Trade & investment

ICC Policy Statement on Making Transport Smarter and Greener (2015)

  • 11 November 2016
Making Transport Smarter and Greener

Transport and mobility are a prerequisite for international trade, growth and prosperity. In order to create a more sustainable transport system ICC calls for global regulations that promote trade, mobility and competiveness.

International transport continues to become more energy efficient. However, there is still room for improvement in terms of lowering the emissions of the sector. Transport and mobility are prerequisites for international trade, growth and prosperity. Regulations aimed at creating a more sustainable transport system should be global and promote trade, mobility and competiveness. The aim should be an optimized system of transportation overall.

Although contributions to air pollution and greenhouse gas emissions vary across different transport modes, their long-term reduction, especially of CO2 emissions, will be a major challenge for all international transport given the relative cost benefits and high energy density of fossil fuels.

A greener, low-emission interconnected international transport sector will depend on a framework of predictable, well-designed and cost-effective global regulations and standards. A combination of many often interdependent parameters is required, such as the development of technology, infrastructure, transport logistics and long-term investments in a globalised world economy. In order to create the proper framework and conditions for private investments and innovation, it is crucial to have long-term, predictable, and global regulations.

International trade — including the free movement of goods and people — which contributes to sustainable growth, depends on an efficient, reliable and well-functioning transport system, both in the short and long term. The free movement of goods and people has to be ensured and regulations should therefore not undermine trade or mobility. Instead, regulations should support the further development of a global, sustainable transport system as a tool for economic, environmental, and social development. To avoid market distortions, this calls for international consistency between national frameworks. ICC therefore cautions against unilateral action.

Despite operational optimisation, an increase in international trade might lead to an increase in CO2 emissions in absolute terms due to an increased transport demand. However, focus on increasing energy efficiency could decouple the rise in transport demand from environmental impact. In this context, the transport sector and individual companies’ measuring and reporting of CO2 emissions could be a useful tool. It is important to also look beyond technology innovation and take all other factors affecting CO2 emissions in transportation and logistics into account. These include mileage, lifetime of vehicles, and the CO2 content of various fuels. In the near term, efforts are needed to ensure consistent and comparable measuring and reporting standards while recognising the specificities of each mode, in order to make accurate and effective improvements. In the longer term, alternative fuels should pave the way for lower CO2 emissions. However, questions remain about the viability of fuels such as Liquefied Natural Gas (LNG) for longer international seaborne voyages, and challenges exist for alternative fuels for sectors such as aviation. Aviation will need a combination of long-term investments in alternative fuels development and diffusion and improvements through new technology and infrastructure improvements.

There are many different technical solutions on the way to a low-emission transport system. Very few, if any, are at present a competitive or politically acceptable alternative to fossil fuels. There are currently a number of disincentives in place that discourage the transport sector from increasing the use of alternative low emission fuels. For example: (1) taxes on LNG fuels for land transport are often equal to those on diesel, and the upfront costs — including the associated taxes — of alternative fuel vehicles are higher as well; (2) regulations on weight and length limits for transport vehicles constitute a challenge for CO2 reductions and the use of alternative fuels; and (3) the lack of an adequate global infrastructure that offers easily accessible low emission fuels. Such dynamics disincentivize companies to switch to more energy-efficient vehicles and lower emission fuels1 . Unless these disincentives are removed, they will continue to increase transport costs and restrict international trade, which in the end will hinder job creation and economic growth.

There has been a major improvement in the energy efficiency of the land-based transport sector. New cars, vans, trucks and trains use less fuel on average and efficient logistics make it possible to transport more goods with less energy consumption and thus decreasing the CO2 emission per tonne-kilometre transported. The greater use of more energy-efficient railways has contributed to more optimised transport chains linking the different modes of transport in a more climate-friendly way. While railways transported more than 9% of the world’s passengers and freight, they generated less than 1% if total energy-related CO2 emissions in 20112. Research and development play an instrumental role in efficiency advances in the transport sector.

The newest engines in heavy vehicles have also made a significant reduction of emissions of particles and NOx, which contributes to cleaner air, especially in urban areas. For example, a new EURO VI truck emits 97% less NOx than a truck did 20 years ago. Similar efficiency improvements have been made in light duty vehicles through passenger car standards. In the short term, it is possible to reduce emissions even further, but restrictions on weight and dimensions of heavy good vehicles and road congestion are counterproductive to a more energy efficient land transport. The rail transport sector has also made substantial commitments to increase energy efficiency — between 1990 and 2011 the share of railway emissions in transport decreased from 4.2% to 3.3%.