Australia’s freight decarbonisation of the freight industry has a positive outlook, but is constrained by cost, infrastructure and policy alignment, attendees at day 2 of MegaTrans exhibition heard.
That was the overall gist of discussions at a fireside talk entitled The Transition Without the Breakdown: Decarbonising Freight While Keeping Australia Moving, which saw Rob Cavicchiolo, Carbon Solutions Manager at Viva Energy Australia, and Jaydeep Solanki, General Manager of Procurement at CEVA Logistics, discuss a wide range of topics relevant to the freight sector.
In a broad spectrum 30-minute discussion on freight decarbonisation, the panellists were asked how they saw the current decarbonisation journey, and the obstacles confronting it.
Decarbonising freight requires a balancing act as customers still expect it to arrive on time, at the agreed price and without any compromise to service.
The challenge for the industry isn’t simply how to reduce emissions, but how to attain that while keeping freight commercially competitive, reliable and fit for purpose.
The two industry leaders considered a range of topics, from decarbonisation pathways, costs and reliability, infrastructure and policy and industry context, to customer needs and reporting requirements to transport options and industry-government collaborations.
Asked about the nation’s decarbonisation journey, and the biggest obstacles moving forward, Cavicchiolo said it’s an evolving stage.
“It’s looking at carbon footprint, that sort of transitioned into emissions and looking at how you actually understand your emissions, then transitioned into what technology pathways there are in terms of electrification, green hydrogen, renewable fuels, or alternative fuels drop-in to now being a compliance sort of market as well,” he said.
“It’s also addressing some of the issues around how you’re going to report your emissions and how you’re going to act on those type of emissions.”
He noted that as a fuel company, Viva will maintain its conventional fuels and energy running in the low-carbon liquid fuels market, while also investing in the different emerging pathways.
“If we talk transport, on-road transport, that might be short to medium term around low-carbon liquid fuels, things such as biofuels or renewable diesel, HVO, and transitioning over to electrification,” he said.
CEVA Logistics’ Jaydeep Solanki said the global logistics provider was seeing greater client knowledge and demands on the issue of emissions.
“We are seeing a lot more heightened and increased awareness about the need to reduce carbon footprint among all of our customers,” he said.
Solanki noted that CEVA as a provider of air, ocean, and road transport solutions to global customers, is seeing more and more need for reporting carbon footprint or carbon emissions from clients.
“That awareness, even on the ground in Australia, has started to increase with government mandating large companies to report their CO2 emissions footprint, and for those companies involved in distribution of large-scale goods, all logistic providers are also required to declare their carbon footprint to the customer. So, this awareness is starting to build a momentum in Australia. Early days, but that momentum has started to build,” he said.
He added that with the increased levels of data now available customers are becoming more clearly aware of their carbon footprints.
“Logistics providers are now in a position to provide more accurate CO2 emissions data based on the type of vehicle they are using, type of fuel they are using, and type of load they are carrying. So that uncertainty, the way it used to be a few years ago, has reduced significantly,” Solanki said.
With the weighty issue of freight costs, Solanki told the audience that CEVA is able to assist its customers to maintain reasonable costs through “full life cycle approach to transportation”.
“We support customers with demand planning and inventory management as a solution, to then estimating what is the best way to plan freight. By properly planning demand ahead of time and maintaining the right level of inventory, we tend to balance the freight mode that we choose for them.”
Rob Cavicchiolo said the issue of cost was always a major issue for Viva Energy which required close work with clients.
“We have to look at what impact does that have on their fleet as such, and how easy is the transition across not only in their assets, but and also the infrastructure to store those fuels on site and access to the fuels. So very much from our perspective, we’ve done all those studies as to those drop-in fuels,” Cavicchiolo said.
“For Viva we’ve got our publicly facing service station to serve as green hydrogen at the pump, as well as diesel, as well as rectification. It’s finding the fit for right purpose for application for those type of vehicles as such, and understanding the familiarity of working with those type of fuels, such as green hydrogen going to be through a fuel cell, or if it’s going to be direct injection into a traditional engine hardware situation.”
As a result, he said there was a need for a great deal of collaboration, working with OEMs and getting all relevant stakeholders to the table. “We’re making sure they’re comfortable with obviously the downstream customers, working with the different authorities and policy settings as well to make sure that they’re all aligned.”
Cavicchiolo added that the ongoing topic of infrastructure requirements was also at the forefront of the decarbonisation debate, saying that it’s an ongoing issue for companies like Viva to keep on top of.
“From an upstream perspective, making those fuels available, we’ve got to get the balance right. We’ve got to keep conventional diesel going out to the marketplace to feed that in themarket but change the infrastructure across to these other types of fuels and bring them into the market as well,” he said.
While Viva is operating its Energy Hub in Geelong, which is Australia’s first commercially scaled and publicly accessible hydrogen refuelling station, Cavicchiolo added the transition to fully providing alternative fuels was ongoing.
“We’ve got to make decisions with our infrastructure to ensure that demand is coming, time that demand, transition our infrastructures accordingly, and then move over, move it across to renewable fuels. When you look at the electrification side of things or green hydrogen, that’s another different kettle bit of fish,” he said.
Solanki agreed that infrastructure was a key area that needed more development.
“Infrastructure is critical for shift towards the lower carbon solutions, but it is a collaborative effort between customers, logistics providers, and the energy distributors. And key to bringing all these party together is a clearer policy direction as a nation,” he said.
Cavicchiolo said that underpinning the infrastructure there a lot of policy development based on decarbonisation.
“There’s a huge amount going on at the moment. You’ve got low-carbon liquid fuel, you’ve got fuel security, you’ve got electrification in terms of policy frameworks around the national vehicle emission scheme,” he said.
“There’s a lot of policy framework there, but they need to be pulled together and harmonised across each other, and then also help incentivise, subsidise, and most definitely help customers, clients, to transition that across because the cost unfortunately has to be borne somewhere.”
Looking at a 10-year projection for decarbonisation in the freight sector, the speakers agreed there is a positive outlook.
Cavicchiolo noted that alternative-fuel adoption is expected to grow as technology matures, infrastructure expands and costs decline, while conventional fuels will remain relevant during the transition, with fuel security and local manufacturing still important.
He said that Viva Energy was looking strongly into feedstocks such as used cooking oil and agricultural inputs as part of a potential transition towards a bio-refinery in the 2030s.
“The future is looking very exciting and it’s a lot less carbon-filled than what it is today,” Solanki said.
“Technology is emerging and maturing steadily, and with that adoption of technology and scale being developed, the costs are coming down. Similarly, the infrastructure is growing, and the multitude of options will continue to grow in next 10 years’ time. There will be more hydrogen stations available.”
He referred to Viva Energy’s first commercially operating hydrogen station as proof of concept, as well as large long-distance prime mover trials happening to show that decarbonisation is gaining a strong foothold.
“The biggest take-up currently is in the inner-city lower load distributions, and that’s where a lot more adoption is already there, and that will continue to grow with the smaller EV vehicles delivering inner city loads,” he said.
“Most importantly, there is a collective will in Australia between customers, energy providers, and logistic service provider to reduce carbon footprint. So this will be a snowball effect. The momentum is already there; it has started to build, and as we progress, it’ll start to grow bigger and bigger with time, and we’ll have a much brighter future in 10 years.”
Cavicchiolo said there was already very strong progress across transport sectors towards decarbonisation, with customers also very much onboard.
“They’re (clients) making decisions now in terms of on-road freight, whether it’s a traditional type of arrangement is it electrification? Is it hybrid? So I think they’re staging their commitments over the 10-year horizon and such, and what’s fit for purpose right now. But also, when they come to reinvest or buy new equipment or assets, they’re looking at what that technology looks like, and is it fit for purpose for three or five years time?,” he said.
He added it was interesting to see the development of fuel needs from traditional, or conventional fuels, maybe to methanol, to LNG, ammonia, to others.
“You sort of get this fractionalisation of what’s happening there as well. And as an energy provider, we’ve got to back the right horse here at the right time,” Cavicchiolo said.
“But in 10 years’ time, I think we’ll see a whole different range of solutions. Some a bit more mature, some adopted, but I still think that conventional fuels will be in the mix but slowly coming down over time in different sectors.
“So,it’s an exciting future, complex, requires a lot of government and policy support around this, particularly in in this country, but I think all the stepping stones there are starting to fall into place for allow us to get this adoption happening pretty quickly.”
The speakers agreed that Australian freight decarbonisation is progressing through reporting, alternative fuels, electrification and collaboration, but cost, infrastructure and policy alignment remain significant constraints.
Extracted in full from: https://primemovermag.com.au/australias-freight-decarbonisation-on-track-viva-ceva/
