Challenges Flashcards
What are the major challenges to making transportation more efficient, accessible and sustainable?
three primary obstacles: (1), massive quantities of upfront capital are needed to transition the existing vehicle fleet to lower emissions technology, (2) significant upgrades to our existing infrastructure are required to support sustainable transportation (i.e. sufficient supply of alternative fuel or charging infrastructure), and (3) extended commercialization timelines involved with the introduction and adoption of new, cleaner technologies.
What is the hurdle for making transportation more efficient from a carbon emissions perspective?
The sheer amount of capital required to re-fleet the global transportation sector with new, cleaner propulsion technology, requiring the support of both public and private enterprise. Most existing transportation assets are designed to last for decades and while capital is accessible to support a re-fleeting of the transportation sector according to historical retirement rates, any acceleration of asset replacements would require a commensurate increase in the amount of capital required to support the re-fleeting. Fortunately, the global investment community has recognized the opportunity to generate attractive risk-adjusted returns via investments that support energy transition across the transportation sector (and they are not at odds).
How will we be able to upgrade our existing infrastructure to support sustainable transportation?
However, funding the energy transition is only part of the solution to achieving reductions in carbon emissions given increasing regulation and growing consumer demand for cleaner alternatives. There is also a requirement to invest vast amounts of capital into charging and fueling infrastructure to support new propulsion technologies. Whether it be the manufacture or distribution of green hydrogen to support zero emissions technology in the aviation and maritime sectors, or the investment required to enhance the production, storage, and reliability of renewable generation and distribution to support battery-electric road and rail vehicles, the obstacles are significant. Massive amounts of capital are required to facilitate the transition of charging and fueling infrastructure and it will take time to re-engineer, construct and operationalize.
How do we work around commercialization timelines amidst the energy transition?
Finally, the adoption rate for new, cleaner technology will continue to be negatively impacted by the reality of the development timelines involved with commercialization and ramping production of the new generation assets required to meet both the consumer demand and the environmental imperative. The constraints on commercialization timelines include new propulsion technology research, development and testing timelines, government regulation and in certain sectors, the uncertainty of which technologies will ultimately deliver the most efficient, reliable, and zero emissions solutions over the long term for the sector. However, these timelines are compressing, partially driven by government incentives, and the pace of introduction for new, cleaner transportation technologies continue to accelerate.
What other infrastructure, working in conjunction with transit infrastructure, needs improvement?
An area that is often neglected is the infrastructure required to properly dispose of the waste created from new transport technologies. The immediate need will be battery recycling and in particular, the ability to safely contain and dispose of the millions of tons of lithium that has been, and will be, a core input of the battery production required to support the electrification of our transportation system. There are several innovative companies developing processes and technologies to mitigate the waste created by new propulsion technologies, but they tend to get less attention than the ones focusing on the powertrain, vehicle design and fueling infrastructure.
