What is the role of renewable fuels in achieving sustainable transportation?


8 minute read

What is the role of renewable fuels in achieving sustainable transportation?

In order to mitigate the imminent effects of climate change, greenhouse gas (GHG) emissions from the transportation sector must be reduced quickly, drastically, and on a massive scale. An abundance of data makes this extremely clear, and yet it’s no simple task. It requires numerous technological innovations, legislative transformation, and individual as well as collective effort. While making transportation sustainable is one of humanity’s greatest challenges of the century so far, it is possible. Through education, empowerment and decisive action it is up to us to transform our transportation paradigm into one that supports rather than threatens the planet.

Carl Nyberg, Executive Vice President of Renewable Road Transport at Neste, points out that emissions from transportation constitute the single largest obstacle in meeting international climate objectives such as limiting global warming or achieving climate neutrality. It is the leading sector for GHG emissions in many countries and regions, responsible for roughly 25% of all GHG emissions globally. The transport sector also accounts for over 60% of global oil consumption and over 25% of all the world’s energy usage. Unlike in many other sectors – such as manufacturing, healthcare, and agriculture – transportation emissions are not decreasing as a result of innovation or policy. Instead, they are increasing due to rising demand for goods, services, and travel. 

carl nyberg

Transport accessibility is strongly linked to quality of life, connecting people and communities to education, healthcare, jobs, and one another. At the same time that it mobilizes today’s societies, it also powers tomorrow’s economic growth. For these reasons, simply decreasing the amount of transportation is not a feasible solution. Yet, dramatic emissions reduction remains a requirement for a sustainable future. Even if climate neutrality was achieved in every other economic sector, failing to sufficiently decarbonize transportation would still result in a global temperature rise of more than 2°C. Put simply, the thing we rely on to power much of our global economy – mobility – is also our greatest enemy in the fight for sustainability.  

Various stakeholders in the transportation sector are already working together to make sustainable transport a reality. Many legislatures and regulatory bodies have acknowledged the need for change and set ambitious targets for lowering transport emissions; investors are driving innovation in the private sector; and large-scale fuel consumers (both private and public) are turning toward low-carbon solutions. The trend, in other words, is present. What remains is to exponentially increase its speed and scale.  

Is there a silver bullet for reducing emissions in transport?

Emissions reductions in transport is a problem for which there is not an effective single answer – no “silver bullet,” says Nyberg.

“We’ve relied on crude oil to do so much for so long that we’ve gotten used to the idea of transportation being based around just one solution,” Nyberg adds. “The result is that people are looking for the next ‘one thing,’ but that’s not the future.”

It is clear that even the most viable, low-carbon transport solutions come with limitations. Electric vehicles, for instance, are effective at reducing emissions and are increasingly popular. However, they don’t support scalable decarbonization in aviation, ocean freight, or long-haul trucking – three modes of transport that are responsible for a disproportionate amount of emissions. While stressing that electrification is still a crucial piece of the puzzle, Nyberg also mentions numerous other challenges related to widespread adoption, such as infrastructure, reliable production at scale, and continued reliance on fossil fuels. Europe alone will need a projected 1 million electric charging stations by 2025, battery supply is currently volatile due to high costs and environmental concerns, and all the while, battery-powered vehicles run on electricity that, in many cases, is produced by burning fossil fuels. 

Other solutions face similar constraints. Mass transit and improved transport networks, for example, are both effective in lowering emissions, but not on a large enough scale to singularly bridge the gap to sustainable mobility. However, even if one technology was capable of sufficiently reducing transport emissions across the board, focusing on it exclusively would almost certainly be a mistake. Over just the past few years, various events have exposed the fragility of numerous global supply chains and provided harsh lessons regarding their dangers. As a result of Covid-19-related closures and quarantines, availability fell and prices rose across countless market segments, and the global economy continues to bear the cost of relying on a single region to produce more than 85% of the world’s semiconductors. Similarly, the current war in Ukraine has exposed an over-reliance on Russian oil and gas exports, bringing about large-scale disruption to energy security and causing significant increases in fuel and energy prices around the world. 

“Optionality is key,” says Nyberg. “Europe’s past choices have led it to experience an unnecessary degree of energy insecurity, and it’s something we can improve on through a more versatile approach to supply.” 

What will the role of renewable fuels really be?

Of all current greener mobility solutions, electric vehicles occupy the most space in public and legislative discourse. However, they are not the only promising technology that is at our fingertips. Another is renewable fuels – that is, fuels produced out of renewable resources. These types of fuels are a major focus at Neste, whose own Neste MY Renewable Diesel product results in up to 90%* less GHG emissions over the fuel’s life cycle compared to fossil diesel. Crucially, it can be deployed in existing diesel engines, requiring no vehicle modifications or infrastructural changes. 

Renewable fuels are intriguing for other reasons as well – primarily, because they are a commercially viable solution that is available today, working to reduce transport emissions in various applications around the world. Renewable fuels are ideal in transportation segments where electrification is unsuitable, including aviation, shipping, and trucking. Together, these three modes of transport – also known as heavy-duty transportation (HDT) – account for over a third of transport emissions, an amount that continues to grow. Because of the inherent limitations of battery technology, powering HDT fleets with electricity is at best impractical, and at worst impossible. Another upside to renewable fuels is the wide range of raw materials from which they can be produced. These include, for instance, multiple types of waste and residues, such as lignocellulosic biomass derived from forestry or agricultural waste.  Renewable fuels will not supplant electric mobility, but they can – and arguably must – complement it. There is little doubt about this among sustainability and transportation experts, who also point out that when performing a “well-to-wheels” rather than simply “tank-to-wheel” analysis, the reduction in net GHG emissions of renewable fuel usage can surpass that of electric vehicles. In fact, renewable methane produced from liquid biomass produces net negative emissions.

Even if deep market penetration is achieved by multiple other low-carbon solutions, electrification included, sufficient emission reductions in the global transport sector will probably require widespread adoption of renewable fuels. However, other challenges exist in this area. For example, renewable raw materials like biomass and solid waste require unique processing methods in order to be successfully converted into fuel. These processes are already commercially viable in the case of some raw materials, but in the case of others, more innovation is needed. More broadly, the challenge associated with renewable fuels is awareness. Many fuel consumers, including businesses, municipalities, and other beneficiaries of large-scale transportation, simply do not know about the effectiveness and availability of renewable fuels today. 

Moving from potential to progress

Despite multiple cost-effective, low-carbon solutions being available, net emissions reductions are not occurring in the transport sector. Instead, emissions are increasing. Carl Nyberg believes governments have a key role to play in changing that: 

“The importance of legislators and regulators can’t be overstated in this context. Not necessarily to make decisions about which technologies to endorse, which may be out of their scope, but to set long-term sustainability commitments and establish transparency around those goals.” 

In Nyberg’s opinion, this type of legislation would provide the kind of confidence vital for spurring action toward sustainable mobility on the part of producers, consumers, and investors alike. 

Additionally, the global nature of transport networks and processes means that authorities must act in a coordinated way to build and maintain a cohesive regulatory framework. Achieving sustainable mobility simply isn’t possible without a high level of collaboration between governments and regulatory agencies. 

However, governmental guidance is only one part of a strategy that must be enacted on multiple fronts. Fuel and energy producers (like Neste), for instance, must balance short-term profitability with long-term innovation. This is not only to align with evolving regulatory requirements, but to ensure their own longevity, since the transport economy of the future will inevitably demand a new range of products and solutions. Meanwhile, large fuel buyers and consumers must focus on actual GHG emissions and how to practically reduce them by implementing low-carbon solutions within their own operations and those of their suppliers. 

In conclusion

Large-scale decarbonization of the transportation sector is an absolute requirement in order to achieve climate targets, conserve resources, and protect the natural environment. It will also support the health and growth of the global economy for decades to come. However, it is a problem that must be dealt with quickly and decisively. Governments, municipalities, energy and fuel producers, corporate consumers, and financial institutions all have major roles to play, and must embrace a multiple-solutions philosophy. 

Amid growing awareness and shifting attitudes, there is reason to be optimistic about the future of mobility. Green innovations and investments are increasingly impacting the transportation market. The most important thing we can do is to not stand in their way.