OGCI’s role in decarbonizing transport
June 11, 2020
As the recent open letter from the CEOs of our member companies underlined, OGCI is committed to taking continued collective action, investing and accelerating the industry response to climate change. This year, OGCI kickstarted dedicated efforts to explore how best to reduce CO2 emissions from transport, and in particular from challenging areas such as commercial trucks and buses, marine vessels, and long-haul aircraft.
Transport is responsible for almost a quarter of energy-related emissions, and road vehicles account for nearly three-quarters of that. Electrification is already playing a role in reducing emissions, especially for two-wheel vehicles, passenger vehicles and light duty commercial vans. But a broader portfolio of solutions is needed to accelerate decarbonization and tackle challenging areas such as commercial medium and heavy-duty trucks and buses, long-haul aircraft and marine vessels. While the repercussions of Covid-19 may slow the pace of emissions growth in these areas now, finding a long term decarbonization pathway for these areas remains crucial.
Source: IEA, McKinsey
Note: Breakdown of annual CO2-equivalent (CO2e) emissions from transport by sub-sector (IEA, 2018). Difficult-to-abate sectors are presented in darker shades of blue.
Impacting emissions today through increased efficiency
With potential for immediate and substantial impact, OGCI Climate Investments has made investing in efficiency solutions to reduce CO2 emissions one of its three key outcome areas – especially in transport. Its latest addition to the portfolio, OnTruck, focuses on optimizing freight distribution to reduce empty kilometers and increase asset utilization, which lead to a decrease in fuel consumption and associated CO2 emissions of up to 20%. Ontruck’s intelligent demand management platform has demonstrated an average 50% cut to empty kilometers, while also reducing driver hours and vehicle maintenance costs. The company was awarded a European Lean & Green star in June 2020 for having transport emissions that are significantly below the industry benchmark.
Ontruck joins three other transport efficiency investments in OGCI Climate Investments’ portfolio: Achates, Norsepower and XL Fleet. OGCI Climate Investments continues to look for practical solutions in decarbonizing transportation with a particular focus on commercial vehicles. Themes of particular interest include medium or heavy duty fleet electrification and associated service or infrastructure business models.
A portfolio of collaborative solutions
In parallel, OGCI’s Transport Workstream is focusing on three areas of action: low carbon liquid fuels, clean hydrogen and closing the carbon cycle through mobile capture.
Low carbon fuels are potential quick wins for reducing transport emissions, especially in hard-to-abate areas like marine and aviation. OGCI is exploring the scale of emissions impact and the ease of deployment of different types of fuels. It is looking at reformulated fuels that can be used with current infrastructure and vehicles, blended fuels that will require some changes to supply chains and refinery operations, alternative fuels such as hydrogen and ammonia that will require new infrastructure and vehicle modifications.
Clean hydrogen: fueling deeper decarbonization
Past attempts to introduce hydrogen as a viable transport fuel have faced technical and economic barriers, but with many countries and organizations adopting net zero targets, there is a surge of interest in the potential of clean hydrogen to accelerate decarbonization.
Clean hydrogen can be produced through electrolysis using renewable energy and is known as green hydrogen. It can also be produced by reforming natural gas in combination with carbon capture and storage, known as blue hydrogen.
OGCI is leveraging this newfound interest to help unlock hydrogen as a viable transport fuel, with an initial focus on heavy-duty trucks. The aim is to help unlock the widespread deployment of hydrogen fueling infrastructure and scaling up the supply of clean hydrogen.
Closing the carbon cycle
The International Maritime Organization (IMO) aims to more than halve greenhouse gas emissions from the marine sector by 2050, compared to 2008. That will require a far broader range of technology options than are currently available, especially for deep-sea shipping which relies on liquid fuels.
OGCI is testing the potential for capturing carbon dioxide on a ship out at sea, and injecting it into an offshore CCUS hub store of the type OGCI’s KickStarter initiative is supporting. OGCI member company Saudi Aramco has already demonstrated 40% carbon capture on a heavy-duty truck, using a type of mobile carbon capture technology. OGCI aims to work with a shipping company to demonstrate the technology on a marine vessel.
Transport is a complex sector, but by working with partners across the industry, OGCI and OGCI Climate Investments are supporting the development and scale-up of innovative low carbon solutions that, alongside electrification, are critical to putting the transport sector on the road to a net zero future.
Transport is just one of the sectors that OGCI is working in to develop and scale low carbon solutions. Click below to learn more about how we work with a broad range of stakeholders to accelerate the pace and scale of action on climate:
ABOUT OGCI CLIMATE INVESTMENTS:
OGCI Climate Investments is a $1B+ fund that invests in solutions to decarbonize sectors like oil and gas, industrials and commercial transport. We look for outcomes that reduce methane and carbon dioxide emissions, and that can recycle or store carbon dioxide. Achieving significant impact requires global implementation and commercial frameworks – at OGCI Climate Investments, we collaborate with innovators, investors and governments to fund and implement impactful solutions.
To learn more about OGCI Climate Investments, please visit www.oilandgasclimateinitiative.com/climate-investments
The Oil and Gas Climate Initiative is a CEO-led consortium that aims to accelerate the industry response to climate change. OGCI member companies explicitly support the Paris Agreement and its aims. As leaders in the industry, accounting for over 30% of global operated oil and gas production, we aim to play an active role in shaping the global pathway to net zero emissions. We do this by leveraging the collective strengths of OGCI, continually improving, and building on good international corporate practices to reduce greenhouse gas emissions and accelerate transitions to a low-carbon future. OGCI member companies include BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Petrobras, Repsol, Saudi Aramco, Shell and Total.
To learn more about OGCI, please visit www.oilandgasclimateinitiative.com