI-funded charging stations include the connector. However, since the industry has already largely agreed to adopt the standard, the federal government has expressed a willingness to update the program requirements and is likely to require the connector once SAE finalizes the standard by mid-2024.

As the NACS and NEVI roll out in tandem over the coming years, EV drivers in the United States will see both increased interoperability of charging stations and increased reliability. EV drivers and supporters have long sought to make EV charging away from home as simple and easy as filling up a gasoline car, and these developments are monumental steps toward making that a reality.

The world’s most climate-vulnerable countries scored a victory at COP28 when delegates agreed to implement a Loss and Damage Fund. The fund aims to collect money from wealthier countries and provide it to developing nations contending with the worst impacts of global warming.

But to have a real impact, the fund needs diverse and long-lasting revenue streams, in addition to pledges already made by some national governments. That’s why various taxes have been proposed over the years, including levies on aviation, maritime shipping, and financial transactions.

In light of the COP developments, we analyzed how much revenue a tax on airplane tickets could raise for the Loss and Damage Fund. Such a tax would provide a more stable and scalable funding source than voluntary, typically one-off financial assistance from wealthier countries.

Table 1 shows that $164 billion could be raised in a year if economy-class tickets were taxed at $30 each and premium-class tickets at $120 each. We selected $30 for economy seats based on the air passenger levy proposed by the United Nations Special Rapporteur on Human Rights and the Environment. In a 2021 policy brief, the special rapporteur (an independent expert appointed by the United Nations) outlined a tax of $10 to $75 for economy and business tickets to help pay for climate-related losses, damages, and adaptation. We put the levy at $120 for premium-class seats because our research shows that premium seating is 2.6 to 4.3 times more carbon-intensive per person than economy seating. Exempting economy tickets to and from lower-income countries would help ensure that the tourism industry and nascent aviation market in those countries are not unduly burdened. Such an exemption would reduce the total tax revenue collected by $19 billion. Taxing just international flights still results in a sizeable chunk of revenue: $68 billion a year or, with the exemption, $58 billion a year.

Table 1. Example ticket tax revenues raised by flight type, seating class, and country income levels.

a Flights are attributed to “lower-income” countries if they depart from or arrive in a country that is classified as low income or lower middle income by the World Bank; the remaining flights are attributed to “higher-income” countries for the purpose of this analysis.

b These are example tax rates for modeling purposes, not ICCT policy proposals.

c Number of tickets and potential revenue exempted if economy-class tickets for flights to and from lower-income countries are not taxed.

There are already examples of such taxes. The French “solidarity tax on airplane tickets” charges €2.63-63.07 per ticket to finance efforts by the global health initiative Unitaid to combat infectious diseases in the Global South. The tax raised over €1 billion in its first decade. Though this tax is only one example, it suggests that aviation taxes can be used to raise significant funds for international causes.

Moreover, the ICCT’s previous research found that certain aviation tax policies can be a more equitable way to raise revenue from those most responsible for the sector’s emissions. A tax on frequent flyers would raise 90% of its revenue from the richest 10% of the global population.

There are, however, competing needs for the revenues from a potential aviation ticket tax. Decarbonizing international aviation will require up to $5 trillion in technology investments by 2050. We recently published an analysis showing that these investments—in order to have the greatest and quickest impact on reducing greenhouse gas emissions—should be prioritized early in any taxation scenario and focused on emerging technologies.

Policymakers could, therefore, consider frontloading aviation tax revenues for mitigation in the near term and then gradually shift toward financial assistance related to loss and damage and to helping developing nations adapt to climate change. In addition, revenue from a domestic ticket tax could be earmarked for subsidizing sustainable aviation fuels within the country, while an international ticket tax can fund mitigation, adaptation, and loss and damage. Figure 1 illustrates how revenue could be apportioned over 30 years, using the same per-ticket taxes as outlined above.

Figure 1. Example allocation structure of aviation ticket tax revenue, assuming 50% of the revenue from international flights initially and an increasing share of all revenues (up to 80% domestic and 100% international) can potentially be used to help vulnerable countries with adaptation efforts and loss and damage.

Even if new aviation taxes went solely to the Loss and Damage Fund, the revenues will likely fall short of the need. Some studies project loss and damage needs of at least $400 billion each year. But even limited funding could have a huge impact for some countries. Small island developing states (SIDS) are typically extremely climate vulnerable but need less funding per disaster because of their small populations and geographic areas. Damage mitigation for the 2022 floods in Pakistan was estimated at $16.3 billion, 92 times higher than the $177 million requested by the island nation of Vanuatu for the entire country’s loss and damage that year.

In the best-case scenario, aviation can contribute to the funding mix for loss and damage, as long as such taxes are equitably designed with the goals of both decarbonizing the industry and helping those nations most injured by climate change.

Last week, we released a wide-ranging analysis estimating that more than 150,000 jobs could be needed in the United States to deploy “behind-the-meter” charging infrastructure for electric light-duty vehicles (LDVs) and medium- and heavy-duty vehicles (MHDVs) through 2032. The term “behind the meter” refers to the customer’s side of the electricity meter and the term “front of the meter” is used when talking about the utility’s side, where there’s infrastructure such as substations, transformers, and feeder lines (Figure 1).

For HDVs specifically, the new study estimated that the Environmental Protection Agency’s (EPA) proposed HDV Phase 3 greenhouse gas (GHG) standard could generate as many as 16,000 jobs by 2032, or about 10% of the national total. But that’s only part of the jobs story.

As we’ll explore here, when all the jobs to construct the infrastructure to channel megawatt-scale power to chargers at private depots and public charging plazas for battery electric trucks and buses are considered, the utility-side infrastructure in front of the meter is likely to require a workforce an order of magnitude larger than the workforce building out customer-side infrastructure.

Figure 1. Battery-electric MHDV charging infrastructure ecosystem.

Let’s look at a preliminary, top-down jobs estimate based on available national-level data. It’s sensitive to assumptions about how individual chargers are configured into charging stations, how expensive utility grid upgrades are at each charging station, and how utility investments translate into jobs in the economy.

Still, we make generally conservative assumptions and the eventual number of jobs created could be larger. First, while the total number of chargers is based on a projected level of zero-emission vehicle adoption supported by the EPA HDV GHG Phase 3 proposal, in previous analysis we found that market forces, aided by Inflation Reduction Act (IRA) incentives, can support a larger number of zero-emission MHDVs and may draw even greater investments in charging infrastructure. Second, we do not fully account for possible infrastructure investments upstream from the distribution substation to support the largest multi-megawatt installations with peak loads greater than 10 MW.

We arrived at the job estimates in Figure 2 by first aggregating the nameplate capacity of 100 kW, 350 kW, and 1 MW chargers into a total number of hypothetical charging stations. The cost of grid upgrades and connection costs for charging stations were taken from previous ICCT research and utility upgrade cost estimates by the National Renewable Energy Laboratory (NREL). Next, we converted dollars invested in distribution grid capacity into a total number of direct and indirect jobs in the United States required and supported by these investments; this is based on an economic impact analysis of a utility’s substation transformer upgrade costs and other high-level utility infrastructure economic impact studies (here and here). Direct jobs are those related to the core construction and electrical work, for example installing substations and laying feeder lines; indirect jobs are upstream manufacturing, administrative, and other jobs not immediately involved in utility upgrade activities.

Under the most optimistic level of electrification likely to occur with the proposed EPA HDV Phase 3 GHG rule, we project more than 493,000 overnight 100 kW chargers, nearly 17,000 fast 350 kW chargers, and around 12,800 ultra-fast 1 MW chargers by 2032. We estimate up to $21 billion would need to be invested in distribution grid capacity to support these chargers, also by 2032.

These calculations, combined with the behind-the-meter jobs our colleagues estimated, suggest approximately 262,000 direct and indirect full-time equivalent jobs would be necessary to support the most optimistic rates of electrification to meet the EPA proposal by 2032 (Figure 2). More than 94% of these jobs come from what would be needed for utility-side infrastructure deployment. These front-of-the-meter jobs are wide-ranging and include substation construction, laying conduit, wiring, installing transformers and meters, laying feeder lines and their foundations, and manufacturing electrical grid components and assembly of these assets.

Figure 2. Estimated direct and indirect jobs created from infrastructure investments in MHDV electrification under the most optimistic rates of electrification to meet the EPA Phase 3 GHG proposal by 2032.

Billions of dollars in public investments are already funding charging infrastructure deployment at the federal and local levels. Private sector investments from companies such as TerraWatt Infrastructure, WattEV, Forum Mobility, and GreenLane reflect this growing industry.

Our estimates suggest the vast majority of charging infrastructure job creation will occur not in the manufacturing and installation of chargers themselves, but in the distribution grid assets that power the chargers. Finalizing the EPA Phase 3 proposal would generate significant momentum toward this job creation and the potential is even greater when accounting for the additional market potential shaped by IRA incentives. It’s key that utilities and regulators not only recognize the potential in constructing infrastructure assets in front of the meter, but that they begin planning to deliver front-of-the-meter assets and prepare their workforce in a time frame consistent with the EPA Phase 3 proposal and beyond.

India’s road sector is responsible for 90% of carbon dioxide emissions from transportation and the widespread adoption of electric vehicles (EVs) is a key measure to reduce these emissions. While fiscal incentives like tax credits and subsidies have been shown to aid in promoting EV adoption, non-fiscal incentives can also help lower barriers and encourage consumers to switch from conventional vehicles to EVs. Late last year, at an IEA training, I gave a talk about non-fiscal incentives in India and I’ll cover some of the highlights here.

First, our recent study shed light on the use and proposed use of non-fiscal incentives to promote EVs across Indian states and union territories up to September 2022. We compared this with fiscal incentives and, as illustrated in the chart below, found that most states have prioritized fiscal incentives over non-fiscal measures. Additionally, the only states that have proposed more than three non-fiscal incentives are Maharashtra and West Bengal—both have four non-fiscal incentives in their state EV policies. Between the two states, Maharashtra focuses more on policies that give EV drivers preferential status on the road than West Bengal.

Figure. Fiscal and non-fiscal incentives in the EV polices of states and union territories in India as of September 2022.

Maharashtra is worth dwelling on because it ranked second in India in terms of EV ownership (absolute number of vehicles across all segments) as of September 2023. The state’s efforts to deploy public charging stations were also evident in another recent ICCT study, which found Maharashtra topped all states and union territories in India in terms of public electric vehicle supply equipment (EVSE) stock. Maharashtra has proposed the following incentives: 

1. Creation of green zones  
2. Reserved parking for EVs  
3. Incentives for efficient charging infrastructure rollouts like digital transactions for mobility cards to aid EV users 
4. Allocation of public land for charging points 

Like Maharashtra, West Bengal has proposed creating green zones and incentivizing efficient charging roll-out strategies like mobility cards for EV users. It also suggests modifications in the building code for provisioning of EV charge stations in both private and commercial buildings; this would be incorporated as amendments for existing buildings and is also applicable to new buildings.  

By complementing fiscal initiatives with non-fiscal incentives, policymakers could expect a variety of benefits that are grouped into a few broad categories below. Non-fiscal incentives can help to: 

Enhance the likelihood of realizing the environmental benefits of EVs. When heavily polluting combustion engines are prevented from operating in a green zone, this bestows a privilege upon EV owners. Through such measures, governments and local authorities both reduce local pollution and create a sense of exclusivity and convenience for EV owners that can make the transition away from combustion vehicles more appealing. 

Support infrastructure development. Charging infrastructure is a critical component of widespread EV adoption. Governments can offer incentives to businesses and property owners to establish charging stations. Additionally, facilitating the installation of a charging network through strategies like issuing no-objection certificates in parking spaces, making public land available for charging, and organizing tenders can help stimulate the market for charging infrastructure. This ultimately benefits EV owners. 

Improve public awareness and understanding. Non-fiscal incentives can involve disseminating accurate information and promoting EV-related initiatives that help consumers make informed decisions and dispel uncertainties about the vehicles. Governments and civil society organizations can launch campaigns, workshops, and events to showcase the advantages of EVs, dispel myths, and address concerns about things like battery life during extreme weather, fire safety, range anxiety, and maintenance needs. For example, the Go Electric campaign was launched by the Ministry of Power and led by the Bureau of Energy Efficiency in February 2021; it created awareness of the consumer benefits of EVs at the national level and boosted the confidence of EV manufacturers and consumers alike.  

Foster collaboration and partnerships. This happens among stakeholders including automakers, utility companies, and local governments. By incentivizing EV partnerships, governments can encourage the development of innovative solutions such as vehicle-to-grid technology and smart charging systems. These collaborations can accelerate the growth of the EV market and provide consumers with enhanced features like advanced battery technology, improved safety, and services like wireless EV charging and seamless payment options. There is also the opportunity to share promising strategies for battery recycling and best practices for closing the loop of battery utilization. 

The states and union territories in India that have not yet focused on non-fiscal incentives in their EV policies have a good opportunity to look at the benefits described here. Fortunately for the climate and public health, there’s evidence that more are paying attention recently. Jharkhand notified an EV policy in October 2022 that provides lane and parking preferences to EVs. In November 2022, Manipur released a new electric mobility policy that includes reserved areas in tourism spots where the state is to provide transport services in an environmentally friendly manner by exclusively using EVs.  

Also, in a new EV policy that Tamil Nadu released in February 2023, the government is to declare six cities as EV cities. In each of these a small mobility program will be designed with a focus on EVs, and the program is to prepare a roadmap that includes the electrification of three-wheelers and buses in phases over 10 years.  

Similarly, Uttar Pradesh released EV manufacturing and mobility policy in November 2022. Green routes are to be identified in each district by 2025 and there are to be electric buses on each of these routes. Urban local bodies may identify spaces for reserved parking in public lots that contain EV charging.  

Non-fiscal measures such as the ones I discussed here can offer important benefits in the long run by supporting the EV transition. Policymakers in India and elsewhere would do well to consider steps to adopt them. 

As the world’s largest vehicle markets move toward electric vehicles to decarbonize road transportation, many legacy automakers support doubling down on existing efforts to use biofuels in Brazil, and they’re focusing on using them in plug-in hybrid electric vehicles (PHEVs) as an alternative to battery electric vehicles (BEVs). Additionally, Brazil’s new vehicle emissions regulation (MOVER) will offer tax discounts (until 2026) exclusive to hybrid vehicles that could be larger than the discounts granted for vehicles that meet energy-efficiency targets. Although such support is sometimes tied to assertions of environmental benefits, research by the ICCT shows that PHEVs have embedded climate risks that could compromise the country’s goal of reaching climate neutrality by 2050.

First, our analysis shows that ethanol-gasoline flex-fuel PHEVs have less greenhouse gas (GHG) emissions mitigation potential than BEVs. The same is true for hybrid electric vehicles that don’t plug in, and for these, life-cycle emissions are estimated to be higher than PHEVs when using the same fuels.

Figure 1 highlights the results from our life-cycle assessment of passenger cars in Brazil. It compares medium-segment internal combustion engine vehicles (ICEVs), PHEVs, and BEVs sold in 2023 (left) and those projected to be sold in 2030 (right). For ICEVs and PHEVs, the three rows represent, from top to bottom, cars operated with (a) 100% gasoline C (E27), (b) the market average of gasoline C (E27) and ethanol, and (c) 100% ethanol (E100). The analysis did not consider flex-fuel PHEVs sold in 2023 because none were available. Emissions from electricity production for BEVs and PHEVs were calculated using the current and projected national grid emissions, including power plant construction and transmission, distribution, and charging losses.

Figure 1. Estimated life-cycle greenhouse gas emissions from medium segment ICEVs, PHEVs, and BEVs in Brazil, for models sold in 2023 and projected to be sold in 2030. The three rows of bars for ICEVs and PHEVs represent, from top to bottom, vehicles operated with (a) 100% gasoline C (E27), (b) the market average sales of gasoline C and ethanol, and (c) 100% ethanol (E100). For BEVs and PHEVs, electricity production emissions correspond to the national grid mix. Source: Mera et al. (2023).

For 2023 models, PHEVs correspond to about 20% fewer emissions than ICEVs when both are operated solely with gasoline C. However, when compared with ICEVs with the average gasoline-ethanol use in Brazil, current PHEVs’ emissions are only 3% lower. ICEVs operating exclusively on ethanol correspond to fewer emissions than gasoline PHEVs over their life cycles. In contrast, current BEVs have estimated life-cycle emissions that are 66% below ICEVs with market average ethanol-gasoline consumption and 65% less than current gasoline PHEVs.

For projected 2030 flex-fuel PHEVs using the market average gasoline-ethanol mix, we estimated the life-cycle emissions to be 17% below ICEVs. The lowest emissions for PHEVs are achieved by combining 100% ethanol with an optimistic electric drive share of 55%; this results in 87g CO2 eq./kmg CO2 eq./km and that is still twice the life-cycle emissions estimated for a corresponding BEV. 

These results alone cast doubts over the climate benefits of flex-fuel PHEVs in Brazil. And there’s more.

ICCT studies regarding the real-world operation of tens of thousands of PHEVs in Europe and the United States showed that average PHEV owners operate less on electric drive than regulators previously assumed. In Europe, for vehicles with a type-approval electric range of 40 km to 75 km, the official type-approval values assumed electric driving shares of 70%–85%. In real-world operation, however, the average electric driving share was found to be only about 45%–49% for private cars and about 11%–15% for company cars. As a result, the real-world fuel consumption of PHEVs was found to be on average three and five times higher for private cars and company cars, respectively, than type-approval values. In the United States, electric drive shares were found to be 26%–56% lower than assumed by the Environmental Protection Agency’s labeling program, and this contributed to the real-world fuel consumption being on average 42%–67% higher. Other studies also identified significant differences between the electric drive shares of PHEVs in real-world situations compared with previous type-approval values, and in 2023, the European Commission reduced and the U.S. Environmental Protection Agency proposed reducing the electric drive share assumed in type-approval toward values to be closer to real-world use. 

Would similar real-world drive shares be expected in Brazil, also? Yes. Figure 2 shows Brazil’s 10 best-selling PHEVs during the first two quarters of 2023 and includes the battery capacity (x-axis) and the electric driving range (y-axis), the latter of which we calculated by considering a reduction of 30% in type-approval values to reflect real-world range. The size of the bubbles corresponds to sales. 

Figure 2. Battery capacity and electric driving range of the 10 best-selling PHEVs in Brazil. Source: ABVE, ten best-selling PHEVs between January and June 2023. 

The mean electric driving range of these vehicles, which are mostly large, luxury SUVs that are imported, is 44 km. That’s similar to the average electric range of PHEVs in Europe and the United States. This range can cover most urban trips, but frequent charging would be necessary and that could favor the use of combustion engines. Indeed, as there are fewer charging points available in Brazil, it’s unlikely that PHEV models sold in Brazil will realize a higher electric driving share than observed in Europe and the United States, at least in the near term.  

Policies could increase the electric driving share of PHEVs, including those that establish maximum fuel tank size and minimum electric ranges, require home charger installation upon purchase, and link tax incentives to real-world use and emissions data. But even still, the choice of fueling a flex-fuel car with gasoline and ethanol determines its emissions. In 2020, hydrous ethanol was 35% (by volume) of the total sales of fuels for otto cycle light-duty vehicles in Brazil. Gasoline C (E27) is a blend of 27% anhydrous ethanol and 73% gasoline. In total, hydrous and anhydrous ethanol was 52% of the national demand, by volume, in 2020 and about one third of it in energy. That means only one-third of the fuel demand from the national passenger car fleet was supplied by hydrous ethanol (E100). More 75% of the national car fleet, and 92% of those sold after 2013, are flex-fuel cars and these could be fueled with ethanol exclusively. Yet, over the past few years, ethanol consumption has stagnated while gasoline sales increased. 

As this all shows, there are limits that flex-fuel PHEVs would impose on Brazil’s climate ambitions. Even the availability of flex-fuel PHEVs is not yet guaranteed, particularly for smaller, less-expensive models. Only a few PHEV models are expected to be produced domestically in the near future and they are luxury SUVs. Government incentives favoring this decarbonization pathway like those announced in the new MOVER program may result in only a small reduction of emissions if PHEVs have a low real-world electric drive share. That could, in turn, require more abrupt action to decarbonize the country’s on-road vehicle fleet over a shorter period, if Brazil is still to meet its climate goals by 2050. Effective public policies for transportation decarbonization differentiate incentives based on real-world emissions, and BEVs have far higher mitigation potential than PHEVs. 

Leia este blog em Português aqui.

À medida que os maiores mercados de veículos do mundo optam por veículos elétricos para descarbonizar o transporte rodoviário, algumas das maiores montadoras tradicionais do Brasil reforçam suas apostas nos biocombustíveis, com planos de utilizá-los em veículos híbridos plug-in (PHEVs, do inglês plug-in hybrid electric vehicles) como alternativa aos veículos elétricos a bateria (BEVs, do inglês battery electric vehicles). Além disso, o novo programa de regulação de emissões de veículos do Brasil (MOVER) oferecerá descontos fiscais (até 2026) exclusivos para veículos híbridos maiores do que os descontos concedidos para veículos que atingirem as metas de eficiência energética. Embora estes incentivos estejam vinculados a possíveis benefícios ambientais, pesquisas do ICCT mostram que a adoção de PHEVs têm riscos climáticos que poderiam comprometer a meta do país de atingir a neutralidade climática até 2050. 

Nossa análise mostra que os PHEVs flex têm menor potencial de mitigação de emissões de gases de efeito estufa (GEE) do que os BEVs. O mesmo vale para veículos elétricos híbridos que não são plug-in (HEVs, do inglês hybrid electric vehicles). Para os HEVs, as emissões estimadas ao longo do ciclo de vida são mais altas do que as dos PHEVs, quando ambos utilizam os mesmos combustíveis. 

A Figura 1 destaca os resultados da nossa avaliação do ciclo de vida em carros de passeio no Brasil. Ela compara veículos de motor de combustão interna do segmento médio (ICEVs, do inglês internal combustion engine vehicles), PHEVs e BEVs vendidos em 2023 (à esquerda) e os veículos projetados para serem vendidos em 2030 (à direita). Para ICEVs e PHEVs, as três fileiras representam, de cima para baixo, carros operados com (a) 100% de gasolina C (E27), (b) a média de mercado de gasolina C (E27) e etanol, e (c) 100% de etanol (E100). A análise não considerou PHEVs flex vendidos em 2023 porque nenhum modelo estava disponível no mercado. As emissões provenientes da produção de eletricidade para BEVs e PHEVs foram calculadas usando as emissões atuais e projetadas da matriz elétrica nacional, incluindo as emissões de construção de usinas de geração elétricas e perdas de transmissão, distribuição e carregamento. 

Figura 1. Emissões estimadas de gases de efeito estufa no ciclo de vida para veículos de segmento médio com motores a combustão interna (ICEVs), veículos híbridos plug-in (PHEVs) e veículos elétricos a bateria (BEVs) no Brasil, para modelos vendidos em 2023 e modelos projetados para serem vendidos em 2030. As três fileiras de barras para ICEVs e PHEVs representam, de cima para baixo, veículos operados com (a) 100% de gasolina C (E27), (b) a média de vendas de gasolina C e etanol, e (c) 100% etanol (E100). Para BEVs e PHEVs, as emissões de produção de eletricidade correspondem a matriz elétrica nacional. Fonte: Mera et al. (2023). 

Para os modelos de 2023, as emissões estimadas dos PHEVs são 20% menores do que as emissões dos ICEVs quando ambos utilizam exclusivamente gasolina C. No entanto, quando comparadas aos ICEVs que utilizam a média de mercado de gasolina e etanol no Brasil, as emissões dos PHEVs atuais são apenas 3% menores. ICEVs operando exclusivamente com etanol tem emissões estimadas no ciclo de vida menores do que os PHEVs a gasolina. Em contraste, os BEVs atuais têm estimativas de emissões ao longo do ciclo de vida que são 66% abaixo dos ICEVs com consumo médio de gasolina-etanol no mercado e 65% menos do que os PHEVs atuais a gasolina.

Para os PHEVs flex projetados para 2030, usando a mistura média de mercado de gasolina e etanol, as emissões estimadas no ciclo de vida são 17% menores, em comparação com ICEVs. As emissões dos PHEVs que utilizam 100% etanol, assumindo uma parcela de condução no modo elétrico otimista de 55%; são estimadas em 87 gCO_2eq/km. Este valor corresponde ao dobro das emissões estimadas no ciclo de vida de um BEV do mesmo segmento.

Esses resultados põem em xeque os benefícios climáticos dos PHEVs flex no Brasil. E tem mais.

Estudos do ICCT sobre o uso real de dezenas de milhares de PHEVs na Europa e nos Estados Unidos mostraram que, em média, os proprietários de PHEVs utilizaram o modo de condução elétricas menos do que os reguladores assumiam. Na Europa, para veículos com uma autonomia elétrica de 40 km a 75 km, os valores aprovados oficialmente assumiam parcela de condução elétrica de 70% a 85%. Na operação real, no entanto, a parcela média de condução elétrica medida foi de 45% a 49% para carros particulares e cerca de 11% a 15% para carros de empresa. Portanto, o consumo real de combustível dos PHEVs foi em média três a cinco vezes maior para carros particulares e carros de empresa, respectivamente, do que os valores oficiais. Nos Estados Unidos, a parcela verificada de condução elétrica foi de 26% a 56% menor do que o assumido pelo programa de etiquetagem da Agência de Proteção Ambiental, contribuindo para um consumo real de combustível, em média, de 42% a 67% maior. Outros estudos também identificaram diferenças significativas entre a parcela de condução elétrica de PHEVs em situações reais em comparação com testes. Isso levou, em 2023, a Comissão Europeia a reduzir e a Agência de Proteção Ambiental dos EUA propor a redução da parcela assumida de condução elétrica, aproximando os valores de etiquetagem do uso real.

Pode-se esperar resultados semelhantes no uso real de PHEVs no Brasil? Sim. A Figura 2 mostra os 10 PHEVs mais vendidos no Brasil durante o primeiro semestre de 2023 e inclui a capacidade da bateria (eixo x) e a autonomia elétrica (eixo y), sendo esta última calculada considerando uma redução de 30% nos valores de testes para refletir a autonomia real. O tamanho das bolhas corresponde às vendas.

Figura 2. Capacidade da bateria e autonomia elétrica dos 10 PHEVs mais vendidos no primeiro semestre de 2023 no Brasil. Fonte: ABVE, dez PHEVs mais vendidos entre janeiro e junho de 2023. 

A autonomia média desses veículos, em sua maioria SUVs grandes importados, é de 44 km. Esse valor é semelhante à autonomia média dos PHEVs na Europa e nos Estados Unidos. Essa autonomia é suficiente para a maioria das viagens urbanas, mas seriam necessárias recargas frequentes, o que poderia favorecer o uso de motores a combustão. De fato, como há menos pontos de carregamento no Brasil, é improvável que os PHEVs vendidos nacionalmente alcancem uma parcela de condução elétrica maior do que a observada na Europa e nos Estados Unidos, ao menos no curto prazo. 

Algumas políticas poderiam aumentar a parcela de condução elétrica dos PHEVs, como estabelecer um tamanho máximo dos tanques de combustível e uma autonomia elétrica mínima, exigir o fornecimento e instalação de carregadores domésticos na compra de veículos PHEVs e vincular incentivos fiscais ao consumo real de combustível e emissões. Mas mesmo assim, a escolha de abastecer um carro flex com gasolina ou etanol determina suas emissões. Em 2020, o etanol hidratado (E100) representou 35% (em volume) das vendas totais de combustíveis para veículos leves de ciclo Otto no Brasil. No total, o etanol hidratado e anidro representaram 52% da demanda nacional, em volume, em 2020 e cerca de um terço dela em energia. A gasolina C (E27), uma mistura de 27% de etanol anidro e 73% de gasolina. Isso significa que apenas um terço da demanda de combustível da frota nacional de carros de passeio foi suprida pelo etanol hidratado (E100). Mais de 75% da frota nacional de carros e 92% daqueles vendidos após 2013 são carros flex e poderiam ser abastecidos exclusivamente com etanol. No entanto, nos últimos anos, o consumo de etanol estagnou enquanto as vendas de gasolina aumentaram. 

Como tudo isso mostra, os PHEVs flex impõe limites às ambições climáticas do Brasil. Mesmo a disponibilidade de PHEVs flex ainda não está garantida, especialmente para modelos menores e mais baratos. Espera-se que apenas alguns modelos de PHEVs sejam produzidos domesticamente nos próximos anos e estes são SUVs de luxo. Incentivos governamentais favorecendo PHEVs flex para a descarbonização do transporte, como os anunciados no novo programa MOVER, podem resultar em limitadas reduções de emissões se os PHEVs tiverem uma baixa parcela real de condução elétrica. Isso poderia, por sua vez, exigir ações mais abruptas para descarbonizar a frota de veículos do país em um período mais curto no futuro para atingir as metas climáticas anunciadas para 2050. Políticas públicas eficazes para a descarbonização do transporte devem diferenciar incentivos com base em emissões reais, e os dados apontam um potencial de mitigação muito maior em BEVs do que os PHEVs. 

Read this blog in English here. 

Is demand for electric vehicles (EVs) slowing in the United States? The short answer is no. Light-duty EV sales data from the Alliance for Automotive Innovation shows continued and significant growth in the United States from 2021 through the third quarter of 2023. Figure 1 illustrates the increase in quarterly sales (bars, left axis) and EV sales shares (red line, right axis). EV sales increased from about 125,000 in Q1 2021 to 185,000 in Q4 2021 and from about 300,000 in Q1 2023 to 375,000 in Q3 2023. The year 2023 also marked the first time annual U.S. EV sales surpassed 1 million, and this was achieved by Q3; sales through the first three quarters of 2023 were about 58% higher than the same period in 2022.

Figure 1. U.S. light-duty electric vehicle sales and sales shares by quarter. Source: Alliance for Automotive Innovation, https://www.autosinnovate.org/EVDashboard.

Since Q3 2021, EV sales have increased every quarter, and the share of total light-duty vehicle sales that EVs represent isn’t shrinking, either. The share of new sales that are plug-in electric increased from about 3% in Q1 2021 to about 7% in 2022 and then reached more than 10% in Q3 2023. For some rough context, data from the U.S. Environmental Protection Agency’s Automotive Trends Report shows that EV sales shares have grown at a faster rate than sales shares of conventional hybrids that don’t have a plug: It took about 25 years for hybrids to reach a 10% market share, compared to about 12 years for EVs.

Additionally, state-level data shows that several states are far ahead of the national averages shown in Figure 1. California leads the country and EVs were nearly 27% of sales in the state through September 2023; this means that more than one in every four new light-duty vehicles sold were battery electric or plug-in hybrid electric. Another 12 states—Washington, Oregon, Colorado, Nevada, New Jersey, Massachusetts, Maryland, Hawaii, Connecticut, Virginia, Vermont, and Arizona—and the District of Columbia had EV sales shares between 10% and 20% through Q3 2023.

We also looked at the U.S. EV sales data by automaker and Figure 2 shows this data, with the companies stacked in order from highest (bottom) to lowest sales for the first three quarters of 2023. Most of these automakers sold more EVs in Q2 or Q3 2023 than in any other quarter in the chart, and each company except Ford sold more EVs in the first three quarters of 2023 than they did in all of 2022. Furthermore, each company shown sold more EVs in Q3 2023 than they did in Q3 2022. For example, third-quarter sales from 2022 to 2023 increased by 40%–60% for BMW, Tesla, and Volkswagen, about 115%–125% for Toyota and Stellantis, and by about 150%–180% for Hyundai and all others combined.

Figure 2. Quarterly U.S. light-duty electric vehicle sales by automaker. Source: Atlas EV hub, https://www.atlasevhub.com/materials/automakers-dashboard/.

This data echoes that collected by other researchers and several automakers. Indeed, BNEF found no signs of a global EV slowdown and said that such reports have been “greatly exaggerated.” Hyundai and Kia reported strong U.S. EV demand. Volvo’s CEO said there’s no slowdown of EV orders and he expects EVs to keep driving sales. Moreover, although Ford and General Motors are scaling back near-term production because of slowing demand relative to previous forecasts, both companies still plan on selling more EVs than ever before and “remain committed to an electric future.”

Beyond the strong sales, the latest consumer survey data by McKinsey and J.D. Power show that intent to purchase EVs is increasing, and a Consumer Reports survey found that 30% of licensed drivers would not even consider a gasoline vehicle for their next purchase or lease. The survey data also show that EV affordability and charging availability are key concerns. Fortunately, new tax credits from the Inflation Reduction Act of 2022 will provide up to $7,500 for new EVs plus several thousands of dollars for batteries. This combined with continued expected manufacturing cost reductions will help make more EV models cheaper than their gasoline counterparts, and there are dozens of new EV models across more vehicle classes and price points coming in 2024 and beyond. In terms of charging infrastructure, new public and private sector announcements sum up to more than $21 billion in investments and this is expected to increase the number of public chargers from about 160,000 in 2023 to nearly 1 million by 2030.

There’s a lot at stake in the transition, as EVs can substantially help reduce climate pollution, support clean air and public health, and bring economic benefits, jobs, and industrial competitiveness. Most automakers typically aren’t quick to vocalize slowing demand for their products, so it’s worth remembering, also, that any talk of a lack of EV demand in the United States coincides with a push to weaken proposed new federal pollution standards. The true story from the data is strongly positive for EVs. There’s never been a better time for new standards to build on the sales momentum detailed above and give a strong signal to automakers, charging infrastructure providers, consumers, and other stakeholders to invest in EVs with confidence.

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050. While the revised strategy is not legally binding, the measures used to implement it can be, and in many ways it’s the stringency of these measures that will ultimately determine shipping’s contribution to future global warming.  

Earlier this week, our colleague highlighted the need for measures that limit emissions from ships measured on a life-cycle basis, the well-to-wake (WTW) emissions. With this blog post, we show how one proposed measure, the GHG Fuel Standard (GFS), can be used to reduce emissions in line with the IMO’s revised 2023 strategy or with a pathway consistent with limiting warming to 1.5°C. 

The GFS being designed now will require ships to use fuels that emit fewer WTW GHG emissions until there is a complete transition to all zero-emission fuels. This GFS is meant to encourage the adoption of new fuels including renewable e-fuels (hydrogen, ammonia, and methanol) and sustainable biofuels; by setting limits on the GHG emissions intensity of fuels, it will drive investments in production capacity and infrastructure for new fuels. One effective design of the GFS would identify the date by which the WTW GHG intensity of marine fuels is to reach zero and include interim GHG intensity targets (at regular intervals) to keep the sector on a steady course toward its final goal. Here we use ICCT’s new Polaris model to estimate the WTW GHG intensity reductions that would be needed to achieve net-zero by 2050 in a pathway consistent with the 2023 IMO GHG strategy. Polaris is a global maritime emissions projection model that reports tank-to-wake (TTW) and WTW emissions as carbon dioxide equivalents (CO₂e) based on the 100-year or 20-year global warming potentials of CO₂, methane, nitrous oxide, and black carbon (we exclude black carbon in this particular analysis because it’s not accounted for in the guidelines on life-cycle GHG intensity of marine fuels). 

Figure 1 shows the straight-line GFS trajectory that satisfies the emissions reduction targets in the 2023 IMO GHG strategy and an S-curve trajectory that would stay below the cumulative emissions limit for 1.5°C estimated here. The GFS trajectories were determined based on the business as usual (BAU) predicted energy use from the Polaris model and target emissions in the 2023 IMO strategy and 1.5°C aligned pathways (using 100-year global warming potentials, GWP100). For 2030, the 2023 IMO strategy set a goal of at least a 20% reduction in absolute GHG emissions compared to 2008 levels, and “striving for” a 30% reduction; for 2040, the GHG reduction goals are at least 70% and striving for 80% below 2008 levels. Predicted energy use from Polaris goes from 10.7 EJ in 2023 to 14.5 EJ in 2050, and we estimated the baseline GHG intensity of marine fuels at 92.5 gCO₂e/MJ from shipping’s fuel mix in 2019 using ICCT’s Systematic Assessment of Vessel Emissions (SAVE) model and excluding black carbon emissions. 

Figure 1. Well-to-wake GHG intensities of marine fuels required to align the IMO GHG Fuel Standard (GFS) with IMO’s 2023 GHG strategy and a 1.5 °C-compatible emissions trajectory.

As Figure 1 illustrates, to achieve the minimum IMO targets, the GHG intensity of marine fuels will have to reduce by 18% to 76 gCO₂e/MJ by 2030 and by 72% to 26 gCO₂e/MJ in 2040 compared to the 2019 baseline. For the “striving” scenario, reductions in 2030 and 2040 will have to be 28% to 67 gCO₂e and 81% to 17 gCO₂e/MJ, respectively. A 1.5°C-aligned pathway requires 32% reductions in WTW GHG intensity in 2030 to 63 gCO₂e/MJ and 99% in 2040 to nearly zero GHG emissions. All pathways require 100% reductions by 2050. Following the GHG intensities in Figure 1 would result in the absolute emissions reduction pathways presented in Figure 2.

Figure 2. Absolute well-to-wake GHG emissions trajectories under each scenario.

Table 1 specifies the GHG intensity limits needed to follow the absolute emissions reduction pathways in Figure 2. This table can be used by policymakers as they develop the GFS.

Table 1. Well-to-wake GHG intensities (gCO₂e/MJ) and reductions in well-to-wake GHG intensities of marine fuels from the 2019 fossil fuel baseline needed to align the GFS with different emissions trajectories.

The cumulative WTW CO₂e emissions compared to “well-below” 2°C (interpreted by us as keeping warming to not more than 1.7°C) and 1.5°C limits are presented in Figure 3. Achieving the minimum or striving IMO targets is consistent with limiting warming to well-below 2°C and the S-curve is consistent with 1.5°C.

Figure 3. Cumulative well-to-wake GHG emissions from 2020-2050 implied by each scenario.

The 2023 GHG strategy also includes a target for the uptake of zero or near-zero GHG emission fuels and/or energy sources that should represent at least 5% (striving for 10%) of the energy used by international shipping by 2030. Achieving even the minimum 5% energy target in 2030 would require 0.6 EJ of zero/near-zero fuels. To put this target into perspective, 0.6 EJ represents around 14% of global biofuel demand in 2022 (~4.3 EJ), whereas shipping (~11 EJ/year) represents about 2.5% of global energy demand (~442 EJ/year). When considered in the context of the limited availability of sustainable advanced biofuels for use in shipping, this underlines the importance of scaling up e-fuels to achieve IMO’s target. 

The stronger the GFS targets, the greater the demand for zero/near-zero GHG emission fuels, the fewer GHGs emitted by the sector, and the greater the likelihood that shipping aligns with both IMO’s GHG strategy and the Paris Agreement. The next opportunity for IMO delegates to contribute to the design of the GFS is at the meeting of the 16th Intersessional Working Group on GHG emissions from ships in March 2024.