8 DEC 2022

Asia's winding road to clean, green transport

Transportation is one of the hardest sectors to decarbonise. Industry players at sustainability conference Ecosperity Week explored ways to cut the carbon costs of the shipping, aviation and auto sectors.

Asia's winding road to clean, green transport Carriers such as Singapore Airlines have been investing in younger, more fuel-efficient fleets to lower emissions.

The transport sector accounts for more than a quarter of energy-related carbon emissions globally. In 2020, as the Covid-19 pandemic forced people indoors and supply chains buckled, emissions from ships, planes and automobiles dropped by more than 10 per cent. But as the world emerges from the grip of a virus that brought the aviation industry to its knees, transport emissions are rebounding as lockdowns end, international business activity recovers, and holidaymakers indulge in “revenge travel”.

Without a major rethink of how people and goods are moved, achieving net-zero emissions by 2050 to avoid the most severe consequences of climate change will be an impossible task. Aviation emissions account for just 2 per cent of the global carbon footprint today, but the International Civil Aviation Organization (ICAO) forecasts air travel emissions to grow by 300-700 per cent by 2050, fuelled by a travel boom in developing countries.

Speaking at Temasek’s sustainability conference Ecosperity Week in June, Juan Carlos Salazar, ICAO’s Secretary-General, said “calls to curb and eliminate aviation emissions have become louder and more urgent” as economies recover post-pandemic and air travel takes off again.


Sustainable aviation fuel gains altitude

Aviation experts at the Ecosperity conference said that improving operational efficiency, by optimising flight paths and switching to younger, more efficient fleets, is important for achieving about one-fifth of the reductions needed to meet the industry’s 2050 net-zero target, set by airline industry body International Air Transport Association in October last year. Each new generation of Boeing aircraft is 15 to 25 per cent more efficient than the preceding model, and carriers such as Singapore Airlines have been investing in younger, more fuel-efficient fleets to lower emissions. 

Making Waves in Sustainable Shipping Panel discussion on "Making Waves in Sustainable Shipping" at Ecosperity Week 2022 (L-R onstage: Dr Bicky Bhangu, President, South East Asia, Pacific & South Korea, Rolls-Royce and Todd Citron, CTO, Boeing Research & Technology; L-R on screen: Jennifer Holmgren, CEO, LanzaTech and Lauren Uppink Calderwood, Head of Aviation, Travel and Tourism, World Economic Forum)

But finding viable sustainable aviation fuels (SAF) is the surest way to reaching net-zero, said Todd Citron, chief technology officer in the research and technology team at aircraft maker Boeing. “An analysis by the Air Transport Action Group shows that by 2050, SAF alone will provide 70 per cent of the improvements we will need to get to net zero,” he said, adding that Boeing is aiming for all of its aircraft, including its existing fleet, to be 100 per cent SAF-compatible by 2030.

The point of debate is what sort of sustainable fuel to use, particularly for long-haul flights which account for a quarter of air traffic but three-quarters of emissions, noted Dr Bicky Bhangu, President, South East Asia, Pacific & South Korea, for engine-maker Rolls-Royce.

“Kerosene [from fossil fuels] today is the most efficient way to get thrust from a gas turbine engine — but we’ve got to break that dependency from hydrocarbons and look for alternatives,” he said, citing biomass, waste and cooking oil as examples.

Depending on the feedstock used to produce it, SAF can reduce the emissions of conventional jet fuel by up to 80 per cent. But Citron said taking the lifecycle emissions of the fuel into account is key. “We can’t just look at the aircraft. We have to look at the total ecosystem. If an aircraft uses sustainable aviation fuel which is not generated from green electricity, then we aren’t really achieving our objective,” he said.

Hydrogen is a much talked-about fuel of the future, and could reduce the climate impact of flights by up to 75 per cent, and propulsion by up to 90 per cent if used in fuel cells, according to a 2020 McKinsey study. But Bhangu noted that hydrogen is more suited for short-haul flights for now, and there is work to be done to bring down costs. “The opportunity with hydrogen is that it’s zero emissions. But it is expensive to produce, and is four times the volume of kerosene, so it’s hard to take on long-haul flights,” he said.

Electrifying air travel is another route to net-zero. Commercial electric flights could be a reality for United Airlines passengers by 2026, while Sweden and Denmark are aiming for all domestic flights to be fossil fuel-free by 2030. But Jennifer Holmgren, chief executive of carbon recycling firm LanzaTech, said that decarbonisation of aviation will not be possible without a combination of solutions. “It is important to be creative and not make it one-solution-fits-all, like we have today with kerosene. We need electric, hydrogen, and SAF — and SAF will play the most important role, at least in the near term, in cross-Atlantic and Pacific long-haul flights.”


Southeast Asia’s bumpy road to electrification

The 2020s is the most disruptive decade the automotive industry is going through in its 125 years history, as car manufacturers race to electrify a sector that contributes to 72 per cent of the global transport sector’s carbon footprint, according to data from Boston Consulting Group.

Currently, 85 per cent of the world’s light vehicle fleet is either powered by gasoline or diesel, but towards the end of this decade, more than 60 per cent of vehicles will either be a battery electric or electric powertrain vehicle, said Nikolaus Lang, Boston Consulting Group’s Managing Director and Senior Partner.

But electric vehicle (EV) growth is unlikely to be as fast in Southeast Asia, where road transport electrification is still in its infancy and EV market penetration is currently 1-3 per cent. In Thailand, one of the region’s more advanced EV markets, just 30 per cent of vehicles are projected to be electric by 2030.

The roadblocks to vehicle electrification in Southeast Asia are numerous, with cost being a key one. For instance, in Norway – which has the world’s highest EV penetration – EVs are exempt from most road taxes, while most Southeast Asian nations have yet to introduce tax breaks for electric vehicles.

The Future is Electrifying: Driving towards Net Zero in Southeast Asia Panellists for "The Future is Electrifying: Driving towards Net Zero in Southeast Asia" at Ecosperity Week 2022 (L-R onstage: Cheryl Goh, Group Vice President, Marketing and Sustainability, Grab; Pras Ganesh, Executive Vice President & Corporate Information Security Officer, Toyota Daihatsu Engineering & Manufacturing and Nikolaus Lang, Managing Director & Senior Partner, Boston Consulting Group)

The total cost of ownership of a four-wheel EV is 82 per cent higher than an equivalent internal combustion engine (ICE) car in Southeast Asia, says Cheryl Goh, Group Vice President of Marketing and Sustainability at ride-hailing firm Grab, which declared in June 2020 that it would be a carbon neutral company by 2040. The significantly higher cost puts electric vehicles out of reach for the lower-income drivers that use Grab’s app.

“For electric mobility to really scale [in Southeast Asia], and to help our drivers transition [to EVs], it needs to be inclusive, and it needs to be affordable for the masses,” said Goh.

Technological innovations could hasten the shift for EVs and bring down cost. Chinese EV manufacturer Nio launched a battery rental service in 2020 that has reduced the overall cost of EVs by 2020, Lang said. 

Battery swapping technologies, such as those offered by Taiwanese e-bike firm Gogoro, could speed up the electrification of Southeast Asia’s ubiquitous two-wheelers. Ride-hailing company Gojek launched a trial with Gogoro in Indonesia last year. 

However, the battery-swapping model faces challenges if riders own the bikes, Goh said. “They [e-bike owners] are quite afraid that they will swap for a less productive battery,” she noted. Battery interoperability is another concern. “We have three to four different models of e-bikes, but the challenge is that everybody uses different batteries,” Goh said. 

Range anxiety is a real fear among Grab drivers, and another reason why the transition to electric vehicles has been slow, she said.

Grab and Gojek are both pushing ahead with decarbonisation ambitions that will hinge on better charging infrastructure and cleaner electricity grids in Southeast Asia — and that will require more government support.

Pras Ganesh, Executive Vice President, Business Transformation Group at Japanese carmaker Toyota, said governments may have to subsidise EVs so that they are more affordable for consumers, as well as invest more in EV infrastructure such as charging points.

Toyota has sold 20 million hybrid electric vehicles since 1997, the year of the launch of its popular hybrid, the Prius. But there is room for growth, as zero-emission vehicles make up less than one per cent of the company’s total sales.

Industry, too, will need to find new ways to scale up EV production economically and sustainably. “Doing a few vehicles is easy, but doing it at scale is not easy,” Ganesh said.

In Norway, where more than three-quarters of the cars on the road are electric, scale was achieved on the back of government incentives such as toll exemption and a healthy appetite for fossil fuel-free driving among consumers.

EV sales are gaining momentum as governments from the European Union to Singapore set targets to phase out polluting petrol-powered vehicles. Global EV sales doubled in 2021, and nearly tripled in China.


Sailing to low-carbon shipping

Shipping is arguably the hardest mode of transport to decarbonise. The 80,000 vessels that sail on the high seas are difficult to electrify, there are few viable alternatives to the 300 billion tonnes of pollutive bunker fuel used every year, and the sector is highly fragmented, with thousands of small fleets operating alongside large conglomerates.

While the carbon cost of moving goods on water is lower than aviation or road transport, the shipping trade still accounts for 3 per cent of global carbon emissions. And as shipping accounts for 80 per cent of global trade, the world will not be able to meet the targets set by the Paris Agreement on climate change if the shipping industry does not decarbonise.

In 2018, the International Maritime Organisation (IMO), the industry body for the shipping trade, unveiled a Greenhouse Gas (GHG) strategy to halve the industry’s emissions by 2050, and reduce carbon intensity by 40 per cent by 2030 compared to 2008 levels. This target falls short of the aims of the Paris Agreement on climate change, but the IMO’s Secretary-General, Kitack Lim, said at Ecosperity that an updated target will be introduced next year, with discussions underway to set a maximum carbon content limit for marine fuels and introduce a carbon pricing mechanism.

Making Waves in Sustainable Shipping Panel discussion on "Making Waves in Sustainable Shipping" at Ecosperity Week 2022 (L-R onstage: Prof Lynn Loo, CEO, Global Centre for Maritime Decarbonisation; Jeremy Nixon, CEO, Ocean Network Express; Quah Ley Hoon, Chief Executive, Maritime and Port Authority of Singapore and Johannah Christensen, CEO, Global Maritime Forum)

Johannah Christensen, CEO of Global Maritime Forum, a non-profit working towards a sustainable shipping trade, echoed Lim’s sentiments that zero-emissions vessels and fuels need to be deployed at scale within this decade in order for the trade to be decarbonised by 2050. However, like aviation and vehicular transport, shipping is faced with a “chicken-and-egg dilemma,” she said. “Investors in vessels are waiting for [sustainable] fuel to become available, and investors in the fuels are waiting for the vessels to become available.”

Numerous alternative fuels are being trialled, including methanol, hydrogen, and ammonia. But a front-runner has yet to emerge, and none have achieved scale, panellists said.

Jeremy Nixon, CEO of Ocean Network Express, the world’s largest container shipping company, said that new technology is needed to retrofit existing ships and build new ones to meet the 2050 net-zero target. The industry is capable of building 3,000 to 4,000 new low-carbon ships a year, which would mean replacing the existing fleet at a rate of 5 per cent a year, he said. “We have to make sure that we work with the regulators to come up with a practical way of decarbonising, and also how we manage the cost,” he noted.

Decarbonising the maritime sector is projected to require US$2.4 trillion in cumulative investment by 2050, according to Boston Consulting Group.

Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation, an industry-backed organisation set up by the Maritime and Port Authority of Singapore last year, said the “pain point” of decarbonisation is in the supply chain, so solutions need to take a holistic approach and consider not only vessels and ports, but entire routes to enable “green corridors”.

To achieve net-zero, the trade needs to get better at collaborating across the industry, Nixon said. “Decarbonisation should not be a point of competition. We need to all work together. The sooner we can do that, the better it will be for everybody.”

One key area for collaboration is in carbon measurement, which is still a grey area since different companies use different metrics. This will make the IMO’s plan to introduce a price on carbon, announced in May after years of industry resistance, difficult. “We do want a carbon price, but we want it to be fair, reliable, predictable, and universal for everybody,” said Nixon.

“We can make all sorts of claims about how green we are. We can take all sorts of fuels on board and say we’re doing the right thing. But it needs to be fully transparent and accountable,” he said.

Watch the session playbacks:

Asia's winding road to clean, green transport