Climate Ambitions Trump Climate Action When it Comes to Decarbonizing Europe’s Trucks
This edition takes a look at T&E's latest ranking of European truck manufacturers' readiness for decarbonization and how actual emissions reduction efforts are discounted in favor of 'ambitions'
Transport and Environment (T&E), a European environmental lobby group, recently published its ranking of European truck manufacturers in the “global race to clean up trucks and gain technology leadership”. As you may expect, the report does a stellar job at ranking truck manufactures’ environmental ambitions, what the authors call readiness for transitioning to zero emission technologies (I’ll come back to what zero-emissions stands for) and provides a set of incisive recommendations around even more ambitious CO2 reduction targets, an extended scope of environmental regulations, as well as ensuring that biofuels and e-fuels – the false climate solutions – are kept out of environmental regulation. The report fails however to discuss the seemingly critical reason for which decarbonization is actually happening - emissions reduction! Put bluntly, it doesn’t matter whether truck manufacturers actually reduce truck emissions, as long as they’re really ambitious about wanting to.
Pretty and colorful graphs make for newsworthy material, especially when they support the current narrative around the urgency of the impending climate disaster. In the midst of all the urgency and panic around climate change, actually reducing emissions seems to be a long and distant thought – somewhat counterintuitive given the urgency of the problem. Interestingly, the T&E report and its methodology mirror closely the Greenpeace Auto Environmental Guide 2022 which I analyzed last year. There are three major issues with ranking truck manufacturers by ambition:
Emissions reduction ambitions don’t reduce emissions
Zero emission vehicles are not zero emissions
Electricity faces a similar problem to biofuels
Ranking Methodology, or Better Still, The Greenwashing Machine
It’s worthwhile to take a closer look at how the European truck manufacturers were ranked. Each manufacturer could get up to 100 points. Points were awarded if certain actions or statements had been made (e.g., emission reduction targets) and subtracted (especially for supporting non “zero-emission” technologies). Up to 40 points were awarded for zero emission truck ambitions, 22 for design improvements of electric vehicles, 32 points in total for value chain and charging infrastructure involvement and 6 points for providing zero emission vehicle financing. Up to 15 points could be subtracted if truck manufacturers supported biofuels, eLNG or supporting low-carbon fuel regulation.
Two TRATON group companies, Scania and MAN, along with Damiler Trucks (Mercedes-Benz) were the top three forerunners in the race, Volvo and Renault (part of the same group) were on 4th and 5th positions with IVECO and DAF as the distant laggards. The distance between the 1st position (Scania) and the last was over 60 points. Put this in perspective, this ranking suggests Scania is doing close to 3 times more for the environment than DAF. So, what exactly are Scania doing so much better than DAF? Have they sold so many electric trucks that the planet is now 1 degree cooler? Not exactly.
Emissions Reduction Ambitions Don’t Reduce Emissions
Truck manufacturers were primarily judged on their ambitions to reduce emissions (2030 or 2040 targets) rather than actual impact. This is why, the best performing manufacturer on the list, Scania, has sold just 47 electric trucks in Q1 2023. Yes, 47, and this figure includes buses. During the same quarter, Scania sold 17,918 trucks. Just 0.2% of Scania’s sales were electric trucks or buses. However, because the company announced its expectation that 50% of vehicles will be electric by 2030, they’re one of the best performers. On the other hand, Volvo Trucks, the manufacturer that holds 50% of the European electric truck market with 825 electric trucks sold in Q1 2023, is just 4th! For context, Volvo sold 31,290 trucks in Q1 2023 and electric trucks accounted for 2% of its sales. Arguably, if the number or proportion of electric trucks produced or sold was a measure for emissions reduction, Volvo’s rank should be higher. But it isn’t. Emissions reduction doesn’t seem to matter, announcements do.
Most pledges or announcements are non-committal because it’s difficult for companies to control the types of trucks ordered by customers. If a customer orders a diesel truck, I suspect the company has to build and deliver a diesel truck. But interestingly, announcements and pledges accomplish one thing: they allow companies to claim ‘green’ credentials while doing relatively little in this respect. In Q1 2023, TRATON (Scania and MAN), Daimler Truck (Mercedes-Benz) and Volvo (including Renault), the top 5 manufacturers by readiness for zero emissions, have jointly sold 241,049 trucks. Of these 1,710 trucks were electric – 0.7% of production. Electric trucks were almost a rounding error in the grand scheme of things.
Zero-Emission Vehicles Are Not Zero-Emissions
It’s probably not a surprise to anyone that zero emission vehicles aren’t actually zero-emission. The production and disposal of vehicles produces emissions. By all accounts, producing an electric truck is likely around 2-3 times more carbon intensive than a diesel one. On this note, China currently has the largest battery cell production capacity, around 82%, meaning that it’s likely that 4 out of 5 electric vehicle batteries will have been produced using electricity produced in China, generated primarily by coal. Using dirty fuels to build clean vehicles.
Zero-emission vehicles have zero tailpipe emissions. Again, this doesn’t mean there are no emissions generated during use. Quite the contrary. Zero-emission trucks can be as environmentally damaging or more in certain situations. To illustrate the point and avoid any claims of bias, I’ve used Volvo’s own emissions footprint calculator to compare emissions of diesel trucks, electric trucks and eLNG trucks (no particular reason for the choice of eLNG, just not to have a blank space). The calculator provides separate emissions estimations for the production, use and end-of-life of the vehicle. While I have my own concerns about the way in which these numbers were derived, they’ll do for now - I’ve put some notes on their calculator at the end of the article.
As you open the emissions footprint calculator, you’re greeted by an image much like the one above. Electric trucks (right hand-side of each column group) produce 98.5% fewer emissions than diesel trucks during operation. The bottom right-hand corner shows that this is the case while using hydro power. That would be true if one could choose where the electricity comes from. For instance, if a logistics services provider would for example build a hydro plant and use it to charge its vehicles and only charge vehicles from there. In practice, however, most of us mortals just have to use whatever electricity the grid provides. I must point out at this stage that not even Norway, whilst producing 83% of its electricity using hydro, doesn’t have an electricity emission profile as low as in the hydro power scenario.
Poland, Germany, and Italy combined operate half of the EU’s trucks. It turns out that charging an electric truck in Poland is actually 36% worse from an emissions perspective than running a diesel truck. Charging a truck in Germany is about 22% better than diesel and in Italy, around 35% better.
Country-level electricity mixes are probably a better representation of expected emissions, and this perspective presents a less favorable picture of electric trucks. We can look at several countries such as Poland, Germany or Italy, which combined operate half of the EU’s trucks. Turns out that charging an electric truck in Poland is actually 36% worse from an emissions perspective than running a diesel truck. Charging a truck in Germany is only about 22% better than diesel and in Italy, around 35% better. I probably should note at this point that Germany’s electricity emissions intensity has been increasing since 2020. Depending on when the Volvo calculator was last updated, the emissions benefits of electric trucks may have changed. Sweden and Norway are often taken as examples for the potential emissions impact of using electric trucks. Undoubtedly these examples are genuine, but they are a drop in the ocean. Sweden and Norway each have around 85,000 trucks registered, compared to 1.1 million in Poland, one million in Germany and close to one million in Italy. Using dirty fuels to operate clean vehicles.
Electric Trucks Face the Same Problem as Biofuels
Truck manufacturers are unable to control (yet) where and how your vehicle is fueled or charged. Whether talking about electric trucks, trucks that can run on biodiesel or eLNG trucks, in either case there’s limited control on where the energy comes from. Trucks may be purchased in Norway and used in Poland, a biodiesel B100 truck may use regular diesel and so on. It is rather challenging to understand why T&E would argue so vehemently against the inclusion of any other fuels except battery electric.
Emissions Reduction for More Profitable Business Models
What seems increasingly obvious is the active, concentrated, and sustained effort to transition away from internal combustion engines to battery electric because of their purported emissions footprint. Zero-emissions vehicles are becoming synonymous with battery electric, despite clear evidence that electric vehicles are far from zero emission. Hence, the stated rationale for an internal combustion engine ban would appear rather shaky.
There may be an ulterior motive for this technology transition specifically to battery electric which is concurrent with a business model transition for vehicle manufacturers, from hardware to service providers. The software industry has achieved this transition and it’s proven extremely profitable. I’ll explain.
There may be an ulterior motive for this technology transition specifically to battery electric which is concurrent with a business model transition for vehicle manufacturers, from hardware to service providers.
We used to buy a piece of software, install it, and run it for, virtually as long as we pleased. The number of uses, the frequency, the amount of data mattered little to the price paid for software. With increasing internet speeds, software providers moved increasingly in cloud-based environments and software-as-a-service (SaaS) became the norm. What used to be a piece of software sold once, became a recurrent subscription. The product wasn’t for sale anymore, access was. This move to the as-a-service business model was extremely profitable for software companies and it seems to be increasingly adopted by vehicle manufacturers.
Some vehicle features are already subscription based and soon, mobility will be too. Would you like to use electric seats today, that’ll be 5 euros. Do you need some extra horsepower for this mountain road, that’ll be 20. By transitioning specifically to battery electric vehicles, mobility is transformed to the as-a-service business model. Because of the relatively short battery lifespan, many truck manufacturers lease vehicle batteries. A battery lease is the enforcement mechanism for the mobility-as-a-service business model. Should one fail to pay the monthly subscription, the vehicle may become unusable. At the end of the battery lifespan, the vehicle itself becomes little but an empty shell in need of a new subscription, much like a laptop with all its software in the cloud and without an internet connection .
The incessant push for the transition away from internal combustion engines to battery electric is rather evident in the T&E’s report. Ambitions to reduce emissions trump actual emissions reduction impact. The narrative created skillfully ignores relevant evidence of the emissions footprint of producing, using and disposing of electric vehicles to arrive at the natural conclusion, that only electric trucks can save the planet. In doing so, the report inadvertently provides the ideological support for truck manufacturers’ transition to a new business model, selling mobility-as-a-service.
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A Note on Volvo’s Emissions Calculator
I mentioned that I had some doubts about the way in which Volvo calculates their trucks’ emissions footprint and it’s worthwhile pointing them out (You’ll need to go in the calculator to see some of these figures):
The truck production emissions are proportionate to truck use. If you slide the yearly mileage from 15,000 km to 150,000 km, you’ll see production emissions increase proportionately. This makes little sense as the emissions generated during production should be independent from use. Otherwise, if you claim you’ve used a truck 15,000 km, what happens to the rest of the emissions generated during production? Maybe it has something to do with the fact that if the “full” emission profile (rather than the yearly) is selected, the full emissions cost for building an electric truck are shown: 59,900 kg CO2-e (vs 21,000 kg for a diesel truck).
The electricity consumption of battery electric trucks seems inconsistent with advertised consumption. The FH Electric model claims a 540-kWh battery with a 300 km range. This should equate to around 180 kwh/100km consumption. However, the emissions calculator indicates a consumption of 326 MWh of electricity for 100,000 km of driving. This equates to 326 kwh/100 km. This seems rather inconsistent with what Volvo Trucks advertise.
Using Germany as an example, using 326 MWh in an electric truck would emit 56,300 kg of CO2-e. That equates to a grid emission intensity of 0.17 kg CO2-e/kwh. Germany’s 2022 grid emission intensity was 0.385 kg CO2-e/kwh. Although carbon accounting uses the word accounting, it is far less precise than financial accounting and, this situation seems to be an example of that. Emissions impact may well depend on which emissions you’re looking at and where the figures are sourced from.