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This report was prepared on behalf of the Texas Advanced Air Mobility(AAM)Advisory Committee by Texas State University with support from the Texas Department of TransportationTexas Advanced Air Mobility Advisory CommitteeTxDOTTexas State UniversityMaruthi R.AkellaJeff BilyeuAndrew ChangAhsan ChoudhuriCade ClarkDan Dalton(Chair)Jason L.DayDavid FieldsGrant GuillotAdministrative and logistics support for the committee provided by the Texas Department of Transportation Aviation Division.Andres Carvallo(co-principal investigator)Rebecca Davio,Ph.D.(co-principal investigator)Judy Oskam,Ed.D.Damian Valles Molina,Ph.D.Dale BlasingameJenny BuschhornZachary CollinsElissa Jorgensen Ernest HuffmanBen IversGus KhankarliGeorge KivorkBrent KlavonAmanda NelsonAngel NewhartMark OzenickJim PerschbachKendal ProsackSergio SaenzMichael Sanders(Vice Chair)Brent SkorupThomas SwoyerNathan TrailCameron WalkerKimberly WilliamsVanessa Higgins Joyce,Ph.D.Jennifer ScharlachAlbert SaurezMatthew PantusoMolly AllredKhan Bin Asad Mortuza,Ph.D.Michael SeabornSunistha ShakyaPursuant to Section 201.210,Texas Transportation Code,the Texas Transportation Commission(Commission)or a Texas Department of Transportation(TxDOT)employee may not use money under TxDOTs control or engage in an activity to influence the passage or defeat of legislation.This prohibition does not prohibit the Commission or a TxDOT employee from using state resources to provide public information or information responsive to a request.This report contains information that is responsive to a legislative directive,under Senate Bill 2144,88thTexas Legislature(2023),to assess current state law and any potential changes to state law that are needed to facilitate the implementation of advanced air mobility technology in Texas.This report and its accompanying recommendations do not express an opinion of the Commission or TxDOT.Special thanks to Senator Tan Parker and Representative David Cook for sponsoring the enabling legislation and their staff members,especially Nick Eastwood and Sara Trott.For questions about:The AAM Advisory Committee and recommendations,please contact Dan.Daltonwisk.aeroCommittee support and general AAM issues,please call 800-558-9368Development of this report,please contact innovatetxstate.eduCONTENTSExecutive Summary.4Introduction.11How was this report developed?.12What is AAM?.13What are the benefits to Texans?.24What are the challenges?.28How are other states addressing these challenges?.31Recommendations(How can the State help?).32Conclusion.36Appendix A:Advisory Committee Biographies.37Appendix B:Advanced Air Mobility Survey of Traveling Publics Perceptions Questionnaire.48Appendix C:Federal AAM Definition.55Appendix D:Texas Regulations.56Appendix E:Potential AAM Communication Strategies.60References .6242024 Texas Advanced Air MobilityEXECUTIVE SUMMARYThe Advanced Air Mobility(AAM)Advisory Committee,created by the Texas Department of Transportation as required by SB 2144 88(R),2023 offers this report to provide information and recommendations to support the Texas Legislatures decision-making regarding AAM.WHAT IS ADVANCED AIR MOBILITY(AAM)?The US Congress believes the US should become a global leader in AAM,which the Federal Aviation Administration(FAA)refers to as a new era of aviation.As frequently occurs in the beginning of any emerging industry,there is not a consistent definition of all terms.Advanced Air Mobility(AAM)is a term for which different entities offer slightly different definitions.The AAM Advisory Committee has chosen to follow the federal working definition of AAM used in the AAM Coordination and Leadership Act of 2022:“a transportation system that transports people and property by air between two points in the United States using aircraft with advanced technologies,including electric aircraft or electric vertical take-off and landing aircraft,in both controlled and uncontrolled airspace.”In May 2024,the FAA Reauthorization Act of 2024 became law and officially defined AAM.AAM includes Urban Air Mobility(UAM)and Regional Air Mobility(RAM).UAM focuses on travel within urban areas(intra-city),while RAM aims to use underutilized airports for regional travel(inter-city).Both UAM and RAM,as components of AAM,will provide some form of services(e.g.,cargo delivery,air taxis,medical evacuation).These services are made possible by the AAM system,which includes aircraft,infrastructure,and regulatory landscape.For the purposes of this report,AAM aircraft include small Unmanned Aircraft Systems(sUAS)or“drones”,and larger electric Vertical Take-Off and Landing(eVTOL)aircraft.Drones are typically electric,weigh less than 55 pounds,and operate autonomously or with a remote pilot.Though vertical take-off and landing aircraft like helicopters have transported people and cargo for years,eVTOLs use new propulsion technologies.Companies are developing piloted and autonomous eVTOL aircraft.As of the writing of this report,no company has received final FAA approval to carry people or cargo for hire.That said,the AAM industry is progressing rapidly,with nearly$10B invested in this space in 2022 and 2023,according to a study by McKinsey&Company.Additionally,the FAA is expecting to start approving aircraft for commercial operations starting in 2025 and continuing into the next decade.Texas has existing physical infrastructure(airports,heliports)that can support AAM,but modifications and additional infrastructure will likely be needed for the scale-up and full implementation of this new sector.There is some digital infrastructure(air traffic control,flight management)that can support AAM in Texas,but it is available on a more limited geographic basis currently and will need to be expanded for full implementation.52024 Texas Advanced Air MobilityThe FAA has exclusive authority over US airspace,managing air traffic control,airspace use,and safety.The FAA also regulates AAM aircraft and operator certifications and evaluates human impacts like noise and air quality.Integration of AAM into airspace will evolve over time,with near-term management using existing rules.State and local governments in Texas cannot regulate airspace use or aviation safety because of the FAAs exclusive authority.That said,the FAA works closely with the Texas Department of Transportation to maximize collaboration and aviation safety for Texans and those who visit Texas by air every day.AAM has diverse uses in Texas,with many drone operations already active.Wing,partnered with Walmart and DoorDash,offers drone deliveries in Dallas-Fort Worth,Manna delivers food,coffee,and medical supplies in DFW,and Amazon provides drone delivery of small packages and prescriptions in College Station.Drones deliver medications and medical supplies,aiding mobility-impaired people and providing emergency care.The Matador UAS Consortium aims to transport organs in the Panhandle.The Texas Department of Public Safety uses drones for inspections,border operations,emergency response,and locating suspects and recovering assets.According to Bard College,Texas leads in UAS adoption and utilization by public safety agencies.Drones increase efficiency in public works and agriculture and have other diverse applications.In Texas,the Burlington Northern Santa Fe railroad uses drones for rail inspections,and Hylio offers cost-effective agricultural drones.Galaxy UAS in Fort Worth offers drone and airship solutions for overwatch and advertising,and the Texas Drone Company in Denton uses drones for inspections and 3D modeling.To complement commercial activities,Texas also has several research centers expanding drone testing.The Texas A&M University-Corpus Christis Autonomy Research Institute is one of seven FAA UAS test sites and includes a 12.9-mile beyond visual line of sight corridor.The North Central Texas Council of Governments(NCTCOG)runs an airspace awareness pilot program including 20 cities.Texas A&Ms RELLIS Campus has a 2,300-acre Proving Grounds with several FAA waivers,including a 12-mile beyond visual line of sight corridor.The UAS Traffic Management(UTM)Key Site in DFW allows UAS operators to share data to inform the FAAs policy decisions and enable a safer shared airspace.The AllianceTexas Mobility Innovation Zone in Fort Worth supports real-world testing for AAM operations.The University of North Texas has a dedicated AAM test facility.Furthermore,several companies are planning eVTOL operations in Texas.Bristow Group,a global helicopter operator headquartered in Houston,intends to diversify their operations and service offerings by utilizing AAM aircraft to support various end markets including its Gulf of Mexico energy customer base.Wisk Aero aims to offer electric autonomous air taxi services in Houston by 2030 and is currently partnering with both the Sugarland Airport and the Houston Airport System to achieve this.United Airlines,Archer Aviation,and Eve Air Mobility are also among the companies planning for cargo and passenger AAM operations at the Houston Airport System within the next 10 years.DFW International Airport is moving forward with its strategic plan to support eVTOL(electric Vertical Take-Off and Landing)limited operations by 2026.The City of Arlington,along with the NCTCOG and DFW International Airport,is planning for a vertiport location at the Arlington Municipal Airport to use for the World Cup in 2026.Texas also has some other eVTOL developments.Port San Antonio,a 1,900-acre tech campus in San Antonio,is considering AAM for cargo and employee transport.Joby and NASA conducted simulations in the DFW airspace to test eVTOL integration into busy airspace,showing dozens of aircraft per hour could operate from airport terminals.Skygrid is an Austin-based company developing integrated systems to address gaps in traditional air traffic management.The City of Fort Worth received a$2M SMART grant in 2023 to fund a program for testing weather sensors on routes used by autonomous vehicles.EXECUTIVE SUMMARYWHAT IS AAM?(CONTINUED)62024 Texas Advanced Air MobilityEconomic:The AAM industry can create jobs and boost economic activity in Texas.A national economic impact estimate,completed by Deloitte in 2021,projects the AAM industry to reach$115 billion by 2035,creating over 280,000 jobs.An economic study for Ohio forecasts$13 billion in economic impact and 15,000 jobs over 25 years.A similar study in Virginia predicts$16 billion in business activity and 17,000 jobs by 2045.A regional study by CalState Long Beach and Wisk shows significant economic benefits from constructing and operating a 20-vertiport network in the LA region.Construction would generate$174 million in labor income and$423 million in economic output,while yearly operation would generate$173 million in expenditures and$90 million in labor income.Additionally,a study done by Virginia Tech on drone deliveries shows they save time and increase sales,benefiting consumers and businesses.An Accenture study for the DFW Metroplex shows similar benefits.Societal:AAM can also bring about societal benefits by improving access to emergency and healthcare services,increasing access to goods,reducing traffic,and increasing efficiency in other industries.An article by Mateen et al.shows that drones can reduce emergency response times of Automated External Defibrillator(AED)delivery by 78.8%and assist mobility-impaired residents,providing significant healthcare benefits.Drone deliveries can also improve access to goods,help avoid car crashes,and save travel miles.Environmental:AAM aircraft,being predominantly electric,could significantly reduce greenhouse gas emissions in the transportation sector.Based on an article by Rodrigues et al.,using delivery drones rather than diesel trucks can lower energy consumption by up to 94%and cut emissions by up to 84%.Communication:Public understanding of AAM is limited,with concerns about privacy,noise,and safety.The AAM industry must communicate benefits and address concerns effectively.Developing communication resources can improve public awareness and mitigate issues.Electricity:The growing AAM industry could strain Texas electric grid,though it is unclear when this might happen.AAM operations,which rely heavily on electricity,could demand significant electrical capacity,with vertiports requiring 1 MW to 20 MW.Accurate estimates of demand and early communication with utility providers are crucial to ensure adequate capacity.Safety:Ensuring the safety of AAM passengers and people on the ground is crucial.Managing air traffic for drones and eVTOLs at lower altitudes is challenging,especially in urban areas with obstructions.Integration with current airspace is necessary to prevent accidents.The automated nature of AAM also introduces cybersecurity risks.A collaborative,multidisciplinary approach can help ensure safety in Texas and the US.Workforce:Piloting eVTOLs differs from piloting traditional aircraft,involving the navigation of dense urban environments with frequent take-offs and landings.eVTOL pilots require specialized training as take-off and landing technology is not fully automated.A 2022 McKinsey&Company study estimated 60,000 eVTOL pilots will be required nationwide by 2028.Additional workforce will be needed in other aviation-related occupations,such as mechanics,technicians,line staff,hospitality staff,drone operators and engineers.A coordinated approach among Texas education providers will help meet workforce needs.WHAT ARE THE BENEFITS TO TEXANS?WHAT ARE THE CHALLENGES?EXECUTIVE SUMMARY72024 Texas Advanced Air MobilityStandards:Standards are crucial for aviation to ensure safety,streamlined operations,and consumer trust.While the FAA regulates AAM,Texas can promote uniformity in vertiport standards and zoning regulations.Without state encouragement,Texas could face a patchwork of different AAM regulations,making Texas unfavorable to industry.HOW ARE OTHER STATES ADDRESSING THESE CHALLENGES?WHAT ARE THE CHALLENGES?(CONTINUED)Several states are preparing for the AAM industry.Based on the opinion of the AAM Advisory Committee,research for this analysis focused on state-led actions in Florida,Georgia,Ohio,and Virginia.When looking To maximize the potential significant benefits of AAM and capitalize on Texas natural advantages,the State needs to overcome some key challenges by providing leadership,plannintg,and innovation.HOW CAN THE STATE HELP?RECOMMENDATION 1.LEADERSHIP Designate key industry and state points of contact to lead and coordinate the development of AAM in Texas.1.1.AAM Advisory Committee1.2.AAM Office(TxDOT)1.3.AAM Position(OOG)1.4.State Agency Information Sharing1.5.AAM Pubic AwarenessRECOMMENDATION 2.PLANNINGCreate a series of coordinated statewide plans and working groups to help shape the future of AAM in Texas.2.1.Statewide Strategic Plan2.2.Statewide Economic Impact 2.3.Cybersecurity Risk Mitigation2.4.First Responder Training2.5.Statewide Airspace Infrastructure2.6.Uniform Infrastructure Standards2.7.Electrical Infrastructure2.8.Workforce DevelopmentRECOMMENDATION 3.INNOVATIONProvide funding to TxDOT to create a program for state universities to support research and development for AAM technologies,products,and services in Texas by providing matching funds for federal grants and requiring a minimum percentage of community or industry match.across these states and the various activities they are doing,all the efforts can be grouped into three major strategies:leadership,planning,and innovation.Texas would be well served by taking a similar approach.Research and Development(R&D):The AAM industry faces R&D challenges due to its nascent technologies and operational frameworks.Key unknowns include optimizing battery and fuel technology,integrating AAM systems with air traffic management,vertiport infrastructure,and ensuring safety and security.Focused R&D efforts are needed to address these gaps.The recommendations are presented in more detail on the next three pages.EXECUTIVE SUMMARY82024 Texas Advanced Air MobilityDesignate key industry and state points of contact to lead and coordinate the development of AAM in Texas.Leadership is crucial for success and is essential for proper planning and strategic innovation.Without strong leadership,Texas will fail to capitalize on its natural advantages and reap the full benefits the AAM industry can bring,thereby falling behind other states.1.1.AAM Advisory Committee.Direct TxDOT to continue and ex-pand the AAM Advisory Commit-tee,in part to support the develop-ment of the Statewide AAM plan.Rationale:Continuation of the AAM Advisory Committee will allow members of the industry to share their contempo-rary and critical knowledge with poli-cymakers and state leaders.Expanding Committee membership will also ensure all aspects of this wide-ranging emerg-ing industry are represented.Addition-ally,Committee input on future AAM plans will be critical.Their contribution to planning ensures that the State and industry work together on critical issues to produce comprehensive plans.1.2.AAM Office(TxDOT).Create an office at TxDOT to provide technical support for AAM infrastructure at Texas airports,with a particular focus on electric and autonomous AAM aircraft needs.Rationale:TxDOT coordinates the funding and management of capital improve-ment projects at the States nearly three hundred General Aviation airports,which will play an important role in AAM imple-mentation.TxDOT needs a focused office dedicated to AAM to foster expertise and allow for the efficient integration of AAM infrastructure into the existing transpor-tation network.Combining the knowl-edge and understanding of AAM with traditional aviation will accelerate the efficient adoption of AAM technology into cargo and passenger mobility operations.1.3.AAM Position(OOG).Create a position at the Office of the Governor to increase adoption and awareness of Texas on the national and international stage to attract investment in autono-mous vehicles including AAM technolo-gies(for example,through demonstration day coordination,conference booths and presentations).Additionally,this position could provide guidance and resources to public safety agencies across the state to assist in the aware-ness of AAM technologies and how to safely interact with these services.Rationale:The AAM industry has only recently emerged and faces issues related to public perception and un-derstanding.A representative at the Office of the Governor(OOG)will raise awareness of Texas as a welcoming environment for AAM among industry leaders.The position will also serve as an AAM single point of contact for indus-try interests and public awareness.AAM leadership in Texas will require a combination of appointing key leadership roles and coordinating communication,as detailed in action steps 1.1 1.5.Recommendation 1.LeadershipHOW CAN THE STATE HELP?(CONTINUED)1.4.State Agency Information Sharing.Reestablish the working group from HB 2340(2019)and include members of the AAM community in the group.Sec.418.055.The work group shall develop recommendations for improving the manner in which electronic information is stored by and shared among state agencies and between state agencies and federal agencies to improve the capacity of the agencies to:(1)respond to a disaster;and(2)coordinate the agencies responses to a disaster.Rationale:AAM aircraft can provide timely and critical information during disasters.Close coordination between agencies during a disaster is critical and inclusion of AAM information sharing protocols will maximize response efforts and ensure safe operations.1.5.AAM Public Awareness.Develop communication materials to be posted on TxDOTs website to inform decision mak-ers,the public,the aviation community,and recreational drone users about AAM.Rationale:Other AAM leader states have addressed communication in part by hav-ing webpages dedicated to AAM on their Department of Transportation websites.These pages act as AAM information hubs,providing basic knowledge about the industry and linking to other authori-tative sources.TxDOT should have space on their website allocated to AAM to help inform decision makers and the general public about AAM in Texas.92024 Texas Advanced Air MobilityPlanning will help ensure coordinated action at the state and local levels,bringing diverse opinions from a variety of players together.Planning will help maximize benefits and minimize risks and challenges.Without proper planning,Texas will fail to maximize the benefits of AAM for its residents and businesses.2.1.Statewide Strategic Plan.Devel-op a statewide strategic plan which establishes a vision and direction for AAM including near-term,medium,and long-range goals in conjunction with industry and community representatives.This plan should include topics like AAM use cases;evaluation of existing infra-structure and necessary infrastructure upgrades,including ones allowing for autonomous operations;potential route planning;regulatory best practices;next steps;and other pertinent information.Rationale:Other AAM leader states have statewide strategic plans which provide information about AAM and lay out future steps.Developing a consen-sus based strategic plan for AAM in Texas will provide industry and state and local policymakers with an idea of how AAM can function in Texas.2.2.Statewide Economic Impact.Estimate the economic impact of AAM in Texas,similar to other AAM lead-er states,with a particular focus on electric and autonomous aircraft.Rationale:The AAM industry has the potential to generate significant economic benefits.Currently,Texas must rely on national estimates and is at a disadvan-tage competing against states that have already completed state-specific eco-nomic impact assessments.A statewide economic impact study for Texas will quantify the potential economic impact of the AAM industry for state leaders and help generate private investment to act as a building block for long-term planning.2.3.Cybersecurity Risk Mitigation.Establish a statewide working group to evaluate cybersecurity and data risks posed by AAM technologies and develop strategies to minimize risks.The working group shall include rep-resentatives from state and local pub-lic safety agencies,National Institute of Standards and Technology(NIST),Cybersecurity and Infrastructure Se-curity Agency(CISA),and industry.Rationale:The highly automated nature of AAM aircraft introduces potential cybersecurity issues,which could lead to data leaks or other problems.With a collaborative multi-disciplinary effort between state,federal,and industry rep-resentatives,these cybersecurity risks to autonomous vehicles can be thoroughly investigated and minimized.This working group could also collaborate with other established groups that are evaluating autonomous vehicles more broadly.2.4.First Responder Training.Cre-ate a Texas Division of Emergency Management-led industry and agency working group to develop curriculum and a resource repository to assist first responders in dealing with AAM-related emergencies.Rationale:AAM aircraft are new and continually evolving,and first responders are not fully prepared to deal with them should they malfunction.With the proper training and resources,first responders will be able to more effectively respond to AAM-related emergencies,keeping them-selves and the public safe.To ensure the optimal design of training materials and resources,there should be a collaborative effort between experienced members of both private industry and agency.Recommendation 2:PlanningCreate a series of coordinated statewide plans and working groups to help shape the future of AAM in Texas.2.5.Statewide Airspace Infrastructure.Develop a plan for an AAM Airspace Integration System to provide airspace awareness that includes:i.Proposed operatorii.System capabilities and architecture iii.Phased implementationiv.Data exchange mechanisms between public and private third-party system operatorsv.Support for public safety to integrate into airspace infrastructure Rationale:AAM aircraft and traditional aircraft will share the airspace regard-less of their function.With an increase in these technologies populating the airspace,a system designed to safely integrate these aircraft and improve communication between operators will be critical in ensuring the safety and security of cargo and passengers in the air.Successful AAM planning in Texas will require a coordinated effort from multiple expert stakeholders,as detailed in action steps 2.1 2.8.HOW CAN THE STATE HELP?(CONTINUED)102024 Texas Advanced Air Mobility2.7.Electrical Infrastructure.Estimate the required electrical generation and transmission capacity in conjunction with the major state utilities,ERCOT,etc.for the different implementation phases of AAM in Texas and evaluate the use of other fuel sources.Rationale:The potential electrical demand of the AAM industry is one of the most pressing issues in its full-scale imple-mentation.To support the burgeoning field of AAM in Texas,it is imperative to develop a comprehensive electrical capacity plan that addresses the antic-ipated demands of this transformative technology.Long lead times for establish-ing additional electrical capacity neces-sitate planning for the establishment of vertiports and associated infrastructure.By proactively planning,Texas can ensure the reliability and efficiency of its electrical grid for AAM and understand how to leverage and augment planned ground EVs infrastructure develop-ment for more efficient development.2.8.Workforce Development.Direct the Texas Workforce Commission,the Higher Education Coordinating Board,Texas State Technical College,and the Texas Education Agency to develop an action plan to educate the workforce required to support a robust AAM industry in Texas,with a particular focus on electric and autonomous aircraft.Rationale:This industry is expected to create thousands of high-paying jobs,and because AAM aircraft function differ-ently than traditional aircraft,these jobs will require specialized training.Training programs for aviation-related occupa-tions,such as mechanics,technicians,line staff,hospitality staff,eVTOL pilots,drone operators,engineers,and other work-ers who understand the nuances of the technology and operating system will be crucial to meet future workforce needs.2.6.Uniform Infrastructure Standards.Identify ways to encourage the use of consensus-based vertiport standards(e.g.,templates)and support uniform planning and zoning enabling language related to powered-lift aircraft,autono-mous aircraft,electric aviation,and other advances in aviation technology across the state.Rationale:Consistency,predictability,and interoperability will be important in es-tablishing this industry throughout Texas.There are two areas where uniformity is especially important:infrastructure standards,and planning and zoning.Encouraging the use of AAM standards,such as for vertiport infrastructure,will allow industry partners to function in a consistent manner across the state,cre-ate a predictable operating environment,and enable the entrance and competition of multiple AAM Offices of Emergency Management(OEMs)and operators.Without statewide best practice guide-lines relating to planning and zoning,the development of the AAM industry in Texas and its related benefits could face a patchwork of conflicting rules.HOW CAN THE STATE HELP?(CONTINUED)Recommendation 2.Planning(continued)Although there are ongoing AAM research efforts in the state,a cohesive and coordinated structured research initiative is needed to avoid redundant research,increase efficiency,and accelerate results.An organized and flexible approach would accelerate the development of viable AAM solutions and promote rapid innovation.This would make Texas and its universities a focal point for AAM technology research and potentially improve its appeal for students across the country.Provide funding to TxDOT to create a program for state universities to support research and development for AAM technologies,products,and services in Texas by providing matching funds for federal grants and requiring a minimum percentage of community or industry match.An approach similar to the National Science Foundations AI research institutes could be used,establishing dedicated R&D centers within Texas university systems.Each center would focus on specific R&D themes and promote interdisciplinary collabora-tion in engineering,technology,urban planning,and regulatory affairs,focusing on themes like battery technology,system inte-gration,safety protocols,and infrastructure design.Collaboration with industry leaders and government agencies would ensure applicable research outcomes for the AAM industry.Example topics include autonomous aviation integration into the National Airspace System,improved batteries,fuel cell technology,alternative fuels,and AAM use cases for various markets.Recommendation 3.Innovation112024 Texas Advanced Air MobilityINTRODUCTIONIn May 2023,the Texas Legislature passed Senate Bill 2144 during the 88th Regular Session.Sponsored by Senator Tan Parker,SB 2144(co-sponsored by Representative David Cook)is an act related to Advanced Air Mobility(AAM)technology that charged the Texas Department of Transportation(TxDOT)with creating an AAM Advisory Committee.The Committees role was to assess current state law and recommend any potential changes to state law that were needed to facilitate the implementation of AAM technology in the state.Based on the definition provided in SB 2144,“advanced air mobility means an aviation transportation system that uses highly automated aircraft,which may be manned or unmanned,to operate and transport passengers or cargo at lower altitudes for commercial,public service,private,or recreational purposes”(1).For the purposes of this report,AAM aircraft include everything from small drones to larger aircraft designed to carry passengers or larger cargo.The purpose of this report is to provide information and recommendations to support the Texas Legislatures decision-making regarding AAM.AAM has the potential to bring economic,societal,and environmental benefits to Texas.These benefits include,for example,the creation of new jobs and revenue streams,improved access to goods and services,and reduced greenhouse gas emissions.AAM is coming to Texas.To maximize the potential significant economic,societal,and environmental benefits it can bring,the State should invest in leadership,planning,and innovation for AAM.The remainder of this report will answer a series of questions that help understand and contextualize this emerging field as simply as possible to help support the recommendations.How was this report developed?This section will outline the participants and the process to develop this report and the recommendations.What is AAM?This section will help explain the current definition of AAM,the AAM system(including the aircraft,the infrastructure,and regulations),and the uses of AAM.What are the benefits to Texans?This section will detail the economic,societal,and environmental benefits to Texans.What are the challenges?This section will explain the challenges the AAM industry faces in Texas.How are other states addressing these challenges?This section will summarize the activities of Committee-identified AAM-leader states.Recommendations(How can the State help?)This section will include a series of legislative recommendations developed by the AAM Advisory Committee.122024 Texas Advanced Air MobilityThe Texas Department of Transportation(TxDOT)created the Advanced Air Mobility(AAM)Advisory Committee consisting of people with AAM expertise,representing a variety of interests.The Committee consisted of 26 members:Maruthi R.AkellaJeff BilyeuAndrew ChangAhsan ChoudhuriCade ClarkDan Dalton(Chair)Jason L.DayDavid FieldsGrant GuillotErnest HuffmanBen IversGus KhankarliGeorge KivorkBrent KlavonAmanda NelsonAngel NewhartMark OzenickJim PerschbachKendal ProsackSergio SaenzMichael Sanders(Vice Chair)Brent SkorupThomas SwoyerNathan TrailCameron WalkerKimberly WilliamsCommittee member biographies are in Appendix A.HOW WAS THIS REPORT DEVELOPED?This Committee held hybrid and fully online meetings seven times over a nine-month period.Meetings were held openly,enabling significant input from non-Committee members.There were also five different subcommittees within the Committee that each met four-to-five times online.Table 1 shows the five subcommittees and their Leaders/Vice Leaders.Table 1.Subcommittees and their leadersSubcommitteeLeaderVice LeaderCommunity IntegrationJim PerschbachAmanda NelsonEconomic ImpactCameron WalkerFundingErnest HuffmanInfrastructureCade ClarkMark OzenickSafety and Public Good Use-CasesJason DayDiscussions from full Committee and subcommittee meetings informed the findings within this report and the final recommendations.Any research requests from the Committee and subcommittees were completed by the research support team at Texas State University.The Texas State University team conducted interviews with Committee members to aid in the development of survey questions.With those questions,the team commissioned a Qualtrics survey of 1,000 representatives of the traveling public in Texas.All respondents were over age 18 and were reflective of the States population,including representation from rural,suburban,and urban populations.The full survey questions are in Appendix B.Some survey results are provided in sections throughout this report and are shown in purple boxes.During one full Committee meeting,representatives from companies,organizations,and universities involved with AAM gave short presentations about their AAM efforts in Texas.These presentations informed our understanding of AAM activity in Texas.Examples of these activities are shown in light blue boxes.132024 Texas Advanced Air MobilityTexas definitionIn SB 2144,AAM is defined as“an aviation transportation system that uses highly automated aircraft,which may be manned or unmanned,to operate and transport passengers or cargo at lower altitudes for commercial,public service,private,or recreational purposes”(1).Federal definitionIn the AAM Coordination and Leadership Act of 2022,the working definition of AAM was“a transportation system that transports people and property by air between two points in the United States using aircraft with advanced technologies,including electric aircraft or electric vertical take-off and landing aircraft,in both controlled and uncontrolled airspace”(6).This definition,likely due to the emerging nature of these technologies,was purposefully broad.This was the federal definition in use at the establishment of this AAM Advisory Committee,used during all subcommittee meetings and during the drafting of this report.However,on May 16,2024,the FAA Reauthorization Act of 2024(HR 3935)became a law and provided an official AAM definition.The AAM definition in this act is:A transportation system that is comprised of urban air mobility and regional air mobility using manned or unmanned aircraft.This act also formally defined RAM and UAM.The full AAM definition,as well as RAM and UAM,can be found in full in Appendix C.AAM can be fundamentally defined as a system made up of aircraft,infrastructure,and regulations,which can be utilized to enhance healthcare,emergency response,and other industries in Texas.WHAT IS AAM?DEFINITION AND CONTEXTAAM has two geographic subsets differentiated by where the air travel is occurring:Urban Air Mobility(UAM)and Regional Air Mobility(RAM).Although both UAM and RAM can be categorized under AAM,they can be differentiated by the scale at which they operate.The goal of RAM,based on a NASA report,is to use existing underutilized airports to create a more affordable and accessible network of regional travel(2).UAM“focuses on operations moving people and cargo in metropolitan and urban areas”(3).As of May 2024,the federal government defines AAM as comprised of UAM and RAM(4).The US Congress believes the US should become a global leader in AAM,which the Federal Aviation Administration(FAA)refers to as a“new era of aviation”(4,5).As frequently occurs in the beginning of any emerging industry,there is not a consistent definition of all terms.Advanced Air Mobility(AAM)is a term for which different entities offer slightly different definitions.There are differing AAM definitions at both the State and federal level,pointing to the fluidity of the still developing industry.Both State and federal definitions are provided here.142024 Texas Advanced Air Mobilityoversight.Based on current designs,it is common for these aircraft to hold four-to-six passengers,use electricity as fuel,and have a range of about 100 miles.This range can potentially be greatly expanded by using different fuel types,which are currently being researched and tested.For example,in 2024,a Joby test flight with a hydrogen-electric air taxi flew 523 miles with no passengers on board(10).One of the debates about AAM in this Committee is whether or not drones are considered AAM.Advisory Committee members discussed that eVTOLs and drones currently share many commonalities,including use of the same lower altitude(below 400)airspace,use of electricity as a typical fuel source,shared future need for digital airspace management systems and more localized weather information,and even some common uses like transporting cargo or emergency response.Just as the Committee considered the similarities,they also considered the differences between drones and eVTOLs.The Chair pointed out the differences in Aircraft,Airspace,and Aircrews(e.g.,pilots)between these two types of aircraft.eVTOLs require a safety certification that drones may not necessarily require.Drones typically operate in lower airspace(below 400)than eVTOLs which will frequently fly thousands of feet above ground.Commercial drone operators are required to be FAA Part 107 certified while eVTOL operators will likely need to meet Part 61,91,and 135 requirements.Continuing to explore the similarities and differences between these two types or aircraft will be helpful as the State looks ahead in potentially developing any regulatory environment.This report will includeas the Committee didboth sUAS/drones and eVTOLs,although the May 2024 federal AAM definition established aircraft weight The federal definition describes AAM as a“system.”This section of the report will further explain the AAM system,which is made up of many components,including the aircraft,infrastructure,and regulations.Aircraft According to the Texas Transportation Code,aircraft means“a device that is invented,used,or designated for air navigation or flight,other than a parachute or other device used primarily as safety equipment”(7).This definition is very broad and includes all aircraft ranging from AAM aircraft to helicopters to airplanes.To further discuss AAM aircraft,we can consider two broad types of aircraft.The first are small Unmanned Aircraft Systems(sUAS),commonly referred to as drones,which are used for a variety of purposes.They are typically electric and operate fully autonomously or with a remote pilot,and they weigh less than 55 pounds.The FAA defines sUAS as“a small unmanned aircraft and its associated elements(including communication links and the components that control the small unmanned aircraft)that are required for the safe and efficient operation of the small unmanned aircraft in the national airspace system”(8).The second type of aircraft can be used as air taxis to transport people or to transport cargo,among other uses,and are commonly referred to as eVTOLs(electric Vertical Take-Off and Landing).Currently,these eVTOLs use powered-lift and have characteristics of a rotorcraft and an airplane.Though vertical take-off and landing aircraft like helicopters have existed for years,what makes eVTOLs new are the propulsion technologies used,including electric motors,hydrogen fuel,and hybrid designs(9).Some eVTOLs are designed to have a pilot on-board and others are designed to be autonomous with human AAM SYSTEM WHAT IS AAM?152024 Texas Advanced Air Mobilityand local level to help facilitate the development of AAM at all levels.FAA RoleThe FAA has exclusive authority to manage all airspace within the US Their management includes air traffic control,airspace use,and safety.Because of the FAAs exclusive management authority,state and local governments within Texas cannot regulate airspace use or aviation safety(12).Along with managing the airspace,the FAA regulates vehicle and operator certifications for AAM aircraft(4).Additionally,the FAA evaluates the human impacts of aviation,including AAM,and discloses them to the public.Human impacts include“noise,air quality,visual disturbances,and disruption to wildlife”(9).Air Traffic ManagementThe integration of AAM into the airspace is an important concern.The FAAs AAM Implementation Plan(2023)offers some insight into how AAM aircraft will be integrated in the near-term.AAM infrastructure,automation,and traffic management approaches will evolve over time as the AAM operational tempo increases in airspace across the NAS National Airspacerequirements that may exclude sUAS from AAM.For the remainder of this report,the phrases“AAM”or“AAM aircraft”will broadly refer to both eVTOLs and sUAS/drones,unless otherwise specified.InfrastructureTexas has existing infrastructure,both physical and digital,that could be used during the initial implementation of AAM.Physical infrastructure includes hundreds of airports and heliports.Existing physical infrastructure will likely require some modifications to function as a vertiport to support AAM(9).Vertiports are structures or areas of land that serve as the takeoff and landing area for eVTOLs(11).Existing digital infrastructure includes air traffic control services and flight management systems.The development of additional physical and digital infrastructure will be required to reach the full potential of AAM.Regulatory LandscapeThe regulatory landscape of AAM is still evolving due to the maturing nature of the industry.Although the FAA has overarching authority over all airspace in the US,there have been laws passed at the state WHAT IS AAM?System.AAM aircraft will be integrated at greater scale with commercial and general aviation(GA)traffic,as well as other low-altitude airspace users,such as recreational and commercial small unmanned aircraft systems or drones.In the near-term for I28 Innovate28,however,these interactions are minimized and thus can be managed with existing ATC tools,procedures,and protocols.AAM aircraft are expected to be operating with a pilot on board and under VFR visual flight rules in VMC visual meteorological conditions conditions;it is likely these aircraft will be treated as any other fixed wing/rotorcraft operating under VFR conditions,to the extent they are able to comply with existing rules,regulations,and procedures(9).Federal Aviation Regulations Title 14,Aeronautics and Space,in the Code of Federal Regulations covers the many rules relating to flight.There are nearly 1,400 parts within Title 14,so this section will only briefly cover a few parts most relevant to AAM operators.FAA Part 61 relates to issuing pilot,flight instructor,or ground instructor certificates(13).AAM SYSTEM(CONTINUED)162024 Texas Advanced Air Mobilityare successful in DFW,it will set an example that can be repeated nationwide(17).Many companies are developing air taxis,but at this time no air taxis are approved to carry people or cargo for hire.At their Drone and AAM Symposium in July 2024,the FAA said they expect to issue a type certificate for the first AAM aircraft before the end of 2025(18).In fact,the FAA,Joby,and Archer agreed on the final certification basis for the companies aircraft in August 2024,moving the industry one step closer to commercial operation(4).Existing State LawSince 1995,several laws have been passed in Texas that relate to the use of drones and uncrewed aircraft and potential issues with their use.None of these laws negatively impact industrys ability to conduct AAM operations.Appendix D provides an overview of these laws.Local Ordinances Though the FAA controls the airspace and the flight of aircraft,the take-off,landing,and delivery areas can be influenced by local rules.Local governments are limited in what they can do from an airspace perspective,but they have some ability to regulate drone use in specific areas,subject to State law.Localities can also have an impact through zoning,which can control where vertiports are located or set regulations around the areas where delivery drones take-off and land.Additionally,they can play a large role in integration of vertiports with bus stops,highways,train stations,and other modes of transportation.Furthermore,local governments can ensure the development of infrastructure surrounding vertiports is compatible with airspace requirements,for example,building height.FAA Part 91 relates to the most basic flight rules and is relevant to everyone that is flying.It includes information about flying in different airspaces,Visual Flight Rules(VFR)and Instrument Flight Rules(IFR)(14).FAA Part 107 relates to the operation of sUAS,or drones,for work or business purposes.To fly under Part 107,users must pass the Part 107 Knowledge Test and then register their drone with the FAA(15).There are several types of waivers within Part 107 that drone pilots must obtain if they want to perform certain actions,such as flying a drone from a moving vehicle or flying at night.Another waiver is commonly known as the beyond visual line of sight(BVLOS)waiver,which allows drone pilots to fly without maintaining a visual on the aircraft.FAA Part 135 relates to the operation of aircraft for commuter and on-demand passenger or cargo purposes.Drone package delivery operations are generally conducted under Part 135,as package delivery for compensation or hire is not allowed under Part 107.In addition,any eVTOL acting as an air taxi and flying passengers or cargo for commercial purposes would fall under Part 135 and need to comply with its requirements(16).Recent DevelopmentsIn July 2024,the FAA approved two drone companies,Wing and Zipline,to conduct deliveries in the DFW airspace without visual observers.These companies will now be able to use UAS Traffic Management(UTM)technology to manage drone-to-drone interactions with FAA oversight.This is the first time the FAA has allowed a third party UTM company to perform this role.Using UTM is a critical step for a safe,shared airspace,and if efforts AAM SYSTEM(CONTINUED)WHAT IS AAM?172024 Texas Advanced Air MobilityDeliveriesDrone package deliveries are one of the most well-known uses of drones.This section briefly describes some of the companies delivering in Texas.TEXAS EXAMPLESWing,headquartered in Palo Alto,California,has been offering drone delivery services in the Dallas-Fort Worth(DFW)Metroplex since April 2022.Wing is partnered with Walmart and DoorDash to provide drone deliveries to customer homes.Wings current delivery drone weighs about 11 pounds,has a wingspan of almost five feet,and is able to travel about 12 miles round trip.Packages are typically around 2.5 pounds or lighter.To make delivery drops,the drone hovers and lowers the package on a tether,and once the package is on the ground,it is released.Manna,headquartered in Ireland,offers drone deliveries in the DFW area for basic goods including food,coffee,and medical supplies.The optimal operating range for Manna drones is about two miles,with a maximum distance of five miles one-way.To make deliveries,drones descend to about 50 feet above the ground and then lower packages on a tether.Amazon offers drone delivery of small packages and prescriptions in College Station.For drone delivery eligible items and in eligible areas,drone delivery is free and occurs within one hour of purchasing.Understanding the various uses of AAM technology and the services that are and will be provided is one of the best ways to understand what AAM is.This section will give examples of AAM uses in different industries,as well as provide a sampling of some of the activities occurring or planned in Texas.These examples are not comprehensive of all AAM activity in Texas but rather give further insights into how it is currently being or planned to be used.Drone-related usesDrones are used for a variety of purposes including deliveries,healthcare,emergency response,public works,agriculture,other services,research and testing,and more.HealthcareIn the healthcare industry,drones can be used to deliver medications and other medical supplies,which is particularly helpful for mobility impaired people,both in urban and rural areas.Drones can also be used to send emergency care faster and more efficiently,such as sending bags of blood,a defibrillator,or even organs(19).TEXAS EXAMPLESThe Matador UAS Consortium,established by the Texas Tech Health Science Center and 2THEDGE in 2022,is partnered with multiple organizations,including the Texas Organ Sharing Alliance,to work toward using drones to transport organs and tissues in rural areas.Their work is focused in 108 counties in the Texas Panhandle.AAM USESWHAT IS AAM?182024 Texas Advanced Air MobilityPublic WorksDrones can be used in various public works-related tasks,providing the benefit of increased efficiency and of not having to send personnel into dangerous settings.For example,the state of New York launched a UAS program in 2021,and since then they have used drones to inspect hard-to reach places like bridges and drill holes,gather data for mapping,and help provide media coverage of events(22).TEXAS EXAMPLESIn Texas,the Burlington Northern Santa Fe railroad began using UAS in 2013 to assist with addressing rail traffic disruptions.Their drones are used in projects like inspecting bridges and gaining information about railways after flood or fire events.They have projects across much of the State,and their extensive network of drone pilots allows them to respond to issues within one hour.Public SafetyDrones can be used in emergency response and public safety in several ways,such as providing situational awareness,faster search and rescue efforts,and transport of essential supplies(20).According to Bard College,Texas is a leader in the nation in both the adoption and utilization of UAS by public safety agencies(21).The state boasts not only the largest public safety UAS program(Texas Department of Public Safety)but the largest statewide coalition in the nation.Every week in Texas,public safety agencies conduct thousands of UAS flights to fight fires,map crash scenes,provide security and overwatch at mass gathering events,and secure the border.Texas public safety agencies also utilize drone technology for disaster assessment,search and rescue,and infrastructure assessments.Texas has proven how to use public safety drones to protect the citizens of Texas while simultaneously protecting their right to privacy.TEXAS EXAMPLESThe Texas Department of Public Safety utilizes UAS for a variety of missions including traffic accident reconstruction,infrastructure inspections,border security,fire mapping,and disaster response.In 2023,the department conducted over 50,000 UAS flights resulting in 11,464 suspects located,3,387 border patrol assists,and$4.37 million in drug and asset seizures.AAM USES DRONE-RELATED USES(CONTINUED)WHAT IS AAM?192024 Texas Advanced Air MobilityAgriculture Drones can be used to increase efficiency in the agriculture industry.For example,they can be used to monitor crop health,quickly inspect fields or livestock,and to apply pesticides,herbicides,or fertilizers(23,24).TEXAS EXAMPLESHylio,a Houston-based company started by University of Texas students,makes and sells drones built specifically for agricultural spray operations.They currently offer four drone products,ranging in size from 25 pounds to 117 pounds.In February 2024,Hylio became the first company to receive FAA approval for swarming their heavier drones(over 55 pounds),allowing the use of up to three heavy-duty drones at a time with a single pilot(25).This approval helps pave the way for larger-scale farming operations using drones,and it illustrates that there are still regulatory changes being made in this rapidly evolving industry.Other ServicesDrone technology has continued to evolve since its initial implementation,leading to many widely varied use cases.In addition to the applications for different industries as described above,there are countless others.For example,drones can be used in wildlife conservation to collect samples and monitor species,and their ability to capture images and videos can apply to multiple industries,such as real estate and sports(26,27).TEXAS EXAMPLESGalaxy Unmanned Systems LLC,based in Fort Worth,provides advanced drone and autonomous airship solutions for diverse applications.Their airships,used in sports broadcasting,are also being adapted for military use.Galaxy offers turnkey flight services and Systems Engineering and Technical Assistancesupport for Department of Defenseand AAM stakeholders,with expertise in fixed-wing,multicopter,and Lighter-Than-Air(LTA)UAS for various use cases,such as autonomous collaborative teaming,automated airspace management,andnearshore/UAM corridor integration.The Texas Drone Company,based in Denton,conducts drone inspections and creates visual deliverables for several industries.For example,they use drones to aid in golf course maintenance,as well as to capture imagery to create interactive 3D models of the course for audience engagement.AAM USES DRONE-RELATED USES(CONTINUED)WHAT IS AAM?202024 Texas Advanced Air MobilityThe Texas A&M University-Corpus Christis Autonomy Research Institute is one of seven FAA UAS test sites in the US and includes a 12.9-mile(12-nautical-mile)BVLOS corridor.The Institute has seven existing and three pending test ranges throughout the state.The Institute contributes to UAS research and innovation,including through demonstrations and evaluations.They also provide operational data to the FAA to help with regulation and standards development.Past operations include damage assessments following hurricanes and searches for injured sea turtles,both of which provided information for faster response times.The RELLIS Campus at Texas A&M,an applied research campus outside of Bryan,has an established Proving Grounds consisting of 2,300 acres.Assets include five runways,taxiways,an apron,hangar space,and a number of unique facilities and capabilities to support AAM,UAS,counter-UAS,and air to ground integration research.RELLIS has established an FAA approved 12-mile(10.4-nautical-mile)BVLOS corridor that facilitates increased testing and use in the AAM environment.Additionally,seven state agencies with a stake in the unmanned industry are located on the RELLIS Campus.The North Central Texas Council of Governments is leading an airspace awareness pilot program through a partnership with three drone service providers.With 20 participating cities in the Dallas area,the pilot program aims to provide live data to aid in safe UAS flights.The program started in November 2023 and will conclude in November 2025.Research and TestingIn addition to the existing applications of drones,there AAM USES DRONE-RELATED USES(CONTINUED)are also research centers with ongoing efforts to expand drone testing in the State.TEXAS EXAMPLESThe UAS Traffic Management(UTM)Key Site in the DFW area is a collaborative effort that aims to gather data on uncrewed aircraft operations to help inform the FAAs policy decisions around BVLOS operations.UTM services allow companies to share data and flight routes with each other,enabling a safer shared airspace.Because of increased UAS activity in the North Texas area,several operators noted the need to be able to communicate with each other,leading to the establishment of the Key Site.The Metroplex area is considered one of the most progressive in the research and use of drone deliveries.The AllianceTexas Mobility Innovation Zone(MIZ)is a 27,000-acre industrial and residential development in Fort Worth that allows for innovation and collaboration on multi-modal mobility platforms,including AAM.With its residential areas,the MIZ can support real-world testing for operations like drone deliveries.Many companies,including some highlighted in this report,have used the MIZ to increase efficiency in their technology and operations.The University of North Texas(UNT)Center of Integrated Intelligent Mobility Systems recently opened the UNT Advanced Air Mobility test facility at their Discovery Park.At 80 feet tall,120 feet long and 300 feet wide,this facility is the largest of its kind in all of Texas and focuses on solutions for Unmanned Aerial Vehicles(UAV)ranging from programming to policy.WHAT IS AAM?212024 Texas Advanced Air MobilityCargo TransportSimilar to drone deliveries,cargo deliveries using eVTOLs have the capability to greatly improve efficiency.TEXAS EXAMPLESBristow Group,a longstanding global helicopter operator headquartered in Houston,specializes in offshore energy transportation and search and rescue services.They are planning to introduce both crewed and uncrewed AAM aircraft and services into the region to support cargo movement initially for their energy customer base,as well as entering new markets.This strategic initiative aims to leverage advanced AAM technology to enhance operational efficiency,safety,and service reach,particularly in the demanding environments where Bristow operates.eVTOL-related usesAAM USES(CONTINUED)Different elements of passenger transport can be utilized in different areas.For example,in urban areas eVTOLs can be used for commuting,airport transfers,business travel,or tourism(28).In rural areas,they can be used to improve accessibility and affordability of regional travel,particularly in underserved areas,through the use of underutilized public use airports(2).One initial use case for both urban and rural areas is emergency response,such as to transport first responders to a scene faster than an ambulance or helicopter(29).This section describes some of the known AAM-related activities occurring or planned in Texas.Initial AAM eVTOL services are predicted to start in 2025.Expected initial uses mostly involve cargo and passenger transport.WHAT IS AAM?222024 Texas Advanced Air MobilityThe City of Arlington is working with the NCTCOG and DFW International Airport to plan for the installation of a temporary vertiport location at the Arlington Municipal Airport for eVTOLs to use during the FIFA World Cup in the summer of 2026.DFW International Airport is moving forward with its strategic plan to support eVTOL limited operations by 2026.The airport will work with interested Offices of Emergency Management(OEMs)and industry experts to cooperatively explore the operational and infrastructure requirements to support an eVTOL program.The Houston Airport System,which includes Bush,Hobby,and Ellington airports,is planning to integrate cargo AAM operations in the near-term and passenger AAM operations to enhance regional mobility within the next 10 years.Together with Archer Aviation and Eve Air Mobility,United Airlines is among the companies planning for AAM operations at Houston airports,in addition to the Wisk activity previously mentioned.Passenger TransportThere are currently no companies conducting passenger transport via air taxis in Texas,but several are planning to.TEXAS EXAMPLESWisk Aero LLC“Wisk”,headquartered in California,is planning for autonomous air taxi services in the Houston area by 2030.Through a partnership with the City of Sugarland and the Houston Airport System(HAS),Wisk will start by assessing vertiport infrastructure needs at the Sugarland Regional Airport and the HAS airports,with the ultimate goal of establishing a larger network across the region.Wisks Generation 6 passenger air taxi,which is currently awaiting FAA approval,is designed to hold four passengers and use an autonomy platform that builds upon proven aviation systemssuch as autopilots,precision navigation,and data linksto create a more advanced autonomy platform that delivers a new level of safety and unlocks the scale needed for commercial success.AAM USES EVTOL-RELATED USES(CONTINUED)WHAT IS AAM?232024 Texas Advanced Air MobilityPort San Antonio,located in San Antonio,is a 1,900-acre technology and innovation campus whose 80 tenant customers have a combined workforce of 18,000 employees.On the campus,leading names in aerospace,such as Boeing and StandardAero,work alongside top private-and public-sector entities making significant advancements in cybersecurity,artificial intelligence,national defense,industrial robotics,and an array of other applied technologies.As such,in combination with other regional,state and national partners,the Port has fostered a special community of collaborators to further refine,test,and validate eVTOL systems.The Port is also advancing construction of one of the nations first vertiports at its industrial airport at Kelly Field.This facility will be able to accommodate traditional fixed-wing aircraft and eVTOLs.Furthermore,the campus presents a unique testbed.For example,several Port customers operate multiple facilities,oftentimes non-contiguous to one another,and would stand to benefit by transporting spare parts and other components within the Port footprint by air.Additionally,the Port foresees adding thousands of on-campus jobs by the end of the decade.Incorporating eVTOLs as a mass transit commuting option for employees who reside throughout Bexar Country would significantly reduce the need to build multi-million dollar parking garages and related infrastructure.Research and TestingAAM is a new and emerging industry,so there is a lot of research and innovation happening nationally and globally.This section provides examples of just two research efforts in Texas.However,almost all eVTOL activity previously mentioned also involves an element of research and testing.TEXAS EXAMPLESJoby and NASA partnered to conduct air traffic control simulations in the DFW area to evaluate the capability of eVTOLs to integrate into the Class B airspace around busy airports.Simulations were done from the fall of 2022 to 2023,proving that dozens of aircraft per hour could operate to and from existing airport terminals.The City of Fort Worth was the only SMART(Strengthening Mobility and Revolutionizing Transportation)grant recipient in Texas in 2023.The City,in partnership with NCTCOG,will use the$2M grant funds to pilot low altitude weather sensors on freight routes used by autonomous vehicles.The programs objective is to demonstrate how weather sensors can be integrated into weather models,ultimately providing more consistent data on air and road conditions.Skygrid LLC,based in Austin,is developing a sophisticated software platform designed to ensure the safe and secure integration of autonomous cargo and passenger air vehicles in global airspace by addressing and eliminating gaps in traditional UTM solutions.AAM USES EVTOL-RELATED USES(CONTINUED)WHAT IS AAM?242024 Texas Advanced Air MobilityAn AAM economic impact study(including drones)done for the state of Ohio found that in a 25-year forecast period,the industry would bring the following benefits:$13 billion in economic impact15,000 high-paying,full-time jobs$2.5 billion in federal,state,and local tax revenues(32)An AAM report(including drones)done in 2023 for the state of Virginia found that AAM would have the following economic impacts through the year 2045:$16 billion in business activity17,000 full-time jobs$2.8 billion in federal,state,and local tax revenues(33)Some AAM-related economic impact studies have also been done regionally in other states.For example,a study for Urban Air Mobilitys(UAM)impact in Long Beach,California and the greater Los-Angeles-Orange County area estimated the economic benefit created by a 20-vertiport system during construction and a 10-year operation phase.Construction phase:2,130 jobs$173.9 million in labor income$423.6 million in economic output$57.4 million in federal,state,and local tax revenues 10-year operations phase(recurring annual impact of operation):940 jobs$90.3 million in labor income$173.3 in economic output$29.4 million in federal,state,and local tax revenues(34)AAM has the potential to transform transportation and logistics in Texas,bringing significant economic,societal,and environmental benefits.ECONOMICThe AAM industry and drones can provide economic benefits by creating new jobs,stimulating economic activity,and by increasing business efficiency.TEXAS SURVEY RESULTRespondents were more favorable to the use of AAM to transport cargo and things(70 points on a scale of 0 100)rather than people(60 points).Based on a national study done by Deloitte in 2021,the AAM industry(not including drones)is expected to reach$115 billion by 2035$57 billion for the AAM passenger market and$58 billion for the cargo marketcreating over 280,000 high-paying jobs nationwide(30).Recently,the AAM industry has seen rapid progression,receiving nearly$10B in disclosed funding in 2022 and 2023 in the US(31).In Texas,this could translate into thousands of jobs in research,aircraft development,infrastructure development,and airspace management.While Texas does not currently have any statewide economic impact studies for AAM,a couple of other states do,illustrating the future economic benefits of the industry at the state level.WHAT ARE THE BENEFITS TO TEXANS?252024 Texas Advanced Air MobilityTable 2.Potential economic benefits from drone deliveries after 5 yearsLower density(Christiansburg,VA)Medium density(Austin,TX)Higher density(Columbus,OH)TX cities with comparable population densities(36,37,38)Big Spring,Kingsville,StephenvilleEagle Pass,Laredo,San AntonioDallas,HoustonTime savings for consumers using drone delivery over 5 years$23-45.9M$323.6-582.5M$219.8-403.8MAdditional sales for participating businesses over 5 years$25,000-73,000$72,000-208,000$34,000-97,000Additional sales for participating full-service restaurants over 5 years$38,000 71,000$79,000 145,000$54,000 99,000For drone deliveries alone,businesses across Texas stand to benefit from increased time efficiency.A study done by Virginia Tech in 2020 analyzed the potential impact of drone deliveries over five years based on varying population densities in three cities(35).They analyzed Christiansburg,Virgina for lower density,Austin,Texas for medium,and Columbus,Ohio for higher density.Using Census data,we found cities in Texas with similar population densities for each category to give an idea of the impacts that could come to different parts of the state.ECONOMIC(CONTINUED)Table 2 shows the potential economic benefits from drone deliveries to consumers and businesses(35).A 2021 study prepared for Wing estimated the benefits of drone deliveries in the Dallas-Fort Worth Metroplex after 5 years of implementation at scale.The study estimated$305M in total value of time saved by consumers and$197M in increased sales for businesses(39).WHAT ARE THE BENEFITS TO TEXANS?262024 Texas Advanced Air MobilityDrone deliveries are already being conducted in parts of Texas,positively impacting access to goods.Drone delivery also has the potential to serve a significant portion of city populations,with Virginia Tech estimating that after five years of drone delivery implementation,about 54%of the population in the Austin metro area would be served(35).Increased drone use can contribute to fewer cars being on the road and reduce the need for some trips.Table 3 shows the potential traffic-related benefits from drone deliveries in cities of differing population densities(35).Avoiding traffic on roads also reduces infrastructure wear and tear.Lastly,as explained in the AAM Uses section,drones can be used to increase efficiency and safety in a variety of industries.For example,using a drone to inspect a bridge or a wind turbine instead of a person automatically prevents any human-related accidents.This not only increases safety but also allows for quicker and more efficient inspections.AAM can also bring about societal benefits by enhancing access to emergency and healthcare services,improving access to goods,reducing traffic,and increasing efficiency in other industries.TEXAS SURVEY RESULTRespondents in rural,urban,and suburban environments were most supportive of the use of AAM for humanitarian and disaster relief.Texans supported the use of AAM for humanitarian and disaster relief(4.2 on an agreement scale of 1-5),medical emergencies(4.1)and to send and receive labs,vaccines and other services(4.0).Drones can be used in emergency response and medication delivery,contributing to public safety.For example,the response time for emergency Automated External Defibrillator(AED)delivery is reduced by an average of 78.8%when operations are conducted with a drone(40).In Austin specifically,drone delivery could assist up to 20,000 mobility-impaired residents by delivering their prescription medication,providing anywhere from$18.7$892 million in healthcare benefits(35).SOCIETAL Table 3.Potential societal benefits from drone deliveries after 5 yearsLower density(Christiansburg,VA)Medium density(Austin,TX)Higher density(Columbus,OH)TX cities with comparable population densities(36,37,38)Big Spring,Kingsville,Stephenville Eagle Pass,Laredo,San AntonioDallas,HoustonCar crashes avoided per year over 5 years28-46287-580244-466Miles saved from avoided travel per year over 5 years18.7 30.5M145.2 294M95.8 183.2MWHAT ARE THE BENEFITS TO TEXANS?272024 Texas Advanced Air MobilityEach year,INRIX releases a Global Traffic Scorecard that ranks traffic congestion in urban areas.In the 2023 scorecard,four Texas cities are in the top 25 for worst congestion in the US(41).Table 4 shows the yearly hours lost from being in traffic,as well as the costs for individual drivers and the cities.A report by the Texas Transportation Institute at Texas A&M University showed similar results for 2022,with urban areas across Texas experiencing delays and excess fuel consumption(42).UAM,the subset of AAM focused on urban areas,is not likely to significantly reduce the volume of surface traffic,but it is likely to reduce traffic congestion during peak times(3).Reduced traffic could ultimately save city residents time and money.Table 4.Impact of traffic congestion in four Texas cities in one year(41)HoustonDallasAustinSan Antonio2023 US Rank8172125Delay(hours lost)62383835Cost per Driver$1,082$658$663$607Cost per City$3.2B$2.2B$632M$625MSOCIETAL(CONTINUED)ENVIRONMENTALAAM aircraft are predominantly electric,which could significantly reduce greenhouse gas emissions from the transportation sector.Delivery drones can have up to a 94%lower energy consumption than diesel-powered delivery vehicles and can reduce greenhouse gas emissions by up to 84%(43).In the DFW Metroplex,replacing traditional delivery vehicles with drones for just 2%of deliveries could eliminate 49,000 tons of CO2 emissions each year(39).Table 5 shows the potential CO2 emissions saved by using drone deliveries in cities of differing population densities(35).Table 5.Potential environmental benefits from drone deliveries after 5 yearsLower density(Christiansburg,VA)Medium density(Austin,TX)Higher density(Columbus,OH)TX cities with comparable population densities(36,37,38)Big Spring,Kingsville,Stephenville Eagle Pass,Laredo,San AntonioDallas,HoustonTons of CO2 saved per year over 5 years28-46287-580244-466WHAT ARE THE BENEFITS TO TEXANS?282024 Texas Advanced Air MobilityWHAT ARE THE CHALLENGES?While AAM is set to transform transportation and logistics in Texas,it also presents several challenges.Overcoming these challenges through leadership,planning,and innovation will best position Texas to fully realize the many potential benefits of AAM.COMMUNICATIONThere is a lack of public understanding about AAM,as well as concerns about privacy and noise.To gain public support,the AAM industry needs to effectively communicate the benefits of AAM and address public concerns.Committee members stressed the importance of communicating in the right places at the right time to ensure the public does not feel misled when these new technologies are not in their communities right away.For electric Vertical Take-Off and Landing aircraft(eVTOLs),the primary public concern is around safety.Public perception of the safety of flying in an automated vehicle is a roadblock due to the lack of full-scale operations.According to an Urban Air Mobility(UAM)Market Study done by Booz Allen Hamilton,53%of individuals would be willing to fly in a piloted UAM aircraft with other passengers,while only 22%of individuals would be willing to fly on a fully automated UAM aircraft without a pilot or flight attendant on board(44).For drones,the public is primarily concerned with privacy and noise.An additional communication challenge is related to the use of private or recreational drones in areas where there are permanent or temporary flight restrictions,such as around an active wildfire.The use of recreational drones in such a scenario can interfere with emergency response drones and negatively impact response efforts.The development of general communication resources will help improve public awareness of AAM and mitigate some of these issues.In addition to communicating to the public,it is also important for the State to communicate internally.One crucial aspect of this is communication during disaster response.As drones continue to play an increasing role in disaster management,and with eVTOLs playing a future role,it is important to reestablish the information sharing work group(HB 2340 2019,Sec.418.055)and include eVTOL and drone representation.Appendix E offers some potential communication strategies.TEXAS SURVEY RESULTRespondents showed a lack of awareness about AAM.Half of the respondents had never seen or heard of it and that is emphasized in rural residents(57%never heard or seen),women(58%),and those with lower education attainment.While awareness was quite low,Texans in general presented somewhat positive feelings toward AAM once it was explained.292024 Texas Advanced Air MobilityThis increased future demand for electricity for AAM comes on top of significant growing demand from other industries.The accelerated growth of data centers,mining of cryptocurrencies,electrification of vehicles,and the return of manufacturing to Texas is significantly impacting Texas overall electrical demand.As AAM grows,it will be critical for the industry to provide accurate estimates of the necessary electrical infrastructure to utility providers and ERCOT to ensure adequate capacity or provide adequate time to generate the additional capacity needed.SAFETYThe safety of both AAM passengers and people on the ground is paramount.With drones and eVTOLs operating simultaneously at lower altitudes,regulating air traffic management becomes a challenge.This scenario is particularly challenging in urban settings due to buildings,cranes,and other obstructions,besides other aircraft that could be in a shared airspace with AAM aircraft.Without thoughtful integration with the current airspace,there could be a potential increase in accidents both in the air and on the ground.Additionally,the highly automated nature of the aircraft introduces risks related to cybersecurity.Vulnerabilities in these automated systems could lead to data leaks(48).The potential negative effects of data breaches highlight the obstacles that exist for first responders who may be expected to utilize AAM aircraft in ELECTRICITYThe widespread development of AAM aircraft may cause significant strain on the electric grid in Texas,managed by The Electric Reliability Council of Texas(ERCOT).Most AAM aircraft are currently powered by electricity,potentially introducing a significant demand for increased capacity,especially once the industry reaches fully-scaled operations,which is expected in the 2030s or 2040s.Future-proofing the AAM infrastructure design could lead to outsized electrical demands at vertiports,ranging from less than 1 MW to 20 MW per project(45).For reference,1 megawatt-hour(MWh)of electricity is enough to provide electricity for up to 1,000 homes(46).A 2023 study by the US National Renewable Energy Laboratory recommends that each vertiport should plan to have at least 1 MW available.To ensure this capacity,they suggest that vertiport sites should engage with the local utility as early as possible,with utility providers most likely being interested in“understanding the power capacity,number of charging stations,and any potential future expansion from the electrification point of view”(47).Additionally,upgrading electrical infrastructure can require years of lead time,highlighting the importance of early engagement with utility providers.The study concluded that installing eVTOL charging capabilities is likely to increase the future electrical load at a site by six-to-seven times.This increase in load would likely overload most existing systems that are typically designed to allow a maximum of only two-to-three times the demand.the field or respond to AAM related emergencies.Also,since AAM is an emerging industry,first responders may not know how to safely and effectively respond if an AAM aircraft or its batteries malfunction.These are important issues that are already being discussed at the federal level,in other states,and across the industry.The Federal Aviation Administration(FAA)has exclusive management of the airspace,and their current approach is to evolve traffic management along with the growth and evolution of AAM,with safety being a key element of the integration of these technologies.The US Department of Transportation also has an AAM Interagency Working Group,with security and air traffic being two of its primary areas of focus(49).Still,there is space for Texas to contribute to the understanding and research for AAM integration into the airspace,including considerations of safety.Texas contributions should not conflict with the FAA but should help capture and share data to help maintain safety and address any Texas-specific needs.A collaborative,multidisciplinary approach can help ensure safety in Texas and the US.TEXAS SURVEY RESULTTexans expressed concerns towards cyberthreat(3.5 on an agreement scale of 1 5),safety when automated,in comparison to piloted planes(3.3),and dangers towards those who are on land under AAM aircraft(3.1).There was also concern about the adoption of the technology worsening air traffic(3.2).WHAT ARE THE CHALLENGES?302024 Texas Advanced Air MobilityWORKFORCEPiloting eVTOLs differs from piloting traditional aviation vehicles because it requires a mixture of helicopter and airplane flying styles.Further,initial implementation will take place in urban areas,creating the challenge of navigating densely built environments.Operations in urban areas will also be characterized by short flight times,meaning that a larger percentage of total flight time will be devoted to complex takeoff and landing maneuvers compared to traditional aviation.These short flights and higher volume of takeoffs and landings will require different training,especially because takeoff and landing technology for piloted aircraft is not fully automated yet(50).As eVTOL use increases over the next decade,these different aspects of AAM flight will create a need for a highly trained AAM pilot workforce.At the same time,more AAM aircraft are expected to become increasingly autonomous in the future,meaning that initial pilot recruitment may be more challenging in the short-term(28).A study done by McKinsey&Company in 2022 estimated that 60,000 eVTOL pilots would be needed nationwide for the AAM industry by 2028(28).In addition to highly trained pilots,there will be an increased need for engineers,mechanics,avionics technicians,drone operators,loaders,manufacturing personnel,educators,line staff,and hospitality staff to meet these increased demands.Many of these positions do not require a college degree.A coordinated approach among Texas education providers will help meet these workforce needs.STANDARDS Standards are important for any industry,especially aviation,to help ensure safety,streamlined operations,and consumer trust(51).While the FAA is the primary regulatory authority for AAM in the US,Texas can still play a role by promoting uniformity in two areas.One is encouraging consistent standards for vertiports and other infrastructure,and the other is encouraging consistency in zoning regulations and processes.Without the States encouragement of uniformity,Texas could end up with a patchwork of different AAM regulations,ultimately stifling the industry.Additionally,some existing infrastructure will need to be upgraded and retrofitted moving forward,such as arrival and departure areas,charging stations,and safety features.The State can help ensure these upgrades are consistent and safe.RESEARCH&DEVELOPMENT The AAM industry faces significant research and development(R&D)challenges stemming from the nascent nature of its technologies and operational frameworks.Key unknowns include optimizing battery technology for longer flight ranges and the reliable integration of AAM systems within existing air traffic management systems.Further complexities arise in ensuring robust safety and security measures that can adapt to AAMs highly dynamic operational environments.The intricacies of vertiport infrastructure development,particularly in urban settings where space and environmental impact are significant concerns,also present considerable challenges.These technological and infrastructural gaps necessitate focused R&D efforts to innovate solutions.There are many unknowns in the industry and numerous entities involved.The State needs to coordinate R&D efforts to increase efficiency,avoid duplicating work,and maximize collaboration.WHAT ARE THE CHALLENGES?312024 Texas Advanced Air MobilityHOW ARE OTHER STATES ADDRESSING THESE CHALLENGES?Several other states have started preparing for the AAM industry.Based on the expert opinions of the Committee,this section will focus on the actions taken by the transportation departments in Florida,Georgia,Ohio,and Virginia,which are states currently viewed as leaders in AAM.FLORIDAThe Florida Department of Transportation has a robust AAM growth strategy,much of which is captured on the dedicated AAM section of their Aviation Office website.This section includes completed AAM reports such as a state AAM Roadmap(June 2022),an AAM Working Group Report and Recommendations(August 2023),and an Implementation and Public Outreach Plan(September 2023)(52).Floridas AAM Roadmap mentions AAM-related research happening at universities in the state,including research labs.GEORGIAThe Georgia Department of Transportation also has an AAM expansion plan captured on their website.They commissioned an AAM Blueprint in April 2024 to assess AAM activities in the state,inventory existing infrastructure,develop tools for communities,and create a statewide action plan(53).Georgias statewide technical report covers ongoing AAM-related research efforts at university research centers in the state,as well as research by the Georgia Center of Innovation,which is part of the state Department of Economic Development.OHIOThe Ohio Department of Transportation also has an AAM development strategy.A statewide AAM Framework was completed in July 2022,detailing many aspects of AAM in Ohio and its potential in the state.Additionally,in June 2021 a consulting firm completed an economic impact study for AAM in Ohio(54).Ohios AAM Framework report describes research efforts in the state,like the Ohio/Indiana Unmanned Aerial System(UAS)Test Center and an airspace management research project led by a state university.VIRGINIA The Virginia Department of Aviation has an AAM section on their website that provides basic information and resources about the industry.The Virginia Innovation Partnership Corporation,a non-profit arm of the states Innovation Partnership Authority,has published reports related to AAM such as a UAS activity study and a report about Virginias AAM future(55).Virginias AAM Future report mentions AAM-related research activities occurring at several institutions in the state,including Virginia Techs Federal Aviation Administration(FAA)UAS Test Site.When looking across these states and the various activities they are doing,all the efforts can be grouped into three major strategies:leadership,planning,and innovation.Texas would be well served by taking similar approach.322024 Texas Advanced Air MobilityRECOMMENDATIONSTo maximize the significant potential benefits of AAM and capitalize on Texas natural advantages,the State needs to overcome key challenges by providing leadership,planning,and innovation.AAM activity is already happening in Texas without any direct intervention from the State.However,if Texas wants to fully realize the benefits of the industry,it is imperative that State leaders implement the following key recommendations.HOW CAN THE STATE HELP?RECOMMENDATION 1.LEADERSHIP Designate key industry and state points of contact to lead and coordinate the development of AAM in Texas.1.1.AAM Advisory Committee1.2.AAM Office(TxDOT)1.3.AAM Position(OOG)1.4.State Agency Information Sharing1.5.AAM Pubic AwarenessRECOMMENDATION 2.PLANNINGCreate a series of coordinated statewide plans and working groups to help shape the future of AAM in Texas.2.1.Statewide Strategic Plan2.2.Statewide Economic Impact 2.3.Cybersecurity Risk Mitigation2.4.First Responder Training2.5.Statewide Airspace Infrastructure2.6.Uniform Infrastructure Standards2.7.Electrical Infrastructure2.8.Workforce DevelopmentRECOMMENDATION 3.INNOVATIONProvide funding to TxDOT to create a program for state universities to support research and development for AAM technologies,products,and services in Texas by providing matching funds for federal grants and requiring a minimum percentage of community or industry match.Texas has many qualities which make it a likely home for AAM services and activity.It has good weather,a large population,a vast landmass,a vibrant economy,a business-friendly regulatory environment,and a tradition of innovation in the flight and aerospace industries.There are also significant rural and urban populations,providing opportunities to capture the benefits of both aspects of AAMUrban Air Mobility and Regional Air Mobility.332024 Texas Advanced Air MobilityDesignate key industry and state points of contact to lead and coordinate the development of AAM in Texas.Leadership is crucial for success and is essential for proper planning and strategic innovation.Without strong leadership,Texas will fail to capitalize on its natural advantages and reap the full benefits the AAM industry can bring,thereby falling behind other states.1.1.AAM Advisory Commit-tee.Direct TxDOT to continue and expand the AAM Advisory Commit-tee,in part to support the develop-ment of the Statewide AAM plan.Rationale:Continuation of the AAM Advisory Committee will allow members of the industry to share their contempo-rary and critical knowledge with poli-cymakers and state leaders.Expanding Committee membership will also ensure all aspects of this wide-ranging emerg-ing industry are represented.Addition-ally,Committee input on future AAM plans will be critical.Their contribution to planning ensures that the State and industry work together on critical issues to produce comprehensive plans.1.2.AAM Office(TxDOT).Create an office at TxDOT to provide technical support for AAM infrastructure at Texas airports,with a particular focus on elec-tric and autonomous AAM aircraft needs.Rationale:TxDOT coordinates the funding and management of capital improve-ment projects at the States nearly three hundred General Aviation airports,which will play an important role in AAM imple-mentation.TxDOT needs a focused office dedicated to AAM to foster expertise and allow for the efficient integration of AAM infrastructure into the existing transpor-tation network.Combining the knowl-edge and understanding of AAM with traditional aviation will accelerate the efficient adoption of AAM technology into cargo and passenger mobility operations.1.3.AAM Position(OOG).Create a position at the Office of the Governor to increase adoption and awareness of Texas on the national and international stage to attract investment in autono-mous vehicles including AAM technolo-gies(for example,through demonstration day coordination,conference booths and presentations).Additionally,this position could provide guidance and resources to public safety agencies across the state to assist in the aware-ness of AAM technologies and how to safely interact with these services.Rationale:The AAM industry has only recently emerged and faces issues related to public perception and un-derstanding.A representative at the Office of the Governor(OOG)will raise awareness of Texas as a welcoming environment for AAM among industry leaders.The position will also serve as an AAM single point of contact for industry interests and public awareness.AAM leadership in Texas will require a combination of appointing key leadership roles and coordinating communication,as detailed in action steps 1.1 1.5.Recommendation 1.LeadershipHOW CAN THE STATE HELP?(CONTINUED)1.4.State Agency Information Sharing.Reestablish the working group from HB 2340(2019)and include mem-bers of the AAM community in the group.Sec.418.055.The work group shall develop recommendations for improving the manner in which electronic information is stored by and shared among state agencies and between state agencies and federal agencies to improve the capacity of the agencies to:(1)respond to a disaster;and(2)coordinate the agencies responses to a disaster.Rationale:AAM aircraft can provide timely and critical information during disasters.Close coordination between agencies during a disaster is critical and inclusion of AAM information sharing protocols will maximize response efforts and ensure safe operations.1.5.AAM Public Awareness.Develop communication materials to be posted on TxDOTs website to inform decision mak-ers,the public,the aviation community,and recreational drone users about AAM.Rationale:Other AAM leader states have addressed communication in part by hav-ing webpages dedicated to AAM on their Department of Transportation websites.These pages act as AAM information hubs,providing basic knowledge about the industry and linking to other au-thoritative sources.TxDOT should have space on their website allocated to AAM to help inform decision makers and the general public about AAM in Texas.342024 Texas Advanced Air MobilityPlanning will help ensure coordinated action at the state and local levels,bringing diverse opinions from a variety of players together.Planning will help maximize benefits and minimize risks and challenges.Without proper planning,Texas will fail to maximize the benefits of AAM for its residents and businesses.2.1.Statewide Strategic Plan.Develop a statewide strategic plan which establishes a vision and direction for AAM including near-term,medium,and long-range goals in conjunction with industry and community representatives.This plan should include topics like AAM use cases;evaluation of existing infra-structure and necessary infrastructure upgrades,including ones allowing for autonomous operations;potential route planning;regulatory best practices;next steps;and other pertinent information.Rationale:Other AAM leader states have statewide strategic plans which provide information about AAM and lay out future steps.Developing a consen-sus based strategic plan for AAM in Texas will provide industry and state and local policymakers with an idea of how AAM can function in Texas.2.2.Statewide Economic Impact.Estimate the economic impact of AAM in Texas,similar to other AAM lead-er states,with a particular focus on electric and autonomous aircraft.Rationale:The AAM industry has the potential to generate significant eco-nomic benefits.Currently,Texas must rely on national estimates and is at a disadvantage competing against states that have already completed state-spe-cific economic impact assessments.A statewide economic impact study for Texas will quantify the potential economic impact of the AAM industry for state leaders and help generate private investment to act as a build-ing block for long-term planning.2.3.Cybersecurity Risk Mitiga-tion.Establish a statewide working group to evaluate cybersecurity and data risks posed by AAM technologies and develop strategies to minimize risks.The working group shall include representatives from state and local public safety agencies,National Institute of Standards and Technology(NIST),Cybersecurity and Infrastructure Se-curity Agency(CISA),and industry.Rationale:The highly automated nature of AAM aircraft introduces potential cybersecurity issues,which could lead to data leaks or other problems.With a collaborative multi-disciplinary effort between state,federal,and industry rep-resentatives,these cybersecurity risks to autonomous vehicles can be thoroughly investigated and minimized.This working group could also collaborate with other established groups that are evaluating autonomous vehicles more broadly.2.4.First Responder Training.Cre-ate a Texas Division of Emergency Management-led industry and agency working group to develop curriculum and a resource repository to assist first responders in dealing with AAM-related emergencies.Rationale:AAM aircraft are new and continually evolving,and first responders are not fully prepared to deal with them should they malfunction.With the proper training and resources,first responders will be able to more effectively respond to AAM-related emergencies,keeping them-selves and the public safe.To ensure the optimal design of training materials and resources,there should be a collaborative effort between experienced members of both private industry and agency.Recommendation 2:PlanningCreate a series of coordinated statewide plans and working groups to help shape the future of AAM in Texas.2.5.Statewide Airspace Infrastructure.Develop a plan for an AAM Airspace Integration System to provide airspace awareness that includes:i.Proposed operatorii.System capabilities and architecture iii.Phased implementationiv.Data exchange mechanisms between public and private third-party system operatorsv.Support for public safety to integrate into airspace infrastructure Rationale:AAM aircraft and traditional aircraft will share the airspace regard-less of their function.With an increase in these technologies populating the airspace,a system designed to safely integrate these aircraft and improve communication between operators will be critical in ensuring the safety and se-curity of cargo and passengers in the air.Successful AAM planning in Texas will require a coordinated effort from multiple expert stakeholders,as detailed in action steps 2.1 2.8.HOW CAN THE STATE HELP?(CONTINUED)352024 Texas Advanced Air Mobility2.7.Electrical Infrastructure.Esti-mate the required electrical generation and transmission capacity in conjunction with the major state utilities,ERCOT,etc.for the different implementation phases of AAM in Texas and evaluate the use of other fuel sources.Rationale:The potential electrical demand of the AAM industry is one of the most pressing issues in its full-scale implementation.To support the burgeon-ing field of AAM in Texas,it is imperative to develop a comprehensive electrical capacity plan that addresses the antic-ipated demands of this transformative technology.Long lead times for estab-lishing additional electrical capacity ne-cessitate planning for the establishment of vertiports and associated infrastruc-ture.By proactively planning,Texas can ensure the reliability and efficiency of its electrical grid for AAM and understand how to leverage and augment planned ground EVs infrastructure develop-ment for more efficient development.2.8.Workforce Development.Direct the Texas Workforce Commission,the Higher Education Coordinating Board,Texas State Technical College,and the Texas Education Agency to develop an action plan to educate the workforce required to support a robust AAM industry in Texas,with a particular focus on electric and autonomous aircraft.Rationale:This industry is expected to create thousands of high-paying jobs,and because AAM aircraft function differ-ently than traditional aircraft,these jobs will require specialized training.Training programs for aviation-related occupa-tions,such as mechanics,technicians,line staff,hospitality staff,eVTOL pilots,drone operators,engineers,and other work-ers who understand the nuances of the technology and operating system will be crucial to meet future workforce needs.2.6.Uniform Infrastructure Standards.Identify ways to encourage the use of consensus-based vertiport standards(e.g.,templates)and support uniform planning and zoning enabling language related to powered-lift aircraft,autono-mous aircraft,electric aviation,and other advances in aviation technology across the state.Rationale:Consistency,predictability,and interoperability will be important in es-tablishing this industry throughout Texas.There are two areas where uniformity is especially important:infrastructure standards,and planning and zoning.Encouraging the use of AAM standards,such as for vertiport infrastructure,will allow industry partners to function in a consistent manner across the state,cre-ate a predictable operating environment,and enable the entrance and competition of multiple AAM Offices of Emergency Management(OEMs)and operators.Without statewide best practice guide-lines relating to planning and zoning,the development of the AAM industry in Texas and its related benefits could face a patchwork of conflicting rules.HOW CAN THE STATE HELP?(CONTINUED)Recommendation 2.Planning(continued)Although there are ongoing AAM research efforts in the state,a cohesive and coordinated structured research initiative is needed to avoid redundant research,increase efficiency,and accelerate results.An organized and flexible approach would accelerate the development of viable AAM solutions and promote rapid innovation.This would make Texas and its universities a focal point for AAM technology research and potentially improve its appeal for students across the country.Provide funding to TxDOT to create a program for state universities to support research and development for AAM technologies,products,and services in Texas by providing matching funds for federal grants and requiring a minimum percentage of community or industry match.An approach similar to the National Science Foundations AI research institutes could be used,establishing dedicated R&D centers within Texas university systems(56).Each center would focus on specific R&D themes and promote interdisciplinary col-laboration in engineering,technology,urban planning,and regu-latory affairs,focusing on themes like battery technology,system integration,safety protocols,and infrastructure design.Collab-oration with industry leaders and government agencies would ensure applicable research outcomes for the AAM industry.Example topics include autonomous aviation integration into the National Airspace System,improved batteries,fuel cell technology,alternative fuels,and AAM use cases for various markets.Recommendation 3.Innovation362024 Texas Advanced Air MobilityAAM is coming to Texas.To maximize the potential significant economic,societal,and environmental benefits it can bring,the State should invest in leadership,planning,and innovation for AAM.AAM ha
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Compact Cities Electrified:ChinaEXECUTIVE SUMMARY2New research from the Institute for Transportation and Development Policy and the University of California,Davis,finds that China could feasibly reduce public-sector expenditures on urban transport at the local,state,and country levels by a cumulative CN 30 trillion through 2050.This could be achieved by using a combination of strategies to support vehicle electrification,compact city planning,and modal shift toward walking,cycling,and public transit.Furthermore,only the combination of these strategies,not any strategy alone,will be sufficient to approach the countrys commitments to reduce carbon emissions in urban passenger transport.This study investigates four possible scenarios for urban passenger transport in China:Business as Usual:Chinas current trends in city planning and vehicle sales,including relatively rapid uptake of electric vehicles(including electric passenger cars,electric buses,e-bikes).Electrification(Only):The fastest feasible replacement of internal-combustion vehicles(ICE)with electric ones.Mode Shift(Only):The fastest feasible transformation of city planning priorities in favor of compact land use and public transport,walking,and bicycling.Electrification Mode Shift:The combination of the previous two scenarios.The estimated requirements to achieve each scenario and the cumulative public-sector expenditure entailed are shown in Figure A.In addition to cost savings,the Electrification Mode Shift scenario would reduce electricity consumption by 411 billion kWh per year by 2050 compared to Electrification(Only).Qualitatively,this scenario would improve road safety,promote economic inclusion of marginalized groups,and reduce air pollution.Percent of newlight-dutyvehicles that areelectricCumulativelane-km ofroadwaybuilt 2015 2050Cumulativetrack-km ofmetro rail built20152050Cumulativelane-km ofprotectedbikeway built20152050Cumulative publicsector expenditure on urban passengertransport 20152050Cumulative public sector expenditure on urban passenger transport 2015-20202015 Baseline1 50 Business as Usual63%2,500,0003,7002,70017,000CN 130 trillion2050 Electrification(Only)100%2,500,0003,7002,70017,000CN 130 trillion2050 Mode Shift(Only)630,000 14,00041,000190,000CN 98 trillion2050 Electrification Mode Shift1000,00014,00041,000 190,000CN 98 trillionThe research also measures greenhouse gas(GHG)emissions from urban passenger transportation in each scenario.The results add to a growing body of evidence1 and show that achieving Chinas Paris Agreement commitments and Nationally Determined Contribution(NDC)will require both electric vehicles and a change in travel patterns.It is insufficient for Electrification to occur at the fastest possible rate.It is only by maximizing Mode Shift as well as Electrification that China can sufficiently reduce emissionsand only through a combination of these strategies can such a reduction be fast enough to be consistent with holding global warming below 1.5C(represented by the blue area in Figure B).1 e.g.International Transport Federation(2023).ITF Transport Outlook 2023.Figure A.Infrastructure requirements and direct public costs by scenario3To achieve the Electrification Mode Shift scenario,China must restructure transportation and land-use policies to prioritize the movement of people rather than vehicles.Such restructuring will entail offering continued incentives and mandates for vehicle electrification,construction of compact mixed-use cities,and reallocation of street space and transportation funding from private motorized vehicles to walking,cycling,and public transport.In all scenarios,cars will still form an important part of the urban transport system,but the Electrification Mode Shift scenario will offer the Chinese public a wide range of travel options that are clean and efficient.By spending less money on building roads,governments will have more resources to devote to other public benefits or to lower taxes.And when Chinese citizens spend less money on fuel,they will be free to invest more in other areas of their life.By protecting our planet from the worst threats of climate change,we will make it possible for the country to prosper long into the future.Figure B.Greenhouse gas emissions by scenarioCumulative Lifecycle GHG(Mt CO2-EQ)CUMULATIVE URBAN PASSENGER TRANSPORT EMISSIONSASSUMING MAXIMUM GRID DECARBONIZATION RATE20,00010,0005,00015,00020202025203020352040204520500Threshold for warming below 1.5CMode Shift(Only)Electrification ShiftElectrification(Only)Business as UsualBAUSum:19,000 Mt CO2EQShift(Only)Sum:13,000 Mt CO2EQEV(Only)Sum:17,000 Mt CO2EQHigh estimate oflimit:13,000 Mt CO2EQEV SHIFTSum:13,000 Mt CO2EQ4ACKNOWLEDGEMENTSLEAD AUTHORS:Han Deng Institute for Transportation and Development Policy Innovative Transport Project ManagerLewis Fulton University of California,Davis Director,Sustainable Transportation Energy Pathways D.Taylor Reich Institute for Transportation and Development Policy Data Science ManagerSUPPORTING AUTHORS:Manuel Blanco Institute for Transportation and Development Policy Transport Data InternFarhana Sharmin University of California,Davis Graduate Research AssistantXianyuan Zhu Institute for Transportation and Development Policy Vice Director East AsiaYuetong Zheng Institute for Transportation and Development Policy Transport EngineerPUBLISHED OCTOBER 2024COVER PHOTO:Guangzhou BRT StaionSOURCE:ITDP China5CONTENTSCOMPACT CITIES ELECTRIFIED:CHINA BRIEF FOR POLICYMAKERS COMPACT CITIES ELECTRIFIED:CHINA COMPACT CITIES ELECTRIFIED:CHINA 1.BACKGROUND CHINA-SPECIFIC BACKGROUND 2.FOUR SCENARIOS 3.METHODOLOGY 3.1.STRUCTURING THE MODEL 3.2.DEFINING SCENARIOS 3.2.1.SCENARIOS FOR ELECTRIFICATION RATES 3.2.2.SCENARIOS FOR MODE SHIFT RATES 4.SCENARIO COMPATIBILITY WITH CHINA CLIMATE COMMITMENTS 4.1.CHINA CLIMATE TARGETS 4.2.SCENARIO IMPACTS ON TRANSPORT EMISSIONS 4.3.MODAL SHIFT REDUCES DEPENDENCE ON GRID DECARBONIZATION 5.SCENARIO IMPACTS ON ELECTRICITY CONSUMPTION 6.DIRECT PUBLIC AND PRIVATE EXPENSES IN EACH SCENARIO 7.MEASURABLE GOALS FOR URBAN PASSENGER TRANSPORTATION 7.1.GOALS FOR ELECTRIFICATION 7.2.GOALS FOR LAND USE 7.3.GOALS FOR TRANSPORTATION INFRASTRUCTURE APPENDIX A:METHODOLOGICAL DOCUMENTATION6BACKGROUNDThis study is the culmination of a decade of collaboration in transport modeling between ITDP and the University of California,Davis.2 Ten years of effort have produced a detailed method for high-level modeling of urban and suburban passenger transportation,but this study of China and parallel studies of other countries are the first time the model has been used to publish analytical results for single countries.Like its predecessor,The Compact City ScenarioElectrified,the current publication compares the economic and environmental implications of four scenarios for the future of urban passenger transportation:1)the current trajectory;2)intensive electrification;3)intensive mode shift;and 4)a combination of the latter two.But while the previous report focused on the global need to pursue these strategies,this study describes the specifics for China.In addition to quantifying the emissions that each scenario would entail,we have also estimated the quantities and costsor savingsof infrastructure that would result from different scenarios for the future of China.These results provide a“road map”for how those scenarios might be realized.CHINA-SPECIFIC BACKGROUNDChinese cities face the urgent need to revolutionize transportation planning given the ramping-up of private small passenger vehicles and the influx of new transport modes on the streets.Nonmotorized transport is regaining popularity.Bus and subway ridership is beginning to recover,but they still need time to return to pre-COVID levels.3 According to the China Cycling Association,in 2022,more than 100 million people rode regularly or used bicycles as a means of transport,and nearly 10 million participated in outdoor cycling.4 The shared-bike scheme is also becoming an essential part of peoples everyday life.In Beijing alone,the number of trips made with shared bikes reached 1 billion in 2023,with the average distance of a single ride approaching 2.4 km and the average duration at 11.7 minutes.The ownership of private micro-vehicles has also experienced exponential growth in 2022,62 million powered two-wheelers were sold,with e-bikes accounting for 81%of the sales.51.Vehicle electrification goals in China fall into two major vehicle types:new energy vehicles(NEV;both passenger and commercial)and energy-saving passenger vehicles(meaning traditional ICE vehicles with lower average fuel consumption and hybrid electric vehicles).And their penetration rates are set for three milestone years:2025,2030,and 2035.Chinas 14th Five-Year Plan as well as the State Councils New Energy Vehicle Industry Development Plan(20212035)propose that by 2025,the annual sales volume of NEVs will reach about 20%of the annual total vehicle sales,and strives through 15 years of continuous effort to make pure electric vehicles the bulk 6 And according to the Carbon Peak Action Plan Before 2030,by 2030 the proportion of new energy and clean energy power transportation(vehicles)tools added that year should both reach about 40%.7 A more specific automotive technology road map outlined by the China Society of Automotive Engineering commands that by 2035,all newly sold energy-saving passenger vehicles should be hybrid-electric vehicles(HEVs).8 2.However,the rapid spread of charging infrastructure and the intensive price competition between major car manufacturers have led to much faster adoption of NEVs.In 2022,Chinas NEV sales reached 6.887 million units,with a penetration rate of 28.2%,surpassing the 2025 target of 20%three years ahead of schedule.9 China EV100 predicts that by 2024,sales of NEVs in China will hit 12.5 million units,with an expected penetration rate of 36%to 41%;the penetration rate will approach 50%by 2025,leading the country to achieve the 2035 target of 50 years earlier.103.Energy-saving passenger vehicles are witnessing an even sharper climb than NEVs.This could be attributed to the disproportionate growth of plug-in hybrid electric vehicles(PHEVs).Data shows that in 2023,the number of insurance registrations for plug-in hybrid products increased by 84.69%year-on-year,more than double that of purely electric models.11 One of the largest sources of growth among PHEVs is the Class A PHEVs of leading manufacturers including BYD and Geely Auto.BYDs Qin PLUS DM-i,for example,sold 430,000 units in 2023the model alone accounted for one-tenth of the total Class A passenger car market size and about half of the new energy Class A sedan market.4.The China Automotive Technology&Research Center(CATARC)s CATARCs China Automotive Low Carbon Action Plan(2022)states that by 2030,NEVs should account for 50%of new car sales under the 2060 carbon neutrality scenario and 70%under the 2050 scenario.To significantly reduce carbon emissions in road transport,the 2030 NEV penetration rate should be raised to 70%or more.2 ITDP&UC Davis(2021),The Compact City ScenarioElectrified;ITDP&UC Davis(2017),Three Revolutions in Urban Transportation;ITDP&UC Davis(2015),A Global High Shift Cycling Scenario;ITDP&UC Davis(2014),A Global High Shift Scenario:Impacts and Potential for More Public Transport,Walking and Cycling with Lower Car Use.3 Ministry of Transport.“Statistical Bulletin on Transport Sector Development.”4 China Economic Weekly(2023),“Soaring cycling fever!More than 100 million people in China ride regularly,and sales of road bikes have surged over 200 percent since the end of May.”5 Energy Foundation China(2024),“Chinas Bicycle Sharing and Electric Two-and Three-Wheelers:The Worlds Best“Last Mile”Zero-Emission Solution.”6 The State Council of China(2020),New Energy Vehicle Industry Development Plan(2021-212035).7 The State Council of China(2021),Carbon Peak Action Plan bBefore 2030.8 China Society of Automotive Engineering(2023),“Energy-saving and NEV Technology Roadmap 2.0.”9 Hainan New Energy Vehicle Promotion Centre(2023),“Miao Wei,former Minister of Industry and Information Technology:The target of reaching 50%new energy vehicle penetration rate may be achieved ten years ahead of schedule.”Retrieved from:https:/ China EV100(2024),“Ouyang Minggao:nNew energy vehicle penetration rate close to 50%in 2025,plug-in hybrid will account for 50%of the total.”Retrieved from:https:/ Ibid.7FOUR SCENARIOSLike the global study and parallel reports for other countries,this research investigates four scenarios for urban passenger transport in China through 2050.These scenarios are diagrammed in Figure A.We start by understanding these scenarios qualitatively,including a summary of the impacts that they might have outside the scope of our modeling analysisfactors such as public health and economic inclusion.In Section 3(page 12),we define these scenarios quantitatively for modeling.Figure A.Diagram of scenariosFASTRATE OF ELECTRIFICATIONSLOWELECTRIFICATION ONLYBUSINESSAS USUALMODE SHIFTAND ELECTRIFICATIONMODE SHIFT ONLYSLOWFASTRATE OF MODE SHIFT8BUSINESS AS USUALAssumptions:China continues its current trajectory.Private motorized travel increases rapidly,becoming responsible for 87%of urban passenger travel by 2050.Electrification is fairly rapid,following current plans,with nearly half of new vehicles electric by 2030.Qualitative impacts:Increase in traffic fatalities12High direct public and private costs13Reduced access to opportunities for low-income or historically marginalized people without cars,leading to increased wealth inequality14Increase in local air pollution,causing many premature deaths and increased healthcare costs15Increase in urban highways,dividing neighborhoods and subsidizing environmentally unfriendly sprawl16Increase in carbon emissions,leading to climate catastrophe1712 Unsurprisingly,steady population growth has historically translated to a corresponding increase in road fatalities,particularly among pedestrians.See:National Safety Council(2021),Car Crash Deaths and Rates;Governors Highway Safety Association(2022),Pedestrian Traffic Fatalities by State:2022 Preliminary Data.13 For example,highway infrastructure spending per mile has risen dramatically:Accounting for inflation,$8 million in the 1960s per mile became$30 million per mile by the 1990s.See:American Economic Association(2023),Infrastructure Costs.14 National Equity Atlas,Indicator:Car Access.15 Despite great gains in air quality in the US,as of 2022,approximately 85 million people nationwide lived in counties with pollution levels above National Ambient Air Quality Standards.Increased natural events such as wildfires partially due to climate change will further erode air quality.See Union of Con-cerned Scientists(2014),Vehicles,Air Pollution,and Human Health;United States Environmental Protection Agency(2023),Air Quality National Summary,1980202022.16 Greg LeRoy,JSTOR(2004),Subsidizing sprawl:Economic development policies that deprive the poor of transit,jobs.17 Andrew Moseman,MIT Climate Portal(2022),Are electric vehicles definitely better for the climate than gas-powered cars?The answer is yes,though the extent to which improvement is meaningful is based on electricity source and manufacturing emissions.The BAU scenario will encourage car-oriented development with a limited increase of clean energy.9ELECTRIFICATION(ONLY)Assumptions:Electrification proceeds even more rapidly than is currently planned,with 63%of new light-duty vehicle sales being electric by 2030.Qualitative impacts:Sharp reduction in carbon emissions18Sharp reduction in local air and noise pollution19Increase in traffic fatalitiesHigh direct public and private costsReduced access to opportunities for low-income people without carsIncrease in urban highways,dividing neighborhoods and subsidizing environmentally unfriendly sprawlConsumption of limited supply of critical minerals,raising concerns related to extractive industries,conservation,national security,and supply chainKey policies:Supply-and demand-side EV incentivesAmbitious fuel economy and tailpipe GHG emission standardsBattery reuse and recyclingEquitable placement of standardized public charging points for EVs(including two-wheelers)Electric grid expansion and decarbonization18 With high electrification,the emissions from transport will be reduced sharply.See:Andrew Mosemen,MIT Climate Portal(2022).,Are electric vehicles definitely better for the climate than gas-powered cars?19 Tsoi et al.,(2023),”The co-benefits of electric mobility in reducing traffic noise and chemical air pollution:Insights from a transit-oriented city.”10MODE SHIFT(ONLY)Assumptions:Compact city planning is combined with reallocation of both funding and street space to walking,bicycling,and public transport.In this case,China slows the construction of new urban roadways,focusing instead on providing denser housing,mixed land use,and better bus/bicycle infrastructure on existing roadways.Car travel continues to rise in absolute terms,but much more slowly than in Business as Usual,and it remains the mode of choice for less than half of urban travel.Qualitative impacts:Reduction in traffic fatalities20Increased access to opportunities,especially for low-income people,people of color,and other groups suffering from spatial segregation,people with disabilities,and the elderly or young21Increase in walking and cycling,which improves physical and mental health,reducing healthcare costs22High local air and noise pollution from ICE vehicles relative to Electrification(Only)Key policies:Reallocation of transport budgets to walking,cycling,and public transport,especially BRTStreet redesigns that shift space from travel lanes and parking to BRT lanes,physically protected bicycle lanes,and footpathsPromotion of bicycles,especially shared electric bicycles 20 Dangerous by Design(2022).21 See:National Library of Medicine(2023),Does the compact city paradigm help reduce poverty?Note,this is most effective in mitigating poverty in com-bination with housing affordability measures;also see Urban Institute(not dated),Causes and consequences:Separate and unequal neighborhoods.22 Matthew Raifman et al.(2021),Mortality iImplications of increased active mobility for a proposed regional transportation emission cap-and-invest program.11ELECTRIFICATION MODE SHIFTAssumptions:Compact cities and mode shift,combined with rapid electrification:Electrification and Mode Shift together.Qualitative impacts:Reduction in traffic fatalities23Increased access to opportunities for allIncrease in walking and cycling,which improve physical and mental health,reducing healthcare costsExtensive reduction in local air and noise pollutionMassive reduction in carbon emissions consistent with the terms of the Paris AgreementKey policies:All policies listed for Electrification(Only)and for Mode Shift(Only),except for growth in urban highwaysCreation of low-emission areas to incentivize both Mode Shift and vehicle ElectrificationAchieving the Electrification or Mode Shift scenarios would require profound but feasible changes in Chinas national policychanges that are possible under Chinas current political and economic structure.They would involve restructuring how transportation budgets are allocated,how street space is used,and how taxes and subsidies are applied to vehicles and fuelbut they are incremental changes that can be reached in the current system and would not require a“revolution”in any economic,social,or political sense.23 Dangerous by Design(2022).12METHODOLOGYThis study uses the same methods as the 2021 Compact City ScenarioElectrified and the other 2023/2024 country-level studies published by ITDP and UC Davis.In each of these studies,we define four scenarios and estimate their impacts using the same modeling methods.This section will first describe the structure of these modeling methods and then outline our process for defining the scenarios that are taken as modeling input.For a more detailed description of the methodology,including a complete set of data,please review the accompanying methodological appendix.3.1.Structuring the ModelOur study is limited to urban passenger transportation and does not include intercity travel,rural travel,or freight carriage of any kind.We define“urban”based on United Nations data,including all urban or suburban areas of 300,000 people or more.24 This definition encompasses about 80%of the Chinese population.Other research shows that both Electrification and Mode Shift will be necessary to decarbonize rural/intercity25 and freight26 transport,and this focus limitation in our scope allows us to model urban and suburban travel with more precision.The model is calibrated to industry-standard data from the International Energy Agencys Mobility Model27 except where more detailed China-specific data is available.This calibration determines the estimation of conditions in the base year,the projection of the Business as Usual scenario,and factors such as emissions factors,fuel emission intensities,and costs.This general modeling approach was reviewed as part of the 2021 publication,and a list of reviewers can be found there.28 Our method provides a high-level comparison of different scenarios rather than a detailed bottom-up analysis.This results in a perspective thats relevant to the urban passenger transport sector broadly rather than focusing exclusively on a handful of specific policies.3.2.Defining ScenariosAfter setting the scope and calibrating the model,the next step is to quantitatively define the four scenarios for urban passenger transportation in China that were described on page X,above.Beginning from the base year of 201529 and looking at time points in 2030 and 2050,we describe possible futures.These scenarios are not intended to precisely define the only options for the future of the sector;rather,they are meant to give an idea of general trajectories that are possible for urban passenger transport.For electrification,our forecasting is expressed in terms of the percentage of new vehicles that are electric.The Business as Usual and Mode Shift scenarios share the same lower electrification rates;the Electrification and Electrification Mode Shift scenarios share the same higher electrification rates.There may be fewer new cars sold per year in the Mode Shift scenario,but the same percentage of those cars are electric.Similarly,modal splits and travel activities(defined in terms of person-miles traveled by different modes)are identical in the Business as Usual and Electrification scenarios,with higher levels of car use;these are also identical in the Mode Shift and Electrification Mode Shift scenarios,with lower levels of car use.After defining these scenarios,we will estimate their implications.For each scenario,based on the size of vehicle fleets and the amount of activity per vehicle,we estimate life cycle30 greenhouse gas emissions(Section 4),energy consumption(Section 5),and total quantities and costs of infrastructure,vehicles,fuel,and operation(Section 6).3.2.1.Scenarios for Electrification RatesThe Business as Usual and Mode Shift scenarios follow the same projections for the percentage of new vehicles that are electric,broken down by year and vehicle typethe sales shares of vehicles.In these scenarios,our projections are meant to align with the countrys current trajectory.These projections,shown in Figure B,are based on estimates by ITDPs China team.Based on research by institutions such as BCG,McKinsey,Roland Berger,Goldman Sachs,and Bloomberg on Chinas road transport carbon neutrality and carbon peaking,the projected NEV penetration rate for 2030 is between approximately 57%and 70%.We assume a 60%NEV penetration rate under the Business as Usual scenario for 2030.NEVs include battery-electric vehicles(BEVs)and other NEVs,with the majority being PHEVs.From a carbon emissions perspective,we assume that PHEVs are equivalent to half BEVs and half ICEs.According to expert forecasts31 the ratio of BEVs to PHEVs in 2030 will be 4:3.Consequently,from a carbon emissions perspective,it is estimated that BEVs will account for 47%in 2030.Similarly,assuming an 80%NEV penetration rate under the Business as Usual scenario for 2050,it is estimated that BEVs will account for 63%that year.The Electrification and Electrification Mode Shift scenarios follow sales share projections that 24 United Nations Department of Economic and Social Affairs(2018),World Urbanization Prospects.25 International Transport Forum:OECD(2023),ITF Transport Outlook 2023.26 Lynn H.Kaack,Environmental Research Letters(2018),Decarbonizing intraregional freight systems with a focus on modal shift.27 The Mobility Model is only available under a closed license,and the full dataset cannot be shared.However,all relevant variables for the US are inclu-ded in the methodological appendix and may be reviewed there.28 ITDP&UC Davis(2021),The Compact City ScenarioElectrified.29 The base year of 2015 rather than a more recent year was selected for three reasons,rather than a more recent year.First,for methodological reasons we required a constant base year across all of the Compact Cities Electrified sibling studies for various countries,to ensure reliability and comparability.Second,data is more reliably available for 2015 than for more recent years.Third,we hoped to avoid distortions due to COVID-19.30 Including emissions not only from the production and consumption of fuel or electricity but also from the manufacture and disposal of vehicles and the construction and maintenance of infrastructure.31 https:/ the maximum speed of electrification feasible in China.These projections,shown in Figure B,are also adapted from the ICCT by ITDP Chinas team.32.Percentages of New Vehicle Sales that Are Electric (Rather than Internal Combustion)Business as Usual and Mode Shift(Only)Electrification(Only)and Electrification Mode Shift201520302050201520302050LDVs(Cars and light trucks)1Gc%1c0%2-Wheelers/motorcycles(not including e-bikes)7000p00%buses3000000%3.2.2.Scenarios for Mode Shift RatesThe Business as Usual and Electrification scenarios include modal splits and travel activity projections based on the industry-standard International Energy Agencys(IEA)Mobility Model,which includes base-year estimates and future projections of travel breakdowns by mode.They can be seen in figures E and F.The Mode Shift and Electrification Mode Shift scenarios follow our own calculations,in two steps.First,we project possible future urban densities in China under a maximum-feasible policy to promote compact,mixed-use cities.Second,we identify the maximum feasible replacement of car and motorcycle travel and substitution with walking,bicycling,public transportation,telecommuting,or shorter trips,including a factor to show how mode shift can be more easily achieved in compact communities.For more detail on this modeling process,see Appendix C:Methodological Documentation Add link.The first step of the calculation draws on data from the European Commissions Global Human Settlement Layer33 identifying the current trends in urban density and then also projecting a compact cities scenario in which various policies come together to achieve the following effect:In the Mode Shift scenarios,cities in China immediately stop sprawling,consuming no new undeveloped urban land.Rather,population growth is concentrated in areas that currently have less than 8,000 people per km2 to bring them to a population above that level.This threshold is arbitrary,but it reflects a general point at which it becomes feasible to serve urban areas with public transportation.The modeling approach is meant to generally represent a densification that could be achieved through“missing middle”housing34 and zoning reform to permit by-right multifamily construction(without parking minimums)on all urban land.Unlike in many other countries,much of Chinas urban population already lives at this relatively compact level,and the existing trend is toward further densification(see Figure C).However,a shift toward further compactness is still necessary:In the Business as Usual trajectory,by 2050 we expect that about 240 million urban Chinese will live at densities below 8,000 people per km2.To meet the Mode Shift scenarios,that number must fall to about 60 million(from about 100 million today).This can be accomplished through relatively modest infill development,rather than drastic changes to neighborhoods.32 Sen and Miller,Vision 205033 ghsl.jrc.ec.europa.eu/34 Missing Middle Housing is“a range of house-scale buildings with multiple unitscompatible in scale and form with detached single-family homeslocated in a walkable neighborhood.”Figure B.Electrification rates by vehicle type,year,and scenario14In the second step,after estimating future densities,we used the projected potential urban densities to identify the maximum feasible reductions in car and motorcycle travel as a function of those densities.In more compact communities,it will be easier to replace car travel with travel by other modes.We estimate that a 19 percent reduction in car/motorcycle travel relative to 2030 Business as Usual and a 52 percent reduction relative to 2050 Business as Usual are achievable.The specific redistribution of this travel to other modes was based on expert judgment,reviewed by the China-specialist reviewers listed on page X;more detail can be found in Appendix C:Methodological Documentation.The results of this calculation are a modal shift relative to Business as Usual,shown in figures E and F,below.URBAN POPULATION DENSITY GROUPINGS BY YEAR AND SCENARIO100,000,00002000 2030 High Shift2015 2030 BAU/HIGH EV500-1000 ppl/km21000-2000 ppl/km22000-4000 ppl/km24000-8000 ppl/km2200,000,000300,000,0002050 High Shift2050 BAU/HIGH EV8000-16000 ppl/km2 1600ppl/km2Figure C.Urban density groupings15Figure E.Travel activity20.0015.0010.05.0020152030 Business As Usual&Electrification(Only)2030 Mode Shift(Only)&Electrification Mode Shift 2050 Business As Usual&Electrification(Only)CarBusRailMODAL SPLITS BY SCENARIO AND YEAR25.002050 Mode Shift(Only)&Electrification Mode Shift2-Wheeler3-WheelerBicycle/e-bikeWalkingAVERAGE PERSON-KM TRAVELED PER PERSON PER DAYModal Splits by Scenario and Year(by person-km traveled,rather than by trip;independent of overall travel activity,which grows over time)2015 Base Year2030 Business as Usual&Electrification(Only)2030 Mode Shift(Only)&Electrification Shift2050 Business as Usual&Electrification(Only)2050 Mode Shift(Only)&Electrification ShiftCar54weG%Bus21%5%Rail4%3%4%3%7%2-Wheeler41%0%0%0%0%Bicycle/e-bike10%5%9%4%5%Walking11%5%7%2%8%Figure F.Mode splits by percent of travel16SCENARIO COMPATIBILITY WITH CHINA CLIMATE COMMITMENTSChinas commitments to greenhouse gas reductions are ambitious.Our modeling shows that the countrys decarbonization goals in the urban passenger transport sector cannot be met with Electrification or with Mode Shift alone,but require both strategies in concert.4.1.China Climate TargetsChina has made commitments to reduce greenhouse gas emissions and help prevent catastrophic climate change in this century.Specifically,all 196 Paris Agreement signatories agreed to“limit the increase in the global average temperature to well below 2C above pre-industrial levels and pursue efforts to limit it to 1.5C.”Additionally,President Xi Jinping declared a commitment to“carbon neutrality before 2060”at the UN General Assembly in 2020.A year later,China further outlined this goal in its Long-Term Low Greenhouse Gas Emission Development Strategy(LTS)to the UNFCCC.35 A few mid-century targets provided include the following:Reach peak carbon emissions by 2030 and carbon neutral by 2060 in its Nationally Determined Contribution(NDC)Reduce carbon emissions from the transportation sector by more than 10%in 2030Reduce carbon emissionsfrom the transportation sector by more than 10%in 2030Furthermore,as of 2020,China has affirmed its commitment to reaching net zero by 2060.36While these efforts are significant,the Climate Action Tracker37 highlights that the net zero goal and its associated commitments are exclusively focused on CO2 emissions,despite a net-zero goal for all GHG emissions being necessary for the 1.5C limit in the Paris Agreement.4.2.Scenario Impacts on Transport EmissionsBecause of Chinas successful electrification efforts and their projected effectiveness,the Electrification scenario alone only yields moderate results when compared to the Business as Usual scenario,and it fails to uphold Chinas climate commitments by a wide margin.While the Mode Shift scenario would cause a considerable reduction in greenhouse gas emissions,only the combined Electrification Mode Shift scenario will reliably keep cumulative urban passenger transport emissions within a level potentially compatible with limiting climate change to 1.5C in this century,as shown by the area under the blue threshold curve38 in Figure G,above.39 Not only is Electrification Mode Shift the only scenario that will reliably hold global warming within Paris Agreement goals,it is also the only scenario that approaches Chinas goal of achieving net zero carbon emissions by 2060.35 UNFCCC.(2021),.Chinas Mid-Century Long-Term Low Greenhouse Gas Emission Development Strategy36 https:/ 37Climate Action Tracker.(2023).,https:/climateactiontracker.org/countries/china/targets/38 Carbon budgets are allocated by the ratio of the USs cumulative emissions in the Business as Usual scenario to worldwide emissions in the Business as Usual scenario.For more detail,see the methodological appendix.39 Note:Our analysis shows that the Electrification Mode Shift scenario will exceed the 1.5 threshold by nearly 1Gt,a shortfall that will need compensa-tion from decarbonization of other sectors of the American economy.Figure G Greenhouse gas emissions by scenarioCumulative Lifecycle GHG(Mt CO2-EQ)CUMULATIVE URBAN PASSENGER TRANSPORT EMISSIONSASSUMING MAXIMUM GRID DECARBONIZATION RATE20,00010,0005,00015,00020202025203020352040204520500Threshold for warming below 1.5CMode Shift(Only)Electrification ShiftElectrification(Only)Business as UsualBAUSum:19,000 Mt CO2EQShift(Only)Sum:13,000 Mt CO2EQEV(Only)Sum:17,000 Mt CO2EQHigh estimate oflimit:13,000 Mt CO2EQEV SHIFTSum:13,000 Mt CO2EQ17With a decarbonized grid,electric vehicles will cause very low emissions through their operation.However,the use of cars,electric or not,will still lead to substantial emissions from the paving and maintenance of roads and from the production of steel and batteries as well as other industrial processes involved in vehicle manufacture and disposal.Under the Electrification scenarios,as can be seen in Figure H,more than half of emissions are from these sources,which are much more challenging to decarbonize.Indeed,electrification actually increases manufacturing emissions by about 34 percent relative to Business as Usual because of the emissions intensity of battery manufacture and of heavier vehicles.40 Electrification alone also requires exponential growth in scarce minerals critical for batteries.The environmental,environmental justice,and national security challenges entailed by that would be significantly mitigated by combining Electrification with Mode Shift and reducing overall dependence on passenger vehicles while electrifying.414.3.Modal Shift Reduces Dependence on Grid DecarbonizationModal shift provides a hedge against obstacles that may arise in decarbonizing the electrical grid.By combining mode shift and electrification,China may still achieve substantial decarbonization even if the shift to electric vehicles and/or renewable electricity generation is slower than optimistically projected.Electrification alone can substantially reduce transport emissions,but electric vehicles are only as clean as the grid that powers them.Chinas electricity grid currently has an emissions intensity of roughly 526 g CO2eq per kWh.The results displayed in the previous section have assumed a highly ambitious level of grid decarbonization in line with the International Energy Agencys(IEAs)Sustainable Development Scenario.Following this assumption,the grid emissions intensity falls to about 10 g CO2/kWh by 2050.40 This 8 percent figure is conservative,based on the assumption of rapid decarbonization of the manufacturing sector by 2050.Eighty percent is a reasonable estimate today:See Andrew Moseman&Sergey Paltsev,MIT Climate Portal(2022),Are electric vehicles definitely better for the climate than gas-powered cars?41 Center on Global Energy Policy(2023),Q&A:Critical minerals demand growth in the net-zero scenario.Figure H.Annual greenhouse gas emissions by scenario and source4002000MILLIONS OF TONNES OF CO2-EQ GHG PER YEARBusiness as UsualElectrification(Only)Mode Shift(Only)Electrification ShiftFuel/ElectricityInfrastructureVehicle ManufactureANNUAL URBAN PASSENGER TRANSPORT EMISSIONS IN 2050ASSUMING MAXIMUM GRID DECARBONIZATION RATE60018Current policies(as per IEAs Stated Policies Scenario)are only projected to reach a grid intensity of about 160 g CO2eq/kWh by 2050 compared to 526 today.This is still an optimistic forecast,but in this case,our Electrification scenario loses much of its effectiveness in reducing cumulative emissions while Mode Shift loses less,shown in Figure G,above.In this case,none of the scenarios is under the blue area signifying compatibility with the 1.5C threshold,but Electrification Mode Shift comes the closest.Figure G.Cumulative urban passenger transport emissions by scenario,with thresholdCumulative Lifecycle GHG(Mt CO2-EQ)CUMULATIVE URBAN PASSENGER TRANSPORT EMISSIONSASSUMING MAXIMUM GRID DECARBONIZATION RATE25,00015,00010,0005,00020,00020202025203020352040204520500Threshold for warming below 1.5CMode Shift(Only)Electrification ShiftElectrification(Only)Business as UsualBAUSum:20,000 Mt CO2EQShift(Only)Sum:14,000 Mt CO2EQEV(Only)Sum:19,000 Mt CO2EQHigh estimate oflimit:13,000 Mt CO2EQEV SHIFTSum:14,000 Mt CO2EQFigure H.Annual emissions as of 2050 by scenario and grid decarbonization0MILLIONS OF TONNES OF CO2-EG GHG PER YEARFuel/ElectricityInfrastructureVehicle ManufactureANNUAL URBAN PASSENGER TRANSPORT EMISSIONS AS OF 2050ASSUMING AMBITIOUS BUT MORE MODERATE GRID DECARBONIZATION RATEBusiness as usal(Moderate grid decarbonitazion)Business as usal(Moderate grid decarbonitazion)Electrification(Moderate grid decarbonitazion)Mode Shift (Moderate grid decarbonitazion)Electrification Mode Shift (Moderate grid decarbonitazion)Electrification(Moderate grid decarbonitazion)Mode Shift(Moderate grid decarbonitazion)Electrification Mode Shift(Moderate grid decarbonitazion)60080040020019The more conservative grid decarbonization projections also shed light on Chinas prospects for reaching its goal of net zero by 2050,as seen in Figure H.If grid decarbonization proceeds in line with current stated policies,it will be impossible for China to achieve that goal without both Electrification and Mode Shift.20SCENARIO IMPACTS ON ELECTRICITY CONSUMPTIONMode Shift not only provides a degree of redundancy with Electrification,it also reduces the burden of rapid grid decarbonization by dramatically reducing the increased electricity demand that vehicle electrification will cause.Furthermore,Mode Shift increases resiliency at all levels by providing redundancy in transportation options.The Electrification(Only)scenario represents a major reduction in total energy consumption relative to Business as Usual,because electric vehicles are much more efficient per mile than internal-combustion vehicles.However,that reduction in total energy consumption comes with a great increase in electricity use,as seen in Figure K.In the Electrification scenario,urban passenger transport in China will consume about 271 billion kWh of electricity annually by 2050.Electrification Mode Shift reduces this consumption by about 50 percent(400 billion kWh),or the equivalent of the annual power generation of almost 83,000 wind turbines.That might mean a reduction in the costs of building infrastructure for renewable power generation or freeing up electricity for other urgent needs in the face of the climate crisis.Figure K.Annual energy consumption1,5002,0001,0005000BILLION KILOWATT-HOURS2015 Business as Usual2030 Business as Usual2030 Electrification(Only)2030 Mode Shift(Only)2030 Electrification ShiftEnergy from liquid fuelsEnergy from electricity2050 Business As Usual2050 Mode Shift(Only)2050 Electrification Shift2050 Electrification(Only)ENERGY CONSUMPTION BY SOURCE,SCENARIO,AND YEAR21DIRECT PUBLIC AND PRIVATE EXPENSES IN EACH SCENARIO The Mode Shift and Electrification Mode Shift scenarios offer efficiencies that could save about 120 trillion CN for the Chinese economy overall,including savings for the public and private sectors.The structure of a transportation system has many impacts on a nations economy,direct and indirect.Our model tabulates only the direct impacts:the expenses of manufacturing,maintaining,fueling,and operating vehicles and the expenses of building and maintaining infrastructure.These are shown in Figure L.These expenses can be divided into those borne ultimately by the public sector and by individuals.42 Mode Shift would lead to enormous economic savings for the Chinese economya cumulative savings of about$60 trillion CN.Of this,about$9 trillion CN in savings would accrue to national,state,and local governments,tabulated in Figure N in Section 7,below.Our calculations only include the direct costs of urban passenger transport and not indirect costs such as healthcare expenses related to vehicle collisions or sedentary lifestyles;costs related to air,noise,or water pollution;costs of farmland or natural areas lost to suburban sprawl;or,conversely,the economic benefits derived from job creation43.All these indirect costs are likely to mean that the true economic benefit of Electrification Mode Shift would be many times higher than we have calculated.42 For the sake of conservatism,in these calculations we have assumed that the government will bear the entire cost of public transport operationsthat is,fares will be free.We do expect that public transport subsidies will increase in the Mode Shift scenarios,though possibly not to this extreme.43 Investments in public transit create nearly twice as many jobs per dollar as investments in new road-building.See:Transportation for America(2021),Road and public transit maintenance create more jobs than building new highways.Figure L.Cumulative direct costs of urban passenger transport100,000200,000300,000400,000500,0000BILLIONS OF 2023 IDRBusiness as UsualMode Shift(Only)Electrification ShiftCumulative Private CostCumulative Public CostCUMULATIVE DIRECT PUBLIC PRIVATE COSTS OF URBAN PASSENGER TRANSPORT 2015-2050,BY SCENARIOElectrification (Only)22MEASURABLE GOALS FOR URBAN PASSENGER TRANSPORTATIONIt is possible for China to achieve the Electrification Mode Shift scenario.This scenario offers enormous savings to the public sector as well as private individuals and enterprises,while also reducing emissions from urban passenger transportation to the level most closely consistent with the countrys climate commitments.It will not require any additional funding beyond the resources that China already expends on urban passenger transportationrather,Electrification Mode Shift will only require a change in policies and a reallocation of resources.There are three elements that must come together to achieve the Electrification Mode Shift scenario:first,increased vehicle efficiency,primarily through electrification;second,land-use reform to make trips shorter by promoting compact mixed-use cities;third,facilitating Mode Shift,primarily by providing alternative infrastructure but also by pricing car travel according to its true cost.In this section,we provide evidence-based goals for each of these three elements based on the quantitative analysis in this study.If achieved,these goals would bring the benefits of the Electrification Mode Shift scenario.These goals could be accomplished in many ways,and in Appendix A,we provide basic policy agendas at the federal,state,and local levels that could help China reach them.7.1.Goals for ElectrificationTo achieve the countrys climate commitments,electrification must proceed much more rapidly than its current course.As discussed in Section 3.2.1,new sales of different vehicle types must be electrified at the rates shown in bold in Figure M below.Most importantly,63 percent of all new light-duty vehicle sales(cars and light trucks)must be electric by 2030,and 100 percent by or before 2050.Percentages of New Vehicles that Are Electric(Rather than internal-Combustion)Business as Usual and Mode Shift(Only)Electrification(Only)and Electrification Mode Shift201520302050201520302050LDVs(Cars and light trucks)1Gc%1c0%2-Wheelers/motorcycles(not including e-bijes)7000p00%Buses3000000%7.2.Goals for Land UseMore compact,mixed-use urban form will have a twofold benefit for the cities of China.First,when people live closer to their places of work or leisure,trips will be shorter,and so even ICE cars will emit less and cost motorists less.Second,when trips are shorter,they are easier to take by bicycle or public transport,facilitating Mode Shift.Achieving the Electrification Mode Shift scenario and meeting the countrys climate commitments will require China to maintain policies that enable compact urban development,while promoting mixed-use and transport-oriented development.As discussed in Section 3.2.2 above,Chinese cities must curb the growth of less-dense neighborhoods and commit to a more compact restructuring of urban residential areas.7.3.Goals for Transportation InfrastructureThis analysis provides the clearest agenda for the third of the three components necessary to achieve the Electrification Mode Shift scenariothe specific transportation infrastructure investments needed to achieve such levels of Mode Shift and the estimated savings that are possible by pursuing such a strategy.Figure N,below,indicates the extent of infrastructure and vehicle investment that China must make to reach the Electrification Mode Shift scenario.As shown in Figure N,the Shift element of the scenario will mean that central,state,and local governments will save about$1 trillion CN by 2050.The expense of building and operating transit will be more than balanced by the reduced need to build and maintain highways.Figure M.Sales of electric vehicles by year and scenario23Total New Infrastructure and Vehicles Required 20152030Road,two-way kmBRT,two-way kmRailway,two-way kmPhysically protected bicycle lanes,two-way kmBuses(total urban buses and minibuses)Train carsTotal cost to governm ents(Trillion CN)Business as Usual&Electrification(Only)1,000,0009001,80013,0001,100,00011,00042Mode Shift(Only)&Electrification Shift600,00013,0003,700480,0001,300,00015,00037Total New Infrastructure and Vehicles Required 20152050Road,two-way kmBRT,two-way kmRailway,two-way kmPhysically protected bicycle lanes,two-way kmBuses(total urban buses and minibuses)Train carsTotal cost to governm ents(Trillion CN)Business as Usual&Electrification(Only)2,500,0002,7003,70017,0002,200,00031,000130Mode Shift(Only)&Electrification Shift810,00041,00014,000190,0003,600,00061,000$98This analysis provides a road map for transportation infrastructure investments in cities across China.It makes a few points clear:Nationwide,China will have to reduce urban road building by one-third to shift to the more space-efficient modes of transportation made possible by denser cities.This aligns with the studys findings concerning urban density,which show that the expansion of cities into rural or natural land must immediately stop,and that growth must instead take place through the densification of existing areas.Cities across the country will have to build more than 25,000 km(50,000 lane-km)of rapid transit by 2050.Nearly 75 percent of this will be bus rapid transit(BRT)rather than metro rail.This must be full BRT in contrast to regular bus lanes,as described in the BRT Standard,with center-running dedicated busways that have off-board fare payment,intersection priority,and platform-level boarding.In 2019,China BRT routes total length reached 6,149 km,with a compound annual growth rate of 14.33 percent from 2013 to 2019.Cities will also have to build hundreds of thousands of miles of bicycle lanes.These must be physically protected lanes,not merely lanes separated from vehicle traffic by painted lines,buffer space,or small bumpers that can be driven over.They also must be separated from pedestrian traffic.This scale of transformation,while massive,is not unprecedented.Paris decreased car travel by almost 50 percent in 30 years by investing in other modes and traffic control strategies.Jakarta and Bogot have each built a mass transit system with more than a million riders a day in less than 15 years.Many Chinese cities have already been building metro rail systems at the rate requiredall that must be done is to maintain that rate of investment and expand to BRT and bicycle lanes as well as rail.Figure N.Detailed description of infrastructure and investment requirements by scenarioAPPENDIX C:METHODOLOGICAL DOCUMENTATIONBecause of its length,the methodological documentation has not been included in this layout of the report.It is available at Compact Cities Electrified China:Methodological Appendix.25Taylor Reich itdpLew Fulton uc davisSEPTEMBER 2024Institute for Transportation&Development Policy
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AUGUST 2024Green shipping corridorsScreening first mover candidates for Chinas coastal shipping based on energy use and technological feasibilityXIAOLI MAO,YUANRONG ZHOU,ZHIHANG MENG,AND HAE JEONG CHOACKNOWLEDGMENTSThis work is conducted with generous support from Energy Foundation China.We thank the late Dr.Chuansheng Peng for his invaluable advice and sincere support for this work.We thank Dr.Chaohui Zheng,Dr.Kun Li,Mr.Shunping Wu,Mr.Yongbo Ji,Mr.Shengdai Chang,Professor Yan Zhang,Ms.Freda Feng,Ms.Liwei Ma,Mr.Feng Tian,and Ms.Lu Fu for their technical and policy comments and suggestions.Critical review of this work was provided by ICCT colleagues Chelsea Baldino and Tianlin Niu.International Council on Clean Transportation 1500 K Street NW,Suite 650 Washington,DC 20005communicationstheicct.org|www.theicct.org|TheICCT 2024 International Council on Clean Transportation(ID 182)iICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSEXECUTIVE SUMMARYGreenhouse gas emissions from the maritime sector are on a growth trajectory incompatible with the climate goals of the Paris Agreement.In recent years,a novel collaboration framework called green shipping corridors(GSCs)has been gaining traction as a tool to speed decarbonization technology innovation in the maritime sector.As of December 2023,there were 44 GSC initiatives globally,yet none of these projects have been fully commissioned,an indicator of the challenges of coordinating these corridors.Compared with international routes,domestic routes could have the advantage of more stakeholder homogeneity.In some cases,a route could be operated by a single entity that owns the cargo as well as the vessels.By encouraging domestic routes to become GSCs,a country may attain the associated environmental and climate benefits while also accruing the experience necessary for instituting large-scale,multistakeholder,international GSC initiatives.This study explores the opportunity for establishing GSCs for Chinas coastal shipping.We first quantitatively characterized Chinas coastal shipping activity based on open Automatic Identification System(AIS)data.The data allowed us to estimate energy use for various shipping routes and evaluate the technological feasibility of meeting that energy use with zero or near-zero life-cycle emission fuels.These fuels include renewable liquid hydrogen(LH2)generated from renewable electricity,renewable methanol(MeOH)and renewable ammonia(NH3)generated from renewable hydrogen,as well as direct renewable electricity.Based on these results,we identified three routes as first mover GSC candidates.For each GSC route,we estimated fuel demand for the first hypothetically deployed zero-emission vessel(ZEV)running on either renewable liquid hydrogen,renewable methanol,or renewable ammonia.We then presented a preliminary analysis of the cost to supply this fuel(Table ES1).In a previous ICCT study,we modeled and demonstrated that the cost of renewable ammonia and renewable methanol is similar to renewable hydrogen,so we only modeled and presented the cost of renewable hydrogen in this study(U.S.Maritime Administration MARAD,2024).Table ES1Green shipping corridor candidates and associated annual fuel cost for one zero-emission vessel in 2030Route characteristicsShip characteristicsFuel demand(tonnes)Annual at-the-pump cost of hydrogen(millions)aPortsDistance(nm)Ship classCapacityOriginal fuel(VLSFO)MethanolAmmoniaHydrogenTianjinShanghai700Bulk carrier57,000 DWT4751,0001,0701538.4($1.2)Shenzhen Tianjin1,400Container2,000 TEU2,2704,7905,13073239.2($5.6)Shanghai/NingboZhoushan75Oil tanker3,000 GT49103111160.7($0.1)Total2,7905,8906,31090147.6($6.8)a Based on 2023 monetary values,using an exchange rate of 7 to US$1iiICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSThis study finds that:The technological feasibility of applying renewable marine fuels on Chinas coastal shipping routes is high.Ships on all routes could use renewable methanol and renewable ammonia without the need to refuel en route.Renewable hydrogen works for most ships and routes except for a few routes traversed by tankers.Battery electric technology is the least feasible,although it is an option for certain ships on shorter regional routes.The three first mover GSC candidates analyzed in this study could be served by ships running on renewable methanol,renewable ammonia,and renewable hydrogen.The GSC candidates include two interregional routes,Yangtze River Delta to Bo Sea and Pearl River Delta to Bo Sea,and one intraregional route in the Yangtze River Delta region.These regions are home to some of the worlds largest ports,including Tianjin,Shanghai,and Shenzhen,which are strategically positioned to commit to GSC initiatives.As an example,we found container ships could use renewable marine fuels to travel a shipping corridor spanning 1,400 nautical miles from Tianjin to Shenzhen.To enable the first ZEVs on these routes,about 6,000 tonnes of renewable methanol or renewable ammonia,or 900 tonnes of renewable hydrogen need to be sourced.This implies a total demand of 4460 GWh of renewable electricity by 2030 to fuel the first mover GSC candidates.We assume this electricity is sourced from offshore wind energy to avoid the negative impacts electrolysis could have on the grid.Policy interventions could help speed the deployment of more ZEVs in these corridors to deliver a meaningful reduction in greenhouse gases.We estimate the at-the-pump cost of renewable hydrogen produced on site at the GSC ports could be$7.60/kg by 2030,more than 3 times the cost of conventional marine fuels on an energy-equivalent basis.With this cost assumption,stakeholders would need to pay around$7 million annually to deploy the first ZEVs in the proposed corridors by 2030.We also estimate that improvements in technology may only reduce the cost of renewable fuels by about 32%by 2050.While future renewable marine fuel costs may be lower or higher than our estimates,depending on developments in key areas such as the cost of electrolyzers,it is likely that a significant policy intervention will be needed to advance GSCs.iiiICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSTABLE OF CONTENTSExecutive summary.iIntroduction.1Methodology.3Data,study region,and scope.3Ship traffic patterns and energy use.4Technological feasibility of renewable marine fuel .4Fuel cost for the first zero-emission vessels deployed on GSC candidates.5Results.10Energy use,technological feasibility,and first mover GSC candidates.10Case study:Cost of supplying hydrogen fuel for first ZEVs deployed on GSC candidates.15Discussion.17Conclusion.19References.21ivICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSLIST OF FIGURESFigure 1.Study region.3Figure 2.Methodology flowchart.4Figure 3.Traffic pattern for interregional bulk carriers along Chinas coastline in June 2021 .11Figure 4.Traffic pattern for“other”tankers along Chinas coastline in June 2021.11Figure 5.Traffic patterns for the three hypothetical zero-emission vessels on the GSC routes,based on 2021 activity data.14LIST OF TABLESTable ES1.Green shipping corridor candidates and associated annual fuel cost for one zero-emission vessel in 2030.iTable 1.Renewable marine fuels and corresponding propulsion systems considered in this study.5Table 2.Costs of producing offshore wind in China.7Table 3.Data assumptions for modeling hydrogen production costs .8Table 4.Vessels and route patterns along Chinas coastline in June 2021.10Table 5.Top five routes for energy use by ship class and refuelings needed for each route.13Table 6.Hypothetical activity for one zero-emission vessel on each GSC route,based on 2021 activity data.14Table 7.Annual fuel and electricity demand for the first zero-emission vessels deployed in 2030.15Table 8.Levelized production cost and the at-the-pump cost of renewable liquid hydrogen produced through water electrolysis.16Table 9.At-the-pump cost of supplying annual fuel demand for the first ZEV in 2030.16Table 10.Projected demand for renewable marine fuel on candidate GSCs under the full deployment scenario.171ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSINTRODUCTIONChina has an extensive coastline with well-equipped ports that enable a thriving coastal freight transport industry.Maritime shipping supplied over 50%of the countrys entire freight transport demand in 2022(Ministry of Transport of the Peoples Republic of China,2023a).In recent years,the government has promoted waterborne shipping as a less carbon-intensive alternative to transporting freight by road(Ministry of Transport of Peoples Republic of China,2023b).Nevertheless,domestic shipping in China is still responsible for an estimated 6%of the countrys total CO2 emissions from the transportation sector(X.Mao,2023;X.Mao&Meng,2022).Options for decarbonizing the domestic maritime industry resemble those proposed for international shipping,namely improving energy efficiency in the short term and transitioning to low-and zero-carbon technologies in the mid-to-long term(X.Mao&Meng,2022).In China,ships used for domestic and international transport may be built in the same shipyards,operated by the same companies,and serviced by the same ports and refueling infrastructure.That makes domestic shipping an ideal proving ground for piloting decarbonization technologies:Knowledge accumulated at the domestic level can diffuse to the international shipping sector and help industry players gain confidence and mature the market.This has become a popular model when adapting international best practices to China.1 One practice gaining momentum internationally is the establishment of green shipping corridors(GSCs).According to the Maersk Mc-Kinney Mller Center for Zero Carbon Shipping,a GSC could be a single point around a specific location,point-to-point between two ports,or a network route where alternative fuels with lower environmental impact than fossil-based fuels are deployed on ships(Maersk Mc-Kinney Mller Center for Zero Carbon Shipping MMMCZCS,2022a).Barriers to adopting zero-carbon fuels in the shipping sector include high fuel costs,lack of fuel supply,and the lack of port infrastructure and safety regulations for alternative fuels.Another challenge is the difficulty of coordinating among different stakeholders such as fuel producers,ship owners and operators,cargo owners,port authorities,and policymakers(Frontier Economics et al.,2019).GSCs have emerged as a strategic platform to overcome those barriers and accelerate the decarbonization of the shipping sector.Focusing on a single route makes it easier for policymakers to identify and engage with key stakeholders and to create targeted regulatory measures.First mover regions or ports could benefit from financial incentives.Readiness for alternative fuels could also turn into a competitive advantage for shipowners,ports,and shippers(MMMCZCS,2022b).Lessons learned from successful green shipping corridors could inform and encourage stakeholders and lead to the rapid adoption,or diffusion,of zero-emission shipping(Slotvik et al.,2022).As more international routes have been announced to transition to GSCs,China could start by exploring domestic GSCs to gauge stakeholder interest and market readiness.The development of a GSC typically starts with pre-feasibility and feasibility analyses(Getting to Zero Coalition,2021;MMMCZCS,2022a).The pre-feasibility analysis involves region-specific research on potential alternative fuel supplies and costs,ship and voyage characteristics,trade flows,and the regulatory landscape.This work informs the process used to establish selection criteria and screen potential corridors.The selection criteria might vary but would in general be based on potential emission reductions,technical and economic feasibility,and stakeholder readiness.Once 1 Another example of this model is Chinas Domestic Emission Control Area.China implemented a localized version of an Emission Control Area(ECA)to evaluate whether and when domestic stakeholders are ready to comply with the International Maritime Organizations regulations for ECAs.2ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSpotential corridors are selected,a more detailed feasibility analysis examining the technological,regulatory,and commercial requirements can be conducted(Boyland et al.,2023).This analysis is a pre-feasibility study on establishing GSCs for Chinas coastal shipping.We first characterize Chinas coastal shipping activities using real-world ship movement data to identify the origins and destinations for each voyage.We then summarize the energy used by ships on each route and evaluate the technological feasibility of powering the ships on these routes using renewable liquid hydrogen produced from 100%renewable electricity,as well as renewable methanol(MeOH),renewable ammonia(NH3)and renewable electricity in the form of batteries.The top three routes in terms of energy use and technological feasibility are selected as first mover GSC candidates.Finally,we chose one representative ship on each GSC to understand fuel demand and to estimate the cost of supplying the required amount of renewable marine fuel.A previous ICCT study showed that renewable ammonia and renewable methanol have a comparable at-the-pump cost as renewable liquid hydrogen on an energy-equivalent basis(MARAD,2024).Therefore,we modeled and presented costs only for renewable hydrogen in this study,as detailed in the methodology section.We then present the results of our analysis,before closing with a discussion and key takeaways.3ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSMETHODOLOGYDATA,STUDY REGION,AND SCOPEWe used vessel-tracking data from the Automatic Identification System(AIS)to characterize the traffic pattern of Chinas costal shipping.2 We selected which ships to include in this study by analyzing AIS data for June 2021;2021 was the most recent year of AIS data available and June is the busiest month for shipping activity in China(Mao&Rutherford,2018).For this analysis,we retained the AIS data for ships with Maritime Mobile Service Identification(MMSI)numbers signifying that they belong to the Chinese fleet.3 We then looked at the annual activity of ships in this dataset,retaining those ships that spent more than 90%of their time in Chinas coastal region.Figure 1 shows the study region including the major port clusters of the Bo Sea(BS),Yellow Sea(YS),Yangtze River Delta(YRD),Xiamen and Pearl River Delta(PRD).The retained AIS data is hereinafter referred to as the Chinese coastal ship activity data.Figure 1Study region Bo SeaYellow SeaYangtze River DeltaPearl River DeltaXiamen2 AIS data is commercially available through Spire Maritime,which acquired exactEarth Ltd.in 2021,and other vendors.3 An MMSI number is a unique nine-digit number assigned to an AIS unit.The first three digits,called the Maritime Identification Digit,are country specific.China is assigned three MIDs,412,413,and 414.A table of Marine Identification Digits can be found here:https:/www.itu.int/en/ITU-R/terrestrial/fmd/Pages/mid.aspx.4ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSSHIP TRAFFIC PATTERNS AND ENERGY USEICCTs Systematic Assessment of Vessel Emissions(SAVE)model marries AIS ship activity data(e.g.hourly speed,location,draught)and data about ship technical characteristics(e.g.ship type,engine power,fuel type)from S&P Global to compile traffic patterns,energy use,and an emissions profile of the global fleet.4 Methodologies are compatible with the Fourth IMO Greenhouse Gas Study(Faber et al.,2020).For AIS data that could not be matched to ships in the S&P Global database,we relied on the open-access tools from Global Fishing Watch(GFW),which uses machine learning to speculate basic ship characteristics such as ship type,gross tonnage,and length(Faber et al.,2020).After aggregating AIS data into hourly intervals,we interpolated the missing hours and assigned unique voyage IDs to specific ships using a voyage identification algorithm(Olmer et al.,2017,MARAD,2024).Finally,using assumptions on engine fuel consumption rates and emission factors updated on a regular basis,we compiled hourly energy use and emissions for each ship and link this information to the voyage ID.The methodology flowchart is shown in Figure 2.We used the SAVE model outputs for 2021 in this study.Figure 2Methodology flowchartHourly energy useand emissions withassigned voyage IDInput dataInterim resultsFinal outputVoyage identificationHourly AIS signalswith assignedvoyage ID Ship characteristicsFuel consumptionrate emission factorsAutomaticIdentificationSystem data TECHNOLOGICAL FEASIBILITY OF RENEWABLE MARINE FUEL The methodology used in this study to evaluate the technological feasibility of powering a ship by liquid hydrogen fuel cell systems,battery electric systems,ammonia fuel cell systems,and methanol combustion engines is described in detail in previous ICCT studies(Comer,2019;X.Mao,Georgeff,et al.,2021;X.Mao,Rutherford,Osipova,&Comer,2020;X.Mao,Rutherford,Osipova,&Georgeff,2022).We compared the energy required to complete each voyage with the energy provided by the amount of renewable marine fuel a ship could carry on board.If the former is greater than the latter,a voyage could not be completed without refueling.The ratio between the twoor how many times a ship would need to refuel to complete the voyage or voyagesis shown in Equation 1.This ratio was used to evaluate the technological feasibility of using a renewable marine fuel option with a corresponding propulsion system(Table 1);The higher the ratio,the lower the feasibility.Information on the density and energy density of fuel was obtained from Mao et al.(2022)and the available volume for fuel storage was obtained from Comer(2019).4 Maritime data provider IHS Markit was acquired by S&P Global in 2022.5ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORS Ri,j=Ei,jDj EDj Vf (1)Where:Ri,j is the number of times ship i needs to be refueled to complete the voyage(s)for each case when using fuel jEi,j is the energy input needed for ship i to operate on fuel j in kWhDj is the density of fuel j in kg/m3 EDj is the energy density of fuel j in kWh/kg Vf is the available volume for fuel storage on board in cubic meters Table 1Renewable marine fuels and corresponding propulsion systems considered in this studyFuel typePropulsion systemAbbreviation Renewable liquid hydrogenFuel cellHydrogenFCRenewable ammoniaInternal combustion engineAmmoniaICEaRenewable methanolInternal combustion engineMethanolICERenewable electricity Battery electricBattery electrica We considered an ammonia-ICE system for its potential to reduce life-cycle GHG emissions to zero or near zero.However,there are other concerns associated with this system,such as the hazards of unburned ammonia,as well as NOX emissions(de Vries,2019).For ships that are matched by GFW data,we lacked the inputsnamely engine volume and powerto apply the above methodology.As a result,we approximated these inputs based on statistical relationships between engine power,engine volume,and gross tonnage,as shown in Equation 2.When these statistical relationships could not be established due to lack of data,we used the average engine power and engine volume instead.Note that cargo ship and tanker are generic ship types for ships matched with GFW data.PMEi,c=0.4650 GTi,c 205.7615(2)PMEi,c=0.4650 GTi,c 205.7615 PMEi,c=0.4650 GTi,c 205.7615Where:PME_i,c is the main engine power for cargo ship i,in kWGTi,c is the gross tonnage of cargo ship iPME_i,t is the main engine power for tanker i,in kWGTi,t is the gross tonnage of tanker iVf_i,c is the volume taken up by the existing fuel tanks on board cargo ship i,in m3FUEL COST FOR THE FIRST ZERO-EMISSION VESSELS DEPLOYED ON GSC CANDIDATESAfter selecting the GSC candidate ships,we chose one representative shipbased on average ship capacity and activityto be the first ZEV deployed in each of the GSCs.For GSCs selected for multiple ship classes,we chose the ship class that consumed the most energy.We did not include ships that had been matched to voyages using GFW data as this data lacks the detailed ship characteristics needed to support an informative analysis of fuel demand and cost.We then estimated the ships annual fuel demand in 2021 using the SAVE model.All selected ships used very low sulfur 6ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSfuel oil(VLSFO)as their original fuel.We converted that demand to renewable marine fuel options assuming equivalent energy output as shown in Equation 3(Comer,2019).The energy densities of fuels were taken from Mao et al.(2022).The efficiency of propulsion equipment associated with different fuel types,including traditional combustion engines and fuel cells,was taken from Comer(2019)and Mao et al.(2022).FCi,j=FCi,LSHFO EDjEDLSHFO ICEp,j (3)Where:FCi,j is the fuel consumption of ship i when operating on fuel j,in kg FCi,LSHFO is the fuel consumption of ship i when operating on VLSFO,in kg EDLSHFO is the energy density of VLSFO in kWh/kg EDj is the energy density of fuel j in kWh/kg ICE is the thermal efficiency of an internal combustion marine engine,which we assume is 50%p,j is the efficiency of the propulsion equipment associated with using fuel j We modeled the cost of supplying renewable liquid hydrogen for this study as equal to the cost for its derivatives,including renewable ammonia and renewable methanol,which we considered comparable to each other on an energy-equivalent basis(MARAD,2024).We assumed renewable hydrogen production would be located at the port,with minimal hydrogen delivery needed between facilities.Given the geographical advantage of ports as well as the limit of onshore land,we considered offshore wind to be the electricity source for renewable hydrogen production in this study.To ensure the renewability of hydrogen,we assumed that hydrogen production is directly connected to offshore wind electricity,rather than receiving electricity from the grid.5 Because wind electricity is only generated when it is windy,such a direct-connection scenario would mean that the production of renewable hydrogen would be limited by how often the wind facility runs.The cost of supplying renewable hydrogen includes two main components:hydrogen production and hydrogen refueling.We adopted the same discounted cash flow(DCF)model as in previous ICCT studies and updated certain data assumptions to estimate the production cost of renewable hydrogen for this study(S.Mao et al.,2021).Particularly,we collected the capital cost and operational cost of offshore wind projects,adjusted by inflation(China Electricity Council,2020;Huang et al.,2020;International Energy Agency&Nuclear Energy Agency,2020;Sherman et al.,2020;Jin,2022;Guo et al.,2023;International Renewable Energy Agency IRENA,2023).These costs include generating the power in offshore locations and transmitting the power to the shore.We assume the capacity factor of offshore windthe ratio of average energy produced to the theoretical maximum power outputto be 35%in China in 2023(Sherman et al.,2020;Guo et al.,2023;IRENA,2023).Researchers expect renewable capital and operational costs to decrease,while the capacity factor increases in the future due to technology improvements.Thus,to project future offshore wind electricity cost,we follow the cost reduction and capacity factor improvement trends used in the National Renewable Energy Laboratory annual technology baseline report(National Renewable Energy Laboratory NREL,2020).The assumed capital cost,operational cost,and capacity factor,along with our estimated levelized cost of offshore wind by year,are shown in Table 2.The capacity factor and levelized cost are inputs to the hydrogen DCF model.5 Renewable hydrogen could also be produced with grid electricity if the hydrogen producer signs a power-purchase agreement with a renewable power supplier.Such a practice is not yet common in China and thus we do not model this scenario in this study.7ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSTable 2Costs of producing offshore wind in ChinaCapital cost Operational costCapacity factorLevelized cost of offshore wind power202317,780/kW($2,540/kW)205/kW/year($29/kW/year)35H0/MWh($69/MWh)203013,720/kW($1,960/kW)180/kW/year($26/kW/year)37.565/MWh($52/MWh)204012,400/kW($1,770/kW)160/kW/year($23/kW/year)38.720/MWh($46/MWh)205011,215/kW($1,602/kW)145/kW/year($21/kW/year)39.8(0/MWh($40/MWh)Note:Based on 2023 monetary values,using an exchange rate of 7 to US$1.We collected the capital cost of alkaline water electrolysis from recent,China-specific studies(Zhang et al.,2023;China Hydrogen Alliance,n.d.).6 Our data assumptions for the hydrogen DCF model are shown in Table 3.Because the market and technology for electrolyzers is still developing,we expect costs to decrease and efficiency to improve in a linear trend.To account for unforeseeable upfront costs,we multiplied the capital cost of an alkaline electrolyzer system by a contingency factor of 1.2,consistent with previous studies(S.Mao et al.,2021;Zhou et al.,2022).As the hydrogen plant in this analysis is getting electricity directly from offshore wind,we consider a 10%discount in the capacity factor to account for potential transmission disruptions and the need to ramp the electrolysis process up and down(Apostolaki-Iosifidou et al.,2019).6 Alkaline is the dominant and most developed type of electrolyzer in China,which is why we estimated renewable hydrogen production cost based on this system.However,alkaline is less flexible than some other types of electrolyzers for ramping up and down.It is possible that other types of electrolyzers might be adopted in the future,such as proton exchange membrane(PEM)because of its rapid system response and dynamic operation(van Haersma Buma et al.,2023).Using these other types of electrolyzers would lead to higher hydrogen costs than estimated in this study.8ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSTable 3Data assumptions for modeling hydrogen production costs Type of electrolyzerAlkalinePlant lifetime30 yearsPlant capacity factorValues in Table 2 multiplied by 90pital cost 4,200/kW in 20232,450/kW in 2050Contingency factor to adjust capital cost1.2x Electrolyzer efficiency66%in 202378%in 2050Electrolyzer lifetime64,000 hours in 2023100,000 hours in 2050Fixed operational cost4%of capital costRenewable electricity costEstimated values in Table 2Water cost 6.5 per tonne of waterWater consumption 12.5 kg water per kg hydrogenDiscount rate8%Sources:Christensen(2020);S.Mao et al.(2021);Wang and Huang(2024);Zhou et al.(2022);Zhang et al.(2023);China Hydrogen Alliance(n.d.)Renewable hydrogen produced through water electrolysis is in its gaseous form.Therefore,the at-the-pump cost includes the liquefaction cost,liquid hydrogen storage cost,and the bunkering cost for liquid hydrogen.While liquid hydrogen can be pumped to ships in three ways(Georgeff et al.,2020),this study assumes a loading arm system connects storage tanks at the port to the vessels.We obtained formulas from Argonne National Laboratorys Hydrogen Delivery Scenario Analysis Model(2024)to calculate the capital cost of the liquefier and liquid storage tank,based on their respective capacities,and adjusted for inflation to the 2023 dollar value(Equation 4 and Equation 5).We used these formulas to corroborate the calculated costs with the values provided in other studies and found the numbers matched(IRENA,2022).Based on the information from previous studies,we assume the capacity limit of a liquefier and a storage tank to be 200 tonnes per day and 3,000m3,respectively(Georgeff et al.,2020;Argonne National Laboratory,2024).This means multiple liquefiers and storage tanks would be needed when hydrogen demand is high.In addition to capital costs,we also considered the cost of electricity needed for liquefaction;we assume the energy input to be 12 kWh per kilogram of hydrogen based on previous studies(U.S.Department of Energy,2019;IRENA,2022;Argonne National Laboratory,2024).We use the same renewable electricity cost in Table 2 for liquefaction.The remaining costs for bunkering liquid hydrogen to ships would include the piping and loading arms,terminal facilities,and a jetty designed for hydrogen specifically,which we estimate from previous studies to be about$425 per kilogram of hydrogen capacity(IRENA,2022;KBR,2022).We use the same DCF assumptions in Table 3 to get the levelized unit cost.Given the uncertainties and limited information on liquefiers,storage,and bunkering costs,we do not make projections for their future costs.We do not consider land requirement and land costs in this study.We also do not include fuel taxes in our at-the-pump hydrogen price.9ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORS CapExliquefaction=5600 Liquifier Capacity0.8 1.3(4)Where:CapExliquefaction is the liquefaction capital cost in 2023 U.S.dollarsLiquifier Capacity is liquefier capacity in kilograms Coststorage tank=48404 Tank Capacity0.5941 2(5)Where:Coststorage tank is the storage tank cost in 2023 U.S.dollarsTank Capacity is tank capacity in cubic meters10ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSRESULTSENERGY USE,TECHNOLOGICAL FEASIBILITY,AND FIRST MOVER GSC CANDIDATESTo characterize Chinas coastal shipping patterns,we define interregional routes as routes connecting two different port clusters.Intraregional routes are defined as routes connecting two ports within the same port cluster.According to the analysis,it is estimated there were 12,250 Chinese vessels performing coastal transport service in China in June 2021.The average transport distance is around 490 nm for interregional routes and 170 nm for intraregional routes.As shown in Table 4,all ships traveled both interregional and intraregional routes.Bulk carriers stood out among the ship types:They were the primary users of interregional routes and also traveled the longest interregional routes.Bulk carriers were more active in northern China(Figure 3).The largest group of ships,identified by the GFW data as“tankers,”predominantly travel intraregionally and appeared to be most active in the Yangtze River Delta region(Figure 4).Table 4Vessels and route patterns along Chinas coastline in June 2021Ship classNumber of shipsMean gross tonnageAverage voyage length/nmNumber of voyagesInterregionalIntraregionalInterregionalIntraregionalBulk carrier86729,2007501404,3002,280Container ship22718,5004502307921,780General cargo ship3125,4804502908131,930Oil tanker5914,5705002002,3502,330Chemical tanker2673,6404402201,3602,920OtheraTanker5,9505563805489029,900Cargo carrier4,0301,460430902,34021,500a Ships matched by the Global Fishing Watch database.We could identify only generic ship classes for these vessels;we included those identified as cargo carriers and tankers.11ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSFigure 3Traffic pattern for interregional bulk carriers along Chinas coastline in June 2021 Figure 4Traffic pattern for“other”tankers along Chinas coastline in June 202112ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSAfter determining energy use at the route level,we ranked the top five routes requiring the most energy for each ship class.We also provided the average number of refuelings needed for the ship classes to complete voyages on these routes if the ships were powered by renewable marine fuel(Table 5).Our findings are listed below:Bulk carriers used the highest amount of energy on the Yangtze River DeltaBo Sea route,consistent with the ship traffic pattern identified above.Tankers,as identified by the GFW data,consumed the most energy out of all groups.Nearly half of that energy consumption took place in the Yangtze River Delta region.Four of the major ship classesbulk carriers,container ships,oil tankers,and general cargo shipsconsumed more energy on interregional routes than intraregional routes.Chemical tankers consumed more energy on intraregional routes.The top route by energy use for all classes except container ships involved the Yangtze River Delta region.Among the different renewable marine fuel options,the use of methanol or ammonia in an internal combustion engine proved to be feasible for all ship traffic evaluated.The use of hydrogen in fuel cells is feasible except for oil tankers,chemical tankers,and other tankers.Battery electric technology is the least feasible option as only certain ships on shorter regional routes can use this energy source without recharging.13ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSTable 5Top five routes for energy use by ship class and refuelings needed for each routeRouteEnergy use(GWh)Number of refuelings neededMethanolICEAmmoniaICEHydrogenFCBattery electricBulk carrierYRDBS3390002PRDBS960003YRD regional510000BS regional430000YSBS160001Container shipPRDBS980002YRD regional190000YRDPRD170001PRD regional80002YS regional50000Oil tankerYRDBS670004YRD regional670001PRDBS390017PRD regional370001PRDYRD130003Chemical tankeraYRD regional360002YRDBS250016PRDYRD70017PRD regional50001General cargo shipYRDBS250002PRDYRD210002BSXiamen110002YRD regional80000PRD regional30000Other:TankersYRD regional5830003PRD regional3970003BS regional1230003YRDBS490018Xiamen regional310015Other:Cargo shipsYRD regional1000001YRDBS540001PRD regional320001BS regional270000Xiamen regional70002Note:YRD=Yangtze River Delta,BS=Bo Sea,PRD=Pearl River Delta,YS=Yellow Sea a We identified only four major routes for chemical tankers.14ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSBecause the top routes for energy use overlapped among the ship classes,we narrowed our selection to three GSC candidates.We then chose one ship per candidate route as a case study to understand how much renewable marine fuel would be needed on an annual basis.Although bulk carriers,general cargo ships,and oil tankers share the same top route(YRDBS),we chose a bulk carrier for the case study as it is the dominant cargo ship type along Chinas coast.We selected oil tankers over chemical tankers for the YRD regional route as there are more oil tankers using the route.Finally,we selected container ships for the PRDBS route.Information about the selected GSC candidates,ship classes,and ship activity are depicted in Table 6 and Figure 5.Table 6Hypothetical activity for one zero-emission vessel on each GSC route,based on 2021 activity dataRoute characteristicsShip characteristicsShip activityGSC routesTypical origindestination pairRoute length(nm)Ship classGross tonnageEngine power(kW)Annual voyages Energy use per voyage(MWh)YRDBSTianjinShanghai700Bulk carrier31,0009,9609275PRDBSShenzhen Tianjin1,400Container23,0005,19044252YRD regionalShanghai/Ningbo-Zhoushan75Oil tanker2,952735729Figure 5Traffic patterns for the three hypothetical zero-emission vessels on the GSC routes,based on 2021 activity dataGSC routesYRDBSYRD regional PRDBS Bo SeaYellow SeaYangtze River DeltaPearl River DeltaXiamen15ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSThe demand for different renewable marine fuel options by the hypothetically-deployed ZEVs is presented in Table 7.In total,the candidate GSCs could need 901 tonnes of liquid hydrogen,or 6,310 tonnes of ammonia,or 5,890 tonnes of methanol to support the deployment of the first ZEVs,or one ship on each of the three routes.Since we assume all these fuels will be derived from renewable hydrogen,which is generated with renewable electricity,we estimated an implied demand for renewable electricity of about 4460 GWh by 2030.For context,China has set a 2025 goal for annual production of 100,000200,000 tonnes of renewable hydrogen and annual generation of 3,300 TWh renewable electricity.Although the estimated demand for ammonia and methanol is more than 6 times in weight that of liquid hydrogen to support the first zero-emission vessels on candidate Chinese coastal GSCs,the corresponding volume suggests a potential problem for hydrogen(Table 7).Liquid hydrogen,although it has a high gravimetric density,requires much more space on a ship due to lower fuel supply system volumetric density compared to ammonia and methanol,making them less preferrable as marine fuel for cargo ships on which every cubic meter is valuable.Table 7Annual fuel and electricity demand for the first zero-emission vessels deployed in 2030Candidate GSC(typical origindestination)Fuel demand(tonnes)per shipFuel demand(m3)per shipRenewable electricity demanda(GWh)Original fuelMethanolAmmoniaLiquid hydrogenOriginal fuelMethanolAmmoniaLiquid hydrogenTianjinShanghai4751,0001,0701535221,2601,5703,8307.410ShenzhenTianjin2,2704,7905,1307322,4906,0307,51018,3003549Shanghai/Ningbo-Zhoushan4910311116541301634000.81Total2,7905,8906,3109013,0707,4209,24022,5004460a The range reflects the conversion rate of different hydrogen-derived fuels.For methanol,we assumed a conversion efficiency of 79%;for ammonia,we assumed a conversion efficiency of 84%,according to MARAD(2024).CASE STUDY:COST OF SUPPLYING HYDROGEN FUEL FOR FIRST ZEVS DEPLOYED ON GSC CANDIDATESThe cost of supplying the fuel for the first ZEVs deployed on candidate Chinese coastal GSCs is presented in Table 8 below.The at-the-pump cost is the final cost of renewable hydrogen fueled to the ships,which includes production,liquefaction,storage,and bunkering costs.All numbers are in 2023 monetary values,with U.S.dollars in parentheses.We estimated the levelized production cost of renewable liquid hydrogen using offshore wind to be 34($4.80)per kg hydrogen in 2030,and the at-the-pump cost to be 53($7.60)per kg hydrogen.The cost of liquefaction,storage,and bunkering is roughly 1520($2.20$2.80)per kg of hydrogen.This hydrogen production cost estimate is based on a number of unpredictable factors,such as future electroyzer costs,the cost of capital financing,and the cost of renewable electricity(Navarrete&Zhou,2024).Thus,these costs could be lower or higher than we modeled.Nonetheless,we expect the production cost of renewable hydrogen to decrease in the future;the decreasing cost is a combined effect of decreasing renewable electricity cost,increasing capacity factor,decreasing electrolyzer capital cost,and improvements in electrolyzer efficiency.16ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSTable 8Levelized production cost and the at-the-pump cost of renewable liquid hydrogen produced through water electrolysisLevelized production cost per kilogramAt-the-pump cost per kilogram203034($4.80)53($7.60)204027($3.80)43($6.20)205021($3.00)36($5.20)Note:Costs are presented in 2023 monetary values.The total amount needed to pay for supporting the first hypothetically deployed ZEVs annually on GSC candidates by 2030 is estimated at$6.8 million(Table 9).Although we only modeled the cost of renewable hydrogen,the at-the-pump cost for renewable ammonia and renewable methanol that are derived from renewable hydrogen would be similar on an energy basis(1.5%lower).This is because while renewable ammonia and methanol have higher fuel production costs than hydrogen due to additional conversion processes,the refueling cost would be significantly lower and can utilize existing infrastructure(MARAD,2024).Table 9At-the-pump cost of supplying annual fuel demand for the first ZEV in 2030Candidate GSC(typical origindestination)Fuel demand(tonnes)At-the-pump cost of hydrogen(millions)Original fuelMethanolAmmoniaHydrogenTianjinShanghai4751,0001,0701538.4($1.20)ShenzhenTianjin2,2704,7905,13073239.2($5.60)Shanghai/NingboZhoushan49103111160.7($0.10)Total2,7905,8906,31090147.6($6.80)Note:Costs are presented in 2023 monetary values.17ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSDISCUSSIONTo help stakeholders envision the practicality of rolling out Chinese coastal GSCs,we presented the potential fuel demand for the first ZEVs to be deployed on three candidate routes.If all ships along those routes start using methanol,ammonia,or liquid hydrogen,the potential demand could present a major challenge to sourcing these fuels with zero or near-zero life-cycle GHG emissions(Table 10).For context,the existing largest renewable hydrogen production plant in China can generate around 20,000 tonnes of renewable hydrogen annually(Collins&Xu,2023).This is 13%of the total 149,000 tonnes of liquid hydrogen that would be required if ships on these routes are powered by hydrogen exclusively.Even more tonnes of renewable hydrogen would be needed if some ships opt to use methanol or ammonia,which would be produced with hydrogen,resulting in energy conversion loss(MARAD,2024).The Chinese clean energy producer Goldwind,which has signed a deal to supply shipping giant Maersk,initiated a clean methanol project in the Inner Mongolia autonomous region in northern China with an expected annual production of 500,000 tonnes of green methanol using both the electrolysis and biogenic pathways(Yang&Tunagur,2024).This is only half of the methanol needed to support a full methanol-fueled fleet on proposed Chinese coastal GSC candidates.Table 10Projected demand for renewable marine fuel on candidate GSCs under the full deployment scenarioCandidate GSCShip classNumber of shipsFuel demand(tonnes)MethanolAmmoniaLiquid hydrogenYRDBSBulk carrier526418,000443,00064,000PRDBSContainer ship6085,00090,00013,000YRD regionalTankers1,700471,000498,00072,000Total2,230974,0001,031,000149,000We did not include battery electric technology when estimating projected fuel demand because of its low feasibility compared with liquid hydrogen,ammonia,and methanol(Table 5).However,the use of battery electric ships is preferable because batteries are more efficient at converting electricity to energy.All other fuel options considered in this analysis are produced using renewable electricity,which can result in energy loss during the conversion process.In this study,we found that battery electric technology is feasible for certain ships on regional routes.Combining findings from a previous ICCT study(X.Mao,Georgeff,Rutherford,&Osipova,2021),we can argue that battery electric technology is highly feasible for small ships deployed on short routes.Feasibility for medium-sized ships is constrained by route distance,and large ships would require advanced battery technology.For the reasons stated above and in the detailed in the methodology section,our hydrogen cost estimate should be viewed with caution.First,we assumed that the hydrogen needed to support the first ZEV deployments will be produced in electrolysis plants located within ports.We also assumed that the renewable electricity required to electrolyze water will be generated within the same ports,presumably from offshore wind farms.This might be a practical solution for decarbonizing a single ship.If more zero-emission ships are deployed on these routes,the ports might not be able to supply all fuel needs as estimated in Table 10.Specifically,to supply 149,000 tonnes of liquid hydrogen each year,the corresponding electrolysis capacity would be as high as 2.7 GW,while the cumulative installed capacity in all of China was only 1 GW 18ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSin 2023(Le&Selvaraju,2024).Furthermore,given that the typical capacity of an alkaline electrolyzer in China is about 5 MW(Zhong,2023),it would require more than 540 electrolyzers to fulfill the total liquid hydrogen demand at the three port clusters in Table 10.Alternatively,the expanded demand for renewable marine fuel can be sourced from outside of the ports,potentially in a centralized location where green hydrogen can be produced on a large scale with relatively cheaper renewable electricity.However,the required amount of installed capacity and land required for generating renewable electricity inland can be a barrier.The fuels would also need to be transported to the ports and bunkered into the ships.The feasibility and cost of transporting a large amount of hydrogen needs to be further studied.As an initial screening study,this paper discussed little about how and when to prioritize different renewable marine fuel options and the practical fuel production pathways for the candidate GCSs.Due to different levels of technology maturity,feedstock availability,costs,and risks,fuel selection would need to be addressed in a technology roadmap analysis,which could be done in a follow-up study.Even if a specific fuel type stands out,various production pathways could result in vastly different life-cycle GHG intensity values as well as cost.Unfortunately,the pathways with better climate performance are usually the more expensive ones.A recent ICCT publication identifies bio-methanol made from gasifying miscanthus or corn stover as the best in terms of overall performance as future marine fuel in the Great Lakes region in the United States(MARAD,2024).However,the availability of waste biomass feedstocks for biofuel production in China is very limited(Foreign Agricultural Service,2023).Finally,theres no policy in place or in the planning stages to ensure the sustainability of renewable marine fuel produced in China.We only considered the scenario of producing renewable hydrogen through a direct connection to renewable electricity.Theoretically,electrolysis hydrogen could also receive electricity from the grid.However,ensuring that grid-produced hydrogen is purely zero emission would require stringent regulations on the certification of renewable electricity combined with a robust renewable purchasing framework,such as power purchase agreements(Malins,2019).Both the European Union and the United States have released or proposed rules on regulating electricity for renewable hydrogen production(Ding et al.,2024;Commission Delegated Regulation(EU)2023/1184,2023).Similar rules are currently lacking in China.While using grid electricity could allow electrolyzers to run at a higher capacity factor when compared with wind-produced electricity,the hydrogen producer would also pay more for grid electricity.Depending on the life-cycle GHG intensity of the renewable source and how expensive the grid fee is in a given region,the cost of a direct connection can be cheaper or more expensive than a grid connection(Zhou et al.,2022).The European Unions Emission Trading System and its FuelEU Maritime initiative are policy designs that could help close the price gap between renewable and fossil fuels(Wrtsil,2024).China could consider expanding its existing emission trading system program to include marine fuel producers as well as shipbuilders.China could also consider regulations to reduce the life-cycle GHG intensity of marine fuels as soon as possible.19ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSCONCLUSIONWith the growing interest in GSC initiatives globally,we looked at how this concept could be applied in China on domestic shipping routes.This study identified first mover GSC candidates for Chinas coastal shipping based on route-level energy consumption and the technological feasibility of using renewable marine fuel to supply that demand.The three GSC candidates included two interregional routes,Yangtze River DeltaBo Sea(Shanghai-Tianjin)and Pearl River DeltaBo Sea(Shenzhen-Tianjin),and one intraregional route in the Yangtze River Delta region(Shanghai/Ningbo-Zhoushan).These regions are home to some of the worlds largest ports and are strategically positioned to commit to GSC initiatives.The port of Tianjin in the Bo Sea region has built the first zero-emission terminal in China.The terminal is fully automated,with all operations powered by clean electricity generated from an on-site onshore wind farm and solar farm.The port of Shanghai,located in the Yangtze River Delta region,has just completed its first ship-to-ship renewable methanol bunkering in April 2024.In the Pearl River Delta region,the Hong Kong government unveiled an action plan in December 2023 to build its port into a bunkering hub for“green methanol”and other“clean fuel.”Ships on GSCs are potential buyers of these clean fuels and electricity.We then estimated the potential demand for renewable marine fuel when the first ZEV is deployed on each of the three GSCs.In total,stakeholders would need to source about 900 tonnes of renewable liquid hydrogen,or an equivalent 6,000 tonnes of renewable methanol or renewable ammonia,which implies a demand for 4460 GWh of renewable electricity.China has set a goal to produce 100,000200,000 tonnes of renewable hydrogen and 3,300 TWh of renewable electricity annually by 2025.Only a very small share of these volumes would be needed to support the first ZEVs on the proposed GSCs.Finally,we provided a case study to understand the cost of supplying the renewable marine fuel required to hypothetically deploy the first ZEVs on these GSCs.The at-the-pump cost of renewable liquid hydrogen produced on-site at the GSC ports could be$7.60/kg by 2030.This estimate is more than 3 times higher than the current cost of VLSFO on an energy-equivalent basis.7 Deploying the first three ZEVs on the proposed GSCs by 2030 would require paying about$7 million for fuel annually.As technology costs decrease and production efficiency increases over time,our cost estimate for renewable hydrogen could drop to about$5.20/kg by 2050,a reduction of approximately 32%.Depending on other factorssuch as the cost of electrolyzers,the cost of financing electrolysis,and the cost of renewable electricityfuel costs could be lower or higher in 2030 and beyond.Without proper policy intervention,the GSCs most likely would be difficult to implement to a larger scale.To summarize,it is technologically feasible to power ships on renewable fuel,including methanol,ammonia and hydrogen,on the first mover GSC candidates we selected for Chinas coastal shipping.Battery electric technology is feasible for certain ships on regional routes.As key stakeholders in GSC initiatives,ports are strategically positioned to supply the needed renewable marine fuel.Fuel demand for renewable methanol,renewable ammonia and renewable hydrogen for the first ZEVs on these routes implies a need for approximately 4460 GWh of renewable electricity in China by 2030,which is only a fraction of planned installed capacity of renewable electricity in China by that time.A major challenge is the cost,as making and supplying renewable marine fuel is expected to remain expensive within the next 5 years.Although not evaluated as part of this study,building or retrofitting ships to run on these fuels also would be more expensive than constructing ships with conventional designs(Meng&7 According to Ship&Bunker,recent VLSFO price in Hong Kong was$611/mt,which can be converted to approximately$0.015/MJ.Source:https:/ REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING CORRIDORSRutherford,2024).Stakeholders willing to share the costs and associated risks could launch the first ZEVs on these green shipping corridors.However,policy interventions could be considered to speed the deployment of more ships on GSCs and to deliver a meaningful reduction in greenhouse gases.21ICCT REPORT|SCREENING FIRST MOVER CANDIDATES FOR GREEN SHIPPING 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stations in Europe.International Council on Clean Transportation.https:/theicct.org/publication/fuels-eu-onsite-hydro-cost-feb22/Zhou,Y.,Searle,S.,&Pavlenko,N.(2022).Current and future cost of e-kerosene in the United States and Europe.International Council on Clean Transportation.https:/theicct.org/publication/fuels-us-eu-cost-ekerosene-mar22/www.theicct.org communicationstheicct.orgtheicct.org B E I J I N G|B E R L I N|N E W D E L H I|SA N F R A N C I S CO|SO PAU LO|WAS H I N GTO N D C
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