$5 billion for Clean Transport

The United States now offers the transport industry a choice of funding incentives to help vehicle operators and technology providers get near-term action rolling out clean transport equipment and refuelling infrastructure across the country. 

On top of US$2.925 billion made available from the Volkswagen emissions scandal settlement, being shared between all States to accelerate deployment of advanced clean transportation technologies and reduce harmful emissions, various State and public utility schemes are offering millions of dollars to support residential charging station construction and the electrification of medium- and heavy-duty vehicles.

“The problem faced by fleets and other stakeholders will no longer be where they can find the funds, but how they can secure the right funding opportunity.”

Read the full story here: https://www.act-news.com/news/clean-transportation-funding/

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Act Now to Achieve IMO Carbon Targets – ITF

The International Maritime Organization (IMO) target of reducing greenhouse gas emissions by “at least 50% by 2050 compared to 2008” aligns the shipping sector with the Paris Agreement temperature goals. Strong actions are needed. The IMO strategy relies on technological innovation and alternative energy sources for global shipping, and support of governments and shipping customers will be essential to realise this new level of ambition.

With intuitive timing, a tremendous amount of guidance has just been made available by the International Transport Forum, releasing a series of reports over the last month that provide comprehensive analysis of the options and actions needed by a host of players in the global maritime industry. They suggest a path forward based on assessments of advancing technologies and best practices in operational management and government policy being used around the world to tackle the issue.

Decarbonising Maritime Transport – Pathways to zero-carbon shipping by 2035

This report explores the full range measures to effectively reduce shipping emissions, which represent 2.6% of total global emissions, and offers recommendations on policies to incentivise decarbonisation. The business-as-usual scenario projects 23% growth in carbon emissions from international shipping by 2035, yet with maximum deployment of currently known technologies it’s possible to reach almost complete decarbonisation in that time.

Alternative fuels and renewable energy can deliver much of required reductions, combined with technological and operational measures to improve energy efficiency. Clear guidance and interventions from governments will be essential to accelerate commercial viability, technical feasibility and investment in sustainable technologies and fuels.

The associated Case of Sweden report analyses why the Swedish shipping industry are pioneers of low-carbon shipping and how other countries can learn from their success. Their remarkable progress in LNG, electric and methanol-powered vessels can be explained by stakeholder cooperation between shipping companies and large Swedish shippers dedicated to green supply chains, along with financial support and regulation from government.

ship CO2 visual

Visualisation of CO2e emission across global shipping routes in 2015. Source: ITF

Reducing Shipping Greenhouse Gas Emissions – Lessons from Port-Based Incentives

Ports have a crucial role to play in facilitating the reduction of shipping emissions. This report identifies port-based incentives currently in place, examining their features and impacts. Most common is the environmentally-differentiated port fee, applied in 28 of the 100 largest ports, yet impacts on global shipping emissions are only marginal. It argues for wider, harmonised application of green port fees, green berth-allocation policies, green procurement and carbon pricing schemes to help enforce the “polluter pays” principle.

Fuelling Maritime Shipping with Liquefied Natural Gas – The Case of Japan

Japan is positioning itself to become the Asian hub for bunkering LNG-fuelled ships on the main East-West trade lanes. Still a marginal share of the world’s fleet, 118 LNG-fuelled vessels currently operating globally will double by 2020 and CMA CGM’s order of nine LNG-enabled mega-container ships is expected to be followed by competitors. Other Asian ports are developing similar bunkering facilities, with Singapore and Japan collaborating on an Asian bunkering network.

LNG’s growth is driven by regulations to reduce SOx and NOx emissions from maritime transport. Its advantages over conventional fuels can reduce ship carbon emissions by 20% but “methane slip” releases fugitive emissions that can negate its greenhouse gas impact. Further technological development is needed to enhance LNG as a greenhouse-friendly transition fuel in shipping.

ship LNG heatmap

 Heatmap of LNG-fuelled ship positions. Source: DNV GL

Important themes for Australia

Two red spots on the above graphic represent the two dual-fuel LNG/diesel powered vessels now operating in Australia – the Siem Thiima platform support vessel services Woodside oil & gas fields on the North West Shelf, and the SeaRoad Mersey II Ro-Ro carries passengers, vehicles and freight across Bass Strait. Several vessels plying Bass Strait are due for replacement, with operators considering LNG-enabled vessels to be covered for the IMO sulphur rules coming in 2020.

Japan is the world’s biggest importer of LNG, much sourced from Australia. Woodside, Australia’s biggest LNG producer, is leading a ‘green corridor’ initiative to develop LNG as a marine fuel for iron ore carriers operating from north-west Australia to China and north Asia. The project aims to build LNG infrastructure and bunkering facilities in the Pilbara, and Woodside has partnered with key mining and shipping players to design vessels and bunkering facilities for a grand vision with a range of benefits beyond emissions reduction, including energy security, regional development and upskilling workforce capability. Yet Australia’s climate policy focus on renewable energy means there’s little government support available. The irony of Japan fuelling LNG ships coming to the Pilbara with Australia’s own gas is wasteful not just in a ‘food miles’ sense, but also the lack of value-add to our plentiful raw resources.

The ITF reports highlight the role of leading ‘green ship index’ RightShip in actions that shippers, charterers, banks and ports can take to decarbonise shipping. Their GHG Emissions Rating covers 76,000 ships, and RightShip recently announced Australia’s major ship charterer Incitec Pivot as the first customer for its new carbon neutral shipping solution built on its carbon accounting tool that measures the ship-sourced scope 3 emissions of shipping customers. While some shipping lines and freight forwarders offer a carbon offset service for containerised freight movements, the size of the environmental benefit of offsetting 73,000 tonnes of CO2e each year from 200 bulk ship charters is a game-changer for supply chain emissions reduction.

Global Shippers Forum

It’s timely also then that next week Australia hosts the world’s most senior gathering of shippers, trade logistics providers and government representatives at the Global Shippers Forum in Melbourne. There’s keen interest in the Global Reform session tackling the issue of carbon emissions in the international supply chain, touching on the work of the Global Logistics Emissions Council who’ve developed a universal method for calculating logistics emissions from road, rail, air, sea and transhipment centres to help control greenhouse gas emissions across whole logistics supply chains.

As part of the global multi-modal supply chain that will keep growing with international trade, shipping’s carbon reduction target fills another piece of the puzzle in a world now aiming for net zero emissions, and we must act now.

#GLECFramework

@smartfreightctr

Extra money to buy new trucks

Announcing a new service that unlocks government funding to buy new efficient trucks.

We can now help mid-to-large trucking companies access government incentives to invest in more efficient transport vehicles by reducing finance costs and paying cash from carbon credits.

Unique Opportunity

With no up-front costs, we can qualify fleet renewals for:

–             a 0.7% finance rate discount monthly

–             cash payments from carbon credits annually

Funded by the Clean Energy Finance Corporation, the finance discount lowers lease payments for the life of the lease and comes off your market interest rate.

The more fuel efficient your new vehicles are compared to those they replace, the greater the carbon credit cash bonus becomes, paid from an established Emissions Reduction Fund project annually for up to seven years.

Easy, Low Risk & No Fees

It’s an easy, low risk process with no up-front or ongoing charges that gives truck buyers extra cash on top of the fuel savings and other benefits that new trucks provide.

And it shows customers you are achieving real, measurable, government-backed environmental improvements as an innovator in your industry.

Why leave money on the table?

Don’t miss out! Contact me today to see how much funding is available for your new truck purchases in 2017 and beyond.

David Coleman

davidcoleman@westnet.com.au

0455 777 551

Think the emissions scandal is all about Volkswagen? Think again.

The Volkswagen emission scandal is rocking the corporate world and it’s just the beginning. The CEO is gone, the workforce shamed and Germany’s flagship industry is a national embarrassment. But if you think it’s all about Volkswagen, think again, because it seems the system has been open to gaming by vehicle manufacturers for years.

Dodgy Test Regime

A new article from the The International Council on Clean Transportation (ICCT) exposes systemic flaws in the European vehicle testing regime. Poor regulatory oversight allows vehicle manufacturers to exploit tolerances in vehicle test procedures with impunity. By showing better fuel consumption and emissions ratings, the market rewards them as consumers vote with their wallets to save fuel costs and reduce environmental impacts. It results in a perverse incentive for manufacturers to spend as much of their efforts perfecting the test as they do improving efficiency of the vehicle itself.

Vehicles are tested in laboratories and on special test tracks to assess their various performance characteristics, including fuel consumption and CO2 emissions, to show the vehicle meets legislated minimum performance standards and support marketing claims. Volkswagen vehicles are now found to be compliant under test conditions but not in ordinary use, with software installed to let the vehicle pass the test yet operate in service with much higher emissions.

Clearly illegal and unethical, Volkswagen is deservedly copping the brunt right now, but the scandal reveals a culture among vehicle manufacturers who can potentially ‘game’ a system that has holes in it so great you could drive a B-Double truck through, completely legally of course. The integrity of all European vehicle fuel consumption and emissions claims are now in doubt because benchmarks can be set on test tracks with downhill slopes with favourable cambers to improve performance and specially-prepared tyres hardened in an oven beforehand to provide the least rolling resistance during the test. Hardly real-world driving conditions. You can’t blame manufacturers for using the most economical drivers, tuning vehicles to suit a track of their choosing and any other methods to give the best test score, because the score influences sales. The point is, however, vehicles cannot repeat these high standards when used by you and me on public roads.

We don’t accept wind-assisted track and field times for world athletics records because it’s a not a true measure of human capability. Likewise, we shouldn’t accept these vehicle performance figures.

The ICCT found the gap between test figures and real-world in service performance is ‘ever-growing’ – from 10% in 2002, to 35% in 2014 and is on track to be 49% by 2020. What confidence can the public – private consumers and businesses alike – have in a score that could be 50% out?

Implications for Australia

Australians are vehicle technology takers, relying on the standards of Europe, USA and Japan to drive fuel and emissions efficiency improvements. Without our own minimum fuel efficiency standards we become a dumping ground for the world’s noncompliant vehicles. With Canada, China, Brazil and Mexico implementing their own minimum fuel efficiency standards, this gap is growing too. As an island continent there’s no secondary market for used vehicles, so the impacts of inferior fuel and emissions performance of “hand-me-down” technology will be felt in Australia for years.

Data is the key constraint in this aspect of the road vehicle industry. People rely on the integrity of performance claims in sales brochures, and expect the protection of regulatory oversight. Buyers of passenger cars can check the Green Vehicle Guide to compare vehicles, yet the ICCT suggests green vehicle ratings are based on desktop review of now dubious test calculations.

Trucking companies already have difficulty believing the fuel efficiency claims of manufacturers because Australian conditions are so different to the test tracks of Europe and America, so large transporters invest in their own R&D by testing trucks themselves before purchase because they know the value of getting their fuel figures right before committing to substantial investments with huge running costs over a truck’s life driven by fuel usage and volatile fuel prices.

Small and medium transport companies may not have the resources or skills to test new vehicles properly before buying. There’s no green vehicle guide for heavy vehicles. The closest offering is the NSW government’s Green Trucks Partnership which brings together vehicle users and manufacturers to test various fuel saving technologies in real-life Australian applications with independent reporting on benefits achieved against claims made by technology proponents. The information is shared in case studies on the Green Trucks website.

Australia needs its own standards

Transport is the second largest user of energy in the Australian economy after electricity and is growing faster. Introducing minimum fuel efficiency standards is one of the easiest, cheapest and most effective ways we can save energy costs, reduce carbon and air pollution emissions, and improve fuel security. Australia must take charge of its destiny and develop its own minimum fuel efficiency standards for light and heavy road vehicles. We can learn from Europe’s woes and stringently test vehicles prior to service then follow the USA’s lead and actually test each vehicle type once in service to validate real world performance. Regulation without enforcement provides only a false sense of security and blind faith in marketing claims which, as Volkswagen has shown, fail under scrutiny.

Transport Energy Audit Standard : seeking your views

Implementing energy audit recommendations usually achieves significant cost savings. However the current Australian Standard for energy audits is based on auditing commercial buildings and is not practical for transport.

Transport operations have characteristics that produce variability in energy performance and make fleet energy use difficult to model:

–          Very high variation in routes, loading and traffic conditions;

–          Vehicle operators strongly influence energy performance;

–          Regulations, such as noise or load limits, provide constraints.

A new transport-specific standard, AS/NZS 3598.3 Energy Audits-Transport Sector, will be the first of its kind internationally. It is intended to help transport operators find the approach best suited to their business for assessing energy efficiency and reducing costs .

To develop a standard of practical value, the consultation process seeks additional expertise to address the specific data measurement and analysis needs of the road, rail, aviation and maritime industries.

You can contribute at the Standards Hub Website as referenced in the inside cover of the draft standard, available here.

Comments close on 10 April 2014.

Shell’s Geelong Refinery – Can we turn Doom & Gloom into a Clean Fuel Boom?

With Shell seeking buyers for its 59-year old refinery, deemed uncompetitive in the traditional hydrocarbons market due to its small scale and old technology relative to Asian competitors, what innovative options can Shell and the Geelong community explore to develop a sustainable asset for long term community wealth?

California provides a guide. A petroleum refinery there is being revamped as an advanced biofuel refinery, with United Airlines underwriting the investment through commercial commitment to buy its renewable jet fuel.

The lesson for Geelong is that partnerships between large fuel users, refiners and biofuel technologists offer the opportunity to use waste and non-food organics to produce low-carbon “drop-in” fuels. Feedstocks would be sourced locally. Ready-made pipeline and terminal infrastructure will efficiently get product to market. Victoria positions itself as renewable fuel hub for international and domestic airlines, land and sea transport operators, miners, farmers and industrial customers.

Sounds like win-win-win, but who can pull it together?

Carbon Neutral Transport

Australia has its first carbon neutral trucking company! Congratulations to Transforce Bulk Haulage in Dubbo who achieved this feat by saving fuel to reduce their carbon footprint then buying carbon credits to offset the remaining emissions.

So what’s stopping other transport firms from going carbon neutral?

Market Incentives & Barriers

Any emissions reductions need to be profitable to motivate action. According to Carbon War Room, heavy trucking can achieve huge emissions reductions using simple technologies with proven savings that are available today. Yet there are three formidable market barriers to get over:

  • access to capital for high upfront costs;
  • good information operators can trust;
  • principal-agent split incentive problem, where in a fragmented industry often those with incentive to save fuel don’t have the cash or the control. This can occur where prime movers and trailers have different owners, where fleets are leased, where freight companies hire sub-contractors, and where customers contract dedicated trucking services with operators paying for fuel.

Shipping also has cost-effective measures to reduce emissions available now. A DNV report points to 16 technical and 8 operational measures, as well as adopting alternative fuels such as biodiesel and LNG. Similar market barriers apply for Shipping as for Trucking. For both transport modes, shippers appear to be at the heart of environmental improvements, for freight owners are more likely to have the power as well as the appetite to pursue environmental improvements above basic regulatory compliance.

Cleaner fuels

There is no single solution to finding a cheap clean diesel alternative. Emissions regulations and oil price volatility will encourage the switch from diesel to a mix of cleaner fuels that need increasingly costly and complex equipment.

For the maritime industry the viability of LNG and biofuels has a longer time horizon than for Trucking, which has its challenges to overcome. As it is, Shipping will struggle with the low sulphur fuel mandate in 2015 due to insufficient refining capacity to make the cleaner grade. Biofuel refining capacity is far below what the shipping industry would need to make the switch.

Information Sharing

Sharing better information on fuel- and carbon-efficiency opportunities will help break down barriers, especially when this improves transparency at an organisational or even a vehicle level. Here are some current initiatives:

  • The Green Freight Europe program addresses the information barrier in Trucking through collaborative learning, reporting and comparative benchmarking
  • Carbon War Room has a shipping efficiency website which rates 60,000 existing ships on their specific fuel efficiency performance, enabling benchmarking against like vessels.
  • Three major shippers are choosing only to charter the most fuel efficient ships available in a demonstration to ship owners that the market will reward investments in sustainable fleets. Such environmental leadership is supported by a vessel fuel efficiency ratings system that uses reliable data from a respected technical specialist.

Measuring emissions to improve the bottom line, reduce risk and discover competitive advantage is a developing science. The ‘art’ of good information sharing may lie in real-time data by company – or by vessel, vehicle or aircraft – so that full supply chain awareness of Carbon Efficiency and Carbon Productivity become the mantra throughout all transport modes.

Accessing Funds to Invest

Trusting good information is important but the key to widespread adoption of fuel efficient technologies and clean fuels is funding the up-front costs.

How can we better link those with cash and the desire to save environmental resources, with those who want to save money but have little capital to invest in improvements? Carbon pricing on Transport helps the business case to finance fuel efficiency improvements, and incorporating carbon offsets helps even more, as Transforce Bulk Haulage has shown.

One maritime proposal wants a new bunker levy to contribute to an international fund so that ship emissions above set reduction targets can be offset by purchasing carbon credits. But who wants another fuel levy that may only be passed along the supply chain anyway?

New developments in California may point the way for Road Transport. Clean Mobility Centres embrace alternative fuels and enable drivers to offset the carbon emissions from their fuel purchases at the pump. Offset dollars go to the Carbon Fund Foundation to directly fund clean air projects.

What if we could offset Transport’s greenhouse gas emissions at the point of sale for all goods and services? Just like booking an airline seat where you choose to pay a little extra to offset your share of the flight’s emissions, imagine if you could offset the transport emissions of any delivery or purchase?

Imagine creating a clear transactional link between the consumer or organisation at the end of a supply chain and the transport operator needing funds to invest in fuel saving measures with economic as well as environmental benefits. It might work like this:

  • consumer chooses to offset the transport component of the emission profile of any goods purchase by paying a bit extra
  • that offset spend goes to a Transport-specific carbon finance fund
  • the fund is accessed by transport operators to finance precisely measured emission reduction projects with real financial paybacks
  • a strong transparent measurement methodology where integrity of data is key underpins emission reduction valuations for the consumer (investor) and transport operator
  • web, mobile and social media technologies enable ‘one click carbon offsetting’ as well as ‘real-time climate friendliness’ tracking of personal emissions savings to inform consumers

Yes – It’s Possible

Transport operators need better access to capital so they can make fuel- and carbon-saving investments, and operators, their customers and ultimately consumers must be able to have faith in the integrity of the emissions savings. Challenging, yes, but the unleashing of such incredible capital liquidity through ‘one click carbon offsetting at point of sale’ may generate huge Transport footprint reductions.

Look at what Transforce has achieved with its fleet of 11 trucks in regional NSW through fuel savings measures that save them money, supplemented with carbon offsets to neutralise their footprint. Yet it’s a question of immense scale to ask:

How can this approach be expanded throughout the mosaic of Australian supply chains?