Driving renewable energy for transport – next generation policies

Renewable energy sources in transport (RES-T) are crucial for avoiding climate change. As transport is currently almost fully dependent on conventional fuels, the transition to RES-T is an important aspect in the broader climate policy. What policy instruments deliver the job? The IEA-RETD report “Driving renewable energy for transport – next generation policies (RES-T-NEXT)”, carried out by CE Delft and Stratas Advisors, evaluates in detail 17 renewable policy instruments for the three pathways of electric, hydrogen and biofuels, under consideration of three dimensions: the vehicle fleet, energy infrastructure and energy carriers.

The study finds that most policy instruments increase the share of alternative powertrains, but few (also) directly target the share of renewable energy consumption. The most effective instruments for increasing the share of Alternative Fuel Vehicles (AFVs) are:

• Zero Emission Vehicle (ZEV) mandates (obliging OEMs to meet a minimum share of ZEVs in their sales);
• Financial incentives in vehicle registration taxes (VRT) and in company car taxation;
• CO2 regulations of road vehicles, particularly when CO2 targets are sufficiently ambitious.

For effectively increasing the share of renewable energy in transport, there are fewer instruments available. Most effective are Fuel regulations and renewable energy mandates.

Regarding the pathways, the study concludes that Battery-electric is the most promising pathway for urban transport. Battery-electric technology has already been commercialised; it now requires policy instruments which generate volume. Hydrogen may provide a feasible alternative or complementing pathway for urban road transport; however, hydrogen technology is not yet fully commercialised and requires policies which primarily promote pilots, first market uptake and further product development. The role of biofuels in (urban) transport firstly depends on the availability of available and sustainable feedstock.

The report can be found here.