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Policies to Reduce Greenhouse Gas Emissions Associated with Freight Movements

Cristiano Façanha, ICF International
Jeff Ang-Olson, ICF International

Introduction

This paper summarizes policies to support a reduction in greenhouse gas (GHG) emissions from freight movements. This paper starts with a brief description of the current freight activity in the United States and its associated effects on GHG emissions. The suggested policies to support a reduction in freight GHG emissions are divided into seven categories: (1) carbon taxes and other pricing mechanisms, (2) improvements in trucking fleet fuel efficiency, (3) improvements in railroad fuel efficiency, (4) improvements in fuel efficiency of other modes, (5) alternative fuels, (6) mode shift, and (7) congestion mitigation. This paper concludes with a brief analysis of the combined effects of these policies.

Freight Fuel Consumption and Greenhouse Gas Emissions – Current Activity

GHG emissions from freight transportation are tied closely to freight energy use. Both are growing because energy efficiency improvements in the freight sector have not kept pace with growth in demand. The transportation sector in total is responsible for 28% of all U.S. GHGs, as reported in the U.S. Environmental Protection Agency's (EPA) Inventory of U.S. Greenhouse Gas Emissions and Sinks (Figure 1). Within the transportation sector, freight movement accounts for 27% of transportation GHG emissions, with the majority of emissions generated by trucking.

Exploded pie chart. The main pie chart has two segments, transportation with a value of 28 percent and other sources with a value of 72 percent. The transportation segment explodes into a pie chart six segments, namely passenger transportation at 73 percent, truck at 20 percent, freight rail at 2 percent, waterborne at 3 percent, air freight at 1 percent, and pipelines at 2 percent.
Figure 1. GHG Emissions by Source and Transportation Mode (2005)1

Energy use and GHG emissions from freight transportation have grown at roughly twice the rate of passenger transportation emissions over the last 15 years. The causes are robust growth in freight demand coupled with an overall decline in energy efficiency within the freight sector. With the exception of pipelines, GHG emissions from all freight modes have increased over the last 15 years (Figure 2). Freight-truck GHG emissions increased by 69% from 1990 to 2005 and accounted for almost 90% of the increase in freight GHGs. Freight-rail emissions increased by 29% during this period and air freight emissions increased by 15%.

Line chart plot of emissions values over a time period extending from 1990 to 2005 for five data sets. The level in 1990 serves as the index value of 100. The trend for trucking is steadily upward, and the most pronounced of all, approaching 180 in the year 2005. The trend for rail is steadily upward, approaching 130 in the year 2005. The trend for air oscillates slightly and approaches 120 in the year 2005. The trend for pipeline is upward about 118 in the year 1997, then downward and approaches 82 in the year 2005. The trend for water oscillates wildly, hitting a low of 55 in 1996 and trending upward to end near 140 in the year 2005.
Figure 2. GHG Emissions by Transportation Model (1990-2005)

The rapid growth in freight GHGs and the overall decline in freight energy efficiency reflect a growing reliance on freight modes – particularly truck and air – that provide faster, more reliable service but have higher energy intensity. The notable exception to freight's growing energy intensity can be seen in rail shipments. Rail ton-miles grew by 62% between 1990 and 2005, exceeding the growth rate for truck and air cargo, but rail energy efficiency also has improved.

In contrast, freight-truck energy efficiency declined between 1990 and 2005. The reasons for this drop are not well understood, but are likely related to market demand for more powerful engines, requirements for advanced emission control devices that also may have compromised fuel efficiency, a decline in operational efficiency, and the elimination of mandatory highway speed limits. However, the recent spike in diesel prices has focused attention on truck fuel efficiency and is likely to slow or even reverse this trend. Between 2000 and 2005, freight-truck energy efficiency was essentially flat.

Looking ahead, freight-transportation energy use and GHG emissions are expected to grow modestly over the next three decades, led again by the trucking sector. Total domestic freight transportation GHG emissions are projected to increase 74% by 2035, an increase of about 1.8% annually. Trucking will still account for the vast majority of domestic freight GHG emissions.

Current environmental regulations will significantly reduce truck and locomotive particulate and NOx emissions, but do little to reduce GHG emissions. Curtailing GHG emissions will be a major challenge for the freight transportation industry. Improved engine efficiency and alternative fuels will be the most important contribution within the freight transportation sector to a more sustainable climate policy and energy security but addressing highway congestion and achieving modal shifts also will be important to reducing freight energy consumption and emissions.

Policies to Reduce GHG Emissions from Freight Movements

Government regulation and complementary support for research and development as well as deployment can help advance technologies and strategies that reduce freight transportation fuel use and emissions. Key elements would involve:

1. Imposing carbon taxes or similar fuel pricing signals

Reducing freight transportation fuel use and GHG emissions can best be achieved when the cost of fuel use and GHG emissions are accurately reflected in the price of freight transportation shipments and passed along to manufacturers, retailers, and final consumers who purchase freight transportation.

Transportation will be expected to help meet the 60% to 80% reduction targets for 2050 GHG emissions that currently are being discussed in proposed state and federal legislation. To have a substantial impact, truck GHG emissions must be greatly reduced. Some freight can be shifted to rail and waterborne freight transportation, but truck vehicle miles traveled (VMT) cannot be reduced significantly without affecting logistics costs for businesses and industries and driving up the cost of goods and services for consumers. This points toward the need to price diesel fuel – the primary fuel for truck and rail engines – to encourage fuel efficiency and adoption of alternative fuels while providing sufficient vehicle-miles of travel to support economic activity.

One approach for using market mechanisms to reduce freight GHGs would be a cap-and-trade-style approach for diesel fuel. Most of the GHG cap-and-trade bills introduced in the 2007-2008 Congress included transportation among the capped sectors through an upstream cap on the CO2 content of petroleum fuels, implemented at the refinery.

Oak Ridge National Laboratory has developed several scenario forecasts of truck fuel economy using the National Energy Modeling System (NEMS). The “advanced” scenario assumes that there is a national sense of urgency to improve efficiency and reduce carbon emissions, and that some increase in direct costs of fuel and carbon emissions (up to $50 per truck) could be passed to customers to meet energy and environmental goals. Under this scenario, long-haul combination truck fuel economy would rise from approximately 5.6 mpg today to 9 mpg by 2020.

2. Improving trucking fleet fuel efficiency

Currently, a variety of strategies are available to improve the fuel efficiency of trucking operations, including tractor and trailer aerodynamic improvements, use of single-wide tires, automatic tire inflation systems, options to reduce extended truck idling, and driver training programs. Full market penetration of these strategies could reduce fuel use by more than seven billion gallons and eliminate 75 tons of GHG emissions annually. The U.S. EPA's SmartWay Transport Partnership is helping to promote these types of strategies by offering recognition and rewards for participating carriers.

High fuel prices and consumer demand for “green” products already are encouraging companies to adopt fuel savings strategies on their own. Wal-Mart, for example, has set a goal of doubling the fuel economy of its truck fleet by 2015, and already has achieved a 25% fleet-wide improvement as of 2008.

New and emerging technologies can potentially lead to greater fuel efficiency gains. Hybrid-electric powertrains are one of the most promising technological developments for trucks. Current hybrid technology is most appealing for stop-and-go driving typical of parcel delivery operations; both FedEx and UPS are now using some hybrid trucks for city deliveries. According to a report prepared for the National Commission on Energy Policy, hybridization of trucks in truck-size classes 3 to 5 can increase fuel economy by 71% in city driving. Several reports suggest that hybrid engines will not be cost effective for typical intercity combination trucks; however, some truck operators and engine manufacturers are researching and testing hybrid powertrains in heavy-duty combination trucks. Wal-Mart and ArvinMeritor currently are developing a hybrid version of the International ProStar class-8 tractor, powered by a Cummins engine. Eaton and PACCAR, the maker of Kenworth and Peterbilt trucks, have announced plans to develop a hybrid heavy-duty truck and bring it to market by 2009. Volvo also has developed a hybrid with a reported 35% improvement in fuel economy.

3. Improving rail fuel efficiency

There are a number of technology opportunities to improve rail efficiency. New locomotive designs are likely to reduce fuel use by capturing wasted energy and using more efficient fuel sources. Hybrid-electric and Generator-Set (“Genset”) switcher locomotives already are in use in many locations. Union Pacific, for example, has more than 150 Genset locomotives working in California and Texas. Advanced hybrid-electric and fuel-cell locomotives are in the research and development stage.

Locomotive information technology can reduce fuel use by optimizing train operation. Onboard computers can monitor engine performance and other characteristics (e.g., train tonnage, grade, speed) to optimize engine speeds, brake use, and fuel consumption. Electronically controlled pneumatic brakes save fuel by eliminating unnecessary braking and acceleration. When combined with satellite navigation, onboard computers can determine optimum speeds to ensure an on-time arrival, while maximizing fuel efficiency.

Another promising development is “positive train control,” which allows central dispatchers to control train operations in order to optimize network behavior. Current efforts to develop positive train control are focused on developing interoperable communication protocols, with limited systems currently in the research and development stage. The long-term fuel and emission reduction benefits of these technologies are uncertain. A goal is to match the fuel economy benefits of the last 30 years, which saw a doubling of U.S. railroad ton-miles per gallon. If this trajectory were to continue (equivalent to a 2.4% annual improvement in fuel efficiency), it would reduce diesel fuel consumption in 2035 by 3.6 billion gallons and eliminate 39 million metric tons of GHG emissions in that year.

4. Improving fuel efficiency of other modes

R&D efforts have explored the potential for improvements in ship fuel efficiency. Design improvements could be achieved through optimizing the hull shape, air lubrication, selection of appropriate propeller, diesel-electric propulsion (e.g., pop propulsion), and use of alternative fuels. Combined, these strategies could improve the fuel efficiency of new ships by up to 30%. Maintenance strategies or retrofit in existing ships also could improve fuel efficiency by about 20%. Other technological improvements include ship power improvements (through alternative types of energy), and alternative non-toxic coatings and active removal systems to remove marine organisms from the ships' hull (to smooth the hull's surface). Operational strategies also can improve fuel performance by adjusting ship routes to avoid poor weather conditions and improving port operations to reduce hotelling times.

Although aviation accounts for a small share of freight GHG emissions, energy efficiency gains can still be achieved through more fuel efficient engines, design innovations in the aircraft body, use of lighter materials, and improvements in airport operations. All of these strategies are being explored by the airlines and aircraft manufacturers in an effort to reduce aviation fuel costs. But, as with other modes, there may be opportunities for government to accelerate their development and deployment.

5. Expanding use of alternative fuels

Alternative fuels such as biodiesel represent an emerging fuel source for heavy-duty trucks. Some states, especially in the Midwest, have mandated the blending of small fractions of biodiesel in all diesel sold. In other cases, individual truck operators are using B5 (5% biodiesel and 95% diesel) or B20 (20% biodiesel and 80% diesel). Some uncertainties remain as to the net GHG benefits from alternative fuels when life-cycle effects (land-use changes, production, distribution, and use) are taken into account. Current Department of Energy models suggest that using biodiesel from soy results in approximately half the GHG emissions of conventional diesel on a life-cycle basis.

6. Encouraging mode shifts to more fuel-efficient modes

Environmental benefits can be realized by shifting freight to cleaner modes. In general, rail and water transportation are associated with lower emissions (on a ton-mile basis) than truck transportation, although these benefits depend on details such as the length of haul and the use of drayage trucks to access intermodal facilities. Emission rates for new trucks will drop significantly in the coming years, which may offset the environmental advantages of rail in some instances.

7. Mitigating congestion

Congestion can affect freight fuel consumption to the extent that it requires vehicles to accelerate and decelerate more often to adapt to network traffic levels. Because fuel consumption is significantly higher in acceleration mode than while traveling at constant speed, fuel consumption typically is higher in congested scenarios.

There has not been much published research to date on the effects of congestion on fuel consumption nationwide. The 2007 Urban Mobility Study makes an attempt to do so, but it does not single out the effects of congestion on freight movements. An assessment of freight bottlenecks on highways has estimated delay incurred by heavy-duty trucks2. Internal ICF estimates indicate that about 135 million gallons of fuel are spent annually by heavy-duty trucks on congested roads, which translates into roughly 1.4 million metric tons of CO2. Because congestion degrades the fuel performance of heavy-duty trucks more heavily than light-duty vehicles, it is important to have a better understanding of congestion effects on freight movements.

Combined Effects of Policies

Figure 3 illustrates how a combination of these strategies might cut GHG emissions from truck and rail freight transport by more than half in 2035.

Bar chart plot of values for million metric tons carbon dioxide equivalent for the years 2005, 2035 baseline, and 2035 with reduction strategies. The equivalent value for 2005 is about 450 million metric tons. The value for 2035 baseline is about 800 million metric tons. Various reduction scenarios bring the equivalent value to below 400 million metric tons.
Figure 3. Impact of Potential Truck and Rail GHG Reduction Strategies3

Workshop Presentation

Policies to Reduce GHG Emissions from Freight Movements. Cristiano Facanha and Jeff Ang-Olson.

Agenda. Bullet list with three items. First item: Current freight activity and GHG emissions; Second item: Policies, which include Carbon Taxes and Other Pricing Mechanisms, Improvements in Truck Fleet Fuel Efficiency, Improvements in Rail Fuel Efficiency, Improvements in Fuel Efficiency of Other Modes, Alternative Fuels, Mode Shift, Congestion Mitigation; and third item: Combined Effects of Policies.

Current Freight-Related GHG Emissions. Exploded pie chart. The main pie chart has two segments, transportation with a value of 28 percent and other sources with a value of 72 percent. The transportation segment explodes into a pie chart six segments, namely passenger transportation at 73 percent, truck at 20 percent, freight rail at 2 percent, waterborne at 3 percent, air freight at 1 percent, and pipelines at 2 percent.

Freight in the Context of GHG Emissions. Horizontal bar chart plotting data sets for 1990 and 2005 GHG emissions. The category freight shows an increase of 58 percent; the category passenger shows an increase of 27 percent, and the category all sources shows an increase of 16 percent. Adjacent chart indicates change in activity, with total domestic passenger miles increasing 38.7 percent and total domestic freight ton-miles increasing 25.3 percent. A second adjacent chart indicates change in energy efficiency, with Pax-miles per unit of carbon dioxide increasing 11.4 percent and ton-miles per unit carbon dioxide decreasing 17.7 percent.

GHG Growth by Freight Mode. Line chart plot of emissions values over a time period extending from 1990 to 2005 for five data sets. The level in 1990 serves as the index value of 100. The trend for trucking is steadily upward, and the most pronounced of all, approaching 180 in the year 2005. The trend for rail is steadily upward, approaching 130 in the year 2005. The trend for air oscillates slightly and approaches 120 in the year 2005. The trend for pipeline is upward about 118 in the year 1997, then downward and approaches 82 in the year 2005. The trend for water oscillates wildly, hitting a low of 55 in 1996 and trending upward to end near 140 in the year 2005.

Carbon Taxes and Pricing. Text slide presenting ways to achieve reductions in GHG emissions. One approach for using market mechanisms to reduce freight GHGs would be a cap-and-trade style approach for diesel fuel. A line chart plots three scenarios of truck fuel economy in terms of miles per gallon over the time period 1995 to 2025. Initial values are 5.6 miles per gallon in 1995, with the base scenario increasing to 6.3 by 2025, the moderate scenario increasing to 7.6 by 2025, and the advanced scenario increasing to 9 by 2025.

Truck Efficiency Improvements. Bullet list with two items. (1) Because trucking represents the most sizeable source of freight-related GHG emissions, it is also the most important source for potential improvements. (2) External factors affecting future truck fuel efficiency: Diesel and energy prices, Future changes in traffic mix, Future changes in network utilization and congestion, EPA emissions regulations, and Anti-idling policies.

Truck Efficiency Improvements. Three text boxes at the top indicate areas for truck engine improvements, non-engine improvements, and operational improvements. Bullet list with three items. (1) Full market penetration of these strategies could reduce fuel use by more than seven billion gallons and reduce 75 tons of GHG emissions annually. (2) The U.S. EPA's SmartWay Transport Partnership is helping to promote these types of strategies by offering recognition and rewards for participating carriers.(3) Higher fuel costs have encouraged private industry to invest in research.

Rail Efficiency Improvements. Bullet list with two items: (1) External factors affecting future rail fuel efficiency: Diesel and energy prices, Future changes in mix of commodities and equipment, Future changes in traffic volume relative to capacity, EPA environmental regulations. (2) There are numerous technological and operational opportunities to improve rail fuel efficiency. Those can generally be divided in: Single-unit Developments, Complete Train or Line-segment Developments, System-Wide Developments.

Rail Efficiency Improvements. Text chart showing transition from short-term to long-term improvements. Items under short-term improvements include: Train simulation programs, On-board information technology, Automatic shutdown devices, Employee Training, Scheduled operations, Train composition for improved aero, Enforcing no-Idling policies, Speed limits. Items under long-term improvements include Rail electrification, Fuel cell locomotives, Automated operations, Dedicated high performance corridors. The transition area between these improvements includes considerations under four areas: Locomotive, Car-Level, Train-Level, and System-Level.

Efficiency Improvements of Other Modes. Text slide covering six observations. (1) R and D efforts have explored the potential for improvements in ship fuel efficiency. (2) Design improvements could be achieved through: Optimization of hull shape, Air lubrication, Selection of appropriate propeller, Diesel-electric propulsion (e.g., pop propulsion), Use of alternative fuels. (3) Combined use of these strategies could improve the fuel efficiency of new ships by up to 30%. (4) Maintenance strategies or retrofit of existing ships could also improve fuel efficiency by about 20%. (5) Other technological improvements include: Ship power improvements (through alternative types of energy), Alternative non-toxic coatings and active removal systems to remove marine organisms from the ships' hull (to smooth the hull's surface). (6) Operational strategies can also improve fuel performance by adjusting ship routes to avoid poor weather conditions and improving port operations to reduce hotelling times.

Efficiency Improvements of Other Modes. Text slide covering two observations. (1) Aviation efficiency gains can still be achieved through: More fuel efficient engines, Design innovations in the aircraft body, Use of lighter materials, Improvements in airport operations. (2) All of these strategies are being explored by the airlines and aircraft manufacturers in an effort to reduce aviation fuel costs. But, as with other modes, there may be opportunities for government to accelerate their development and deployment.

Alternative Fuels. Bullet list with three items. (1) Alternative fuels represent an emerging fuel source for heavy-duty trucks. (2) There remain some uncertainties as to the net GHG benefits from alternative fuels when life-cycle effects. (3) Current DOE models suggest that using biodiesel from soy results in approximately half the GHG emissions of conventional diesel on a life-cycle basis. A scatter plot presents GWP in grams of carbon dioxide -e per MJ ethanol for five data sets. The values for gasoline plot range between 80 and 100. The values for corn plot range from below 40 to nearly 120. The values for sugarcane from Brazil range from below twenty to about 30. The values for cellulosic corn stover plot just above 20. The values for cellulosic switchgrass plot range between zero and about 12.

Mode Shift. Vertical bar chart with the heading Environmental benefits can be realized by shifting freight to cleaner modes. The plots show ton-miles per ton of carbon dioxide equivalent for five data sets. The plot for rail extends nearly to a value of 40,000. The plot for pipeline extends nearly to a value of 30,000. The plot for water extends to a value just above 10.000. The plot for truck extends to a value nearly reaching 5,000. The plot for air extends to a value less than about 2,000.

Mode Shift. However. Bullet list with two items. (1) There is a wide variation in environmental benefits depending on the lane, equipment type, and service offering. Rail-truck fuel efficiency ratio can range from about 1.5 to over 5. (2) Planned fuel efficiency improvements will affect different modes in very different ways.

Congestion Relief. Line chart plot of carbon dioxide emission factor in grams per mile over speed in miles per hour for five data sets. The data set labeled LOS F swings down from a value of about 525 at 5 miles per hour, settles at a value of about 425 between 15 and 20 miles per hour, and increases slightly at 25 miles per hour. The data set labeled LOS E swings down from a value of about 360 at 15 miles per hour, settles at a value just above 300 between 25 and 30 miles per hour, and increases to a value of about 360 at 40 miles per hour. The data set labeled LOS D swing down from a value of about 300 at 20 miles per hour, trend along a value of about 250 between 25 miles per hour and 45 miles per hour, and increase slightly to a value of about 275 at 50 miles per hour. The data set labeled LOS A-C swings from a value of about 250 at 35 miles per hour upward to a value of about 35 at 70 miles per hour. The data set labeled LOS A plus swings from a value of about 250 at 45 miles per hour upward to a value of about 350 at 75 miles per hour.

Combined Effects of Policies. Bar chart plot of values for million metric tons carbon dioxide equivalent for the years 2005, 2035 baseline, and 2035 with reduction strategies. The equivalent value for 2005 is about 450 million metric tons. The value for 2035 baseline is about 800 million metric tons. Various reduction scenarios bring the equivalent value to below 400 million metric tons.

Questions and Answers. List item: Cristiano Facanha - cfacanha@icfi.com.

1 ICF International Based on U.S. EPA's Inventory of U.S. Greenhouse Gas Emissions and Sinks.

2 Cambridge Systematics (2005): An Initial Assessment of Freight Bottlenecks on Highways, Prepared for FHWA.

3 ICF International.

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