Transportation is changing rapidly as the world moves to address climate change by reducing greenhouse gas emissions. While passenger transport shifts to electric vehicles with increasing momentum in the U.S., the picture for freight transport — the movement of goods by truck, rail, ship or plane — is more complex.

Electrification is a good option for some freight transportation, such as short- and medium-haul trucking, but is more challenging for other parts of the freight system, such as ocean shipping or aviation. “Drop-in” alternative fuels — those that can be used in place of fossil fuels in existing engines — can play an important transition role if sustainably produced, but the limited supply of truly sustainable drop-in fuels will mean these will play more of a niche role in the long term.

Sustainable hydrogen and ammonia offer possible long-term solutions for freight transport that are difficult to electrify.

While shifting fuels will be critical in meeting climate goals, improving the efficiency of energy use in freight transport will also need to play a critical role. For example, electric vehicles increase the efficiency of delivered energy, while truck, ship, plane and engine design improvements can also play a role. Additionally, in maritime freight, wind power is making a comeback with innovations in the use of sails on ships, opening the door to less fuel use.

Improving supply chain management and logistics planning will also be important. Reducing the overall demand for freight transportation and improving the efficiency of the system will mean less need for low- and zero-carbon fuels and the equipment to utilize them, easing the challenge of scaling up these technologies.

The opportunities and obstacles to using electrification, sustainable drop-in fuels, and hydrogen and hydrogen-derived fuels to decarbonize freight transportation are discussed below.

Role of Electrification in Freight Transport

Battery-electric vehicles, which are taking center stage for passenger transport, can also play an important role for short- and medium-distance road freight. Last-mile deliveries and fixed route shipping to and from distribution centers are amenable to electrification since the trucks and vans providing these services travel shorter distances and have greater opportunities for recharging. There are also significant incentives in place for truck electrification. Similarly, electrification may play a role in short-haul and regional aviation and in river and coastal shipping.

While electrifying long-haul freight is more challenging, battery electric vehicles may still be the best option for trucking. Multi-megawatt charging stations at truck stops with battery designs that enable their use may be less of a challenge than hydrogen fueling and will very likely remain cheaper. Innovation to increase the energy density of batteries and/or autonomous trucks could lead to battery electric trucks dominating this use case.

Charging an electric truck.
A hybrid electric heavy-duty truck, used to move freight at the Long Beach Port in California, is plugged in to charge. Battery-electric vehicles can play an important role for short- and medium-distance road freight. Photo by Dennis Schroeder/NREL / Flickr.

Vehicles using fuel cells, which convert a fuel like hydrogen directly to electricity, may provide another workable option for decarbonizing long-distance freight. While fuel cell technology itself is relatively mature, widespread adoption in truck, rail and marine freight transport will require significant development and cost reduction of low-, zero- or negative-carbon hydrogen or other fuels, along with distribution and fueling infrastructure. Improved batteries and charging infrastructure may allow batteries to compete favorably with hydrogen fuel cells for long-distance road freight.

Batteries are not well suited for shipping freight across the ocean. With current technology, increasing battery capacity to increase range means a significant weight penalty and reduced cargo space. Battery weight is also a major limiting factor for electrifying aviation, particularly for long-distance flights.  These kinds of transportation will require energy-dense alternative fuels to decarbonize.

Electrifying freight transport and operations at ports and railyards can also provide significant health and equity benefits for local communities. The current reliance on burning diesel fuel for freight transport comes with significant air quality costs that are borne most heavily by low-income and minority communities that live near major highways, ports and transportation hubs.

Role of Drop-in Liquid Fuels in the Transition to Decarbonization

Energy-dense liquid fossil fuels are the mainstay of the current freight transportation system, whether in the form of diesel fuel for trucks and locomotives, jet fuel or fuel oil for shipping. Such fuels are operationally ideal for long-distance transportation and aviation, providing high energy content per unit of volume or weight of the fuel. Many pathways exist to develop low-, zero- and negative-carbon drop-in fuels, and these can provide an important transitional role by reducing the emissions from the equipment in the existing freight system. However, significant challenges remain to scaling up these alternatives sufficiently to replace the current fossil fuel supply.

Current alternative transportation fuels offer some greenhouse gas advantage over gasoline and diesel, but do not offer a pathway to fully decarbonizing the transport sector. The primary alternative transportation fuel in the U.S. today is corn ethanol (4% of total U.S. transport energy), along with less than 1% each for biodiesel and renewable diesel. Ethanol is added to most gasoline sold in the U.S. as an oxygenate, which reduces conventional air pollution by enhancing fuel combustion. In the U.S., ethanol is primarily produced through fermentation of corn, with corn representing over 90% of biomass input for biofuels by weight in 2022.

Biodiesel is produced by transesterification, which uses alcohol to break down plant and animal fats, oils and greases to produce fuels. Soy oil is the most common feedstock in the U.S., though other vegetable oils and waste fats and oils are also used. Biodiesel is approved for blending with petroleum diesel.

Renewable diesel can be made from the same feedstocks, but is made by hydrogenation, which converts the oils and fats to a fuel with the same chemical makeup as fossil diesel and can be used as a drop-in fuel. Hydrogenation can also produce hydroprocessed esters and fatty acids (HEFA), which can be used today as a drop-in alternative aviation fuel.

The use of purpose-grown fuel crops creates significant tradeoffs with food production and other land uses. The growing demand for food, feed, fiber and fuel in the coming decades is increasing competition for use of land. Increasing production of fuel crops puts pressure to use other land for food production and other uses. For example, given linked global markets, using soy oil for biodiesel increases overall demand for soy and other vegetable oils. Palm oil plantations in Indonesia and soybean production in Brazil are both major drivers of deforestation, so increasing demand for soy oil for biofuel production can increase carbon emissions from land-use change.

Production of biofuels from waste materials, such as used cooking oil and agricultural residues, can have significant greenhouse gas advantages over fossil fuels while avoiding the food and land use competition concerns of energy crops, though the supply of bio-waste materials is insufficient to supply the full transportation sector. Biodiesel, renewable diesel and HEFA can be readily made from waste fats and oils. Liquid biofuels can also be produced through pyrolysis or hydro-thermal liquefaction of residues, such as corn stover (the stalks, leaves and cobs left over after corn harvest). 

Synthetic liquid fuels can provide a pathway to low- or zero-carbon transportation fuels when they are produced with clean hydrogen and renewable energy. The carbon required can come from sustainable bio-based feedstocks or from carbon dioxide captured from the air. The Fischer-Tropsch process can deliver a variety of liquid hydrocarbon fuels that can be used as drop-in substitutes for gasoline, diesel and jet fuel. Clean hydrogen can also be used to produce ammonia and methanol, which may both play a role as a low-carbon fuel for marine freight transportation.

While these technologies are well developed, the cost of production of alternative fuels through these pathways is currently too high. Significant investments are needed to help bring down those costs and strong climate policies need to be enacted if these fuels are to be widely deployed. Combustion of these fuels will result in local air pollution similar to burning fossil fuels, giving an advantage to non-combustion options such as battery- and fuel-cell-electric vehicles where feasible.

Because sustainable production of these alternative liquid fuels is likely to be limited due to limited supply of sustainable biomass resources and high production costs, it will be important that they are only used where other options are not available. High on that list is long-distance aviation. While aviation is a small player in terms of share of freight tonnage and freight carbon emissions, the overall demand for sustainable aviation fuels going forward will likely limit the potential for these sustainable liquid fuels in other parts of the freight transportation system.

Role of Hydrogen and Hydrogen-derived Fuels for Long-Term Decarbonization of Freight Transport

Hydrogen and hydrogen-derived fuels will need to play a major role in the long-term decarbonization of freight. Hydrogen fuel cells can be used to electrify long-distance road and rail freight transport and may play a role with shorter distance maritime freight, while renewable liquid fuels such as ammonia and methanol can be produced from clean hydrogen. Obstacles to scaling up the use of these low-carbon fuels include the high cost and lack of production of clean hydrogen and the lack of infrastructure to get the hydrogen and hydrogen-derived fuels to the trucks, trains, ships and airplanes to use them.

As with alternative liquid fuels, these barriers suggest the importance of focusing the use of clean hydrogen to the right freight transport use cases and considering the competition — such as industrial sectors requiring high heat — for clean hydrogen from other sectors of the economy. While reducing the overall energy demand from freight transport through increased efficiency and improved logistics and using batteries for electrification can contribute to emission reductions, clean hydrogen will likely remain an important mitigation approach for targeted freight transport that lack other clear decarbonization options.

Shipping freight.
A cargo vessel departs from Port Newark’s Container Terminal. Improvements in supply chain management and logistical planning will be crucial to improving energy efficiency in the freight sector. Photo by the Port Authority of New York and New Jersey/Flickr.

Two pathways offer a method to producing hydrogen at very low or even net negative greenhouse gas emissions — electrolysis and biomass gasification using waste feedstocks combined with carbon capture — but both require cost reductions. In addition, the relatively limited supply of waste biomass feedstocks will limit the scale at which that pathway can be developed.

The use of hydrogen as a transport fuel in the U.S. will require significant distribution and fueling infrastructure across the country. Hydrogen gas itself is energy dense by weight but not by volume, making its storage and distribution for direct use in transport a challenge. Liquefying or compressing hydrogen to reduce the volume needed for storage and distribution comes with energy and cost penalties. Similarly, conversion of clean hydrogen to ammonia improves the volumetric energy density of the fuel, but comes with energy and cost penalties.

An additional factor to consider is how hydrogen leakage affects climate change. While typically not considered a greenhouse gas itself, hydrogen released into the atmosphere can prolong the time methane remains in the atmosphere and increase stratospheric water vapor. These effects have recently been estimated to make hydrogen 33 times more potent a greenhouse gas than carbon dioxide on a 20 year time horizon, making it essential that leakage be reduced as much as possible in the distribution, storage and use of hydrogen.

Prioritizing Clean Fuels for Freight Transportation

Freight managers are looking for deep emissions reductions to meet both ambitious near-term and long-term emissions reduction goals and standards. While electrification is a first choice for freight transportation where that is feasible, such as short- and medium-haul trucking, other types of transportation, like aviation and maritime shipping, will be more difficult to electrify. This creates a need for cleaner alternate fuels in the near term that is challenging the capacity of existing fuel production pathways and technologies.

Given the many technical and economic challenges for production and use of alternative transportation fuels, a clear prioritization needs to be kept in mind. The first priority goes to decreasing the energy demand for freight transport through increased efficiency and improved logistics and supply chain management. The next priority is to electrify freight transportation as much as possible with the use of batteries and, when needed for longer distance freight, fuel cells. The final priority goes to the targeted use of sustainable fuels from waste biomass or clean hydrogen. These fuels will be needed for parts of the freight transport system that are hard to electrify, such as long-distance aviation and shipping. Because the supplies of these sustainable fuels will likely remain limited, their use should be focused where needed.

Editor’s Note: This article is part of WRI's work on clean transportation fuels, which is supported by UPS Foundation. This article reflects the independent views of the author.