The Pathway to Decarbonization

To reduce the probability of devastating climate change impacts, the world economy must rapidly decarbonize. In 2019, 28% of the total U.S. energy consumption was attributed to the transportation sector and approximately 91% of the domestic transportation energy use came from petroleum products.1

What does decarbonization look like in the Class 8 heavy-duty trucks sector? Likely it will require a combination of several technologies including biomass-based diesel and battery-electric, to reduce the greenhouse gas emissions from the typical petroleum diesel fueled trucks. This question is incredibly important as we try to rapidly decarbonize freight trucks, which today consume more than 35 billion gallons of diesel fuel annually.2

Recently, I, along with my co-authors, researched the financial and greenhouse gas emission impacts of different decarbonization scenarios for Class 8 heavy-duty trucks.

Our study, Quantifying the Comparative Value of Carbon Abatement Scenarios over Different Investment Timing Scenarios, considers the impacts of investing early in commercialized biomass-based diesel technology compared to delaying investment by five years and investing in a battery-electric pathway for Class 8 heavy-duty trucks, assuming they are commercially available. This study quantifies both the technical and financial feasibility of different technologies and feedstocks for different cargo transport scenarios. The following four scenarios are modeled:

  1. Baseline Petroleum Diesel: 100% petroleum diesel,
  2. Biomass-based diesel: a blend of 20% biodiesel (B20) and 80% renewable diesel (R80),
  3. Baseline Petroleum Diesel to battery-electric, and
  4. Biomass-based diesel to battery-electric.

This methodology calculates a 20-year net present value for each scenario and includes the social cost of carbon as a revenue. That latter part, internalizing the social cost of carbon, is a novel but important aspect.

“It is important for policymakers, researchers, industry, and other interested stakeholders to understand and consider the impacts of investing today in a mature and commercialized carbon abatement pathway versus delaying investment in a potentially lower-carbon pathway that has yet to reach commercialization.”

This study accounts for a social cost of carbon in the form of an internalized revenue stream for each low-carbon fuel system. This allows researchers and policymakers to understand the societal value generated from early action. To account for the social cost of carbon, the annual emissions production from the comparative scenario (biomass-based diesel or battery-electric) is subtracted from the annual emissions production of the baseline petroleum diesel scenario. This value is then multiplied by the annual global social cost of carbon value calculated by the Interagency Working Group on Social Cost of Greenhouse Gases.3 This study finds that under the weight-limited cargo transport scenario, the biomass-based diesel scenario generates the highest 20-year net present value, while the lowest net present value is achieved by the petroleum diesel pathway. In terms of GHG emissions, the lowest cumulative emissions are generated by the biomass-based diesel to battery-electric scenario. The highest cumulative emissions are achieved by the petroleum diesel scenario. The biomass-based diesel scenario achieved the second lowest cumulative emissions. Under the volume-limited cargo transport scenario, the biomass-based diesel to battery-electric pathway achieves the highest 20-year net present value, while the petroleum diesel scenario yields the lowest.

This study underscores the importance of accounting for investment timing when assessing the financial viability and societal benefit when comparing various decarbonization scenarios. It found when investment timing is accounted for, scenarios that yield the highest annual GHG emission reduction benefits do not always generate the largest decarbonization benefits. It is important for policymakers, researchers, industry, and other interested stakeholders to understand and consider the impacts of investing today in a mature and commercialized carbon abatement pathway versus delaying investment in a potentially lower-carbon pathway that has yet to reach commercialization. It is vital for researchers to model and for policymakers to consider both the environmental and financial tradeoffs that occur when investments are made in a mature and commercialized carbon abatement pathway versus delaying investment in a lower-carbon pathway that has yet to reach commercialization for Class 8 heavy-duty trucks.

Full Study Authors: Jenny Frank, Tristan Brown, Martin Haverly, Dave Slade, Robert Malmsheimer

Footnotes

1 U.S. Energy Information Administration. Use of energy explained — Energy use for transportation 2020. Accessed January 28, 2021.
2 www.eia.gov/outlooks/archive/aeo16/
3 Interagency Working Group on Social Cost of Greenhouse Gases United States Government. Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis — Under Executive Order 12866. 2016.

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Jenny Frank
Jenny Frank is a Ph.D. Candidate at the State University of New York College of Environmental Science and Forestry. Jenny majors in sustainable energy and as a researcher, she focuses on quantifying the technical and financial impacts of diverse renewable energy pathways via techno-economic analysis methodology. Her research also incorporates the life cycle greenhouse gas emission impacts of different technologies and feedstocks. She aims to present research that is valuable to other researchers and policymakers in the field.

Jenny is a co-chair of the Next Generation Scientists for Biodiesel and presented or moderated sessions at the National Biodiesel Conference & Expo.
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