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Transforming Transportation With Technological Change

To meet our emissions reductions targets for transportation, embracing technological change and decoupling transport emissions from economic growth will be essential, says Dr Barry O’Dwyer, associate director at KPMG Sustainable Futures.

Transport and Climate Action

Transport is critical to business and supply chains and transport emissions and economic activity are inextricably linked. However, transport is one the largest contributors to Ireland’s CO2 emissions accounting for 40% of overall emissions in 2019 (prior to the COVID pandemic), with car transport representing the largest component.

Emissions reductions from the transport sector have not achieved the same decline as other sectors, with European transport emissions only starting to decrease in 2007 and remaining higher than in 1990.

Decoupling transport emissions from economic activity will therefore form a key challenge in meeting Ireland’s ambition to decrease transport emissions by 51% by 2030. New and emerging technologies will play a key role in enabling the significant emissions reductions required by the CAP.

Transport in the Climate Action Plan

There is now a strong international and national policy focus on decreasing emissions from the transport sector by promoting an irreversible shift to low emission mobility. The European Green Deal aims to reduce emissions from transport by 90% by 2050 by reducing reliance on fossil fuels, making alternative choices available and influencing pricing to reflect environmental impact. Meanwhile, in Ireland, sustainable mobility is a core objective of Project Ireland 2040, with the National Investment Framework for Transport prioritising investment not only in decarbonisation but also mobility of services, goods and regional connectivity.

Ireland’s Climate Action Plan 2021 sets an ambition of reducing emissions from the transport sector by 7 million tonnes of CO2 (approximately 51%) between 2021 to 2030. To achieve this target, the Climate Action Plan has a vision of delivering an integrated public transport system, decreasing car journeys, increasing the uptake of electric vehicles, and growing alternate energy sources such as biofuel for sub-sectors of the transport sector. The plan sets out a range of measures to reduce emissions from the transport sector which include:

  • Increased investment in and expansion of walking, cycling and public transport infrastructure and services with the aim of delivering 500,000 sustainable journeys by 2030.
  • Increasing the uptake of electric vehicles (EVs) and low-emission vehicles (LEVs) with a target of 945,000 EVs and LEVs on the road by 2030.
  • Support the decarbonisation of key sub-sectors of the transport sector, such as Heavy Goods Vehicles, by increasing the use of renewable transport fuels such as biodiesel.
  • Behavioural change including demand management to reduce kilometres driven by remaining internal combustion engine vehicles.

What Does This Mean for Business and the Transport Sector?

Businesses need to rethink their approach to transport, business travel and ways of working. Existing and emerging technologies will play a key role in not only decreasing carbon footprint but also in driving other benefits including employee wellbeing, reputation, and the bottom line.

For business, transitioning fleets to low and no emission fuels will form an important first step in decreasing emissions. The CAP has an ambitious target of nearly 945,000 EVs and LEVs on the road by 2030. Meeting this target will be extremely challenging and particularly in the context of ongoing supply disruptions resulting from COVID-19, Brexit and shortages in global chip supply and rare minerals which is keeping battery prices high.

In addition, to meet these goals, there will need to be significant investment and expansion in Ireland’s charging network. There are currently 1,900 public chargers installed at 800 sites across Ireland, with estimates suggesting that Ireland would need 100,000 chargers to support the ambition of nearly a million electric vehicles on the road by 2030.

Alternative and Transitory Fuels

Given the challenges associated with full electrification of the fleet, it will be important for businesses to consider other alternative and transitory fuels. While electrification of heavy good vehicles remains a challenge, the increased uptake of biofuels such as biodiesel and bioethanol can form an important step in decarbonising the fleet. Business will also need to consider transitory fuels such as Compressed National Gas (CNG).

CNG can bring immediate benefits in terms of carbon reductions with more significant reductions expected as renewable gas which is compatible with existing gas infrastructure becomes available. Gas Networks Ireland are currently developing a network of public and private CNG stations in Ireland.

Green hydrogen represents another potential alternative fuel to power fleets and can be produced from excess energy being produced by wind farms. Although green hydrogen is currently very expensive, given Ireland’s unique position and potential for wind power development, green hydrogen as an alternative fuel has the potential to support the transition to low and no emission fleets in the future.

Supply Chain Management

The potential for businesses to drive emissions reductions by engaging with their supply chain is immense and remains substantially unexploited. Supply chain emissions are on average 5.5 times as high as direct emissions, so businesses need to engage with their supply chains and integrate environmental performance, including carbon emissions, into their procurement practices, rewarding suppliers that prioritise transition.

In addition, shortening supply chains and manufacturing goods locally provides an important approach to reducing supply chain emissions. Moreover, sourcing locally also serves to increase the resilience of supply chains as well as reducing emissions.

New Ways of Working & Transport

The acceleration of remote working during the COVID pandemic demonstrated how business can work differently. Employees working from home reduced the need to commute, while virtual meetings saved on commute times and travel expenses while also reducing overall businesses transport emissions.

As we emerge from the pandemic, businesses should assess work and travel patterns and consider whether employees can work from home, travel on set days or travel outside of peak periods to avoid congestion.

For example, the National Transport Authority supported 150 large employers and 23 campuses develop mobility plans. For those workforces that actively engaged with the plan, car commuting reduced by 18%.

Businesses must also encourage a shift to sustainable mobility among employees by promoting sustainable travel modes, reviewing existing parking arrangements, and ensuring that there is adequate electricity supply and infrastructure to meet projected increases in demand. 

Meeting the Challenge

Meeting emissions reductions targets for transport set out under the CAP will be a challenge that must be met by all. For business, this will involve a systematic change in how we manage and power fleets, engage with supply chains and in ways of working.

However, meeting these targets also presents opportunities and will result in reduced costs, increases in the well-being of staff and employees and improved reputation while at the same time decreasing environmental impact.

KPMG Ireland


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