Eric Olson, Senior Vice President, Advisory Services, BSR

Fleet operators and transport-service providers in Europe face the twin sustainability challenges of climate change and urban issues around air quality, noise, and congestion. As Peter Harris, Europe sustainability director for UPS, explained at the BSR Spring Forum in Paris last week, “Our business depends on being able to get into and out of cities. Urban access restraints materially affect our business.” Through strategies tailored to the European context, businesses are addressing these two challenges, which we explored at a Future of Fuels session.

In the past two years, our Future of Fuels initiative has helped companies understand the greatest sustainability impacts of their transport fuels, and what they can do about them. We initially focused on the North American market, but at the Forum, we expanded to opportunities for collective climate action in Europe.  

Hot Time in the Cities

Mickaël Bergès, director of mobility management for the city of Toulouse, illustrated these climate and urban challenges in action as he described the city’s new delivery charter, which limits the use of vehicles with fuel engines to two hours a day, while allowing electric engines all day. Similar programs are under consideration across Europe.

So what is a company to do?  In addition to achieving significant improvements in energy efficiency, UPS has developed an "Alternative Technology Roadmap" that categorizes lower-carbon fuels by their sustainability and feasibility. The roadmap identifies electrics and hybrids as the preferred solutions for short-haul collection and delivery. Truck-maker Volvo has its own framework for evaluating different fuels, including climate impact; energy and land-use efficiency; vehicle-adjustment requirements; and a fuel’s potential, cost, and infrastructure. Like UPS, Volvo has prioritized a shift to electric vehicles for short-distance transport, especially in cities.

However, these efforts are hindered by the need for greater collaboration among companies and with governments and other key stakeholders in Europe’s cities. Bergès explained that in Toulouse, new electric vehicles are often too expensive for small, local carriers, and the availability of adapted vehicles is limited. Patrik Klintbom, Volvo’s director of environment and energy, noted challenges from the manufacturing side, including lack of standardized rules and specifications across European cities and countries. “We cannot develop different trucks for each country,” he pointed out.

Long Hauls Need 'Better' Biofuels

The needs of long-distance transport are different, and so are the opportunities and challenges. UPS identifies electric hybrids and biogas as preferred alternatives, with conventional natural gas and biodiesel as backups. Harris said biodiesel is currently less attractive due to lingering uncertainty about land-use impacts. Klintbom indicated that certain biofuels would become more important for long-distance vehicles at Volvo. In Volvo’s case, liquid natural gas and dimethyl ether are prioritized.

However, as is the case of electrics for cities, adopting and scaling biofuels in Europe has been hampered by an inconsistent approach to policy incentives and uncertainty around the impacts and desirability of specific fuels and feedstocks. Rolf Hogan, executive secretary of the Roundtable on Sustainable Biomaterials, discussed the need for better engagement between business and policymakers, without which, there is too much complexity across markets, incentives are misaligned, and opportunities are missed.

A Call to Action

Based on the discussions in Paris, BSR agreed to facilitate the development of two opportunities for action under the Future of Fuels umbrella. The first will address the acceleration of effective, low-carbon transport programs for cities through engagement with business and stakeholders, and the second will develop a more consistent approach to scaling biofuels solutions across Europe.

In each of these efforts, there will need to be an emphasis on sound science, economic viability, and “extreme collaboration.” We need sound science to resolve the uncertainties that inhibit action on biofuels, for example. We need to design and test business models based on new types of fuels to see whether they are viable at scale. Last but not least, we need to be highly collaborative, building on the good work already being done in several places and sectors.