SMART DIGITAL PORTS OF THE FUTURE 2024SMART DIGITAL PORTSOF THE FUTUREEUROPE24-25 SEPTEMBER 2024 ROTTERDAM,THE NETHERLANDSEDITION 144-2024THE E-JOURNALOF PORTS AND TERMINALSSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|1THANK YOU TO OUR 2024 SPONSORSPLATINUM&OFFICIAL 5G SPONSORPLATINUM SPONSORSILVER SPONSORSEVENING DINNER SPONSORBRONZE SPONSORSLUNCH SPONSOREXHIBITORSWelcome to the latest issue of our maritime journal,where we delve into current trends and pioneering developments in the industry!We are thrilled to present this edition as we celebrate the eighth instalment of Smart Digital Ports of the Future(SDP 2024).Once again,were in Rotterdam to explore the cutting-edge technologies that are transforming ports into streamlined,secure,and sustainable hubs.In this special issue,were pleased to share insights from our key sponsors and speakers.Verizon starts us off with an exploration of how private 5G networks are revolutionising port operations.Their piece highlights how these networks,central to“Port 4.0,”enable real-time data transmission,low-latency automation,and enhanced security,paving the way for smoother logistics and greater operational efficiency.Connectivity remains a crucial theme in Panasonics piece,exploring the role of Internet of Things(IoT)technologies alongside their rugged mobile devices like the Panasonic TOUGHBOOK.Their analysis emphasizes how these advancements enhance safety,improve asset tracking,and support sustainability efforts.Data quality and management take centre stage in this edition,with several articles underscoring their importance in the digital transformation of port operations.Awake.AIs research on just-in-time scheduling reveals how sophisticated data analysis can reduce vessel waiting times,fuel consumption,and emissions,all crucial for boosting port efficiency.Kevin Martin from One Digital Nation explores the critical need for Data Quality Automation.As ports increasingly adopt artificial intelligence(AI)and IoT technologies,accurate data management is vital for maintaining efficiency and regulatory compliance.High-quality data,Martin argues,is essential for informed decision-making and resilience against future challenges.We also delve into the expanding role of smart port solutions,especially Port Community Systems(PCS).Umesh Kurlekar from Kale Logistics offers insights into how PCS platforms centralise data,streamline processes,and improve stakeholder communication.By integrating AI,IoT,and blockchain,PCS are reducing manual errors,optimising workflows,and supporting sustainability by cutting resource wastage.Hans Rook and Nico de Cauwer from IPCSA further explore the impact of PCS on global trade.Their article highlights how secure,real-time data exchange enhances transparency and operational efficiency,while also reducing fuel consumption and emissions,showcasing the dual benefits of digital innovation.Emerging technologies like Digital Twins are also featured,with Jorge Melero Corell and Gonzalo Sandis Corbilln from TIC4.0 discussing how these virtual models of physical assets are revolutionising port operations.Digital Twins improve planning,predictive maintenance,and performance optimisation through Big Data integration.Returning once more to our journal,AllRead discusses how Optical Character Recognition(OCR)is enhancing port security and efficiency.By automating access control and monitoring,OCR helps manage the flow of people,vehicles,and goods while ensuring compliance with the International Ship and Port Facility Security Code.Were also delighted to welcome back Que Tran,Vice President of Technology at DP World Europe.His piece emphasises the importance of aligning technological innovations with business needs to drive efficiency,sustainability,and growth.Digitalisation offers great benefits but requires careful planning and collaboration to effectively transform supply chains.As digitalisation and decarbonisation continue to intersect,our next contributors examine how ports are working to reduce emissions and enhance energy efficiency.A joint study by Royal HaskoningDHV and Portwise explores optimising shore power systems through berth simulations,demonstrating how reconfiguring zones can lead to significant cost and energy savings.Michaela ODonohoe from GE Vernova provides an in-depth look at alternative power systems,including electric ship architectures and port microgrids.These innovations,such as GE Vernovas SeaStream and Digital Suite Operations ,are crucial for meeting the International Maritime Organizations greenhouse gas(GHG)reduction targets and aligning with global sustainability goals.Our final contribution on decarbonisation comes from Brunel Universitys Green Yard Scheduler(GYS),part of the EUs PortForward initiative.The GYS project aims to reduce energy consumption and GHG emissions through improved crane scheduling and container positioning,demonstrating how operational efficiency can support environmental responsibility.We are looking forward to an exciting two-day event filled with engaging panel discussions and inspiring keynote addresses.This journal aims to capture the spirit of the conference and foster meaningful conversations among industry leaders and innovators.On behalf of PTI,we warmly welcome you to Rotterdam and we hope you will find SDP 2024 as insightful as ever as we look forward to seeing you at our future events!Margherita Bruno,EditorFROM THE EDITORSmart Digital Ports of the Future 2024www.porttechnology.org2|EDITION 144CONTENTS6.SDP 2024 SPONSORS11.SDP 2024 SPEAKERS20.TRANSFORMING PORTS WITH PRIVATE 5G NETWORKS:EMPOWERING SMART PORTS 4.0Mehdi Quraishi,Director,Verizon Business27.SMART PORTS:HOW 5G AND IOT CAN REVOLUTIONISE GLOBAL TRADEThorsten Lutz,Solution Architect Panasonic TOUGHBOOK32.HARNESSING JIT SCHEDULING TO ENHANCE PORT PERFORMANCEDr.Petra Virjonen,Data Scientist,Awake.AI,and Dr.Jussi Poikonen,VP of AI&Analytics,Awake.AI38.DATA QUALITY AUTOMATION:THE KEY TO FUTURE-PROOFING THE MARITIME INDUSTRYKevin Martin,CEO,One Digital Nation43.TRANSFORMING PORTS INTO PORT COMMUNITY SYSTEMS THROUGH DIGITAL INTEGRATIONUmesh Kurlekar,Vice President Maritime Technology,Kale Logistics Solutions50.THE ROLE OF PORT COMMUNITY SYSTEMS IN OPTIMISING TRADE FACILITATIONHans Rook,Ambassador,IPCSA,and Nico de Cauwer,Secretary-General,IPCSA56.DIGITAL TWINS AND BIG DATA:HOW TIC4.0 ENHANCES THE POTENTIAL OF NOVEL TECHNOLOGIESJorge Melero Corell,Senior Manager,TIC4.0,Gonzalo Sandis Corbilln,Project Manager,TIC4.061.PORT SECURITY:THE ROLE OF OCRAdriaan Landman,COO and Co-founder,AllRead66.LEADING THE CHARGE IN PORT EFFICIENCY WITH DIGITAL INNOVATIONQue Tran,Vice President Technology Ports&Terminals and Transformation,DP World Europe71.OPTIMISING SHORE POWER THROUGH BERTH SIMULATIONSJan Kees Krom,Port Consultant,Royal HaskoningDHV,and Pim van Leeuwen,Simulation Consultant and Manager,Portwise77.PORT AND MARITIME DECARBONISATION THROUGH ELECTRIFICATION AND DIGITALISATIONMichaela ODonohoe,Strategic Growth Leader,GE Vernova82.THE GREEN YARD SCHEDULER:A DIGITAL PATHWAY TO GREENER,SMARTER,AND MORE COMPETITIVE CONTAINER TERMINALAfshin Mansouri,Professor of Operations and Supply Chain Management,Brunel Business School,Brunel University London www.porttechnology.org linkd.in/porttech infoporttechnology.org PortTechnologySmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|3Thrive as a Smart Digital PortSmart ports understand that optimizing performance is critical to their competitive advantage.Geographic information system(GIS)technology allows port managers to bring information together from across their organizations to improve their operations;their performance;and ultimately,their bottom line.Come discover why the worlds leading ports build their intelligence foundation on Esri software.Learn more at 2024 Esri.All rights reserved.Smart Digital Ports of the Future 2024www.porttechnology.org6|EDITION 144PLATINUM&OFFICIAL 5G SPONSORVerizon BusinessVerizon Communications Inc.(NYSE,Nasdaq:VZ)powers and empowers how its millions of customers live,work and play,delivering on their demand for mobility,reliable network connectivity and security.Headquartered in New York City,serving countries worldwide and nearly all of the Fortune 500,Verizon generated revenues of$134 billion in 2023.Verizons world-class team never stops innovating to meet customers where they are today and equip them for the needs of tomorrow.PLATINUM SPONSORMawani Ports Mawani was established as the General Corporation for Ports to oversee and develop Saudi Arabias ports,enhancing trade and passenger transport.A royal directive initiated the privatisation of the ports,driving efficiency and modernisation.Mawani,now the General Authority for Ports,leads all seaport operations and is aligned with Vision 2030 to transform Saudi Arabia into a global logistics leader,propelling the country to the forefront of the global maritime industrySILVER SPONSORSAwake.AIAwake.AI is a Finnish optimisation platform company whose solutions are focused on developing customised AI/ML models to optimise cargo flow through the ports and reduce waiting times and emissions.Awakes AI-driven Logistics Platform is developed to bring together all maritime actors at sea,ports and land,making port operations more efficient,safe and sustainable.For Terminal Operators they optimise port calls with AI insights,for Port Authorities Awake.AI maximises the use of their existing port capacity,for Ship Operators they enable Just-in-Time(JIT)arrival and faster turnaround times and for Cargo Owners they bring full transparency to cargo flow in sea-port-land.CitymeshCitymesh is a preeminent Belgian technology company,serving as a pivotal solution partner for business clients with innovative challenges for nearly two decades.Established in 2006,the company specialises in offering both permanent and temporary connectivity solutions,utilising cutting-edge Wi-Fi,0G,4G,and 5G technologies.Citymesh operates across various sectors,including industry,logistics,public services,offshore markets,education,healthcare,and smart cities,and extends its services to numerous events and festivals.Citymesh distinguishes itself through its personalised approach and commitment to pioneering projects,such as the Safety Drone project,which leverages 5G technology to control drones that assist emergency services.As a member of the Cegeka group,Citymesh employs over 250 dedicated professionals,committed to delivering innovative solutions to their clients.SPONSORSSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|7EsriEsri is the world leader in the geographic information system(GIS)software industry.Their software allows port professionals to visually analyse their networks and operations,which results in better,faster decisions that improve efficiency,productivity and profitability.Esri technology also integrates your IT systems into one enterprise application resulting in superior systems integration from the office into the field.GE VernovaGE Power Conversion,part of GE Vernova,applies the science and systems of power conversion to help drive the electric transformation of the worlds energy infrastructure.Designing and delivering advanced motor,drive and control technologies that help improve the efficiency and decarbonisation of energy-intense processes and systems,helping to accelerate the energy transition across marine,energy and industrial applications.GE Power Conversion is at the heart of electrifying tomorrows energy.Kale Logistics SolutionsKale Logistics Solutions is a global vertical SaaS company,providing a suite of software solutions for the logistics industry.It counts several Fortune 500 companies including large seaports and airports as its customers.With in-depth domain knowledge and technical expertise,Kale has developed a suite of comprehensive digital enterprise solutions.Its flagship product is the Cargo Community Platform,which offers a single source of data to support operational flows,disseminating information to various stakeholders and facilitating the paperless exchange of trade-related data between stakeholders.Kale has offices in India,UAE,Kenya,Netherlands,Malaysia,R.Congo,Colombia,Canada and the US.It engages with 5500 clients in 40 countries.Panasonic Connect EuropePanasonic Connect Europe strives to link businesses to a brighter future by integrating cutting-edge technologies with their specialised hardware.Drawing on their extensive manufacturing history and expertise,they deliver advanced services that add value,solve challenges,and contribute to a more sustainable future for our customers.At the forefront of rugged technology,the TOUGHBOOK division provides robust,high-performance solutions across industries.Renowned for reliability,their mobile devices redefine productivity in challenging environments.Tailored for the unique demands such as ports and harbours,their expertise drives digitisation,optimising operations industry-wide:crane maintenance,in-vehicle integration,mobility asset tracking and 5G private networks support.Smart Digital Ports of the Future 2024www.porttechnology.org8|EDITION 144BRONZE SPONSORSThe Acceleration AgencyThe Acceleration Agency is the leading digital innovation firm that has the strategic experience,digital expertise,and agility to scale quickly to solve complex business objectives in both consumer and enterprise spaces.They are the leader in Active Digital Twins for real-time visualisation and simulation for a wide range of industries and domains.Their digital expertise delivers scalable and secure solutions that are adaptable and agile while utilising AI/ML,edge computing,and IoT sensors.The Acceleration Agency designs and delivers native products in 3D with gaming engines,web applications,and complete end-to-end platforms for advanced visualisation,enabling simulations and real-time data-driven decision support.They are biased to action and their clients include some of the biggest brands in the world:Disney,Carnival,Universal,and more.The Alliance for Private NetworksThe Alliance for Private Networks is championing the global industry adoption of private networks by educating the ecosystem and providing publicly available tools that ease deployment,such as:Uni5G technology blueprints leverage 3GPP 5G standards to define profiling and classification requirements,enabling industry verticals to efficiently deploy their own optimised,reliable,and secure 5G private network in any available spectrum.Their unique global PLMN-ID simplifies the path to private network deployment and accelerates the ecosystem.Acting as a 3GPP Market Representation Partner,the Alliance welcomes alignment with industry organisations that share their vision for global private network adoption in any available spectrum.Brunel University LondonBrunel University London is the birthplace of the Green Yard Scheduler(GYS),an innovative solution to promote the sustainability and productivity of container terminals in their transition to net zero.As a dynamic and research-intensive university with global ambitions,Brunel University London fosters far-reaching networking,global collaborations,and research impact.Following the successful implementation of the GYS at the Port of Vigo in Spain,Brunel University London seeks to promote its reach and impact through pilot testing and implementation in other ports.GISGROGISGRO is a pioneering Finnish SaaS company offering a new-generation Port Management Information System based on port Digital Twin.GISGRO is the most visual and intuitive PMIS System for all port departments and is used in 50 ports around 12 countries concentrating on business-critical operations.Moffatt&NicholMoffatt&Nichol is a multidisciplinary,full-service professional services firm that has expertise in structural,marine,and waterfront facilities;civil,coastal,mechanical,and electrical design;marine construction cost engineering;and inspection and rehabilitation.Moffatt&Nichol provides creative and practical solutions in the field of port engineering.Moffatt&Nichol,a recognized leader for over 75 years in the planning,design,and operations of ports and maritime infrastructure,has played a vital role in developing terminal and waterfront facilities worldwide.From the advent of containerisation to todays complex goods movement trends,environmental regulations,and sophisticated technologies,Moffatt&Nichol has built an international reputation for providing innovative solutions to support virtually any port,maritime,or freight transportation assignment.SPONSORS ContinuedSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|9EVENING DINNER SPONSORSSH Communications SSH is a leading defensive cybersecurity company that secures communications and access for and between humans,systems,and networks.Their customers include a variety of enterprises,ranging from Fortune 500 companies to SMBs across sectors such as Finance,Retail,Industrial,Critical Infrastructure,Healthcare,and Government,including leaders in providing industrial machinery for ports and services for global shipping.They help their customers secure their business in the hybrid cloud and distributed IT and OT infrastructures.Their biometric,passwordless,and keyless PrivX Zero Trust solutions reduce costs and complexity while quantum-safe encryption keeps critical connections future-proof.Their teams and partners in North America,Europe,and Asia ensure customer success.The companys shares(SSH1V)are listed on Nasdaq Helsinki.LUNCH SPONSOR Three Group Solutions Three Group Solutions delivers wholesale,enterprise,and IoT solutions that leverage CK Hutchisons global mobile networks,partner networks,and CK Hutchisons expertise in ports and related services,retail,and infrastructure.CK Hutchison Group Telecom operates the 3 networks in Italy,the UK,Sweden,Denmark,Austria,and Ireland.It also holds a majority interest in Hutchison Telecommunications Hong Kong Holdings Limited(HTHKH),providing cutting-edge mobile services in Hong Kong and Macau.Hutchison Asia Telecom(HAT)comprises CK Hutchisons mobile operations in three rapidly growing Asian markets Indonesia,Vietnam,and Sri Lanka.Hutchison Ports,the worlds leading port investor,developer,and operator,is also a member of CK Hutchison Holdings.This unique position enables Three Group Solutions to offer customers the best solution designers,engineers,and go-to-market specialists across CK Hutchison,in addition to market expertise.Smart Digital Ports of the Future 2024www.porttechnology.org10|EDITION 144EXHIBITORSAirwayz Airwayz revolutionises airspace management with its DynamicUTM technology,enabling scalable multi-drone operations for inspection,monitoring,delivery,emergency response,and more.Their AI-driven system integrates data from manned and unmanned systems,weather services,and local authorities,providing real-time,autonomous decision-making for seamless and safe drone operations.With over 30,000 autonomous flights conducted worldwide,Airwayz is the leading UTM service provider,including for the groundbreaking commercial project at the Port of Rotterdam.Join us to explore how Airwayz can enhance operations,security,and logistics in ports globally.Tata Consultancy Services Tata Consultancy Services is an IT services,consulting and business solutions organisation that has been partnering with many of the worlds largest businesses in their transformation journeys for over 55 years.Its consulting-led,cognitive powered,portfolio of business,technology and engineering services and solutions is delivered through its unique Location Independent Agile delivery model,recognised as a benchmark of excellence in software developmentSentinelDQThe future of your business depends on high-quality data.SentinelDQ from One Digital Nation is your trusted partner,helping you transform your data burden into digital brilliance.Businesses that rely on data for operational and strategic decision-making are realising the benefits of using our technology to create a competitive advantage.Turn physical into digital;turn impermeable into searchable;turn chaos into wisdom.With round-the-clock quality and compliance monitoring and scoring,SentinelDQ ensures that Data Quality,and the business that depends on it,are never compromised.Use your IQ.Grow your DQ.XRFXRF specialises in developing software solutions to aid decision-making for complex scenarios.By leveraging extended reality and artificial intelligence,XRF transforms critical information into visually engaging and easily accessible formats.Their innovative approach has earned an international clientele,including the Port of Valencia,and Saudi Arabias NEOM Line project.SPONSORS ContinuedSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|11SPEAKERSDino Ablakovic,Director,Microgrid Solutions,GE VERNOVADino Ablakovic is Microgrid Solutions Director with GE Vernova.He is a leading technical expert in the field of power systems with more than 15 years of experience in distribution networks and microgrids in various positions,from research and development to consulting.He has worked on more than 50 microgrid projects worldwide,which involve simulating,designing and consulting on microgrids of all types and sizes.He has published more than 10 papers on related topics for IEEE,Springer and others.He holds an advanced degree in electrical engineering.Martin Benderson,Chief Partnership Officer,THE MARITIME ANTI CORRUPTION NETWORKAs Chief Partnership Officer,Martin is responsible for scaling MACNs Collective Action initiatives and for stewarding MACNs partnerships with international donor organisations.Martin joined the MACN secretariat in 2014 and has since catalysed and led Collective Action initiatives to tackle Collective Action initiatives in Indonesia and Malaysia and has steered MACNs efforts to establish a Global Port Integrity Platform.Dr.Jrme Besancenot,Head of Digital Transition,HAROPA PORTDr.Jrme Besancenot,PhD in Computer Science graduate from Paris University,is Digital Transition Project Director for HAROPA PORT(Le Havre,Rouen and Paris Ports).Expert in maritime IT strategy and single windows,he developed a new generation of Port Community System(PCS)software designed to facilitate vessels and cargo transit through any port:S-WiNG (Single-Window Next Generation).Jrme Besancenot leads a community cybersecurity platform project for HAROPA PORT,a competitive advantage for the port in being recognised by customers as a cyber third trusted party,therefore dealing smarter with digital transition.Bugra Bilginer,Managing Director,LONDON PORT&LOGISTICS CONSULTING Bugra Bilginer is a seasoned professional in Shipping,Logistics,and Port Management.Currently serving as the Managing Director of LPLC,he works as a consultant and corporate trainer in Ports and Logistics.His career encompasses a diverse range of executive port management skills,including Commercial,Business Development,Operational,Administrative,Engineering,IT,Marine,PR&CR,Automation,Innovation,Investments,and Projects.With a deep understanding of Port Operations,he specialises in managing Container Terminals,Car Terminals,Liquid Bulk Terminals,General Cargo,Dry Bulk,and Project Cargo.Terry Bills,Transportation Industry Director,ESRITerry Bills is the Transportation Industry Director at Esri.He has over 30 years of experience in transportation planning and policy,information technology and GIS.Terry has been with Esri for 15 years,where he provides subject matter expertise and thought leadership in transportation.Christian Blauert,Global Director Port and Terminal Development,MOFFATT&NICHOLChristian Blauert is the Global Director of Port and Terminal Development for Moffatt&Nichol.Christian has over 25 years of experience within the maritime industry with a strong focus on container terminal developments,terminal management,automation projects and management strategy as well as business development.Christian joined Moffatt&Nichol having held various C-suite roles,including CEO,for global terminal operators.Christian is a specialist in terminal planning,operational excellence and supply-chain integration,drawing on significant experience working for a broad range of port and terminal operators internationally.Christian also draws on extensive experience in terminal automation,having personally implemented several automation projects at container terminals.Smart Digital Ports of the Future 2024www.porttechnology.org12|EDITION 144Maarten Boot,Policy Advisor,FEPORTSince 2019,Maarten Boot has been Policy Advisor at FEPORTthe Federation of European Private Port Companies and Terminals,which represents the interests of a large variety of terminal operators and stevedoring companies performing operations and carrying out activities in the seaports of the European Union.At FEPORT,Maarten Boot ensures the functioning of the Environment,Safety and Security Committee(ESSC)and the Customs and Logistics Committees(C&LC).Maarten Boot has studied Political Science(international relations track)and International Law at the Vrije Universiteit Amsterdam,where he developed a strong interest in the functioning of the European Union.Matteo Boschian Cuch,PhD Student,CENIT(CIMNE),PORT OF BARCELONAMatteo Boschian Cuch holds a Bachelors Degree in Aerospace Engineering and a Masters Degree in Mobility Engineering from Politecnico di Milano.He joined the Centre for Innovation in Transport,CENIT,in 2023 as a PhD student in Transport and Sustainable Mobility in the port sector at the Port Authority of Barcelona.In the port authority he works with the Innovation and Strategy department and his research topics are related to intermodal transport,especially concerning the connection between the port and his hinterland by rail,and inland transport emissions calculation in the port area.Wouter Buck,Head of Customer Digital,PORT OF ROTTERDAMWouter Buck is a Manager at the Port of Rotterdam Authority,where he has held various roles including Consultant Digitalization advising other international seaports,Product Owner of various port community and management tools,and Project Manager in supply chain optimisation projects.He currently leads a team dedicated to enhancing supply chain and port call performance through digitisation projects and pilots with customers.Wouter is passionate about integrating strategy and vision into daily operations to create meaningful impact.He resides in Rotterdam with his wife and enjoys playing tennis.Nico de Cauwer,Secretary General,IPCSANico De Cauwer has been the Secretary-General of the International Port Community Systems(IPCSA)since 1 May 2023.Before his appointment,he served as IPCSAs Representative for Europe and North America in the Executive Committee of IPCSA since mid-2017.Additionally,he is also leading IPCSAs Standards&Technology domain and serves as the Chairman of IPCSAs Message Design Group PROTECT.Nico is a member of the Industry Advisory Board at the Digital Standards Initiative(DSI)of the International Chamber of Commerce(ICC),a participating Expert member of the UN/CEFACT Transport and Logistics Domain,and an IPCSA delegate who also resides in the IMO Expert Group on Data Harmonisation(EGDH)of the International Maritime Organisation(IMO).Nico is also a member of the Data Collaboration Committee at IAPH,the International Association of Ports and Harbors.As Business Architect Port Community Solutions at the Port of Antwerp-Bruges,he has 30 years of experience in the port and maritime sector,involved in a wide variety of digitalization and innovation projects.He holds a masters degree in mathematics and computer sciences from the University of Antwerp.Kaj de Groot,Head of Automation Projects,PORTWISEKaj de Groot works as Director of Automation Projects at Portwise.He has worked in the ports and terminals field for about nine years and has been involved in terminal design,decarbonisation and automation implementation projects.Jan Egbertsen,Innovation Manager,PORT OF AMSTERDAMJan Egbertsen has studied Management and Logistics at the University of Twente.He works as Strategy and Innovation Manager for the Port of Amsterdam.Jan is among others responsible for digitalisation,energy transition and transport.SPEAKERS ContinuedSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|13Paul Gerken,IT Project Manager,BREMENPORTS GMBH&CO.KGPaul is working with the port management company bremenports GmbH&Co.KG for the ports of Bremen and Bremerhaven.In his role as IT Project Manager,he is taking care of both bremenports internal and external digitalisation projects within the Smartport initiative.He holds a Masters degree in industrial engineering and management and has profound expertise in logistics digitalisation projects from his previous employment as a research associate at the University of Bremen.Matthias Hinz,Smart Port Coordinator,BREMENPORTS GMBH&CO.KGIn his role as Smartport Coordinator,Matthias is managing the Digital Transformation Initiative of the Ports of Bremen and Bremerhaven.Matthias is employed at the port management company bremenports GmbH&Co.KG,working in close cooperation with the port authority,terminal operators,logistics service providers and all major stakeholders of the ports who form the Smartport Community.He studied Naval Architecture and Industrial Engineering and is teaching Innovation Management at the University of Applied Sciences in Bremen.Matthias started his career in IT consulting with a focus on project and change management and then worked with a global logistics provider prior to his current role as Smartport Coordinator for bremenports.James Hosken,Client Executive,GISGROWith a five-year track record in port digitisation projects,James Hosken,Client Executive at GISGRO,excels in building strong client relationships and delivering successful projects.His ability to simplify technical complexities empowers ports to seamlessly integrate digital solutions into their daily workflows.Norbert Klettner,Vice President,TIC 4.0Norbert has been working for more than 15 years in the port and terminal industry implementing and integrating Terminal Operating Systems(TOS),initially for the terminal operator EUROGATE,and since several years as the Managing Director of the RBS EMEA Office implementing the TOPS Expert system.With akquinet port consulting as well,he has moved into the area of using data for simulation and emulation purposes on the CHESSCON suite.Norbert has been a founding member of TIC4.0 since 2018 and is the Vice-President of TIC4.0,as well as a member of the Executive and Operation Councils of TIC4.0.Kevin Kruijthoff,Managing Director/Director of Product&Technology,ROUTESCANNERKevin Kruijthoff is a complexity simplifier passionate about removing waste from the logistics supply chains,with over a decade of experience in decision support system development.He drives applicable R&D with a focus on effective time to market.He holds an MSc from TU Delft in Engineering&Policy Analysis and has a broad background in development,technology and data science applications for the port and logistics realm.He worked at the Port of Rotterdam in the IT,commercial and innovation departments in various roles,from which Routescanner was initiated in 2021.He has been responsible for its product and development from the start and since the start of 2024 has acted as the Managing Director for Routescanner as a whole.Kevins mission is to empower shippers and forwarders of all sizes to find their optimal container routes.Umesh Kurlekar,VP-Head of Maritime Practice,KALE LOGISTICSUmesh Kurlekar brings with him more than 20 years of experience in port operations and shipping lines.He spearheads the CODEX Port Community System(PCS)development for global markets.Executed under his leadership,CODEX has been recognised by esteemed institutions like the United Nations,Asian Development Bank and CII for its innovation in Trade Facilitation.Smart Digital Ports of the Future 2024www.porttechnology.org14|EDITION 144Starr Long,Executive Producer,THE ACCELERATION AGENCYStarr Long has been making video games and technology for over 30 years.During his career,he helped start the MMO industry and has created some of the largest Active Digital Twins ever built.Starr was the Project Director of Ultima Online,which is now the longest-running MMO in history and holds eight Guinness World Records.Starr has led teams at Electronic Arts,The Walt Disney Company,and NCSoft.Starr currently works at The Acceleration Agency(taa.io)whose clients include Carnival Corporation,Universal,Disney,INVI Mindhealth,Circuit of the Americas,the Port of Corpus Christi and more.Thorsten Lutz,Solution Architect,PANASONIC TOUGHBOOKMobility expert since digitalisation started in mobile communication.The span is from modern networks,identification and verification to 5G smartphones with the supporting elements of services and solutions in mobile IT.Jos Andrs Gimnez Maldonado,Director of Port Logistics,FUNDACIN VALENCIAPORTJos Andrs Gimnez is an Industrial Engineer and has 17 years of experience in the logistics port sector,developing innovation and research projects focused on the fields of port logistics and maritime transport.His fields of expertise are related to increasing the efficiency of logistics and port operations through the development of Industry 4.0 models and technologies(IoT,Big Data,Artificial Intelligence,Process Automation,etc.).He has been Director of Energy and Security and he is currently developing his work as Director of Port Logistics at the Valenciaport Foundation(Port of Valencia).He is currently Secretary General of the International Association Terminal Industry Committee(TIC4.0),an entity that brings together global container terminal operators along with port machinery manufacturers and developers of digital solutions.Afshin Mansouri,Professor of Operations&Supply Chain Management,BRUNEL UNIVERSITY LONDONAfshin is a Professor of Operations and Supply Chain Management at Brunel University London.Over the past decade,he has led several projects in the area of sustainable maritime shipping.In the EU project PortForward,Afshin has successfully led the development of The Green Yard Scheduler(GYS)to enhance the sustainability and productivity of container terminals for the first implementation at the Port of Vigo in Spain.He is actively seeking to promote the reach and impact of the GYS through its pilot testing and implementation in other ports.Ori Marom,Program Manager of New-Mobility at the Innovation Department,PORT OF ROTTERDAMOri serves as a Board Director at SAE Industry Technologies Consortia.At the Port of Rotterdam,he is responsible for the integration of connected autonomous machines,such as autonomous vessels and drones,into port systems.Before joining the port,he was a start-up entrepreneur and served on the faculty of the Rotterdam School of Management at Erasmus University.Kevin Martin,CEO,ONE DIGITAL NATIONKevin Martin is a visionary leader with extensive technology leadership experience in ports and supply chains.Kevin has diversified from pure-play consultancy,forming One Digital Nation to pioneer innovative solutions that empower organisations to harness the power of current and emerging digital technologies for strategic growth and operational excellence.Angel Martinez,Senior Product Manager,NEXTPORT.AIAngel Martinez is a Telecommunication Engineer with an extensive background in consultancy applied to Maritime Transport and Logistics,as well as applied R&D activities related to Technology.Before NextPort.ai Angel worked for companies like CapGemini or ProDevelop,providing consultancy services and developing technology for Ports and Terminals.In NextPort,as Senior Product Manager Angel leads currently a cross-functional team developing DigitalTwin and Artificial Intelligence solutions for ports.SPEAKERS ContinuedSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|15Manuel Martinez de Ubago Alvarez de Sotomayor,Business Manager&Product Strategy,NEXTPORT.AIManuel Martinez de Ubago joined Moffatt&Nichol to lead the Business Development and Product Strategy of the Technology offering,with a significant focus on NextPort as a key investment.Previously he worked at the STC Group in the Netherlands.Before that,he held positions in different private organisations in the port and logistics fields,as well as in the United Nations.He holds an MSc in Civil Engineering and another MSc in Transport&Logistics at the TU Delft,in the Netherlands.Jess Medina Blanco,Chief Information&Innovation Officer,ALGECIRAS PORT AUTHORITYJess Medina is a Telecommunication Engineer from the University of Seville,holds an MBA with a speciality in Logistics and Transportation from the IMF Business School and has a proven track record with more than 15 years of experience in the field of consulting,technology,digital transformation,and innovation,mainly focused on the logistics-port sector.He has completed his training with many certifications such as Prince2 Practitioner and ITIL Intermediate.He is currently Chief Information&Innovation Officer at Algeciras Port Authority where he joined in 2018.He is in charge of leading the digital transformation and fostering the innovation culture at Algeciras Port Authority.He is focused on the integration of business,technology and innovation to improve the ports competitiveness and offer superior quality of service.Koen Mioulet,Consultant and Founder/Secretary of Association,EUWENAKoen Mioulet(NL)graduated in Mechanical Engineering and Business Administration in 1984.After some assignments in heavy industry,he switched to telecoms and worked for employers like Ericsson,Nortel and Powerwave in the telecoms industry and notably in the wireless domain.As of 2006,he works as an independent consultant under his label UlWiMo(Ultimate Wireless Mobility).In 2021,with eight peers and specialists from the sector he founded EUWENA,the European Users of Wireless Enterprise Networks Association.The association strives for the acceleration of the ecosystem and market development in the emerging niche of private mobile networks.Massimo Nardone,Vice President of Operational Technology(OT)Security,SSH COMMUNICATIONS SECURITYMassimo Nardone serves as the Vice President of Operational Technology(OT)Security at SSH Communications Security Plc.He collected more than 29 years of working experience in the IT/OT/IoT cybersecurity environments in multiple cybersecurity leadership positions like CISO,Lead Architect,OT/IoT/IIoT Global Security Competence Leader,etc.helping many clients to understand their IT/OT/IoT/IIoT cybersecurity risks/impacts and how to mitigate them by developing and leading security programmes.He has a deep understanding and practical knowledge of security standards and frameworks like ISO2700 series,NIST series,IEC 62443,IEC 61508,ANSSI,COBIT,PCI Dss,CIS controls,HIPAA,etc.as well as security regulations and directives like GDPR,DORA,NIS2,and more.Maxim Neiser,Project Manager,HPC HAMBURG PORT CONSULTINGMaxim Neiser is a Project Manager at HPC Hamburg Port Consulting,a leading global port consultancy based in Hamburg,Germany.Maxim has over 10 years of experience in the shipping and transport industry,combining in-depth knowledge of port call optimisation and port and terminal operations.For the last three years,Maxim has been acting as Product Owner for the port call collaboration platform of the Hamburg Vessel Coordination Center GmbH a unique public and private cooperation towards port call optimisation in the Port of Hamburg.Elisa Romero Gonzlez,Environmental Technician,Works and Blue Economy Department,PORT OF VIGOElisa has been working for the Port of Vigo for five years as an Environmental Technician in the implementation of European projects developed by the port in the framework of its Blue Economy Strategy.During this time,she has participated in more than 10 innovation projects(H2020,Interreg and national calls).Prior to this,she worked for 12 years in the field of environment,waste management and circular economy,developing technical,research and training activities.Smart Digital Ports of the Future 2024www.porttechnology.org16|EDITION 144Hans Rook,Ambassador,IPCSAHans has worked in the transport and logistics sea trade sector for 52 years.He started his career at a shipping agency and having gained experience in all facets of import and export services,he was appointed to set up the ICT function in the company.He is also one of the gurus on EDI standardisationhe joined UN working groups to establish UN/CEFACT EDIFACT messages for the global sea trade industry.Having been General Manager of ICT within the shipping agency,Hans was asked to join the Rotterdam group of experts for the set-up of the Port Community System in the Port of Rotterdam.Since then,he has been working for Portbase Rotterdam until January 2019 when he retired.Hans is quite simply one of the visionaries in the development of new services to support the simplification of trade.Hans,retired from Portbase Rotterdam at the beginning of 2019 where he was senior adviser at Portbase,the Port Community System in The Netherlands.Chiara Saragani,PhD Student,CENIT(CIMNE),PORT OF BARCELONAChiara Saragani is an Industrial Engineer from the University Alma Mater Studiorum of Bologna.She joined the Centre for Innovation in Transport,CENIT,in 2022 as a PhD Student in Digitalization and Logistics in the port sector at the Port Authority of Barcelona.In the Port Authority,she works with the Innovation Department and her research is focused on new technology solutions for improving the logistics activities of the ports.In particular,she is studying Digital Twins,Artificial Intelligence and 5G connection as main topics.Arvin Singh,VP Global 5G Solutions&Innovation,VERIZON Arvin Singh is the Head of Global 5G Solutions Engineering at Verizon Business Group,where he leads a dynamic team of architects,engineers,and thought leaders.With a focus on accelerating the adoption of emerging technologies such as private wireless networks and multi-access edge compute(MEC)capabilities,Arvins team is at the forefront of delivering Verizons cutting-edge technology strategy and vision.His role involves conducting innovation workshops,designing advanced solutions,and driving impactful business outcomes by leveraging Verizons comprehensive portfolio of technological assets.With over 25 years of experience in information,communications and wireless technologies across various industry segments,Arvin brings a wealth of knowledge and expertise to his position.Karno Tenovuo,CEO,AWAKE.AIKarno Tenovuo has been in the marine business since 2004 and launched several groundbreaking solutions to the market.Now he is the CEO of Awake.AI.For the first seven years of his career,he worked at the Finnish shipyards leading R&D and business development.Then he started his own company and Rolls-Royce became one of his customers and was soon offered a global role heading business development and strategy based in Norway.Two weeks after starting in that role,Karno started the research on future ship operations and then grew that into the Ship Intelligence business where was the SVP and P&L owner.Some highlights include a project with Maersk&Svitzer that demonstrated the worlds first remotely controlled commercial vessel,Stena and MOL cooperation around an intelligent awareness system,Safer Vessel with Autonomous Navigation(SVAN)project with Finnferries that was the first autonomous commercial ship demonstration in the world.Then he realised that smart ships cannot interact with the rest of the logistic chain unless the needed digital handshakes are being developed and linked to an open platform.And so,Awake.AI was born.Joeri Tranchet,COO,CITYMESHJoeri Tranchet is the Chief Operating Officer at Citymesh,where he is responsible for driving operational strategy and optimising business processes.With extensive experience in technology and operations management,he plays a key role in strengthening Citymesh as a leading telecom operator in Belgium.Joeri focuses on enhancing efficiency and fostering innovation,enabling the company to deliver high-quality connectivity solutions across various sectors.His leadership is a driving force behind the successful implementation of advanced technologies within the organisation.SPEAKERS ContinuedSmart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|17Boris Wenzel,President,TIC 4.0Boris is a seasoned CEO with a strong focus on strategy and change management.He has 20 years experience in senior leadership positions in Asia and Europe backed by early experience as a turn-around specialist and a proven track record in building successful teams and creating shareholder value.He has multi-industry,multi-company and multi-continent experience in diverse cultural environments and solid experience representing the interests of financial institutions and PE-type investors.He is a passionate communicator who can build trust and convince stakeholders to envision and support important transformations of the business or of the industry.Boris holds extensive negotiation and lobbying experience dealing at the top governmental levels in Europe,Asia and South America,as well as EU institutions.Graham Wilde,Head of 5G Business Development,THREE GROUP SOLUTIONSGraham Wilde is Head of 5G Business Development at Three Group Solutions,a global telecoms unit of CK Hutchison.He is responsible for Private Network development coordination across the Hutchison Group of mobile operators.He also works closely with Hutchison Ports on digitisation and automation projects across the companys ports in 27 countries.Prior to joining Three Group Solutions,Graham was Managing Director at UK Broadband,a company which had been acquired by Three UK,and operates private 4G networks at the Port of Felixstowe,Heathrow Airport and the Port of Immingham in the UK.His earlier career was spent at Logica UK(now CGI),Nortel Networks Hong Kong,and as an independent consultant in telecommunications.He has a bachelors degree in Experimental Psychology from the University of Oxford,UK.He once played the drums for the late Curtis Mayfield.Eyal Zor,Co-founder and CEO,AIRWAYZEyal has more than 20 years of experience with unmanned vehicles and airspace management.Before founding Airwayz,Eyal served in the IAF as an Airborne Air-Traffic Controller,ranked major(res.),and also has Previous experience in the Autonomous drones industry.Eyal holds a B.A in Business&Economics from Berkeley California&IDC Herzliya.Investment in InfrastructureProcess AutomationDigitalization/Digital TransformationArtificial Intelligence Cybersecurity/SafetyDigital Twin TechnologyPort Call Optimization5G/ConnectivityDecarbonization Future Trends and Global Outlookpts-north-Hilton Norfolk The Main,Norfolk,Virginia,USAKey Topics:19-21NOVEMBERStep into the Epicenter of Innovation!Connect,Discover,and Network atthe first-ever Port Technology Summit North America.WHY CHOOSE US?pts-north-Hilton Norfolk The Main,Norfolk,Virginia,USAFREE TO ATTEND FOR PORTS&TERMINALS!Host PartnerGold SponsorsSilver SponsorsBronze SponsorsThe Port Technology Summit North America is coming to the Hilton Norfolk The Mainin Norfolk,Virginia,on 19 21 November following the success of last years CTACNorth America 2023.Bringing together our global community of C-level industry professionals from ports,terminals,and technology solution providers,PTS North America boasts three daysof exclusive keynotes and insightful panel discussions on the industrys keychallenges and developments.With an extended agenda,larger conference and exhibition spaces,more attendeesthan ever before,and high-quality service for all participants,we invite you to be apart of the celebration of our industry-leading events.UNITING NORTH AMERICANUNITING NORTH AMERICANUNITING NORTH AMERICANPORTS AND TERMINALSPORTS AND TERMINALSPORTS AND TERMINALSEARLY BIRDEARLY BIRDEARLY BIRDTICKETSTICKETSTICKETSAVAILABLEAVAILABLEAVAILABLELunch SponsorExhibitorsTRANSFORMING PORTS WITH PRIVATE 5G NETWORKS:EMPOWERING SMART PORTS 4.0Smart Digital Ports of the Future 202420|EDITION 144www.porttechnology.orgINTRODUCTIONIn the evolution towards Port 4.0,private 5G networks emerge as a cornerstone of modern industrial connectivity solutions.Tailored specifically for industrial environments,these networks offer unparalleled advantages over traditional wired or Wi-Fi setups.They are meticulously optimised for IoT applications,boasting low energy consumption,fortified data security,and robust support for high connection densities.IMPORTANCE OF PRIVATE 5G NETWORKS IN SMART PORTSSmart ports epitomise the need for resilient network infrastructures capable of managing vast streams of data from interconnected workers and machinery such as cranes and vehicles.A private 5G network stands out by delivering the necessary bandwidth and minimal latency crucial for sustaining mission-critical operations.This includes enabling Digital Twins and automating asset management processes with precision and efficiency.Moreover,private 5G networks excel in facilitating seamless mobility within ports as equipment becomes increasingly interconnected,continuously generating real-time data.By minimising handover times and ensuring uninterrupted data flow,5G networks enhance operational efficiency across the ports extensive infrastructure.This capability supports swift and continuous communication,optimising resource allocation and enhancing overall productivity.THE IMPACT OF PRIVATE 5G NETWORKS ON PORT OPERATIONSThe convergence of private 5G networks,IoT advancements,and automation marks a revolutionary shift in maritime logistics and port operations.Ports,as pivotal hubs in global trade and logistics networks,are embracing these technologies to elevate operational efficiencies,streamline resource management,and fortify safety measures.This white paper delves into the transformative impact of private 5G networks on smart ports,exploring their benefits,navigating implementation challenges,and outlining future prospects.Mehdi Quraishi,Director,Verizon Business“IN THE ERA OF SMART PORT 4.0,PRIVATE 5G IS THE BACKBONE THAT ENABLES THE SEAMLESS INTEGRATION OF ADVANCED TECHNOLOGIES,ALLOWING PORTS TO OPERATE SMARTER,FASTER,AND GREENER.”Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|21EXPLORING INDUSTRY 4.0 POTENTIAL:KEY USE CASES FOR SMART PORTSIn this section,we delve into five pivotal use cases that highlight the transformative potential of Industry 4.0 technologies in smart ports.While these examples are impactful,they represent just a glimpse into the vast array of possibilities for enhancing smart port operations.1.REMOTE-CONTROLLED SHIP-TO-SHORE CRANESTraditionally,remote-controlled ship-to-shore(STS)cranes rely on a mix of WiFi and fibre optic connections.However,fibre optics are prone to damage and expensive to repair,leading to higher operational costs and safety risks.By fully digitalising information exchange among the remote operator,checker,and deckman,a robust private 5G network enables seamless integration and real-time control of STS cranes from a centralised control room,ensuring efficient and streamlined dockside operations.Implementation Requirements To fully leverage the capabilities of private 5G networks,each dockside container crane needs to be equipped with advanced technologies:3D Sensors:These sensors provide detailed spatial awareness,crucial for the precise control of crane movements.HD Cameras:Numerous high-definition cameras are necessary to provide real-time video feeds to the remote-control room,ensuring clear visibility of crane operations.Optical Character Recognition(OCR):OCR technology is used to identify containers,reducing the need for manual checking and speeding up the handling process.Key Benefits of Private 5G for STS Cranes Real-Time Control:With low latency and high bandwidth,private 5G networks facilitate real-time control of STS cranes,ensuring precise and responsive operations.Enhanced Operational Efficiency:The seamless integration of information exchange allows for more efficient dockside operations,reducing downtime and increasing throughput.Improved Safety:Reliable 5G connectivity minimises the risk of sudden communication failures,thereby enhancing the safety of port workers and equipment.2.AUTOMATED GANTRY CRANESAutomated gantry cranes are integral to the efficient functioning of modern ports.These cranes,which move containers to and from ships,trucks,and storage areas,are pivotal for handling the immense volume of cargo that passes through ports daily.Traditionally,these cranes have relied on wired and WiFi connections,which pose significant limitations.The adoption of private 5G networks can revolutionise the operations of automated gantry cranes,offering improved efficiency,reliability,and safety.Implementation Requirements To maximise the benefits of private 5G networks,automated gantry cranes should be equipped with the following technologies:Advanced Sensors:High-precision sensors for real-time monitoring of crane operations and environment.HD Cameras:Cameras to provide live video feeds to control centres,ensuring accurate and safe crane operations.Machine Learning Algorithms:Integrated with private 5G,these algorithms can analyse data in real time to predict maintenance needs and optimise crane movements.Key Benefits of Private 5G for Automated Gantry Cranes Enhanced Real-Time Control:The low latency of private 5G networks ensures that automated gantry cranes can be controlled in real time,enabling precise and swift operations.Increased Operational Efficiency:With high-bandwidth connectivity,large amounts of data from sensors and cameras can be transmitted seamlessly,optimising crane movements and reducing idle times.Improved Reliability and Safety:The robust and secure nature of private 5G networks minimises the risk of connectivity failures,enhancing the overall safety and reliability of crane operations.Cost-Effective Maintenance:Eliminating the need for extensive wired infrastructure reduces maintenance costs and operational downtime.3.AUTOMATED GUIDED VEHICLES(AGVS)Automated Guided Vehicles(AGVs)are revolutionising port operations by automating the movement of containers and cargo within the port terminal.These driverless vehicles enhance efficiency,reduce labour costs,and improve safety.However,the successful deployment and operation of AGVs depend heavily on a reliable and high-performance communication network.Private 5G networks provide the ideal solution,offering the necessary bandwidth,low latency,and robust connectivity required for optimal AGV performance.Challenges with Traditional Technologies Connectivity Reliability:WiFi networks can suffer from interference and limited coverage,leading to communication dropouts that disrupt AGV operations.Smart Digital Ports of the Future 2024www.porttechnology.org22|EDITION 144 Latency Issues:High latency in traditional networks can result in delayed responses from AGVs,affecting their precision and efficiency.Scalability Limitations:Traditional networks struggle to handle the high density of connected devices in a port environment,limiting the scalability of AGV deployments.Security Concerns:Ports need secure communication channels to protect sensitive operational data from cyber threats,which traditional networks may not fully guarantee.Implementation Requirements To fully leverage private 5G networks for AGV operations,ports need to equip their AGVs and infrastructure with the following technologies:Advanced Sensors:Equipped with various sensors,AGVs can collect real-time data on their surroundings,operational status,and cargo conditions.HD Cameras:High-definition cameras on AGVs provide live video feeds for remote monitoring and control,enhancing operational oversight.Machine Learning Algorithms:Integrated with 5G,these algorithms can process real-time data to optimise AGV routes,predict maintenance needs,and improve overall efficiency.Key Benefits of Private 5G for AGVs Seamless Connectivity:Private 5G networks offer consistent and reliable connectivity across the entire port,minimising communication dropouts and ensuring continuous AGV operation.Ultra-Low Latency:With latency as low as 1 millisecond,private 5G networks enable real-time control and immediate response to commands,crucial for the precise operation of AGVs.High Bandwidth:The high data transfer rates of 5G networks support the transmission of large volumes of data from AGV sensors and“THE CONVERGENCE OF PRIVATE 5G NETWORKS,IOT ADVANCEMENTS,AND AUTOMATION MARKS A REVOLUTIONARY SHIFT IN MARITIME LOGISTICS AND PORT OPERATIONS.”Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|23cameras,facilitating advanced analytics and real-time decision-making.Enhanced Security:Private 5G networks provide robust security features,protecting AGV communications from cyber threats and ensuring data integrity.Scalability:Private 5G networks can support a high density of connected devices,allowing ports to scale up their AGV fleets without compromising performance.4.CONDITION MONITORING SYSTEMSCondition monitoring systems are critical for maintaining the operational health of port infrastructure and equipment.These systems continuously collect and analyse data on the condition of machinery,structures,and vehicles,enabling predictive maintenance and preventing costly downtime.The implementation of private 5G networks significantly enhances the capabilities of condition monitoring systems by providing reliable,high-speed,and low-latency communication essential for real-time data processing and decision-making.Challenges with Traditional Technologies Data Latency:Traditional networks often suffer from high latency,leading to delays in data transmission and processing,which can impact the timely detection of potential issues.Smart Digital Ports of the Future 202424|EDITION 144www.porttechnology.org Limited Coverage:WiFi and wired networks may not provide comprehensive coverage across extensive port areas,resulting in gaps in monitoring and data collection.Scalability Issues:Traditional network infrastructures struggle to handle the high volume of data generated by numerous sensors and monitoring devices deployed across the port.Security Vulnerabilities:Ports require secure communication channels to protect sensitive operational data from cyber threats,a challenge for older network technologies.Implementation Requirements To effectively utilise private 5G networks for condition monitoring,ports need to deploy the following technologies:Advanced Sensors:Sensors capable of monitoring various parameters such as temperature,vibration,pressure,and humidity,providing comprehensive data on the condition of equipment and infrastructure.Edge Computing:Integration of edge computing devices to preprocess data at the source,reducing latency and bandwidth usage by transmitting only relevant data to central systems.Analytics Software:Software platforms capable of real-time data analysis,predictive maintenance algorithms,and automated alerts to ensure timely intervention and maintenance.Key Benefits of Private 5G for Condition Monitoring Systems Real-Time Data Transmission:Private 5G networks enable instant data transmission from sensors and monitoring devices to central control systems,allowing for immediate analysis and response.Comprehensive Coverage:Private 5G networks provide extensive and reliable coverage across the entire port,ensuring that all areas and assets are continuously monitored.High Data Throughput:The high bandwidth of 5G networks supports the transmission of large volumes of data,essential for detailed condition monitoring and predictive analytics.Enhanced Security:Private 5G networks offer robust security features,ensuring that data collected from monitoring systems is protected from cyber threats.Scalability:Private 5G networks can support a large number of connected devices,allowing for extensive deployment of condition monitoring sensors without performance degradation.5.DRONES FOR SURVEILLANCE AND DELIVERIESDrones have emerged as versatile tools in port operations,serving dual purposes of surveillance and logistics.With the integration of private 5G networks,drones equipped for surveillance and deliveries can enhance security measures and operational efficiency within ports.This use case explores how private 5G networks enable real-time data transmission,precise control,and secure communication for drones operating in port environments.Challenges with Traditional Technologies Limited Range and Coverage:Traditional drone communication technologies,such as WiFi or standard cellular networks,often have limited range and coverage,restricting their operational capabilities within large port areas.Latency Issues:Delayed data transmission can impact the effectiveness of real-time surveillance and logistics operations,compromising response times and decision-making.Security Concerns:Standard networks may lack the robust security measures required to protect sensitive data transmitted between drones and control centres,posing risks to operational integrity.Key Benefits of Private 5G for Drones in Ports Real-Time Surveillance:Private 5G networks enable drones to stream high-definition video and sensor data in real-time to port security centres,enhancing monitoring capabilities and threat detection.Precise Navigation and Control:Low-latency communication ensures precise control of drones,allowing operators to manoeuvre effectively around port infrastructure and obstacles.Extended Range and Coverage:Private 5G networks provide broader coverage across the port area,enabling drones to operate over larger distances without signal degradation.Enhanced Security:Advanced encryption and authentication protocols in private 5G networks protect data transmission between drones and control centres,safeguarding sensitive information.CONCLUSIONPrivate 5G networks are poised to revolutionise smart ports,offering unparalleled connectivity solutions tailored for Industry 4.0 applications.By integrating private 5G,ports can enhance operational efficiency,improve safety protocols,and pave the way for future innovations in global trade and logistics networks.The benefits span from real-time control of critical operations to enhanced data security and scalability,ensuring that smart ports remain at the forefront of industrial innovation.As smart ports continue their evolution towards greater automation and efficiency,private 5G networks will play a pivotal role in unlocking new possibilities Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|25and efficiencies.Embracing this technology is not just a step towards digital transformation but a strategic move to future-proof port operations amidst evolving industry demands and technological advancements.ABOUT THE AUTHOR:Mehdi Quraishi is the Director of 5G,Edge Solutions,and Innovation at Verizon Business Group,leading a team that drives the adoption of private networks and multi-access edge computing.He spearheads Verizons cutting-edge technology strategy,designing advanced solutions to achieve impactful business outcomes.With over 25 years of experience in ICT and wireless,Mehdi is a recognised industry leader,deeply committed to advancing 5G and fostering innovation.ABOUT THE COMPANY:Verizon Communications Inc.(NYSE,Nasdaq:VZ)powers and empowers how its millions of customers live,work and play,delivering on their demand for mobility,reliable network connectivity and security.Headquartered in New York City,serving countries worldwide and nearly all of the Fortune 500,Verizon generated revenues of$134 billion in 2023.Verizons world-class team never stops innovating to meet customers where they are today and equip them for the needs of 5G NETWORKS ARE POISED TO REVOLUTIONISE SMART PORTS,OFFERING UNPARALLELED CONNECTIVITY SOLUTIONS TAILORED FOR INDUSTRY 4.0 APPLICATIONS.”26|EDITION 144www.porttechnology.orgSmart Digital Ports of the Future 2024SMART PORTS:HOW 5G AND IOT CAN REVOLUTIONISE GLOBAL TRADE“5G SERVES AS THE CONNECTION THAT LINKS HUMANS,DATA,CARGO,AND MACHINERY IN REAL TIME AND WITH TOTAL OPERATIONAL VISIBILITY.”Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|27Ports and harbours are the lifeblood of global trade,handling the vast majority of the worlds freight.The integration of cutting-edge technology,specifically the Internet of Things(IoT)and 5G,is set to revolutionise these essential nodes in the supply chain,transforming them into“Smart Ports”.THE SHIPPING FORECASTPorts and harbours serve as pivotal channels for trade,freight,and logistical operations.Facilitating the transportation of cargoes such as oil,bulk commodities,perishables,and standardised containers,they are a linchpin of international supply chains.Keeping operations running smoothly and trade buoyant is already a complicated challenge.Port and harbour operators need to coordinate a vast network of vehicles,equipment,systems,people,and machineryboth onshore and offshore.With so many moving parts,clear communication,accurate logistical movement,and timely actions are of the highest importance.CHALLENGES AHEADGlobal freight demand is expected to triple by 2050,significantly increasing the complexity and risks of port operations.This surge necessitates improved asset visibility and optimised yard and terminal operations.With the expected 50 per cent increase in cargo throughput at EU ports by 2030,the safety and efficiency of port operations will be paramount.From a technological perspective,the challenge lies in fortifying and transforming digital infrastructure and operations to better navigate this escalating demand and volume of trade.The solution,or at least a crucial part of it,lies in the development of Smart Ports,fuelled by the integration of cutting-edge technology and data into every aspect of operation.SMART PORTS AND IOTPorts are undergoing a digital transformation,driven by the need for operational efficiency,cost reduction,and enhanced safety measures.IoT has emerged as a key enabler in this transformation,offering real-time monitoring and management of assets,including terminal tractors,reach stackers,container handlers,cranes,containers,lorries,and personnel.IoTs ability to connect sensors,data streams,and digital devices allows for comprehensive visibility and management of all terminal operations,significantly enhancing efficiency and reducing the risk of unexpected downtime.RISING DATA DEMANDSAs powerful as the benefits of IoT are,the scale of rollout needed to link all the necessary elements of ports and harbours comes with significantly greater connectivity demands.Additionally,the physical nature of ports and harbours brings further challenges that encumber mobility and impede the efficacy of these technologies.Due to the size of ports,tracking the movement of containers,vehicles,people,and equipment requires a network that can span several kilometres and keep devices and sensors always connected.But scale is only half the battle.The constant movement of dense,bulky objects can obstruct signals and interrupt data connections.Dead spots can appear “out of nowhere”,causing unexpected disruption and delays,as well as safety issues.Thorsten Lutz,Solution Architect Panasonic TOUGHBOOKSmart Digital Ports of the Future 2024www.porttechnology.org28|EDITION 144WiFi and Bluetooth simply arent designed to support networks of this size and nature.Likewise,using public cellular 4G networks for communication isnt a viable option either.A lack of reliability and control,having to share the network with other users in the vicinity,and the uncontrollable variable of security vulnerabilities are just some of the limitations and concerns that would make it unfeasible.The benefits of a fully connected asset ecosystem within ports and the wider supply chain are clear to see.However,achieving this in practical terms is not without its challenges.To fully capitalise on the power of IoT and usher in a new era of Smart Ports requires a network that goes beyond the capabilities of WiFi,Bluetooth,or 4G.5G PRIVATE NETWORKS:THE BACKBONE OF SMART PORTS5th-generation wireless technology(5G)enhances the speed and efficiency of communication between devices,leading to higher mobility and seamless real-time applications.This allows for more efficient use of network resources,improved network slicing capabilities,and better support for massive IoT deployments.However,theres an important distinction to make between 5G standalone(5GSA)and 5G non-standalone(5GNSA).With 5GSA,both the core network and the radio access network are designed specifically for 5G technology,enabling advanced features and capabilities.In contrast,5GNSA,which initially used the 4G infrastructure for certain functions,the optimised 5G network architecture of 5GSA offers faster data speeds,lower latency,and improved network efficiency.Relying on public 5G networks can bring many of the same competition,security and control limitations associated with 4G networks.ADVANTAGES OF PRIVATE 5G NETWORKS5G serves as the connection that links humans,data,cargo,and machinery in real time and with total operational visibility.This enables a new platform for swift and seamless exchanges between vessels,dock teams,harbour control centres,and beyond.Real-time updates on shipment status,precise location details,and the condition of items in transit emerge as an intrinsic feature,catalysing improved asset tracking“POWERED BY A 5G PRIVATE NETWORK,THE INTERCONNECTION OF EVERY FACET OF HARBOUR ACTIVITY,FROM THE BUSTLING TERMINALS TO MARITIME VESSELS,CAN USHER IN A NEW FUTURE OF SMART PORTS.”www.porttechnology.orgEDITION 144|29Smart Digital Ports of the Future 2024and elevating operational efficiency to unprecedented levels.Extending this vision beyond the confines of the port perimeter,a wider communication layer that knits together more disparate parts of the supply chain can provide even greater visibility and offer all parties the benefits of real-time tracking and status updates.Likewise,the sharing of information with other businesses,services,and residents in the ports local area can alleviate congestion,improve traffic,and mitigate environmental impacts.Powered by a 5G private network,the interconnection of every facet of harbour activity,from the bustling terminals to maritime vessels,can usher in a new future of Smart Ports.THE CRUCIAL ROLE OF 5G MOBILE DEVICES IN SMART PORTSConnecting all the moving parts of port and harbour operations is only useful if the information is accessible in real time and actionable by those on the ground.While many processes have been automated and digitised,people still have a massive role to play in the operation of cranes,loaders,vessels,and other equipment all over the port.For them to harness the full spectrum of advantages furnished by interconnected data,teams need powerful and portable devices to assist them wherever they go.However,ports and harbours are unforgiving environments.They are fraught with dust,rain and saltwater splashes,high vibration levels,sudden impacts,and rough handling.Wet and windy conditions,knocks,drops,and bangs,and interfacing with a variety of different vehicles and equipment are just some of the challenges that mobile devices need to overcome.Outdoor usage also brings considerations around temperaturesfrom the icy lows of winter to the blistering heat of a crane cockpit during the height of summer.Overcoming these challenges requires mobile devices that can both fully support 5G networks and withstand the outdoor conditions and hazards that typify the maritime domain.For over 25 years Panasonic has been at the forefront of rugged innovation,developing devices that are built to bring unparalleled computing power and usability to the harshest of environments.Combining a fully rugged design with built-in 5GSA connectivity and a dedicated 5G Private Network service,Panasonic TOUGHBOOK is the perfect choice for overcoming the challenges of today and unlocking the opportunities of Smart Ports of the future.CONCLUSIONThe convergence of 5G technology,modern yard management supported by video analytics and ruggedised mobile devices paves the way for Smart Ports,transforming maritime operations with unparalleled efficiency and connectivity.The realisation of this vision will significantly enhance global trade,safety,and environmental sustainability,marking a new era in port and harbour operations.ABOUT THE AUTHOR:Thorsten Lutz is a true mobility expert,serving,planning and running mobile networks in the early days of GSM(2G)already.Advising and supporting customers from rugged mobility to tablets and smartphones,on any OS.Years of experience in building and developing mobility services and solutions.ABOUT THE COMPANY:Panasonic TOUGHBOOK,a leader in rugged computing solutions,offers durable laptops,2-in-1 and tablet devices as well as accessories for harsh environments.With specialised and customised vehicle integration and 5G private networks,TOUGHBOOK ensures reliable performance for ports and harboursSmart Digital Ports of the Future 2024www.porttechnology.org30|EDITION 144Intel Core vPro processor familystaying connected when it matters mostUnmatched connectivityRugged enduranceVehicle integrationTested to MIL-STDBuilt for all conditionsDesign consultingCustom docksFully secure5G SA Capability5GConnect today.Scan the code to learn more.125114_PAN_Ports_Advert_210 x297mm_AW_v04.indd 1HARNESSING JIT SCHEDULING TO ENHANCE PORT PERFORMANCE“TO EFFICIENTLY TARGET JIT OPTIMISATION,IT IS BENEFICIAL TO UNDERSTAND AND QUANTIFY THE OPTIMISATION POTENTIAL,WHICH VARIES SIGNIFICANTLY ACROSS DIFFERENT PORTS,TERMINALS,AND CARGO TYPES.”Smart Digital Ports of the Future 202432|EDITION 144www.porttechnology.orgINTRODUCTIONIn 2024,Awake.AI won the 2024 Moroccan Smart Port Challenge to develop digital solutions for port performance improvement in collaboration with the Moroccan National Ports Agency ANP.The focus of this proof of concept development project was to enable the adoption of just-in-time(JIT)scheduling and related performance optimisations in Moroccan ports.To identify where JIT scheduling processes and tools would be most effective,Awake.AI implemented a data analytics procedure to quantify the potential benefits in selected ports.MOTIVATIONQuite often vessels need to wait before entering a port due to various reasons,such as port restrictions like bad weather or the target berth being occupied by another vessel.Vessels may wait at a designated anchorage area or move slowly near the port for extended periods while waiting for berthing.In many cases,if the actual time when the vessel can arrive at berth was known in advance,the vessels could arrive at a slower,more economical speed,thus saving fuel and money while reducing emissions.Adopting such a just-in-time(JIT)scheduling process requires a change in practices and contractual agreements from the first-come first-serve process traditionally applied in the maritime industry;this is seen by the International Maritime Organization(IMO)as a significant part of port call optimisation and making the industry more sustainable.To efficiently target JIT optimisation,it is beneficial to understand and quantify the optimisation potential,which varies significantly across different ports,terminals,and cargo types.DATAIn this study,an analysis was performed in selected Moroccan ports using AIS(Automatic Identification System)and port restriction data for the year 2023.Port restrictions included time windows during which incoming traffic to the port was restricted,for example,due to strong swell or wind.All commercial vessels transmitting AIS data were included in the analysis.Figure 1 shows an example of the AIS vessel location updates near a port,with the point colours indicating vessel speed over ground;anchorage areas,fairways,and berth positions are clearly visible from the location history.ANALYSISBerth and anchorage areas and their usage were determined from the AIS data.The areas were found by recognising locations where the vessels were at anchor or moored according to their AIS navigation status.Separate areas were distinguished using a clustering algorithm,and the bounding area polygons were determined by forming a convex hull over the vessels included in each cluster,taking into account the vessel dimensions reported in AIS data.Berth and anchorage visits for each vessel were determined using the observed berth and anchorage areas and the AIS location data timeline.Vessel speed and orientation values were also utilised when determining whether a data point was part of a continuous berth or anchorage visit.JIT potential was estimated using a large area encompassing all the observed circling paths Dr.Petra Virjonen,Data Scientist,Awake.AI,and Dr.Jussi Poikonen,VP of AI&Analytics,Awake.AIFIGURE 1.Overview of AIS position update data for vessels visiting a target port.Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|33around the port(referred to as“idle area”).For each arriving vessel,the time of entering this area was detected,and it was estimated when the vessel could have been at the target berth if it had travelled the remaining path without any anchorage events or excessive manoeuvres(“earliest possible arrival time”).This estimation was based on historical arrivals and their median travel speed.In cases with port traffic restrictions,the earliest possible arrival time was adjusted forward taking into account the end time of the restriction window.The JIT potential was then calculated by noting the difference between the actual time when the berth became available and the earliest possible arrival time.Cases where the first visited berth was unoccupied at the earliest possible arrival time of the vessel were not included in the total JIT potential.Figure 2 shows an example of this analysis process for one port visit with significant estimated JIT potential.The blue line in the left-hand subfigure shows the speed over ground(SoG)of the vessel from AIS data,while the right-hand subfigure shows the corresponding vessel locations.As visible in the vessels speed and position history,before entering the anchorage,the vessel manoeuvres in the vicinity of the port.In the left-hand subfigure,the vertical black line shows the time of entry to the idle area,the green line the estimated earliest possible arrival time at berth,and the purple line the time when the target berth became available.In this case,the estimated JIT potential was almost 95 hours.RESULTSFigure 3 shows the JIT potential in hours versus the time duration spent at anchorage for each vessel arrival in one studied port.The colours of the data points show whether there was a port traffic restriction during the arrival or not.On the high level,three types of arrivals can be identified in the data,as highlighted in the Figure.In the first arrival type,the JIT potential is substantially larger than the observed anchorage duration.In these cases,the vessel has been manoeuvring or travelling very slowly within the idle area near the port.In the second arrival type,JIT potential is roughly the same as the observed anchorage duration.These vessels arrived directly at the anchorage area and then moved to berth as soon as it became available.Most of the arrivals are of this type.In the third arrival type,the JIT potential is lower than the observed anchorage duration.In these cases,for some reason,the vessels did not move to the target berth even though it had become available.Additional data on the vessels operations would be required to analyse these cases in detail.FIGURE 2.Example of positioning data and derived port call event times for one visit with significant JIT potential.Left:vessel speed over ground over time(blue dotted line),with detected events related to the port call indicated by vertical dashed lines.Right:vessel position data over the port call.FIGURE 3.Overview of waiting scenario types for one port.The vertical axis is the estimated JIT potential in hours,horizontal is the anchorage duration in hours.Each point in the figure is a single port visit,with the point colour indicating whether some port traffic restrictions coincided with the visit.Smart Digital Ports of the Future 2024www.porttechnology.org34|EDITION 144In total,the JIT potential was between 5,000 and 19,000 hours for the analysed ports,when assuming that traffic restrictions cannot be taken into account when scheduling vessel arrival times.It was found that if accurate information on port restrictions is available when planning port call schedules,the JIT potential is even greater.Figure 4 shows the cumulative ratio of berth events having JIT potential versus the observed JIT potential amount in hours for three analysed ports(marked with green,blue,and red colour).For each port,there are two lines:the solid line is calculated with the assumption that there is information available regarding the end of the port traffic restriction time windows before the port call,while in the cases marked by dashed lines,this information is assumed not to be known in advance.It can be seen that the JIT potential varies significantly by port.For example,for the port with the highest overall JIT potential shown here,more than 35 per cent of the visits have more than 10 hours of JIT potential event without considering port traffic restrictions.This port has more restrictions than the other two ports,and the potential depends also on whether there is information available on the restrictions in advance.DISCUSSIONThe results show that the JIT potential can be estimated using AIS data and that there is substantial JIT potential in the analysed ports.The JIT potential of visiting vessels cannot be determined merely by exploring anchorage durations but it is also important to consider the approach and manoeuvring behaviour of the vessels.There are some limitations to this analysis:accurate estimations on the target berth availability and port restrictions are necessary to estimate the JIT potential of an incoming vessel.It should also be noted that ports differ from each other;idle area usage and behaviour of the incoming vessels may vary,and different restrictions may affect traffic.These factors need to be taken into account and the analysis must be adjusted according to the specific features of each port.This type of analysis gives port authorities valuable information on how to enhance port operations and identify where the most significant gains can be achieved by adopting port optimisation tools.To implement JIT scheduling in practice,such optimisation tools need to include the berth planning processes of terminal operators in real time while enabling and monitoring the realisation of digital agreements between parties.ABOUT THE AUTHORS:Dr.Petra Virjonen is a Data Scientist at Awake.AI and a Senior researcher in Data Analytics at the University of Turku.She received her doctorate in Computer Science and M.Sc.in Physics,both from the University of Turku.She has coauthored publications in various fields such as maritime route prediction,forest trafficability,acoustics and sport analytics.She is interested in topics such as model sensitivity and prediction uncertainty.Dr.Jussi Poikonen is a Co-Founder and Vice President of AI and Analytics at Awake.AI and an Adjunct Professor at the University of Turku.He has previously worked as an AI development lead for remote and autonomous operations at Rolls-Royce Marine,focusing on machine learning models for situational awareness and navigation systems,and as a senior researcher in Finnish universities,publishing over 80 articles on topics such as machine learning,energy-efficient computing architectures,wireless communication systems,and emerging technologies.ABOUT THE COMPANY:Awake.AI is a Finnish optimisation platform company whose solutions are focused on developing customised AI/ML models to optimise cargo flow through the ports and reduce waiting times and emissions.Awakes AI-driven Logistics Platform is developed to bring together all maritime actors at sea,ports and land,making port operations more efficient,safe and sustainable.FIGURE 4.Overview of JIT potential overall berth visits for three analysed ports,marked by green,blue,and red lines.Solid lines indicate the potential when port restrictions are assumed to be available in schedule planning,while dashed lines indicate the potential when this is not assumed,i.e.the waiting time due to port restrictions is removed from estimated JIT potential.“THIS TYPE OF ANALYSIS GIVES PORT AUTHORITIES VALUABLE INFORMATION ON HOW TO ENHANCE PORT OPERATIONS.”Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|35DATA QUALITY AUTOMATION:THE KEY TO FUTURE-PROOFING THE MARITIME INDUSTRY38|EDITION 144www.porttechnology.orgSmart Digital Ports of the Future 2024As we all gather in Rotterdam for the eighth edition of Smart Digital Ports of the Future,it is interesting to note the key topics for discussion this yearDigital Twins,IoT,Artificial Intelligence,and the role of digitalisation in achieving sustainability goals.Each of these topics highlights the technological ambitions of the maritime industry,but they are all underpinned by a single,unifying element:Data.These technologies are not just passive users;they actively consume,transform and generate vast amounts of data.Were talking about millions of terabytes,often structured,sometimes semi-structured,but mostly unstructured.One would be forgiven for thinking that,given the critical role data plays in successful technology adoption,achieving goals,gaining a competitive edge,and even in day-to-day operations,good quality data would be a top priority for every organisation.And yet,for many,it continues to be as elusive as it is essentiala challenge that demands urgent attention if we are to fully realise the potential of these emerging technologies.Why is that?The complex nature of data is one answer,but there are more fundamental challenges.The cost of implementing and maintaining Data Quality Management systems;skills,processes,and resource requirements;data silos;integration challenges;the sheer volume of dataall of these combine to complicate efforts to create a cohesive data strategy.Often,though,data initiatives are hindered by established organisational habits and a reluctance to change.The picture isnt all bleak,though.The opportunities that mastery of data quality presents are substantial.Properly executed,data governance and Data Quality Management can be transformational.Among the many benefits,accurate data enables informed decision-making,enhances operational efficiency,and ensures regulatory compliance.The cultural shift required for good data management empowers organisations to be more innovative,proactively adapting to shifting market conditions.Well-managed data is more secure,can support sustainability objectives,and translates into measurable business outcomes.The statistics speak for themselves.According to Forrester Consulting.58 per cent of companies focussing on data are more likely to beat revenue goals than those that do not.BARC reports that businesses using data for decision making see,on average,a 10 per cent decrease in overall costs,with 69 per cent citing better strategic decisions,54 per cent reporting improved control of operational processes,and 52 per cent reporting a better understanding of customers.The stakes are high,but clearly,so are the rewards.Overcoming these challenges not only unlocks Kevin Martin,CEO,One Digital Nation“PROPERLY EXECUTED,DATA GOVERNANCE AND DATA QUALITY MANAGEMENT CAN BE TRANSFORMATIONAL.”Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|39the opportunities of today but also sets the stage for the adoption of advanced and emerging technologies that can transform the industry.But how can these obstacles be addressed?Do you remember every piece of Smart Port literature you ever read,that cited automation as one of the key technologies of a Smart Port?Traditionalists may associate automation with yard equipment and cargo movements,but just as automation continues to revolutionise physical operations,it is also transforming digital processes,such as Data Quality Management.For many,the barriers to entry into the world of good data quality are falling fast,most significantly the high costs of implementation and maintenance.Traditional approaches often require substantial investment in technology and highly skilled resources,putting them out of reach for smaller organisations or those operating lean teams.New methods democratise data management by leveraging advanced technologies to handle many of the more complex tasks that were traditionally handled by specialists.This makes the Data Quality Management role accessible to more employees,simplified to a level where data management duties can be adopted alongside,or as part of,a more traditional role.New systems are also designed to be user-friendly,adopting intuitive interfaces and automated workflows that reduce the dependency on technical expertise.By empowering employees with the tools to efficiently perform data quality tasks and by reducing the need for extensive training or specialised staff,Data Quality Management is now a more cost-effective exercise,even for organisations with limited budgets and resources.“JUST AS AUTOMATION CONTINUES TO REVOLUTIONISE PHYSICAL OPERATIONS,IT IS ALSO TRANSFORMING DIGITAL PROCESSES,SUCH AS DATA QUALITY MANAGEMENT.”Smart Digital Ports of the Future 202440|EDITION 144www.porttechnology.orgOvercoming costs is a significant achievement.One would expect integration with legacy systems,such as those commonly found in ports and terminals,to be much more challenging.In fact,the task is far less daunting than it once was.Those legacy systems are typically built on similar proprietary database technologies,such as Oracle,SAP HANA and SQLall of which offer standard connectors that facilitate easy integration with third-party applications.New tools break down data silos with multiple connections into discrete systems.Centralised data management,regardless of source,enhances overall data coherence,simplifies the application of governance policies,facilitates data integration,and supports data consistency,setting businesses on the path to Master Data Management.With integration challenges addressed,the next logical concern is how to manage the ever-increasing volume of data.After all,if people are good at one thing,it is hoarding vast amounts of data that is often duplicated,obsolete,redundant,or of no real value to the business.Once again,new tools rise to the challenge.It would take one employee 5,000 years to read one terabyte of data.Modern applications index it and turn it into a searchable resource in a matter of hours.Speed and accuracy are critical in the modern business environment,and timely access to reliable data is a crucial competitive advantage.Automated tools perform data quality tasks around the clock,giving organisations the comfort that data is accurate,up-to-date and ready for use in the decision-making process.In many ways,the principles that ports and terminals have applied to improve the management,maintenance,and operation of their physical equipment translate seamlessly to the digital realm.Concepts such as asset management,preventive maintenance,automation,and standardisationthe bedrock of efficient and reliable terminal operationsare just as relevant to digital assets,including systems and data.If Data Quality Management is the equivalent of Asset Management,then monitoring and cleansing represent preventive maintenance,and where automation of the physical yard equipment reduces manual labour and increases safety,Automated Data Quality Management also reduces effort,reduces errors,and improves the overall safety of the business from a security perspective by helping to control access to data assets.With the exponential growth of global data expected to reach 463 zettabytes by 2030,the need to adopt robust Data Quality Management strategies has never been greater.The sheer volume of datamuch of it unstructuredcreates a significant challenge that cant be addressed through traditional means and is only going to become greater.Moreover,increasing global regulationsuch as GDPR and CCPAmakes data accuracy and compliance no longer a nice-to-have but a critical business necessity.The cost of poor-quality data is staggering.Gartner,Inc.,a global research and technology consulting firm specialising in Smart Digital Ports of the Future 2024www.porttechnology.orgEDITION 144|41IT and supply chain functions,estimates it at$15 million per year for large organisations.That doesnt only relate to financial losses,but also to lost opportunities,operational inefficiencies,and the erosion of trust that underpins decision-making.Put simply,the costs of poor data management are now too high to ignore.If that isnt enough incentive,monetisation opportunities are beginning to emerge.Creators of large language models(LLMs)are reaching the limits of available data to train their systems on and considering the possibilities of synthetic data.Yet,the publicly available internet data they have been using until now represents less than half of the data in existence.These organisations,and others like them,are hungry for accurate,clean,and unique data in areas such as finance,healthcare,manufacturing,and logistics to train models for specific applications.The ability to capitalise on those opportunities could be a competitive advantage in an increasingly data-driven economy.The adoption of data governance and the automated tools that support it is not just a tactical response to the challenges of modern business,but a strategic imperative that will define the future success of strategic digital,sustainability,and growth initiatives.It will in turn support the advanced technologies that will drive innovation in the industry.Automated Data Quality Management empowers organisations with the tools to maintain data at scale,enabling them to proactively adapt to changing market and regulatory conditions.Incorporating Automated Data Quality Management into a data management strategy future-proofs the business,enabling it to leverage emerging technologies and drive long-term sustainable growth through enhanced decision making.As organisations navigate the complexities of the digital age,their ability to manage data effectively will determine their success.In short,Automated Data Quality Management is not just the key that unlocks the full potential of organisational data,but a competitive edge that will position the organisation as a leader in tomorrows data-driven economy.ABOUT THE AUTHOR:Kevin Martin is a visionary leader with extensive technology leadership experience in ports and supply chains.Kevin has diversified from pure-play consultancy,forming One Digital Nation to pioneer innovative solutions that empower organisations to harness the power of current and emerging digital technologies for strategic growth and operational excellence.ABOUT THE COMPANY:One Digital Nation is an independent technology partner with three decades of experience in the application of digital solutions in commercial environments,including ports,terminals,supply chains,utilities and smart cities.They work with technology partners to provide proven,practical,digital solutions that deliver tangible results.The company also provides a range of business consulting and technology outsourcing services to support ports and terminals with IT Strategy,Business Process Analysis and Design,Process Automation,IT Programme and Project Delivery,Software Development Lifecycle,Data Quality Management and Business Change.“THE ABILITY TO CAPITALISE ON THOSE OPPORTUNITIES COULD BE A COMPETITIVE ADVANTAGE IN AN INCREASINGLY DATA-DRIVEN ECONOMY.”Smart Digital Ports of the Future 2024www.porttechnology.org42|EDITION 144
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E-bikes:Charging Toward Compact Cycling CitiesACKNOWLEDGEMENTSAUTHORS:Dana Yanocha ITDPJonas Hagen Independent ConsultantResearch and drafting support provided by Evelyn YuenCOVER PHOTO:It is common to find electric and mechanical bicycles on Bogots bicycle lanes during rush hour.SOURCE:ITDPEXPERTS INTERVIEWED:The authors thank the following experts who generously provided their time and insights during the interview phase,which strengthened the quality of this report.Benjamin Hategekimana ITDP AfricaDanielle Hoppe ITDP BrazilShanshan Li ITDP ChinaQiuyang Lu ITDP ChinaMega Primatama ITDP IndonesiaCiptaghani Antasaputra ITDP IndonesiaSyifa Maudini ITDP IndonesiaDeliani Siregar ITDP IndonesiaPhilip Amaral European Cyclists Federation(ECF)Noa Banayan PeopleForBikes (formerly)Jules Flynn Zoomo ITDP BoardDaniel Guth Aliana BikeJustine Lee ITDP BoardMichael Linke Independent ConsultantMike Salisbury Denver Office of Climate Action,Sustainability,and Resiliency(CASR)Caroline Samponaro LyftSeble Samuel Transport Decarbonization Alliance and ITDP BoardSonal Shah The Urban CatalystsTejus Shankar LyftCeri Woolsgrove European Cyclists Federation(ECF)Published March 2024Support for this report was generously provided by Climateworks Foundation.REVIEWERSCiptaghani Antasaputra ITDP IndonesiaBernardo Baranda ITDP MexicoShelley Bontje Dutch Cycling EmbassyJules Flynn Zoomo ITDP BoardCamila Herrero C40 RodriguezDanielle Hoppe ITDP BrazilChris Kost ITDP AfricaJacob Mason ITDP GlobalLarry Pizzi Alta Cycling GroupAshley Seaward PeopleForBikesTejus Shankar LyftDeliani Siregar ITDP IndonesiaAV Venugopal ITDP IndiaLi Wei ITDP ChinaJonathan Weinert 2 Billion Bikes FoundationCeri Woolsgrove European Cyclists Federation(ECF)CONTENTSE-BIKES:CHARGING TOWARD COMPACT CYCLING CITIESI.INTRODUCTION4Unlocking the Potential of E-Bikes for Climate,Equity,and Access in Cities Integration with the Built Environment Potential for Carbon Reductions Improving Access and Equity Stimulating Economic Opportunities A Growing Market8 Context for this ReportII.WHAT IS AN E-BIKE?Defining E-Bikes Classification of E-Bikes Around the WorldFostering E-Bikes in Indonesia,a Nascent MarketCreating Clarity in Brazil,an Emerging MarketThree Classes of E-bikes in the United States,an Emerging MarketRefining E-Bike Classifications in China,a Developed Market14III.WHAT IMPACTS CAN E-BIKES DELIVER?Climate Impacts Decarbonizing the Transport Sector by Replacing Car Trips Estimating the Climate Impacts of a Large-Scale Global Shift to E-Bikes Access ImpactsExpanding Access to Affordable,Clean TransportationProviding Alternatives for Underserved Groups Economic ImpactsProviding Economic Opportunity for Delivery WorkersUnlocking Domestic ManufacturingIV.SEVEN KEY BARRIERS TO E-BIKE UPTAKE23V.RECOMMENDATIONS TO SUPPORT E-BIKE UPTAKE284I.INTRODUCTIONUnlocking the Potential of E-Bikes for Climate,Equity,and Access in CitiesElectric bicycles(e-bikes)are vastly popular with their owners,and their use is growing by leaps and bounds around the world.For the purposes of this report,we define e-bikes as electrically powered two-and three-wheeled cycles that are compatible in terms of size and maximum speed with conventional(nonmotorized)bicycles.Our definition of e-bikes does not include electric scooters or motorcycles(see Section II for a more complete definition).E-bikes have multiple positive impacts for the climate and access(see Section III),especiallywhen used in place of private vehicles like cars and motorcycles:Integration with the Built EnvironmentE-bikes are cleaner,quieter,and more space-efficient,and they integrate better into citystreets than cars and internal combustion engine(ICE)two-wheelers.They have the potentialto provide excellent mobility optionsfor people in cities,and for those living in more periph-eral urban and even rural areas too.Potential for Carbon ReductionsThe potential for e-bikes to replace automobile(and,to some extent,ICE two-wheeler)trips is greater than for traditional bicycles,with electric motors reducing the challenges of hills,hot weather,and longer distances.E-bikes can also greatly expand the share of potential users of public transport,leading to further emissions reductions.This makes e-bikes a key piece in the puzzle of reducing carbon emissions from urban transport.Improving Access and EquityE-bikes have the potential to improve access to destinations particularly for historicallyunderserved groups,including women,the elderly,and low-income populations given theirlow cost(relative to cars)and ease of use.Shared e-bikes as part of bikeshare systems are alsobeing used at much higher rates compared to conventional bikeshare bicycles.SOURCE:City of Durham NCvia Flickr5Stimulating Economic OpportunitiesThe domestic production of e-bikes is an opportunity for countries to stimulate both manu-facturing and downstream jobs as a result of increased demand for e-bikes,such as in bicycle retail and mechanics.Further,e-bikes used in commercial applications provide a source of income and economic opportunity for bicycle delivery workers.A Growing Market In 2022,the global market for e-bikes was valued at USD$37.5 billion,or about 15%of the global market for all electric vehicles(valued at USD$246.7 billion in 2020).1 With demand for e-bikes growing rapidly in many regions,the global market is expected to increase to$119.7 billion by 2030,with an annual growth rate of 15%(total growth of 220%).2 Many countries in-cluding Japan,Brazil,the US,Australia are experiencing rapid growth in demand for e-bikes.In the US,for example,the number of imported e-bikes increased from 25,000 in 2019(pre-pan-demic demand)to 463,000 units in 2020 and 790,000 in 2021 an increase of more than 3,000%from 2019 to 2021.In the US,e-bike imports were higher than electric car and truck imports in 2020(463,000 e-bikes versus 325,000 electric cars and trucks)and 2021(790,000 e-bikes versus 652,000 electric cars and trucks).3 E-Bike Growth by Region 202020254 Fortune Business Insights.(May 2023).“Electric Bike Market Growth&Trends|Industry Analysis 2030.”Fortune Business Insights.(May 2023).“Electric Bike Market Growth&Trends|Industry Analysis 2030.”North American Bikeshare and Scootershare Association.(August 2022).3rd Annual Shared Micromobility State of the Industry Report 2021 eBicycles(January 2024),Useful Facts&Stats of E-Bikes;Alexandru Arba(June 2023),Sales volume of electric power-assist(pede-lecs)bicycles in Japan from 2011 to 2020;Aliana Bike(April 2023),https:/aliancabike.org.br/mercado-eletricas-2023/;Confedera-tion of European Bicycle Industry(July 2022),Bicycle and E-Bike Sales Continue to Grow,Reaching Record Levels;PeopleForBikes(May 2023),Electric Bicycle Incentive Toolkit;Blueweave Consulting(September 2022),India Electric Bicycle(E-Bike)Marketby Propulsion Type(Pedal-Assist,Throttle);By Battery Type(Lead Acid,Lithium-Ion,Nickel Metal Hydride,Others);By Region(North India,East India,West India,South India),Trend Analysis,Competitive Landscape,Market Share&Forecast,20182028;ITDP India(June 2022),Status of E-Micro Mobility in India;iResearch Consultants(August 2022),Chinas Two-Wheeled Electric Vehicle Industry White Paper 2022.SOURCE:City of Durham NCvia FlickrEuropean Union$2,2005,000,000India$240-$1,80091,142Japan$500-$1,000737,740United States$2,600 525,000Brazil$1,36944,833China$3004,670,000LOWMEDIUMHIGHGrowth of E-Bike MarketCountryAverage E-Bike Cost(USD)#E-Bike Sales/Year6The largest existing market for e-bikes is China,with more than 183 million e-bikes in urban areas5 and a reported 350 million e-bikes countrywide in 2021.6 The prevalence of e-bikes in China can be attributed to a variety of factors,including:1)bans on motorcycles implement-ed in the late 1990s,2)challenges associated with acquiring motorcycle licenses,3)relatively short travel distances in Chinese cities,and 4)affordability of e-bikes.E-bikes became a pop-ular replacement for motorcycles after major Chinese cities banned motorcycle licensing and use in the early 2000s.7 As a result,e-bikes in China are more visually similar to mopeds than bicycles,though their weight and power align with low-speed e-bikes.Many relatively low-cost e-bike options(low-end models start at around USD$300)are available,too.Chinese cities have also expanded investments in cycle infrastructure over the past decade,providing safe and comfortable travel spaces for e-bike riders.Overall,the projected global growth in the e-bike market in the coming years represents an op-portunity for local manufacturing and assembly.Although most e-bikes are currently produced in China and the EU,companies in other countries,including the US,India,Indonesia,Brazil,Mexico,and Kenya,are beginning to produce e-bikes.Context for This ReportWhile e-bikes are growing in popularity,it is also relatively early days in the development of this technology.Local,regional,and national governments are grappling with ways to integrate e-bikes into transportation networks in cities and in peri-urban and rural areas.Many coun-tries and cities have not yet clearly defined what e-bikes are,what quality standards they must meet,and/or where they can be used.This lack of clarity has led to safety concerns around conflicts between people on e-bikes and other street users,deadly e-bike battery fires,and other challenges.To avoid these regulatory confusions,governments must engage the topic.However,we recognize that there is no single“best”way to regulate e-bikes and introduce them into local markets,so governments must work to develop the solutions that work best in their context.Recognizing this pivotal moment in the trajectory of global e-bike uptake,this report aims to define e-bikes and evaluate how and where they are currently being used,the benefits e-bikes can deliver,factors preventing more widespread adoption,and how cities and national govern-ments can respond.As part of this broader goal,the report has two main objectives:1)to showcase how e-bikes can contribute to climate-friendly,livable,equitable cities by reducing carbon emissions and ITDP.(December 2021).The Compact City ScenarioElectrified.Xu Bing,China News Shanghai.(June 18,2023).奔赴赛道，中国两轮电动车行业满足消费者多元需求-中新社上海 Heading for the track,Chinas two-wheeled electric vehicle industry meets diversified consumer demands.”Guo et al.(2020).Personal and societal impacts of motorcycle ban policy on motorcyclists home-to-work morning commute in China.A family rides anelectric bicycle alonga downtown street inBeijing.SOURCE:1000 Words viaShutterstock72)to provide guidance to municipal,regional,and national governments on how to encourage and integrate e-bikes into existing transport networks.We draw on existing research as well as lessons learned from government and private-sector successes and shortcomings from around the world.The report relies heavily on data gathered from 14 interviews with e-bike experts who work in nine countries across six continents,in-cluding ITDP staff and external consultants.Notably,this report aims to evaluate the use and potential impacts of e-bikes separate from trips made by ICE two-wheelers(such as mopeds or motorcycles).E-bikes and two-wheelers are often conflated despite important differences in their use,requirements for safe oper-ation,and purchase price.Cities and countries where two-wheelers are prevalent have faced particular challenges to adopting e-bikes(see Section IV).As the global e-bike market grows and a larger range of e-bike types becomes available,using them to replace ICE two-wheelers will likely become more competitive.Importantly,strategies to electrify two-wheeler fleets should include encouragement of modal shift to e-bikes.8II.WHAT IS AN E-BIKE?Defining E-bikesE-bikes are electrically powered two-and three-wheeled cycles that are compatible in terms of size and maximum speed with conventional(non-motorized)bicycles.E-bikes come in vari-ous forms and serve multiple functions,including transporting passengers and goods.The ma-jor types currently on the market are detailed in Table 1.Notably,we do not consider e-mopeds and e-motorcycles without pedals and with maximum speeds above 45 kph(e-motorcycles can typically travel even faster)to be e-bikes.Table 1:What is an e-bike?As a first step to understanding how e-bikes are being used and what their potential can be,this report will primarily focus on low-speed e-bikes,including ecargo cycles(see Highlight Box 1),where the electric assist shuts off when a maximum speed of about 25 kph(or up to 15 mph)is reached.Because the motor power is low(generally 250 watts or less),low-speed e-bikes function similarly to a conventional bicycle8 even when the electric assist is activated.This report occasionally references,but does not focus on,medium-speed e-bikes and speed pedelecs,though we do consider these to be e-bikes.In this report,the authors use the terms“conventional”and“traditional”interchangeably to refer to bicycles that do not have motors.TypeMaximum speed before assist shutoffAssist provided byE-bikesCompatible with conventional bicycles in cycle lanesLow-speed e-bikes25 kphPedal assist or throttleEcargo cycles25 kphPedal assist or throttleMedium-speed e-bikes32 kphPedal assist or throttleShould not be ridden in cycle lanesSpeed pedelecs45 kphPedal assistNot e-bikesE-mopedsNo speed limiter(top speed 50 kph )Throttle onlyE-motorcyclesNo speed limiter(top speed 80 kph )Throttle only9E-cargo cycle used by the German postal service in Munich.SOURCE:Anne Czichos via ShutterstockBOX 1:TYPES OF E-CARGO CYCLESElectric cargo cycles serve as a last-mile solution for urban freight as well as to transport passengers and goods by private users,and they have great potential to substitute for vehicle trips in these contexts.Compared to standard electric bicycles,ecargo cycles have a larger carrying capacity and higher power output.Ecargo cycles are used by prominent couriers such as Amazon,UPS,DHL,and Germanys postal service(Deutsche Post)in place of cars and light-duty trucks.Freight deliveries are trending toward smaller packages,with increased demand for tighter delivery time windows and same-day delivery.This trend makes ecargo cycles increasingly attractive to replace cars and light commercial vehicles for urban freight delivery.9 Another advantage of ecargo cycles is their ability to use cycle lanes when streets are congested,thereby saving time.This was the case for the operator of New York Citys public bikeshare system,which started using ecargo cycles to transport bicycles around the citys busiest streets,as vans performing the same task were frequently caught in traffic.10Researchers have found that 19%to 48%of courier trips made by autos could be replaced by ecargo cycles.11 The CO2 reductions from a large-scale shift to ecargo cycles for freight would be dramatic:Case studies from Porto(Portugal),12 the Netherlands,13 and So Paulo(Brazil)14 have found CO2 reductions of 73%,80%,and 90%,respectively,when shifting delivery services from autos to ecargo cycles.In a growing number of places,personal ecargo cycles are used in place of cars to transport groceries,large-volume objects,and additional passengers.A program in Germany and Austria made cargo cycles(electric and conventional)available for free for more than 9,750 users,and a survey indicated that about half of participants(46%)substituted their car trips with the shared cargo cycles.159 Rudolph,C.,&Gruber,J.(September 2017),“Cargo cycles in commercial transport:Potentials,constraints,and recommendations,”Research in Transportation Business&Management,24,2636.10 Lyft,Inc.,2022,How Were Rebalancing the Citi Bike System.11 Gruber,Johannes,Verena Ehrler,&Barbara Lenz.(2013).“Technical potential and user requirements for the implementation of electric cargo bikes in courier logistics services.”13th World Conference on Transport Research(WCTR).12 Melo,S.,Baptista,P.(2017).“Evaluating the impacts of using cargo cycles on urban logistics:integrating traffic,environmental and operational boundaries.”13 Moolenburgh,E.,van Duin,R.,Balm,S.,Altenburg,M.,&van Ploos Amstel,W.(2020).“Logistics concepts for light electric freight vehicles:A multiple case study from the Netherlands.”14 Ormond Junior,P.A.,Telhada,J.,&Afonso,P.(December 2018).“Evaluating the Economic and Environmental Impact of the Urban Goods Distribution by Cargo Cycles a Case Study in Sao Paulo City.”15 Becker,S.,&Rudolf,C.(2018).Exploring the potential of free cargo-bikesharing for sustainable mobility.Delivery bikeLong john bikeFront load tricycleHeavy-load tricycleLongtail bike10Classification of E-bikes Around the WorldWhile demand for e-bikes is growing globally,the regional realities of access to,perception of,and use of e-bikes differ considerably.Classification and regulation of e-bikes also varies from country to country(and,in some cases,within countries),which heavily influences how e-bikes are produced and sold(see Appendix I for more).There is also a wide range of contexts that cities and countries are experiencing with regards to e-bike use.Nascent markets,like Indonesia,Rwanda,and South Africa,have a very small market share of e-bikes.16 In some nascent markets,e-bikes may be primarily used by rec-reational cyclists,for example,people using e-mountain bikes.In South Africa,most of the demand for e-bikes comes from wealthy mountain bike riders purchasing high-end e-bikes to ride on trails,not for everyday transportation.17 In such places,a clear definition and classifi-cation for e-bikes may not be available because supply and use is so limited.Fostering E-bikes in Indonesia,a Nascent MarketMost trips in Jakarta and other major cities in Indonesia are completed using ICE two-wheelers.Cheaper and easier to maneuver and park than private cars,ICE two-wheelers dominate streets,causing traffic congestion,air and noise pollution,and road safety challenges.The e-bike market in Indonesia is very nascent,however political will exists for transport electrification broadly-the president of Indonesia is interested in accelerating electrification and supports efforts like financial incentives to purchase electric two-wheelers and electric cars.In 2021,the Indonesian Ministry of Transportation(MoT)sought to regulate micromobil-ity in the country,implementing a regulation(PM45-2020)to address the gap between existing regulations and the new micromobility products on the market.However,the regulation has been poorly enforced,and safety issues have occurred when two-wheel-er users encroach in bicycle lanes designed for low speed e-bikes and conventional bicycles.Further,circumventing the regulation by modifying lower-speed e-bikes to increase maximum speeds from 25 kph to up to 40 kph,making them incompatible with conventional bicycles,is common.The MoT has not released a clear definition of e-bikes,and how they differ from electric(and ICE)two-wheelers.Because the e-bike market is so new,supply is limited,and it is more expensive to purchase an e-bike compared to an ICE two-wheeler due to the mature market for ICE two-wheelers.This has limited uptake of e-bikes in Indonesia.The government subsidizes electric two-wheelers and electric cars,but not e-bikes.This makes it more challenging to purchase an e-bike compared to other electric vehicles.In several major Indonesian cities including Jakarta,Semarang,and Surabaya,bikeshare operators have expressed interest in providing low-speed e-bikes as part of their fleets.This is an important step in building public awareness around e-bikes and the types of trips they can service.Clear classification of e-bikes and their ability to safely use cycle lanes will be important to support and grow shared as well as personal e-bike use.In emerging e-bike markets like Brazil and the United States,where the supply of e-bikes is larger and use is more prevalent than in nascent markets,unclear classifications for e-bikes can pose significant challenges for regulators,retailers,and users.In these cases,unclear classification can inhibit growth of the e-bike industry by creating confusion,especially among potential users.E-bike users may be unsure whether they need a license,registration,and in-surance to operate an e-bike,and about where on the street e-bikes can be ridden.16 ITDP Indonesia,(May 17,2023),video interview by author;Benjamin Hategekimana(ITDP Africa),(June 1,2023),video interview by author;Michael Linke,(May 2,2023),video interview by author.17 Michael Linke.(May 2,2023).Video interview by author.ICE two-wheelers are popular across Indonesia,which has limited the uptake of e-bikes.SOURCE:ITDP Indonesia11Creating Clarity in Brazil,an Emerging MarketIn recent years,the market for micromobility modes has grown in Brazil,with a large range of new vehicle types becoming available.An array of e-bikes,e-scooters,and electric two-wheelers were being imported and sold without adequate vehicle classi-fications and approvals.Some retailers misrepresented e-mopeds to customers,tell-ing them the vehicles they were buying were legal to use in cycle lanes and would not require a license or registration to use.This contributed to a diverse array of electric two-wheelers,including higher-speed e-mopeds,using cycle lanes and causing frequent conflicts with pedal cyclists and pedestrians.Even transportation authorities and police were not well-informed about the differenc-es and whether these new vehicles were legally allowed to circulate in cycle lanes.18 This eventually led to the broad apprehension of e-mopeds,e-motorcycles,and e-bikes in So Paulo and Rio de Janeiro because they were circulating without license plates and users did not have drivers licenses.In the city of So Paulo,police apprehended 100 electric two-wheelers in the first four months of 2022.19This lack of legal clarity led cycling interest groups to advocate for a new national law that classified e-bikes separately from higher-speed e-mopeds.This law was meant to address the large array of new vehicle types that were already circulating in Brazilian cities and to facilitate registration and licensing for higher-speed vehicles with local traffic authorities.The new regulation was implemented in July 2023,and it updated the classification of e-motorcycles and e-bikes.E-bikes now have the same registration requirements and rights to street infrastructure as bicycles,must be pedal-assist with a maximum speed of 32 kph(previously 25 kph),and have a motor power of 350 watts to 1,000 watts.The new law aims to provide clarity for authorities and consumers.Notably,the law addresses the difference between vehicle maximum speeds and local speed limits.Ac-cording to Brazilian legislation,local traffic authorities,not federal legislation,define speed limits.Therefore,the increased 32 kph maximum speed applies to the vehicles capability and not to the speed limit on the street where the vehicle is being ridden.Despite attempts at clarity,the new legislation has faced some criticism,particularly for permitting moderate speeds for e-bikes(32 kph)and allowing small e-mopeds in the self-propelled category to circulate on sidewalks(up to 6 kph)unless prohibited by local authorities.2018 Daniel Guth(Aliana Bike).(June 1,2023).Video interview by author.19 William Cardoso.(May 20,2022).Motos eltricas so apreendidas em blitze e proibidas nas ciclovias de So Paulo.20 Marcos de Souza.(June 26,2023).32 km/h no demais para uma bike na cidade?Before a recent regulation was adopted in Brazil,a lack of clarity about what can be categorized as an e-bike led to mopeds using cycle lanes,causing conflicts with lower speed e-bike and pedal bicycle riders.SOURCE:ITDP Brazil12Three Classes of E-bikes in the United States,an Emerging MarketIn the United States,a federal definition adopted in 2002 states that an electric bicycle is a“two-or three-wheeled vehicle with fully operable pedals and an electric motor of less than 750 watts,whose maximum speedis less than 20 mph 32 kph”(2002 Public Law 107-310).This definition does not specify where on the road e-bikes are permitted,since state laws typically govern rules of the road.Therefore,individual state motor vehicle codes must define e-bikes and identify where and how they can be used.The vast majority(48 of 50)of state motor vehicle codes use a more detailed three-class definition based on speed and how the electric assist is delivered to identify which types of e-bikes are permitted to use bicycle infrastructure.All three classes are considered bicycles and do not require a license or registration.Class 1 and Class 2 e-bikes have a maximum speed of 20 mph,while Class 3 e-bikes can reach 28 mph(45 kph).Class 2 e-bikes have a throttle,while Class 1 and Class 3 are only pedal-assist.The two states that do not use the three-class system,Alaska and Rhode Island,define e-bikes more closely to that of a motorized vehicle than a bicycle,which can mean a license,insurance,and registration are required.Finally,China and countries in the European Union(such as Germany,Switzerland,and Sweden)have developed e-bike markets.In these markets,supply and access to e-bikes is widespread and they have a clear definition in vehicle regulations.In the EU,e-bikes are defined as ex-clusively pedal-assist,with power cutting out at 25 kph.21 In China,e-bikes can be either ped-al-assist or throttle-powered,with a maximum speed of 25 kph,and they must have operable pedals.2221 Association Franaise de Normalisation.(January 2009).Cycles Electrically Power Assisted Cycles-EPAC Bicycles.22 Government of the Peoples Republic of China.(September 6,2021).“电动自行车安全技术规范Safety Technical Code for Electric Bicycles（GB17761-2018）国家标准解读.”http:/ cycles built to carry additional passengers can substitute for cars.Source:Waltarrrrr,flickr13Refining E-bike Classifications in China,a Developed MarketWith clear definitions and strong national laws guiding the use of e-bikes,China has one of the most established e-bike markets.China has had a strong cycling culture since the last century.This facilitated the continual refinement of cycling policies,including a national standard for e-bikes that was enacted in 1999.In 2018,a set of new National Standards on Electric Bicycles fine-tuned the definition of electric bicycles,strictly rec-ognizing pedal-assisted e-bikes as bicycles but also adding tamper-proof and fireproof requirements.Although subnational governments in China have comparatively less au-thority to define e-bikes,these governments help enforce the standards established by the national government.Provincial governments regulate parking and charging of elec-tric bicycles,while county governments fund law enforcement,emergency response,and administrative management of electric bicycles.In March 2023,policymakers submitted a proposal to update the 2018 National Stan-dards for Electric Bicycles to better accommodate e-bikes used in deliveries.E-bikes are widely used across China for delivery and courier purposes.The new proposal address-es the regulation of ecargo cycles,calling for the existing standards to include a larger battery capacity and maximum loading weight.It also suggests the implementation of a smart system to prevent ecargo cycle modifications that circumvent the regulation,a practice commonly seen with personal e-bikes as well.The proposal also aims to in-clude a system to register ecargo cycles used for commercial deliveries so that they can be more easily monitored for safety and compliance.Pedal assist e-bikes are defined as bicycles in the Chinese National Standards on Electric Bicycles.SOURCE:Alpha from Melbourne,Australia,via Wikimedia Commons14III.WHAT IMPACTS CAN E-BIKES DELIVER?Like conventional bicycles,e-bikes currently account for a relatively small share of trips in most countries.However,the potential benefits they present,especially with a large-scale growth in ridership,are significant.E-bikes can contribute to climate goals by shifting trips away from high-polluting ICE cars and two-wheelers;improve equity by expanding access to affordable,clean transportation,especially for women and low-income populations;and create domestic economic opportunities.Climate ImpactsDecarbonizing the Transport Sector by Replacing Car TripsExperts agree that keeping global warming below 1.5C is critical to avoiding the most serious and catastrophic impacts of climate change.Greenhouse gas(GHG)emissions from transport account for 24%of the worlds total energy-related GHG emissions.Fueled by rapid urbaniza-tion and motorization in developing countries,this could increase by 60%by 2050.23Given this challenge,practitioners in the urban transportation sector are pursuing multiple avenues to decarbonize.Research and modeling conducted by ITDP and UC Davis show that both compact cities developed for walking,cycling,and public transit and a rapid and strategic transition to electric vehicles are needed to cut GHG emissions from urban transport by 50%by 2050,in line with a 1.5C scenario.24E-bikes can play a critical role in this transition as substitutes for automobiles for many types of trips because they can serve relatively long trip distances.25 This is especially important in areas where average trip distances are longer,including in large cities,low-density areas,and peripheral urban zones(see Highlight Box 2).Studies have also shown that increasing cycling leads to a decrease in the frequency of car driving.In some cases,e-bike use resulted in im-pressive reductions of car trips,ranging from 25%to 60%.26 E-bikes also provide a more com-fortable ride for users while cycling up hills,in warm climates,and when carrying additional passengers or goods,all trips that might otherwise be made with an automobile.23 World Bank.(2023).“Global Facility to Decarbonize Transport(GFDT).”24 Lewis Fulton&D.Taylor Reich.(December 2021).The Compact City Scenario Electrified.25 Hiselius,L.W.,&Svensson,.(2017).E-bike use in Sweden CO effects due to modal change and municipal promotion strate-gies.Journal of Cleaner Production,141,818824.26 Helga Birgit Bjrnar et al.(July 2019).From Cars to Bikes The Effect of an Intervention Providing Access to Different Bike Types:A Randomized Controlled Trial.Joost De Kruijf et al.(September 2018).Evaluation of an Incentive Program to Stimulate the Shift from Car Commuting to E-Cycling in the Netherlands.15BOX 2:CAN E-BIKES REPLACE VEHICLE TRIPS OUTSIDE OF URBAN AREAS?People in urban peripheral and rural areas often have few transportation options aside from private vehicles because of expensive,infrequent,and/or nonexistent public transport services as well as longer trip distances as a result of lower-density development.E-bikes present a viable solution to improve mobility in lower-density areas because they are better suited for longer trips than conventional bicycles.A study of 10,000 European cyclists reported an average e-bike trip of about 9 km compared to an average conventional bicycle trip of about 5 km.27 A US study estimated average trip lengths of 7.5 km for e-bikes and 5 km for conventional bicycles.28 However,a lack of protected cycle lanes and supportive infrastructure(i.e.,convenient bicycle parking,repair locations,etc.)and limitations presented by inconsistent electricity access and charging infrastructure in rural areas likely present a more difficult environment for e-bike use than in urban contexts.How-ever,in high-income country suburbs,low-speed neighborhood roads could sup-port local e-bike trips,and theft may be less of an issue where space is available to store e-bikes indoors.Studies and interviews conducted for this report highlight the potential of e-bikes for travel outside city limits.On large farms or other agricultural properties,e-bikes are being considered as quieter,cleaner options for moving around the property,substituting for gas-powered utility terrain vehicles.29 In Tanzania,researchers es-timated that e-bikes could save students traveling from rural areas to school up to 80%of commuting time,reducing a four-hour commute to 50 minutes.30 E-bike use is growing in rural areas of the Netherlands,too,where there is a greater opportunity for e-bikes to substitute for car trips and yield emissions reductions than in cities where car ownership is lower.31 In China,rural poverty is closely intertwined with rural immobility,but e-bikes are considered a way for rural residents to access op-portunities beyond those available in rural areas.3227 Alberto Castro et al.(June 2019).Physical activity of electric bicycle users compared to conventional bicycle users and non-cy-clists:Insights based on health and transport data from an online survey in seven European cities.28 Michael McQueen,John MacArthur,&Christopher Cherry.(October 2020).The e-bike potential:Estimating regional e-bike im-pacts on greenhouse gas emissions.29 Noa Banayan(PeopleForBikes).(May 4,2023).Video interview by author.30 Kennedy Aliila Greyson et al.(June 2021).Exploring the Adoption of E-bicycle for Student Mobility in Rural and Urban Areas of Tanzania.31 Michael Jenkins et al.(November 2022).What Do We Know about Pedal-Assist E-Bikes?A Scoping Review to Inform Future Directions.32 Zhao Yu&Pengjun Zhao.(February 2021).“The Factors in Residents Mobility in Rural Towns of China:Car Ownership,Road Infrastructure,and Public Transport Services.E-bikes have the capacity for longer trip distances than traditional bicycles,allowing for the possibility of them replacing private vehicles for local trips.SOURCE:Bad Kleinkirchheim via Flickr16E-bike use has also been directly linked to reductions in vehicle kilometers traveled and related emissions.In North America,using e-bikes for 15%of all miles traveled could result in a 12%reduction in carbon dioxide emissions from transport.33 In Denver,71%of participants in the citys e-bike purchase incentive program reported reducing car trips(see Highlight Box 3).BOX 3:EXPANDING ACCESS TO E-BIKES AS A CLIMATE SOLUTION IN DENVERA citizen-led effort to push for more coordinated action to address climate change at the city level in Denver led to the passage of a ballot measure in 2020 to create a sales taxsupported Climate Protection Fund.Since then,the tax has generated around USD$40 million per year,which the citys Office of Climate Action,Sustainability,and Resilience(CASR)has used to support climate actions across the transport,building,and energy sectors.In 2021,CASR began to look into potential incentive programs for e-bikes in an effort to encourage more people especially low-income residents to pur-chase an e-bike as a way to reduce private vehicle use.The cost of an e-bike had been identified by low-income residents as a significant barrier to purchase and daily use.Because the program was primarily targeting low-income residents,a reimbursement or rebate received after the purchase would not be viable,be-cause many low-income residents would not be able to afford the upfront price,even if they would receive a rebate(partial refund)later.CASR decided to pur-sue a point-of-sale discount,which means that bicycle retail shops would cover the full cost of e-bike purchases through the program until the city reimbursed them.Consultations with local bicycle retailers indicated that they were gener-ally supportive of the program it would increase e-bike sales but were con-cerned about the reimbursement process and the time it would take.Given this feedback,CASR hired a third-party to implement and operate the program in an effort to deliver timely reimbursements to the bicycle shops.33 Michael McQueen,John MacArthur,&Christopher Cherry.(October 2020).The e-bike potential:Estimating regional e-bike im-pacts on greenhouse gas emissions.In Denver,e-bike rebates are coupled with improved bicycle infrastructure in order to incentivize climate friendly transportation options.SOURCE:Lars Plougmann via Flickr17Denvers e-bike voucher program launched in 2022.The point-of-sale voucher can be used to purchase an e-bike or ecargo cycle from any Denver-based bicy-cle retailer,with$400 standard vouchers available for regular e-bikes and$900 vouchers for ecargo cycles.Income-based vouchers provided$1,200 toward the purchase of a regular e-bike and$1,700 toward an ecargo cycle.CASR originally budgeted$300,000 for vouchers,but demand significantly dwarfed that amount more than 1,000 people applied for vouchers in the first few days of the pro-gram.CASR was able to allocate additional funds to support more vouchers,ulti-mately offsetting the purchase of about 4,700 e-bikes in 2022,about half of which were bought by residents using income-qualified vouchers.A survey of users of the e-bike vouchers showed promising climate impacts from the program.E-bike owners reported riding an average of 26 miles(42 kilo-meters)per week,with income-qualified voucher recipients riding slightly more than average,at 32 miles per week.And 71%of respondents reported using their car less often,with the 4,700 e-bikes purchased through the program replac-ing approximately 100,000 vehicle miles traveled per week.Each year,the 4,700 e-bikes will offset approximately 1,450 metric tons of greenhouse gas emissions,or the equivalent of taking more than 300 cars off the road.34The program was renewed for 2023,and demand for e-bike vouchers is well be-yond what CASR can provide.Meanwhile,the city is investing in complementary infrastructure,like protected bicycle lanes,that can support more frequent and longer e-bike trips and greater modal shift away from private vehicles.35Finally,as the share of electricity generated by renewable sources(e.g.,wind and solar)increases around the world,and particularly in low-and middle-income countries,the potential for GHG re-ductions from e-bikes will grow.The promise of inexpensive,clean transportation from e-bikes can also add incentives for the creation of sustainable,consistent electricity supply to areas that cur-rently have inconsistent(or no)supply and/or a GHG-intense electricity supply.Estimating the Climate Impacts of a Large-Scale Global Shift to E-bikesAs outlined above,the emissions-reduction potential from replacing vehicle trips with e-bike trips is high,especially in places where car ownership is high.This is because for most people conventional bicycles are well-suited for trips under 5 kilometers,whereas e-bikes enable riders to cover longer dis-tances(10 km or more)with less physical effort.As such,e-bikes are a useful addition to the active mo-bility fleet,substituting for cars over longer distances compared to conventional bicycles.Using data from The Compact City Scenario Electrified,we can estimate the impact of a large-scale global shift to e-bikes(away from polluting vehicles)by 2050.36 In this high-shift scenario,we assume that cycling,walking,and public transport are the dominant and prioritized modes,supported by sustained funding and street space allocation.Vehicle travel still increases in the years leading up to 2050,albeit at a much slower rate than we currently see year over year.Overall,the share of urban passenger kilometers traveled(PKT)by car would decrease,and part of that decrease would be the result of an increase in e-bike PKT.Using research on ex-isting conditions for e-bike access and use,we can estimate the percentage of the mode shift away from cars that e-bikes would be responsible for in each region and the associated emis-sions reductions(shown in Table 2).Table 2.Projected Impacts of a High Shift to E-bikesCountry/RegionE-bike mode share in 2050Number of e-bikes in use to support shift(millions)Millions of cars taken off the roadMillions of ICE 2W taken off the roadAnnual emissions reductions due to e-bike shift(Mt/year)Non-OECD Europe/Asia102525.925.1105India14 025.11584United States7U7.80.154Other Americas117.12.144Europe(OECD)909.83.243China166011.65.240Africa/Middle East33.93.231Brazil11%2.71.311E-bike refers to low-speed electric bicycles(not e-mopeds or e-motorcycles)as defined in Section II.34 City and County of Denver et al.(2023).Denvers 2022 E-bike Incentive Program Results and Recommendations.35 Mike Salisbury(Office of Climate Action,Sustainability,and Resiliency,City of Denver).(May 4,2023).Video interview by author.36 Lewis Fulton&D.Taylor Reich.(December 2021).The Compact City Scenario Electrified.18Worldwide,approximately 1.25 billion e-bikes are needed to support a shift that would yield about 400 megatonnes(Mt)of annual emissions reductions.This means that more than 1 bil-lion additional e-bikes are needed worldwide by 2050.After the non-OECD Europe and Asia region,the individual countries with the largest emissions reductions potential are India and the United States,where a high shift to e-bikes could take more than 40 million private vehi-cles(cars and ICE two-wheelers)and 8 million cars,respectively,off the road.Access ImpactsExpanding Access to Affordable,Clean TransportationThe integration of e-bikes with public transport can further reduce emissions,especially for first-and last-mile trips.37 E-bikes can significantly expand public transport station catchment areas beyond walking and conventional bicycles,enabling more people to consider using public transport.38 E-bikes are more likely to become a viable transport option for both personal and commercial vehicle trips when they are integrated with existing sustainable transport modes like rail and buses,and especially when coupled with complementary policies.Such policies in-clude enabling safer,more secure cycle trips by providing protected cycle lanes and convenient bicycle parking,or policies like low-emission zones and pricing parking,which disincentivize driving.Notably,e-bike battery fire concerns have led some transport agencies such as PATH,which operates commuter trains between New York City and New Jersey to consider banning e-bikes onboard metro trains,indicating a need to balance integration and safety goals.39 40Providing Alternatives for Underserved GroupsE-bikes can also improve mobility for underserved populations by connecting to transit or ful-filling entire trips.Women,older adults,people with disabilities,students,and even informal street vendors report being more willing to use an e-bike compared to a conventional bicycle.41 In the Copacabana neighborhood of Rio de Janeiro,Brazil,women make up 33%of e-bike users compared to 25%of traditional bicycle users.42 E-bikes make carrying goods and extra passen-gers tasks often required by women more manageable than when using conventional bicy-cles,and e-bikes offer more route flexibility compared to public transport.In the Netherlands,production of adapted e-bikes is growing,offering active mobility options for people with physical disabilities.4337 Michael Jenkins et al.(November 2022).What Do We Know about Pedal Assist E-Bikes?A Scoping Review to Inform Future Directions.38 TUMI.(2023).Increasing catchment area for public transport through e-bikes39 Henry Beers Shenk.(June 23,2021).The PATH Train Just Quietly Banned E-Bikes at All Times.40 Jules Flynn(Zoomo).(May 16,2023).Video interview by author.41 Samantha J.Leger,Jennifer L.Dean,Sara Edge,&Jeffrey M.Casello.(May 2019).“If I had a regular bicycle,I wouldnt be out riding anymore”:Perspectives on the potential of e-bikes to support active living and independent mobility among older adults in Waterloo,Canada;ITDP Indonesia.(May 17,2023).Video interview by author.42 Transporte Ativo.(August 2014).Contagem de Ciclistas.43 See:Van Raam.In New York City our low-income members use bikeshare very frequently.And they disproportionately choose electric bikes.”Caroline Sampanaro,LyftSOURCE:Antonio Reynoso,Flickr19“In Jakarta,womensurveyed said theyprefer to use e-bikesbecause it was moreadvantageous.Theythink its easier touse them in this kindof humid climate,and they are usuallycarrying goods.”Deliani Poetriayu Siregar,ITDP IndonesiaSOURCE:Toto Santiko Budi via ShutterstockIn some cities,e-bikes have been integrated into bikeshare programs,providing access without the upfront cost to users.For example,Tembici,a Brazilian bikeshare operator,offers shared e-bikes in eight of the 10 Brazilian cities it operates in,as well as in Bogot,Colombia.44 Shared e-bikes are growing in popularity:Data from eight bikeshare systems in the US operated by Lyft in 2022 shows a 107%increase in new e-bike riders since e-bikes were added to their systems in 2020.Data from the North American Bikeshare Association(NABSA)shows a similar trend,with the percentage of bikeshare systems offering e-bikes growing from just under 30%in 2019 to 50%in 2021,and shared e-bike trips tripling from about 6 million to 18 million over the same period.45 Income-qualified riders who use Lyfts reduced-fare membership take twice as many e-bike rides compared to standard members.46Though e-bikes are increasingly popular among users,bikeshare operators face challenges,as they cost more and have the higher operational costs of battery swapping and charging.This has limited the availability of e-bikeshare,especially in low-and middle-income countries(see Highlight Box 4).44 Tembici.(2020).Tembici Tem coisa boa.45 North American Bikeshare and Scootershare Association.(August 2022).3rd Annual Shared Micromobility State of the Industry Report 2021.46 Lyft.(2023).Lyft Multimodal Report 2023.20Tembici electric bikes are part of the companys bikeshare fleet in Sao Paulo.SOURCE:Toto Santiko Budi via ShutterstockBOX 4:DESPITE DEMAND,OPERATIONS COSTS HOLD BACK SHARED E-BIKESSince 2018,both public and privately operated bikeshare systems have been inte-grating e-bikes into their fleets.Most bikeshare systems that include e-bikes see high utilization of e-bikes compared to conventional bicycles;for example,in New York City,electric Citibikes are used for two out of five(40%)trips,despite making up only 20%of the fleet.47 Shared e-bike riders in New York have also reported con-necting with public transport more than twice as often as conventional bikeshare riders.48 Globally,as of 2022,29%of all bikeshare systems worldwide(567 total)offer e-bikes,up from 18%of systems in 2021.49 While shared e-bikes can greatly improve urban access,especially for low-income residents,the cost of purchasing shared e-bikes compared to traditional bicy-cles as well as the cost and logistics of ensuring shared e-bikes remain charged complicate bikeshare operations.50 Existing bikeshare stations may need to be retrofitted to connect to the electricity grid and enable e-bikes to charge when docked at a station.The cost of this varies widely by region because of labor and construction costs as well as permitting.Bikeshare operator Lyft estimates that if 20%to 30%of a systems stations are connected to the grid,that can offset up to 90%of vehicle miles traveled to conduct battery swaps.51 Indeed,battery swap-ping,where the bikeshare operator replaces low e-bike batteries with charged ones throughout the day,presents a different set of costs and limitations.Cities interested in integrating e-bikes into existing or planned bikeshare systems must understand these potential challenges and work with utility providers and other relevant stakeholders to identify feasible solutions.In low-and middle-income cities,financing might be available to support such solutions.For example,Brazils National Bank for Economic and Social Develop-ment(BNDES)financed Brazilian bikeshare company Tembici so it could expand its fleet of electric bicycles and increase its capacity to manufacture bikeshare bicycles domestically in Manaus,a hub for bicycle manufacturing in Brazil.The in-vestment is meant to address the negative impacts of climate change and reduce harmful emissions by encouraging people to switch from driving to using clean mobility options like e-bikes.5247 Lyft.(2023).Lyft Multimodal Report 2023.48 Lyft.(May 18,2023).Video interview by author.49 The Meddin Bike-Sharing World Map.(December 2022).The Meddin Bike-Sharing World Map Report.50 Justine Lee(25Madison).(April 27,2023).Video interview by author;Caroline Samponaro and Tejus Shankar(Lyft).(May 18,2023).Video interview by author.51 Lyft.(May 18,2023).Video interview by author.The right percentage of grid-connected bikeshare stations will vary based on system design,as well as constraints as a result of permitting and site selection.52 Brazilian Development Bank.(February 2023).BNDES Finances Tembici in an Unprecedented Micromobility Operation.21Economic ImpactsE-bikes can improve access to destinations(education,jobs,etc.),generating economic returns,though these can be difficult to quantify.E-bikes have also contributed to economic growth by supporting local delivery companies and expanding domestic manufacturing opportunities.Providing Economic Opportunity for Delivery WorkersGiven their relatively low cost and ability to cover longer distances,e-bikes can help people(especially those without access to a car)access economic opportunities.With the rise of app-based and traditional delivery companies,demand for delivery drivers is high.For example,in China in 2022,more than 7 million e-bike delivery drivers53 earned income from Meituan and Ele.me,the two largest food delivery apps in the country.54 55 Experts estimate that the total number of app-based delivery workers in China may be around 10 million.56 Many of these are low-income workers:According to Meituan,approximately four out of five of the apps delivery workers in 2022 were low-income“rural transfer laborers”and 6%report being impoverished.A large percentage of New York Citys reported 65,000 delivery workers57 use e-bikes(many also use motorized scooters;however,data on specific modes used by these workers is unavailable)largely because it is easier to maneuver and park an e-bike around the city than an automobile.Many of these delivery workers are low-income immigrants to the US,a group that faces high rates of unemployment.These economic opportunities are only accessible if potential drivers can afford a vehicle to use for deliveries.Though they are less expensive than cars,e-bikes can still be unaffordable,especially for people with limited income.In Brazil,bikeshare operator Tembici launched a partnership with a food delivery app to offer reduced-rate bikeshare plans for delivery work-ers.58 This includes special rates for e-bikes in seven major Brazilian cities.These plans put e-bikes within reach of low-income delivery workers,improving daily incomes with the greater speed and range that e-bikes provide.Unlocking Domestic ManufacturingBeyond their potential for emissions reductions and access to clean transport in cities,e-bikes can present positive impacts for the economy.China and countries in the EU have been leveraging the economic opportunity presented by e-bikes for some time in the form of domestic production and sales.Consumers in EU countries are buying between 5 million and 6 million e-bikes per year,which is about a quarter of the total bicycle market(about 22 million bicycles sold per year).The e-bike market has yet to plateau in the EU,with about 30%growth each year.59 Alternatively,in Brazil,demand for e-bikes is largely concentrated in wealthier cities such as So Paulo and Rio de Janeiro,and e-bikes make up a relatively small share about 1.5%of the overall bicycle market.Experts forecast e-bikes to grow to around 5%of the Brazilian bicycle market in the next few years.6053 Many app-based delivery workers in China use vehicles that would not be considered e-bikes in this report(instead riding e-scooters or similar);however,some use true e-bikes(e.g.,pedal-assist or throttle e-bikes with a maximum speed of 25 kph).54 Meituan.(February 2023).美团发布2022年骑手权益保障社会责任报告：624万骑手通过美团获得收入 2022 Meituan Rider Rights Protection Social Responsibility Report.55 Ele.me.(October 2022).2022蓝骑士发展与保障报告：全职或兼职送外卖-云快卖，移动点单服务商 2022 Delivery Rider Develop-ment and Protection Report.56 Shanshan Li(ITDP China)&Qiuyang Lu(ITDP China).(May 4,2023).Video interview by author.57 Nathaniel Meyersohn.(May 2023).How On-Demand Delivery Services Hobbled an American City.58 Tembici.(January 17,2024).Planos Ifood Pedal.59 Ceri Woolsgrove(ECF)&Philip Amaral(ECF).(May 23,2023).Video interview by author.60 Daniel Guth(Aliana Bike).(June 1,2023).Video interview by author.E-cargo cycles serve as a lower cost option for delivery drivers that may otherwise be unable to enter the market.SOURCE:Angus Gratton via Flickr22Demand and potential for domestic design and manufacturing is also growing in African coun-tries,where dozens of local private start-up companies are offering e-bike fleets for local deliv-eries,personal transport,and ambulance services.61Given that the global e-bike market is projected to grow by about 220%from 2022 to 2030,62 e-bikes are a viable product for the growth of domestic green manufacturing.Countries seek-ing to lead the way to greener industry have an opportunity in the coming years to bolsterdomestic production of e-bikes,contributing to their own national supply and,potentially,offering e-bikes as exports to other countries as demand grows.Additionally,as production ofelectric cars ramps up in many places,demand for lithium-ion batteries will grow.Industrialpolicies that prioritize e-bike production will be a more equitable,sustainable use of limitedbatteries and materials for example,because an e-bike battery capacity is 0.5kWh and anelectric cars is 80kWh,many more(e.g.,160)e-bikes can be produced for every electric car.6361 Emilie Martin et al.(2023).African Electric Bicycles Start-Up Booklet.62 Fortune Business Insights.(May 2023).Electric Bike Market Growth&Trends|Industry Analysis 2030.63 Authors calculations.SOURCE:International Labor Organization via Flickr23IV.SEVEN KEY BARRIERSTO E-BIKE UPTAKEIn nascent and developing e-bike markets and even in established ones,many barriers to ac-cess and use exist.These barriers limit e-bike uptake and thereby limit potential climate,ac-cess,and economic benefits from these vehicles.It is important to understand these barriers so that infrastructure and policy interventions promoting e-bikes can be most effective.1.Streets and policies prioritize vehiclesMany barriers to e-bike use are the same as those limiting the use of bicycles for everyday trips,and interventions that enable more and safer cycling also enable e-bike adoption.In many cities,even those where the majority of people do not own or have access to a car,streets are designed primarily for car users.Critical infrastructure that makes cycling safe,convenient,and comfortable includes:a network of interconnected cycle lanes(both for local and longer-distance trips between cities),low-speed streets with low volumes of vehicle traffic for travel within neighborhoods,and secure bicycle parking near all destinations.Without this infrastructure,women,young children,and older adults groups who consistently report not feeling safe or comfortable riding a bicycle without separation from vehicles are not likely to consider using an e-bike even if other major barriers like affordability,storage,and charging concerns are minimized.64 Without safe spaces on the street to ride an e-bike,and in the face of policies that heavily in-centivize and prioritize driving,e-bike uptake will be marginal at best.Policies that promote vehicle use include fuel subsidies,discounted or free parking provided by employers,and free municipal on-street parking.Even free on-street parking/charging and rebates for electric au-tos make e-bikes less attractive compared to private cars.This is especially true when there are no similar subsidies to offset the cost of purchasing an e-bike or provide cash-outs for cy-cling to work.64 Jennifer Dill,Tara Goddard,Christopher Monsere,&Nathan MacNeil.(January 2015).Can Protected Bike Lanes Help Close the Gender Gap in Cycling?Lessons from Five Cities“Without safe infrastructure,few people will actually consider shifting from cars to e-bikes.”Jules Flynn,ZoomoSOURCE:LarsPlougmann via Flickr242.Limited supply,high cost,and legacy market for competing modesIn nascent e-bike markets especially,supply of e-bikes and replacement parts is limited be-cause of a combination of low(or no)domestic manufacturing,high import tariffs,and few secondhand bicycles or parts.There also may not be accessible,low-risk alternatives to pur-chasing an e-bike such as community e-bike libraries or e-bikes integrated into bikeshare systems which allow people to try an e-bike before committing to purchasing one.Limited supply makes e-bikes and their parts expensive for people to purchase,especially compared to the mature markets for competing modes like ICE two-wheelers and used cars.In secondary cities in Ethiopia,potential for bicycle ridership is higher than in major cities be-cause trip distances are shorter and there is less traffic;however,tuk-tuks dominate short-dis-tance trips because most people do not have the disposable income to pay upfront for a bicy-cle(or e-bike).65 Similarly,e-bikes are more expensive than ICE two-wheelers in many African cities,where people have less disposable income compared to other regions,and e-bikes are too expensive to consider for personal use.66 Further,insufficient electrical grid capacity and inconsistent electricity access in general,especially for low-income populations,currently make it difficult to substitute e-bikes for ICE two-wheelers,which can be more reliably fueled with gas or diesel.67In Indonesia,e-bikes are also more expensive to purchase than ICE two-wheelers because the two-wheeler market is very well-established and benefits from subsidies and econo-mies of scale.68 Commercial use of e-bikes is also limited by a lack of supply.For example,in a pilot aiming to use bicycles for goods delivery in Mexican cities,none of the participating cooperatives used ecargo cycles because they were not able to afford them.Some organizations attempted to adapt e-bikes to transport cargo,but the added weight and limited carrying capacity made this unsuccessful.69 Substituting e-bikes for higher-polluting,higher-speed ICE two-wheelers(to reduce pollution and emissions)is challenging when e-bikes that are built to carry extra weight(i.e.,ecargo cycles)are not readily available.65 Seble Samuel.(June 15,2023).Video interview by author.66 Michael Linke.(May 2,2023).Video interview by author;Benjamin Hategekimana(ITDP Africa).(June 1,2023).Video interview by author.67 Seble Samuel.(June 15,2023).Video interview by author.68 ITDP Indonesia.(May 17,2023).Video interview by author.69 Eloy Gonzalez(ITDP Mexico).2023.Email communication with author.Well-established legacy markets for ICE two-wheelers and the lower upfront cost of tuk tuks inhibit the uptake of e-bikes,particularly in nascent markets.SOURCE:Katell Ar Gow via Flickr253.Unclear classification for e-bikesAs noted in Section II,classifications of e-bikes vary widely from country to country(and,often,subnationally).For example,in the EU,e-bikes must be pedal-assist,while in the US,e-bikes can have pedal-assist or a throttle.In the EU,China,and India,e-bikes are classified as bicy-cles and do not require riders to be licensed,carry insurance,or pay for registration,whereas in Vietnam and Singapore,registration for e-bikes is required,adding an extra barrier to their use.70 In other places,such as Indonesia,e-bikes exist in a poorly classified gray area between bicycles and motor vehicles.Unclear classification causes confusion for potential riders,who may not feel confident pur-chasing an e-bike if they are unsure of the rules for where e-bikes can be ridden and what doc-umentation is required.71 Fear of policy changes that may cause e-bikes or their parts to fluc-tuate in cost also reduces consumer confidence.72 It also creates challenges for retailers,who may choose not to stock e-bikes because of low consumer demand.Furthermore,unclear visual distinctions between vehicle classifications make it difficult to enforce regulations on where e-bikes versus heavier,faster two-wheelers are permitted to be ridden.4.E-bikes are perceived,taxed,and regulatedas luxury goodsSimilar to bicycles,e-bikes are often seen as something used for recreation rather than for everyday transport in cities.The perception of e-bikes as recreational not only impacts how individual people make choices about how to move around their cities but it underscores how e-bikes are taxed and regulated.E-bikes are often taxed as luxury items.This is especially truein Brazil,where 85%of the cost of an e-bike is taxes;the IPI tax(a national tax on manufac-tured products)makes up 35%of the taxes on e-bikes,which is a higher share than on cars,guns,and certain alcohols.73 Regulators also look at e-bikes as a recreational vehicle,not amode of transport,which leads to unclear and uninformed classification.7470 ITDP Indonesia.(September 2023).Road Map and Timetable of Two-Wheeler Electrification in Greater Jakarta:Electric 2W Inte-gration to Urban Traffic Guideline.71 Noa Banayan(PeopleForBikes).(May 4,2023).Video interview by author.72 Adam Mayer.(2019).Motivations and barriers to electric bike use in the U.S.:Views from online forum participants.73 Daniel Guth(Aliana Bike).(June 1,2023).Video interview by author.74 Jules Flynn(Zoomo).(May 16,2023).Video interview by author.Unclear distinctions between e-bikes and two-wheelers causes confusion for those trying to enforce regulations and those considering purchasing an e-bike.SOURCE:V.T.Polywoda via FlickrRegulators often see e-bikes as recreational vehicles,not transport modes,resulting in extraneous taxes that inflate e-bike purchase costs.SOURCE:Canyon Bicycles265.Few secure storage and theft-prevention optionsEven in established e-bike markets,secure storage and theft prevention are important factors that influence whether or not to purchase an e-bike for daily use.Because of their size and weight,it can be more difficult to lock e-bikes at traditional bicycle parking racks,and users may be unsure if they can safely lock an e-bike at every destination.E-bikes are also generally known to be more expensive than conventional bicycles,making them targets for theft.Recom-mendations to use more than one lock or a lock and chain also pose additional upfront costs its expensive to purchase high-quality locks.Furthermore,e-bike battery theft can be difficult to mitigate depending on the design of the e-bike.It is preferable to store an e-bike in a covered,dry location because battery degradation can occur more quickly with exposure to moisture.In dense cities,many people do not have the space or physical ability(i.e.,to carry an e-bike up several flights of stairs)to store an e-bike inside their building or apartment,and few,if any,alternative secure storage options are avail-able.In some cities,such as in China,it is illegal to store e-bikes indoors due to concerns sur-rounding battery fires(see Barrier 7 for more).6.Perceived lack of safetyMany people have never ridden an e-bike and likely will not feel comfortable purchasing one without having that experience.People often perceive riding an e-bike as less safe than riding a conventional bicycle because of its weight,ability to accelerate quickly,and motor.However,data shows that the risk of a crash involving e-bikes is only slightly higher than for convention-al bicycles,and this is mainly attributed to balance problems.75 E-bikes have not been found to be more likely to cause a serious crash than conventional bicycles.76 77 7875 A.Fyhri,O.Johansson,&T.Bjornskau.(November 2019).Gender differences in accident risk with e-bikes.76 Ibid.77 Institute for Road Safety Research.(May 2022).Pedelecs and speed pedelecs:Is a pedelec or speed pedelec more dangerous than a conventional bicycle?78 German Insurance Association.(November 2014).Compact accident research:Traffic safety of electric bicycles SOURCE:Katell Ar Gow via FlickrUse of e-bikes on shared paths causes concern for potential conflicts with pedestrians.Infrastructure that separates cyclists from pedestrians,such as protected bicycle lanes,deters unsafe incidents.SOURCE:V.T.Polywoda via Flickr“If you dont have a good place to store an e-bike,that becomes an issue.Youve got more to lose.Park-ing is an issue.”Philip Amaral,ECF27Other related safety concerns exist around e-bikes and potential conflicts with lower-speed conventional bicycles in bicycle lanes and pedestrians in shared paths or sidewalks.A Dutch study that compared adult and elderly cyclists each riding e-bikes and conventional bicycles along the same route found that the speed of elderly cyclists riding an e-bike was about the same as adult cyclists riding a conventional bicycle.79 Both groups slowed their speeds when riding an e-bike in“complex traffic situations,”indicating that e-bike riders self-regulate their speed based on their surroundings.Observations of e-bike riders,conventional bicycle riders,and pedestrians in Shenzhen showed that conflicts between e-bike riders and pedestrians were most frequent,exposing pedestrians to higher injury risks.80 Cities that lack sufficient infrastructure separating e-bike(and conventional bicycle)riders from pedestrians are more likely to experience these conflicts.Nonetheless,the vast majority of pedestrian injuries and fatalities come about in crashes with heavier,higher-speed motor vehicles.817.Charging and battery handlingCharging an e-bike battery is much simpler than charging larger electric vehicles like cars and buses;most e-bike batteries can be removed from the bicycle frame and charged using a standard wall outlet.As the market continues to mature,the range for e-bike batteries is ex-panding,making charging and what is often referred to as“range anxiety”82 less of an issue.83 However,in places where residential access to electricity is intermittent,needing to charge an e-bike at home presents a serious barrier to use.84Improper charging of lithium-ion e-bike batteries has also led to serious fires,especially when batteries are left to charge over long periods of time or when low-quality or incorrect voltage chargers are used.Repairs using low-quality or incorrect components can also increase risk of fires.In New York City during the first six months of 2023,13 people died as a result of more than 100 fires caused by e-bikes(likely by faulty lithium-ion batteries overheating).85 Without national battery or charging standards in the US,state and city-level legislators are pursuing safety standards for batteries and charging in New York.86 In Chinese cities,where one in five people owns an e-bike,concerns about battery fires means that people are not permitted to charge their e-bike batteries inside their homes.Large cities like Beijing provide public charging cupboards,similar to public cell phone charging stations,where people can pay a fee to leave their e-bike battery to charge.79 Willem P.Vlakveld,Divera Twisk,Michael Christoph,Marjolein Boele,Rommert Sikkema,Roos Remy,&Arend L.Schwab.(January 2015).Speed choice and mental workload of elderly cyclists on e-bikes in simple and complex traffic situations:A field experiment.80 Xinyu Liang,Xianghai Meng,&Lai Zheng.(August 2021).Investigating conflict behaviours and characteristics in shared space for pedestrians,conventional bicycles and e-bikes.81 World Health Organization.(June 2018).Global status report on road safety 2018.82 Range anxiety refers to the concern that an electric vehicle will run out of power before the user is able to reach a charging station.83 Ceri Woolsgrove(ECF)&Philip Amaral(ECF).(May 23,2023).Video interview by author.84 Seble Samuel.(June 15,2023).Video interview by author.85 Winnie Hu.(June 2023).How E-Bike Battery Fires Became a Deadly Crisis in New York City.86 Bicycle Retailer and Industry News.(November 28,2023).Bill would require all NY State shops selling e-bikes to have fire suppression equipment.Public charging stations for e-bikes serve as a solution to charging indoors,which can be a fire hazard.SOURCE:Herzi Pinki via Wikimedia Commons28V.RECOMMENDATIONSTO SUPPORT E-BIKE UPTAKEThe following recommendations are meant to address the barriers discussed in Section IV and to expand access,affordability,and ridership of e-bikes for both personal and commercial uses,as well as to cultivate a stronger cycling culture more broadly.Doing so will position cit-ies and countries to benefit from the climate,economic,and equity gains presented by a large-scale growth in e-bike use.Some recommendations should be implemented at the national level,some at the city level,and some at both national and subnational levels,as shown in Table 3.Table 3.Recommendations for Scaling E-bike UseE-bikes open up cycling to more people and trip types.SOURCE:ITDP IndonesiaLevel of governmentRecommendationNationalCityDevelop a definition for e-bikes and their use(or higher)Ensure quality manufacturing standards for e-bikes,batteries,and battery recycling(or higher)Improve affordability of e-bikesFund cycle infrastructure(or higher)Educate potential e-bike usersIncrease access to shared e-bikesDevelop an enforcement plan for e-bikes and cycle infrastructureImprove ability to import and/or produce quality e-bikes domesticallyDisincentivize private vehicle useAlign e-bikes with climate pledgesPursue universal charging for e-bikesIncorporate e-bikes into electrification plans29Recommendation 1|Develop a definition for e-bikes and their use Define weight,width,speed,and power maximums for e-bikes separate from ICEtwo-wheelers.Identify where e-bikes are permitted,such as on bicycle infrastructure,off-streettrails,and the street.With regard to traffic laws and regulations,national governments should clearly define e-bikes as bicycles for use on roads.Defining e-bikes as bicycles(for use on the road)facilitates their operation without obtaining a license,insurance,or registration.This is keyto enabling broad,easy use of e-bikes.A national standard helps consumers know what typeof e-bike is safe.Local road rules can then point to the national standard and permit the useof compliant e-bikes in bicycle lanes.A national standard also safeguards customers fromfalse or misleading information,such as companies branding electric mopeds as e-bikes.Aclear definition of e-bikes helps define what is not an e-bike.For example,electric mopeds ormotorcycles,which are heavier and can reach top speeds higher than 32 kph,should not bedefined as e-bikes and should not be permitted to use bicycle lanes.National governments should also use an industry standard for accepting e-bikes into consumer markets.For example,the European Union uses industrial standard EN15194,87 the worlds first comprehensive safety standard for electric-assisted bicycles,and requires all electric-assisted bicycles to comply in order to be sold in the EU.China uses the GB 4229588 standard.A national,regional,or federal definition helps to ensure consumer safety,standardizes production requirements,and enables enforcement for violations.Such standards should also require anti-tampering to reduce instances of after-market modifications of e-bikes to exceed speed restrictions.Another reason to develop a national definition is to facilitate national funding streams.A standardized national definition facilitates the deployment of national subsidies and grants to regional or municipal programs.For example,the Swedish ministry struggled to award funding from a 125 million fund for e-bikes and ecargo cycles because it lacked a clear national definition for what qualified as an e-bike.89 Recommendation 2|Ensure quality manufacturing standards for e-bikes,batteries,and battery recycling Introduce,disseminate,and enforce quality and safety standards for e-bikes and batteries.Develop a plan for e-bike battery(and other parts)recycling that mandates how materialsare recovered or disposed.Encourage manufacturers,retail shops,bikeshare operators,etc.to maximize inter-changeability and reuse of e-bike components and materials.The two main types of batteries used in e-bikes today are lead-acid and lithium-ion.Lead-acid batteries are not easily flammable and are much less expensive,but lithium-ion batteries are lighter,hold more energy,last longer,and charge faster.Lead-acid batteries are widely used in China because of their low cost.Unfortunately,their widespread use has also caused serious lead pollution in that country.9087 The European Committee for Standardization.(August 2023).Cycles Electrically power assisted cycles EPAC Bicycles.88 National Standards.(December 2022).电动自行车电气安全要求.89 Cycling Industries Europe.(2023).CIE Expert Group on Cargo Bikes and Cycle Logistics.90 Min Liu et al.(January 2023).Life Cycle Environmental and Economic Assessment of Electric Bicycles with Different Batteries in China.“It is really import-ant to have the Ministry of Trans-port launch the specification,de-fine what e-bikes are,and talk about safety,because we dont want mopeds in bike lanes.”Deliani Poetriayu Siregar,ITDP IndonesiaThe cycling industry has lacked standardization of components but the electric evolution of bicycles can change that.SOURCE:aerogondo2 via ShutterstockNationalNational30Lithium-ion batteries are widely used in e-bikes outside of China.As mentioned in the previous section(on barriers to e-bike uptake),low-quality lithium batteries are the cause of most e-bike fires,as they are highly sensitive to high temperatures and can burst into flames.Water seepage can also lead to fires.91 Low-quality batteries(not conforming to any existing standard)coupled with improper charging,storage,and maintenance of e-bikes increases this risk.National authorities can prevent these deadly fires by introducing,disseminating,and enforcing existing standards for e-bikes and batteries.Batteries for e-bikes are relatively tightly regulated in the EU,and there have been few safety issues in the region.In the EU,a Batteries Regulation ensures that batteries entering the EU market are sustainable and properly disposed of.92 An equivalent standard used in the US and elsewhere around the world is Underwriters Laboratories(UL)2849,93 the Standard for Electrical Systems for E-bikes.Further,UL 227194 is specifically for batteries used in light electric vehicles.Lawmakers in the US have introduced legislation to ensure higher levels of safety by taking faulty lithium-ion batteries off the market and setting consumer guidelines.This legislation is currently under consideration at the national level95 as well as in New York City.96Battery fires have also been a concern in China,where more than 6,000 e-bike related fires were reported in the first six months of 2021.97 Although China has a standard for e-bike batteries,it is not compulsory,with lax implementation by manufacturers and enforcement by authorities.98 A compulsory standard for lithium-ion e-bike batteries is in development;however,lead-acid batteries will not be covered.Further,technical training and certification for e-bike retailers and guidance for users on proper e-bike storage,maintenance,and battery charging is essential to prevent dangerous fires from occurring.National governments should also help ensure responsible battery recycling and disposal,especially as e-bike use expands and legacy models reach the end of their life span.The EU provides perhaps the most comprehensive example to date of battery recycling.The union has taken a unified approach to e-bike battery recycling,addressing this through the European Green Deal and as part of the circular economy.99 Beginning mid-2025,a more comprehensive regulatory framework on Extended Producer Responsibility will come into enforcement,with new rules for production,recycling,and repurposing of batteries.This will include higher collection and recycling targets being introduced over time:All collected batteries have to be recycled and high levels of recovery have to be achieved,in particular of valuable materials such as copper,cobalt,lithium,nickel,and lead.100Conversely,the US has not sought to address e-bike battery recycling in a coordinated way.In lieu of a national-level mandate,private-sector firms are leading the way in battery recycling.For example,Redwood Materials101 is working with Lyft the operator of several major bikeshare programs in North America,including New York Citys system(which has e-bikes)to recycle shared e-bike batteries.Another industry-led program enables private owners to easily recycle e-bike batteries.102 While these initiatives are a step in the right direction,without a national mandate,they are not compulsory,and there is little oversight of how materials are being recovered or disposed of.In addition to batteries,national governments should seek to improve recovery of other materials used in e-bikes.An emerging area for e-bike recycling is electric motors.This is particularly important,as e-bike motors are one of the components with a large environmental footprint because of the high use of copper in motor production.103 Overall,governments should nudge the e-bike ecosystem(manufacturers,retail shops,bikeshare operators,etc.)toward maximum interchangeability and reuse of e-bike components and materials.Including e-bikes in an overall effort to achieve a circular economy will increase the environmentalsustainability of this transport mode.Recommendation 3|Improve affordability of e-bikes Offer e-bike purchase incentives.Reduce import or other tariffs that inflate the cost of e-bikes.91 HDFCErgo.(June 2022).Why Do E-Bikes Catch Fire?Check Out 12 Tips to Prevent It.92 EUR-Lex.(July 2023).Regulation(EU)2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batte-ries and waste batteries,amending Directive 2008/98/EC and Regulation(EU)2019/1020 and repealing Directive 2006/66/EC.93 UL Solutions.(n.d.).E-Bikes Certification:Testing to UL 2849.94 UL Standard.(September 2018).UL 2271|UL Standards&Engagement|UL Standard.95 United States Congress.(March 2023).H.R.1797 Setting Consumer Standards for Lithium-ion Batteries Act.96 E-bike Lovers.(March 2023).New Law Requires Certification for Electric Bicycles and Batteries in NYC to Improve Safety Stan-dards.97 Shawn Lin.(October 2021).Chinas 300 Million E-Bikes Cause Alarming Number of Fires98 Shanshan Li&Qiuyang Lu.(May 4,2023).Video interview with ITDP China.99 European Commission.(December 2022).EU agrees new law on more sustainable and circular batteries.100 European Commission.(August 2023).Batteries.101 Redwood Materials.(n.d.).Redwood Materials.102 eBike Battery Recycling.(n.d.).Hungry for E-bike Batteries.103 Liu et al.(January 2023).Life Cycle Environmental and Economic Assessment of Electric Bicycles with Different Batteries in China.“Technical stan-dards and certifi-cation are import-ant to improve safety,particularly for commercial e-bike fleets.Say you have a fleet of 500 e-bikes,and one or two catch fire,you could be looking at a ca-tastrophe.”Michael LinkeNational City31While mid-range e-bikes cost 10 to 15 times less than a mid-range car,104 they are still more expensive than the majority of conventional bicycles and therefore remain unaffordable for many.In recent years,local and national governments(particularly in wealthier countries,such as the US,Australia,and EU members)have offered incentives such as point-of-sale vouchers,rebates,and credits for trading in a vehicle to reduce the cost of purchasing an e-bike or ecargo cycle.105 106 Incentive programs in other cities and countries have alsobeen extended to businesses to purchase e-bikes for deliveries or other commercial uses.National-level examples of this include the Netherlands(up to 62%of purchase offsetthrough tax deductions),Germany(up to 4,200 purchase subsidy),and Belgium(up to4,000 purchase subsidy).107Of course,initiatives to improve the affordability of e-bikes should reflect each countrys economic reality.An example of such an initiative from a middle-income country comes from India.As part of the Delhi EV Policy adopted in 2021,offering a 25%discount to 10,000 e-bike customers and a 33%discount to 5,000 ecargo cycle customers is meant to generate both personal and commercial demand for e-bikes.108 The design of these incentive programs is important:Many offer vouchers or credits on a sliding scale based on income,with lower-income residents able to receive more support.Point-of-sale vouchers(like those used in Denver;see Highlight Box 3)are preferred over rebates,because people do not have to be able to pay the full amount up front and wait for reimbursement.Ensuring support and buy-in from bicycle retailers is also critical.Notably,Delhis incentive program includes a scrappage scheme where e-bike and ecargo cycle buyers can receive an extra Rs 3,000(USD$36)to scrap or deregister an ICE two-wheeler.109 Incentive programs could also be tied to quality standards,where only certified e-bikes and batteries qualify for the incentive.110Jurisdictions that offer tax advantages for the purchase of an electric car should work to ensure that these can also be applied to e-bikes.Compared to EVs,subsidies for e-bikes may do more to incentivize purchase because the cost offset by the subsidy is much higher.For example,a$1,000 subsidy offsets 66%of the cost of a$1,500 e-bike compared to 3%of a$30,000 EV.In this hypothetical scenario,the presence of the subsidy likely reduces the purchase price enough to change the demand for e-bikes,while those who could not afford a$30,000 electric car or truck will most likely not be able to afford one that is 3%cheaper.A survey of e-bike voucher users in Denver showed that 67%of low-income respondents would not have purchased an e-bike without the subsidy.111Securing and allocating funding for e-bike purchase incentives may be challenging for local and even national governments with limited budgets.However,many governments have been able to introduce and dedicate funding for incentives to offset the cost of purchasing an electric automobile(as well as for electric car charging on public rights of way)as a means of encouraging electric car or truck uptake.City and national governments should revisit these incentives and explore how allocating some of those funds or designing similar programs to support the purchase of e-bikes could be a more effective path to reducing harmful emissions and achieving related environmental and access goals.Revenues generated from policies intended to reduce demand for driving,such as priced on-street parking or congestion pricing,could also help fund e-bike purchase incentives(see Recommendation 9).Alternatively,market-based interventions,such as supporting the local production and distribution of e-bikes across a range of price points,could increase supply and lower overall purchase costs for consumers.112 While some governments may not be able to offer upfront purchase incentives for e-bikes,they may be able to reclassify e-bikes so they are no longer considered“luxury goods”or forgo import tariffs(see Recommendation 8).This is what Brazil has done with electric cars since 2015113,and Ethiopias national NMT strategy suggests this for bicycles.114 Countries could consider lowering taxes for,or otherwise incentivizing,the domestic production of e-bikes to boost local supply and drive down the cost to purchase.104 Dana Yanocha and Mackenzie Allan.(2019).The Electric Assist:Leveraging E-bikes and E-scooters for More Livable Cities.105 Noa Banayan,Ashley Seaward,&Kyler Blodgett.(2023).Electric Bicycle Incentive Toolkit.106 European Cyclists Federation.(n.d.).Money for bikes:Tax incentives and purchase premiums for cycling in Europe.107 Urban Arrow.(November 2022).Receive Subsidies When Purchasing Cargo Bikes for Businesses.108 Transport Department of NCT of Delhi.(2021).Delhi EV Policy.109 Express News Service.(April 2022).Delhi government includes e-cycle under its EV policy.110 Connecticut Department of Energy and Environmental Protection.(July 2023).Electric Bicycles eBikes.111 City and County of Denver et al.(2023).Denvers 2022 E-bike Incentive Program Results and Recommendations.112 Michael Linke.(May 2,2023).Video interview by author.113 Waldheim Garcia Montoya.(March 2023).EV import subsidies divide Brazils auto industry.114 ITDP.(May 2020).Ethiopia Non-Motorized Transport Strategy 20202029.“We know that if we only make progress on EVs electric cars and trucks or e-bikes,we wont get any-where near our climate goals.We know that we need to make action on both fronts.So we want to promote EVs,but we also know that we need to get people out of their cars,so just investing in EVs is not going to get us to our climate goals;we need to invest in e-bikes as well.”Mike Salisbury,City of Denver32Recommendation 4|Fund cycle infrastructure Develop,finance,and implement a network of bicycle lanes and supportive bicycleinfrastructure that accommodates e-bikes.Designate annual,national-level funding for active mobility.E-bikes thrive when cycling is an irresistible choice for travel.A connected network ofprotected cycle lanes,greenways,safe intersections,and low-speed streets is critical tosupport many types of people cycling for everyday trips.The same is necessary to support theuse of e-bikes.115 Cities in China and Western Europe,where e-bike use is highest,also havesome of the worlds most extensive cycle lane networks,coupled with low speed limits forvehicles and safe crossings at intersections.While providing cycle lanes and bicycle parkingis an important first step,these should be designed in a way that also accommodates e-bikes.For example,allowing for wider cycle lanes and including a passing lane in the design canmake maneuvering an e-bike easier and more comfortable.Bicycle parking racks should be farenough apart that an e-bike can fit between racks with other parked bicycles present.Parking racks should also be located far enough away from walls or other items so it is easy to maneuver a larger,heavier e-bike into the parking space.E-bike chargers could be installed in high-demand bicycle parking areas.National and local governments play key roles in creating environments that support people using bicycles and e-bikes,including through:Creating standards for infrastructure design(national governments).Providing funding for implementation of infrastructure and programming(nationaland local governments).Creating platforms for local governments to exchange information to facilitatepeer-to-peer learning about cycling(national governments and/or civil societyorganizations).Recently,Ireland and France have both made significant progress in supporting cycling(and e-bike use)at the national level.Irelands National Transport Authority allocated 290 million euros(USD$323 million)to deliver hundreds of projects to support cycling and walking in line with thegovernments Climate Action Plan.116 Similarly,in 2023,the French government committed 2 billioneuros(USD$2.2 billion)through 2027 to improve cycle infrastructure and help people buy bicyclesin an effort to reduce car use and boost cycling across the country.E-bikes are gaining popularityin France,with one in four bicycles purchased in 2022 being electric,117 and 65 million euros($72.3million)have been allocated to help people buy e-bikes as part of this program.National governments can also be particularly important players in stimulating e-bike use in suburban and rural areas where municipal authorities may not have jurisdiction or sufficient resources.Another key role that national governments can play is in stimulating countrywide,inter-city cycle networks.E-bikes are particularly well-suited for longer-distance trips,such as between cities.When cyclists can complete these trips on high-quality off-road paths specifically designed for cycles(or“bicycle highways”118),e-bikes become a very attractive substitute for vehicles for more types of trips.115 Shanshan Li(ITDP China)&Qiuyang Lu(ITDP China).(May 4,2023).Video interview by author.Noa Banayan(PeopleForBikes).(May 4,2023).Video interview by author;Justine Lee(25madison).(April 27,2023).Video interview by author.116 National Transport Authority.(n.d.).Active Travel Investment Programme.117 Sandy Dauphin.(May 2023).The Government Releases Two Billion Euros for Its New Bicycle Plan.118 ITDP.(February 2020).Will E-Bikes Make Cycle Highways Happen?SOURCE:ITDP MexicoNational City33Recommendation 5|Educate potential e-bike users Develop educational campaigns to encourage e-bike use across demographic groups.Shift perception of cycling(and e-bike use)from recreational to transportation.Because e-bikes are less familiar than traditional bicycles to most people,cities should work to educate the public about what an e-bike is(classification,speed,etc.)and how they differ from higher-speed vehicles like mopeds and motorcycles.Education on e-bike safety,regulations for use on the street,and related policies is also needed.This could include partnering with local cycling advocacy groups or bicycle retailers to disseminate information and communicate new programs,like the availability of e-bike purchase incentives or community e-bike libraries.Outreach events where people are able to test-ride e-bikes and receiveinformation on incentive programs or sign up for a bikeshare membership could help peoplefeel more comfortable integrating an e-bike into their daily life.Furthermore,promoting thesafe use of e-bikes and noting the dangers associated with improper charging or battery usecan help to curb accidents and injuries.Cities might also consider partnering with privatesector companies,such as those that employ delivery workers who use e-bikes,to ensure thatcommercial e-bikes and batteries meet safety standards.Recommendation 6|Increase access to shared e-bikes Offer e-bikes as part of public bikeshare programs.Consider incentives for local delivery companies that offer employees long-termaccess to shared e-bikes instead of vehicles.Even if people know how to ride a bicycle,they may never have tried riding an e-bike.Giving people a low-risk opportunity to experience riding an e-bike(i.e.,without the responsibility to purchase,store,or maintain one)can help people better visualize how an e-bike might fit into their life and work for the types of trips they make.Many cities have done this by integrating e-bikes into existing bikeshare programs.Similar to integrating e-bikes into bikeshare systems as a low-risk way for people to try them,long-term e-bike rentals are also gaining popularity,especially in the United States and Australia.Long-term e-bike rental programs are also increasingly used by local delivery workers who do not have access to a car or two-wheeler.Monthly subscription programs typically provide access to an e-bike whenever its needed,as well as maintenance and even spare batteries.While these programs are largely offered by private companies,cities might consider incentives for local delivery companies that offer their employees access to e-bike rentals,or subsidizing e-bike rental programs for public employees.Though much smaller than a citywide bikeshare system,e-bike libraries function similarly in terms of expanding access and awareness and reducing barriers.These programs are typically run by community-based organizations and enable residents to borrow an e-bike free of charge for weeks or months at a time.Users can charge and store their rented e-bikes at home,or they can drop them off at a designated location between uses.This model can be particularly ideal if a short-term grant or local funding is secured for a limited number of e-bikes.E-bike libraries can be a good option to provide access to e-bikes in places where a full bikeshare system may not be available.119119 Noa Banayan(PeopleForBikes).(May 4,2023).Video interview by author.SOURCE:Ana NassarCityNational City34Recommendation 7|Develop an enforcement plan for e-bikes and cycle infrastructure Designate responsibility for citing noncompliant vehicles that use cycle lanes.Ensure enforcement officers can visually distinguish between e-bikes and higher-speed mopeds and motorcycles.With speeds comparable to conventional bicycles,low-speed e-bikes should be permitted to ride in bicycle lanes and other bicycle infrastructure citywide.For speed pedelecs and other e-bikes that can reach speeds of 45 kph,we recommend differentiating between the ability touse bicycle infrastructure in high-and low-density urban areas.In high-density urban areas,where vehicle speeds tend to be lower and there are many people cycling and walking,speedpedelecs should not use cycle or pedestrian infrastructure unless that infrastructure has beendesigned to accommodate them,such as the inclusion of passing lanes.However,in lower-density areas farther from the city center,where vehicle speeds may be higher and cyclinginfrastructure is likely to be less crowded,speed pedelecs could be permitted to use cyclelanes where available.Higher-speed(ICE or electric)mopeds and motorcycles should not be permitted to use cycle lanes,and there should be clear and enforced penalties for doing so.Cities will need to designate responsibility for citing mopeds and motorcycles that use or block cycle lanes this could fall under the purview of municipal police and therefore will require coordination between police and the transport agency.It is important to establish clear,visual distinctions between e-bikes and faster mopeds to ensure enforcement officers can more easily identify violating vehicles.In other words,high-speed devices should look out of place in low-speed infrastructure.Strict penalties should be set and enforced for modifying e-bikes to travel at higher speeds,as well as for counterfeiting manufacturer labels that differentiate between devices.Recommendation 8|Improve ability to import and/or produce quality e-bikes domesticallyRemove(or reduce)import tariffs on foreign-produced e-bikes.Offer incentives to attract e-bike manufacturers to produce domestically.One of the biggest barriers to e-bike uptake,especially in nascent markets,is a lack of supply of e-bikes and e-bike parts,which leads to high prices and a sense of scarcity.Governments need to ensure that safe,quality e-bikes(see Recommendation 2)can be imported or manufactured domestically and sold to consumers at affordable prices.It is also important to have measures in place to avoid dumping of low-quality e-bikes from foreign markets.Foreign brands may be subject to import taxes and other restrictions that contribute to supply issues.Reducing import tariffs can be very helpful to stimulating emerging modes.This was the case in Brazil,where electric cars and parts have been exempt from the countrys 35%vehicle import tariff since 2015,helping make Brazil the biggest electric car and truck market in Latin America.120 A more welcoming tax structure for e-bike production would help stimulate job creation as well as e-bike supply.Ethiopias national NMT strategy identifies the existing 20%import tariff on bicycles and bicycle parts as an impediment to accessing high-quality bicycles,and it recommends removing the tariff as part of the implementation of the strategy.121 Currently,Ethiopias Ministry of Transport and Logistics and Ministry of Finance are coordinating on such an exemption on taxes for importing bicycles and e-bikes.National(and in some cases subnational)governments could also consider offering incentives to attract local manufacturing of e-bikes and e-bike parts,increasing overall domestic supply and ensuring a range of models are available at different price points.Introducing a simple,lower-cost,good-quality e-bike model to the market could be even more impactful at spurring uptake than a government-sponsored subsidy scheme that lowers the purchase cost of a higher-priced model for a small subset of potential users.122 Experts warn against encouraging very inexpensive,low-end e-bikes,though,as these have very limited ranges and low-quality batteries,which greatly increases the risk of fires(in the case of lithium-ion batteries)or serious environmental damage(in the case of lead-acid batteries).120 Waldheim Garcia Montoya.(March 2023).EV import subsidies divide Brazils auto industry.121 ITDP Africa.(May 2020).Ethiopia Nonmotorized Transport Strategy 20202029.122 Michael Linke.(May 2,2023).Video interview by author.NationalCity35Recommendation 9|Disincentivize private vehicle use National CityImplement parking pricing and/or zone-based vehicle restrictions such as congestionpricing or a low-emission zone,and direct revenue to e-bike programs.Making the implicit costs of driving explicit through policies like pricing parking,fees per vehicle kilometer traveled,congestion pricing,and emissions-based pricing can nudge people and companies to rethink using a private vehicle for every trip and shift some trips to cycling/e-bikes.123 The City of London(a one-square-mile commercial district within Greater London)announced in 2018 that it would restrict vehicle access on half its roads and limit vehiclespeeds to 15 mph to reduce emissions and improve comfort and safety for pedestrians andpeople riding bicycles.124 Five years later,pedestrians account for the majority of trips in thisarea,and cyclists make up 40%of road traffic during peak hours.125Low-emission zones designed to levy a fee on or restrict access for the highest-polluting freight vehicles could encourage delivery companies to switch to a model where last-mile deliveries are done using ecargo cycles.Focusing on commercial fleet transitions that integrate e-bikes as opposed to individual uptake is a helpful entry point for broader e-bike adoption,especially in cities where e-bikes are relatively expensive or difficult to find.126 A portion of revenues from low-emission zone or congestion-pricing entry fees could be allocated to e-bike purchase subsidy or e-bikeshare programs.Importantly,these policies need to be coupled with cycle infrastructure thatsupports direct,comfortable trips by bicycle or e-bike.123 ITDP.(March 2021).Taming Traffic.124 Eillie Anzilotti.(October 2018).The City of London is kicking cars off half its roads.125 Carlton Reid.(March 2023).“Cyclists Now Outnumber Motorists in City of London.126 Danielle Hoppe(ITDP Brazil).(June 1,2023).Video interview by author.SOURCE:waltarrrrr via FlickrSOURCE:ITDP ChinaNational City36into countries Nationally Determined Contributions(NDCs)to the Paris Agreement on Climate Change.This could make efforts to promote e-bike use in low-and middle-income countries eligible for carbon credits.NDCs detail what actions countries will undertake across all sectors to align with the Paris Agreement goal to limit global warming to 1.5C.A search of NDCs127 revealed that only three countries Nepal(Second NDC),Sierra Leone(Revised First NDC),and Tuvalu(Revised First NDC)mention e-bikes.128 Including e-bikes in NDCs would help align national institutions,create plans with measurable outcomes,improve Monitoring,Reporting,and Verification(MRV)of GHG emissions avoided through e-bike uptake,and improve funding prospects for programs to support e-bikes and cycle infrastructure.Furthermore,as carbon markets mature in coming years,additional funding for carbon-reducing projects will become available under Article 6 of the Paris Agreement.Article 6 establishes mechanisms for selling carbon credits,and plans to support e-bike use could be candidates for international funding under Article 6.To ensure that e-bike projects are eligible,countries should add e-bikes to their NDCs.Recommendation 11|Pursue universal charging for e-bikes Gather knowledge from manufacturers and other stakeholders around challenges andopportunities related to universal e-bike charging.SOURCE:John-Fs-Pic via ShutterstockNational127 Conducted using Climate Watchs NDC Search Tool.128.Nepals NDC mentions“e-vehi
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Data and AI in logisticsWhitepaperstatworx2024 0812024 08Data and AI in logisticsWhitepaper1Artificial intelligence can fundamentally change the logistics industry and supply chain management.But how can companies benefit from this and optimize their processes?The strategic introduction of AI technologies is the key to increasing efficiency and productivity.Data and AI in logisticsWhitepaperstatworx2024 082statworx GmbHHanauer Landstr.15060314 Frankfurt am M 49(0)69 6783 067-51Tarik AshryPR&Communications SpecialistTarik Ashry is an AI editor and expert for strategic communication.He deals with the prerequisites for an ethical ethical use of AI and the roles that corporate management and corporate culture corporate culture play in this.In this whitepaper,you will learn how artificial intelligence can be used in the logistics indus-try and in supply chain management and what benefits it offers.It describes the various application areas of AI in logistics and outlines how companies can optimize their processes by integrating AI technologies.We also share specific use cases and provide an outlook for the future.Find out what you can expect in this whitepaper and which authors are behind it.About the whitepaper and the authorsTobias Salfellner Senior ConsultantTobias Salfellner is an expert in AI,data science and machine learning.Through his work on a variety of data science use cases in different indus-tries,he has a deep understanding of the market and technology.Data and AI in logisticsWhitepaperstatworx2024 083Contents4519Management SummaryA brief overview of the topic of AI in logisticsWhitepaper ContentsHow AI is revolutionizing the logistics industryUse CasesFour exemplary use cases from around the world23About statworxWhat you should know about the company22Outlook and ConclusionWhat you should take away from this white paper25SourcesReferences and further informationData and AI in logisticsWhitepaperstatworx2024 084Management SummarySummaryThe impact of artificial intelligence(AI)in(intra)logistics and supply chain management lies in its transformative potential to streamline operations across various func-tions.AI applications in logistics encompass planning,procurement,manufacturing,warehousing,distribution,transportation,and sales.The adoption of AI technolo-gies offers benefits such as optimized routes,improved demand forecasting,enhanced productivity,reduced operational costs,and on-time deliveries.Compa-nies leveraging AI in supply chain management report decreased costs,increased revenues,and improved operational efficiencies.AI systems help reduce manual efforts,enhance safety,streamline warehouse opera-tions,and facilitate timely deliveries to customers.The integration of AI with real-time data and external sources is crucial for maximizing its effectiveness in supply chain operations.Whitepaperstatworx5 5From cost reduction to resilience and sustainability1Whitepaperstatworx2024 08Data and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 086From cost reduction to resilience and sustainabilityIntroductionLogistics and transportation generate and account for immense economic value.UNCTADs Global Trade Update reports that in 2021,worldwide trade reached a peak of$28.5 trillion a tenfold increase since 1980.1 According to New Strategy Consulting,the global intralogistics market was valued at$47.08 billion in 2022 and is expec-ted to reach$145.49 billion by 2030.With a compound annual growth rate of 15,1%,it is driven by the adoption of robotics and automation,leading to greater effi-ciency,accuracy,and speed.2 These figures underscore the extensive transportation networks that have under-pinned globalization for years.Robust supply chains and efficient logistics are critical components for long-term business success across all industries.In recent years,the focus in supply chain management has shifted from pure cost reduction to resilience,sus-tainability,and the integration of artificial intelligence(AI).For decades,many businesses have relied on single suppliers for certain resources,favoring simplified supply chains and scale economies.This has been a generally successful strategy until a global pandemic,armed con-flicts and wars in regions highly influential on world trade,and subsequent disruptions have significantly altered global trade dynamics in the past four years.Companies are re-evaluating their risk strategies,emphasizing the need for nearshoring,alternate sourcing,inventory opti-mization,and better collaboration for increased visibility.Using automation,digitalization,artificial intelligence,and machine learning,logistics firms want to tackle typi-cal challenges such as low stock turnover,small order quantities with high delivery speeds,and the growing need to operate in an energy-efficient and sustainable manner whilst also dealing with staff shortages and increasing demand.Adding to these challenges is the rise of environmental,social,and corporate governance(ESG)prescriptions and a growing political will to regulate supply chains.i Transparency in emissions of harmful substances and compliant labor practices are set to become stricter and more binding.In this environment,digitalization and AI can be transformative tools for enhancing supply chain agility,efficiency,transparency,and resilience.With the recent introduction of(generative)AI tools in many industries,the workforce will have to learn how to make use of these new technologies.3 Technology does not work wonders on its own but requires skilled and trained users and a strong data culture to improve decision-making and productivity.iAs evidenced by the proposed Corporate Sustainability Due Diligence Directive of the European Union.Efficient management and optimization of storage spacesThe integration of AI enablesAccurate forecasting of supply and demandError detection and quality controlOptimization of transport and picking routesPredictive maintenance for equipment7A broad range of possibilities2Whitepaperstatworx2024 08Data and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 088A broad range of possibilitiesStatus quoArtificial intelligence can perform a range of tasks from basic to highly complex.And it is now essential across various sectors,including supply chain management and logistics.AI enhances these industries by providing ins-tant insights and by cutting costs,saving time,minimizing waste,and boosting efficiency.Real-time optimization and managementThe role of AI in the industry will continue to grow rapidly.Research conducted by AI-platform provider Dataiku sug-gests that by 2026,companies will prioritize AIOpsii,aug-mented intelligence,as well as discovery and analysis applications.When it comes to the implementation of AI in 2024,however,firms in the supply chain sector work on intelligent task-and process automation,discovery and analysis apps,as well as augmented analytics.4 Currently,four major use cases are prevalent:Optimization of Fulfillment and DistributionAI is being utilized to automate and optimize logistics pro-cesses,including order processing,inventory manage-ment,and distribution.This automation leads to more efficient resource utilization and an enhanced customer experience.AIs predictive capabilities enable accurate forecasting of production and transportation volumes,contributing to improved efficiency.5Route OptimizationAI algorithms analyze real-time traffic data and environ-mental conditions to identify the most efficient routes for delivery vehicles.This not only reduces fuel costs and improves delivery times but also enhances driver safety by avoiding hazardous conditions.6 Inventory ManagementAI plays a crucial role in inventory management,especi-ally for businesses dealing with a large number of stock keeping units.AI can predict demand,manage stock levels,and even automate ordering processes,thereby reducing the risk of stockouts or overstocking.7Supply Chain VisibilityAI enhances supply chain visibility by providing real-time data on shipments,enabling companies to monitor their goods throughout the supply chain.This visibility helps in identifying potential delays and making necessary adjustments to ensure timely delivery.8iiCoined by Gartner,AIOps or artificial intelligence for IT operations,is the application of artificial intelligence(AI)capabilities,such as natural language processing and machine learning models,to automate and streamline IT service management and operational workflows.AI adoption rate in supply chain and manufacturingWorldwide in 2022 and 2025Not usingPiloting use casesLimited adoptionWidescale adoptionAI is critical400 %0%Current adoption in 2022Expected adoption in 2025Quelle:StatistaContinue on next pageData and AI in logisticsWhitepaperstatworx2024 089Status quoStrengthening resilience with prescriptive analyticsIn view of the changing global environment,however,the most important trend for the future is a different one:diversification is the name of the game as years of pan-demics,wars,and other disruptions have turned resi-lience into the number one priority.As discussed above,AI systems can predict demand trends,inventory changes,and possible disruptions using historical and current data.This prediction aids in optimizing stock levels,reducing shortages,and enhan-cing supply chain efficiency.Accurate demand forecasts ensure products are available when and where needed,increasing effectiveness and customer satisfaction.Predictive analytics is progressing towards prescriptive analytics,which will eventually automate more workflow components.Here,AI will play a key role due to the surge in data generation.By 2025,it is estimated that the data produced will equal the storage of 200 billion iPhone 14s,about 181 zettabytes.This data,along with growing com-putational power,allows for the creation of more sophis-ticated models for complex tasks.9Most industrial companies want supply chain resilienceChanges to global supply chains in the last two years62%have made significant changes to their supplier base57%have established new operations in one or more additional countries53%have near-or re-shored operations10Applications of Data Science and AI:Almost anything is possible3Whitepaperstatworx2024 08Data and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 0811Fields of ApplicationApplications of Data Science and AI:Almost anything is possibleThe range of potential use cases and applications of data science and AI in logistics and transportation can be segmented into eight categories.In each category,AI and data science technologies can optimize a particular set of tasks and processes.10 It can assist procurement and sales(1);streamline the warehouse(2);automate sortation,storage,and retrieval(3);optimize shipping(4);visually detect errors and damages(5);manage the avai-lability of machinery and vehicles(6);completely change the game in the form of robots,drones,and autonomous vehicles(7);or guide people with sensory support sys-tems(8);or assist in all aspects of communication and information transfer(9).1.Demand Forecasting,Supply Planning&Dynamic Pricing:AI significantly improves the utilization of real-time data for precise demand forecasting and dynamically fine-tunes supply chain operations.It enables on-the-fly pri-cing adjustments to align with market fluctuations.By promptly detecting inventory shortages,AI facilitates the timely placement of orders.It oversees inventory levels and generates necessary alerts,streamlining stock management,boosting supply chain effective-ness,and reducing expenditures.Requiring vast data-sets to detect trends,patterns,and seasonal changes,AI ensures efficient inventory control and consistent product availability.2.Warehouse Management Systems(WMS):WMS streamline warehouse operations by managing inventory,fulfilling orders,and coordinating equipment,ensuring efficient material flow.These systems cut labor costs through task optimization,bolster inventory management to avoid shortages,and enhance space use.AI-enhanced WMS,utilizing ML for product insights,smartly allocate storage based on product attributes,improving placement efficiency and accuracy while offe-ring real-time bottleneck alerts.Continue on next pageData and AI in logisticsWhitepaperstatworx2024 08123.Automated Sortation Systems&Automated Storage and Retrieval Systems(AS/RS):Automated sortation systems identify and direct mate-rials on conveyors,enhancing speed,reducing labor reli-ance,and increasing order accuracy.AS/RS automate material storage and retrieval,following set paths to manage tasks traditionally done by workers.They come in various forms like cranes and carousels,dramatically lowering labor requirements,enhancing accuracy,and maximizing storage density.4.Route Optimization/Freight Management:AI optimizes routing to reduce shipping costs and time.In warehouses,time is of the essence in collecting and providing goods.Faster picking speeds up delivery to customers,enhancing satisfaction and loyalty.AI opti-mizes picking paths and transportation routes within the warehouse,using ML to determine the most efficient routes for robots and staff,taking into account special cases like delivery windows,and aiming to reduce energy consumption.This not only modernizes operations but also lessens the ecological footprint,maintaining com-petitiveness and meeting market demands.5.Damage/Error Detection&Visual Inspection:Computer vision technology identifies damages for qua-lity control.To maintain high-quality standards in the face of increasing demands,AI can be employed to automate the inspection process,detect errors early,and improve product quality.For instance,AI-based inspection sys-tems using optical sensors and image processing can examine products in real time,identifying defects at the point of reception,thus minimizing waste and the need for rework.This ensures quality and increases efficiency.6.Predictive Maintenance&Industrial Internet of Things(IIoT)&Fleet Management Systems:Fleet management oversees vehicles to boost producti-vity and efficiency while cutting costs.Using telematics,it tracks vehicle data,enabling better route manage-ment,equipment protection,and maintenance sche-duling.AI,analyzing data from IIoT sensors,anticipates machinery malfunctions to avert breakdowns.This pre-dictive maintenance,empowered by AI,proactively iden-tifies potential issues through sensor data and machine learning,slashing downtime by up to 90%,bolstering safety,and extending the lifespan of equipment.Such preemptive strategies not only save significant costs by reducing inefficiencies but also intertwine with the broader scope of the Industrial IIoT.The IIoT creates a network of interconnected devices within warehouses,thereby streamlining operations,amplifying productivity,trimming expenses,and supporting more informed deci-sion-making with superior data insights.7.Automated Guided Vehicles(AGV),Autonomous Mobile Robots(AMR),Collaborative Robots&Delivery Drones:Drones deliver to inaccessible areas,or areas that have become dangerous to access for humans.AI-driven robots are heavily used to improve supply chain manage-ment.Cobots assist human workers by minimizing errors and enhancing speed and efficiency,allowing staff to focus on higher-value tasks.Studies show cobots can boost efficiency by 30%,aiding in various tasks such as picking and packing.AGVs and AMRs facilitate cargo movement,with AMRs operating independently thanks to environmental sensors.They enhance productivity,decrease manual labor,reduce errors,and improve safety while being scalable to operational growth.Fields of ApplicationContinue on next pageData and AI in logisticsWhitepaperstatworx2024 08138.Wearables,Voice Picking&Pick-to-Light and Put-to-Light Systems:Wearable devices such as smart glasses and GPS bra-celets enhance warehouse operations by providing real-time guidance,streamlining tasks like stocking and navigation.They focus workers attention,increase effi-ciency,and lower costs by enabling quicker task com-pletion.Voice picking systems use verbal instructions to assist workers in fulfilling orders,improving accuracy,productivity,and safety by keeping hands and eyes free from paperwork and devices.Pick-to-Light and Put-to-Light systems guide workers using lights for item place-ment and retrieval,boosting productivity by up to 50%,improving accuracy,and cutting down on training time.9.AI-Chatbots:AI chatbots offer a variety of useful functions in the logistics industry.They are available 24/7 and enable seamless customer interaction across various platforms such as websites and messaging services.These chat-bots can provide real-time delivery status and tracking information,increasing transparency and boosting cus-tomer confidence.They also make it easier to manage order changes,cancellations and product enquiries,Fields of Applicationwhich promotes customer satisfaction and loyalty.With the ability to handle multiple enquiries simultaneously,AI chatbots improve the scalability and efficiency of cus-tomer service and lower operating costs by reducing the need for additional staff.In addition,they support inven-tory management,optimise the last mile of delivery and collect valuable customer feedback that can be used to continuously improve services.Overall,AI chatbots are helping to automate operational processes,reduce costs and increase customer satisfaction in the logistics industry.2024 0814Benefits and impact:The best is yet to come4WhitepaperstatworxData and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 0815AI delivers real economic value and that value can grow significantly.According to a study by McKinsey,the suc-cessful implementation of AI has helped businesses improve logistics costs by 15%,inventory levels by 35%,and service levels by 65%.11 Another McKinsey study sug-gests that logistics companies will generate$1.3 to$2 trillion per year for the next 20 years in economic value by adopting AI into their processes.12,13 But the impacts of AI go beyond cost savings and also comprise efficiency gains,environmental benefits,and improved customer experience:Cost Savings:AI-driven route optimization reduces travel distances,idle time,and fuel costs,leading to substantial savings in operational expenses.14,15 Implementing AI algorithms for workforce efficiency can automate tasks,streamline planning processes,and reduce manual effort,ultimately cutting down on overtime costs.16 Improved Efficiency:AI enhances operational efficiency by optimizing routes,automating critical tasks,and increasing delivery capa-city without the need for extra resources.17 AI-powered systems streamline logistics operations,improve deli-very times,reduce idle time,and boost productivity.18OutputBenefits and impact:The best is yet to comeReduced Environmental Impact:Optimized routes through AI result in less fuel usage,reduced emissions,and contribute to sustainability efforts and environmental conservation.19 By minimizing distance traveled and eliminating unnecessary idling or detours,AI-driven route planning helps in reducing the carbon footprint of logistics operations.20Enhanced Customer Experience:Quicker routes and on-time deliveries due to AI-powe-red route planning lead to happier customers,improved satisfaction levels,and increased customer retention.21 AI-driven chatbots in customer service provide instant support,answer queries efficiently,and enhance overall customer satisfaction by reducing response times.222024 0716Challenges:Will invest-ments pay off?5Whitepaperstatworx2024 08Data and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 0817While AI offers numerous benefits,implementing it also comes with challenges that must be considered befo-rehand.With AI,logistics and transportation companies can benefit immensely,amongst others,from improved efficiency and cost savings.However,AI projects can also come with a high price tag a problem especially if costs were not planned to their final extent.Moreo-ver,AI projects can(and may even be meant to)cause workforce displacement with subsequent legal costs,declining staff satisfaction,and other related issues.Doing AI requires extensive and intensive training for the whole company which takes time and costs money.Ethical considerations play a role when implementing AI,not only when AI takes on the jobs of humans.The need for human-AI collaboration must be carefully managed to ensure a successful and responsible integration of AI.Lastly and most importantly,data quality,data privacy,and data protection are crucial factors for all AI projects.If the requirements in these realms arent met,any pro-ject will likely fail.According to PwCs“2024 Digital Trends in Operations Survey“23,which gathered insights from 600 operations and supply chain officers,69%of these professionals indicate that their technology investments have not fully realized the anticipated business outcomes.The survey highlights that 45%of CEOs fear their companies may become nonviable within a decade if current trajecto-ries are maintained.Key challenges identified include integration complexity(30%),technologies not meeting expectations(28%),and deficiencies in people capabi-lities(27%),among others.Additionally,while the majo-rity of companies are dabbling in generative AI,only 20%report its widespread use in their operations.There is also a noted lack of emphasis on digital skills develop-ment,with less than a third of respondents treating it as a high priority.Furthermore,59%cite multiple factors for their underperforming technology investments in opera-tions.ChallengesChallenges:Will investments pay off?Cost of IntegrationIntegrating AI into existing systems can be expensive due to the need for customized solutions and speciali-zed hardware.The initial investment includes not only the cost of AI systems but also the infrastructure required to support them.24,25 Operational Costs AI systems require a significant amount of energy to ope-rate and maintain.The components,such as processors and batteries,can be costly to replace.Additionally,AI machines may increase utility bills as they can operate for extended periods without breaks.26 Workforce Displacement As AI automates tasks,there is an inevitable reduction in the workforce.Companies must address the challenge of job displacement,either by finding new roles for affected employees or by releasing them.This transition must be managed carefully to minimize the impact on employees livelihoods.27 Training and AdaptabilityImplementing AI requires training for the workforce to adapt to new technologies.This training incurs additional costs and may initially reduce business efficiency as emp-loyees learn to work with AI systems.28 Continue on next pageData and AI in logisticsWhitepaperstatworx2024 0818ChallengesData Privacy and SecurityAI systems rely heavily on data,raising concerns about data privacy and security.Ensuring the protection of sensitive information is a significant challenge that com-panies must address.29 Ethical Considerations The expansion of AI raises ethical questions,such as the extent to which AI should replace human jobs and the safety considerations of AI in transportation,espe-cially considering accidents involving semi-autonomous vehicles.30 Human-AI Collaboration While AI can predict and automate,it does not eliminate the need for human judgment.Human expertise is still required to make decisions based on AI-generated data and insights,ensuring a balanced approach to managing supply chains.31 Scalability and Customization AI solutions must be scalable for long-term success,and the customization of AI systems can be a complex and costly process.Companies must work with AI ser-vice providers to ensure that the technology meets their specific needs.32 Decentralization Decentralization,i.e.having many regional branches,brings logistics closer to customers,which is bene-ficial.Yet,AI projects thrive on centralized and stan-dardized processes,resources,and companywide accessible data.33 Implementing an AI project at multiple,spread-out branches within one company requi-res extensive communication,a strong digital infra-structure,data governance and management.Data and AI teams must grasp the various needs across branches to identify unifying elements.Legal changesThe German Supply Chain Due Diligence Act(Lieferket-tensorgfaltspflichtengesetz)and a planned EU Supply Chain Directive pose administrative challenges in terms of reporting,drafting contracts with suppliers,and risk management.34 A lack of clear regulation and legal uncer-tainty creates an investment-unfriendly environment,putting AI automation on the back burner.19Use Cases:High complexity,high reward6Whitepaperstatworx2024 08Data and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 0820Four exemplary use cases from around the globe show a glimpse of what is already being accomplished in logis-tics,warehouse management,and transportation with AI.Use Case I:Route optimization that saves up to$30 million Challenge:A German manufacturing company faced inefficiencies in its supply chain operations,leading to increased costs and operational challenges.Solution:The company integrated a comprehensive data roadmap aligned with its business objectives.By lever-aging AI technologies,they implemented a solution for route optimization to streamline operations effectively.Impact:The German manufacturing company achieved significant cost savings of up to$30 million.The imple-mentation of AI-driven solutions not only optimized rou-tes and improved delivery efficiency but also enhanced accuracy in demand forecasting and inventory manage-ment.This resulted in a more streamlined supply chain operation,reduced costs,and increased overall effi-ciency for the company.35 Use Case II:Maximizing warehouse efficiency by 60%Challenge:A multinational logistics provider struggled with optimizing warehouse operations,particularly during seasonal peaks and variable demand.Manual processes caused bottlenecks,leading to protracted order fulfill-ment times and climbing labor costs.Inefficient space use in warehouses further limited storage and throug-hput.Additionally,manual inventory tracking led to inac-curacies and stockouts,delaying replenishment.Solution:The company created an automated system for picking and packing,incorporating machine learning and Use Casesrobotics.This system adjusted resource use in real-time,based on demand forecasts and historical data,optimi-zing labor and warehouse space.They also introduced AI for precise inventory management,enabling proactive stock replenishment and seamless operations.Impact:The results were significant:Order fulfillment times were cut by 50%,boosting operational efficiency.Labor costs fell by 30%,yielding considerable savings.Storage capacity utilization rose by 60%,thus maximizing warehouse efficiency and throughput.36 Use Cases:High complexity,high rewardContinue on next pageData and AI in logisticsWhitepaperstatworx2024 0821Use CasesUse Case III:Raising efficiency of multi-order picking from 58%to 94%Challenge:A leading global logistics provider was tas-ked with planning a new warehouse for a client,aiming to process 13,000 order lines or 750 picking cartons daily.The project required developing an optimal algorithm for multi-order picking,considering workers would use trol-leys for picking goods.Solution:Experts devised an algorithm ensuring straight picking routes for operators to minimize unnecessary backtracking.They utilized a simulation model to validate this algorithm,incorporating real historical data to opti-mize operators routes based on criteria such as maximi-zing carton quantity per tour and article overlap.Impact:Implementing the suggested layout configu-ration,equipment,and movement algorithm resulted in a significant improvement in trolley utilization rates,increasing from 58%to 94%.These results demonstrate the investment efficiency to the client and provide insights for optimizing warehouse layout,article distribu-tion,and determining the ideal balance between service level and staff workload.37 Use Case IV:Cutting downtime and costs with Predic-tive MaintenanceChallenge:A prominent US refrigerated storage spe-cialist struggled with maintaining their fleet due to the unstructured and siloed nature of vast operational data.This complexity hindered their ability to proactively schedule maintenance,which was crucial for enhancing customer service.Solution:The storage specialist collaborated with a team of experts to create a predictive analytics infrastructure utilizing Microsoft Azures services.This partnership faci-litated the integration of IoT devices and the streamli-ning of data management.Additionally,machine learning models were deployed to predict potential equipment failures and calculate the remaining useful life of the fleets components.Impact:The adoption of the predictive maintenance model yielded significant benefits:Precise predictions allowed for preemptive maintenance strategies,reducing equipment downtime.Cost efficiencies were realized by addressing potential problems before they escalated into critical failures.Operational efficiency was boosted by the timely scheduling of necessary repairs,which in turn elevated customer satisfaction levels.New revenue opportunities emerged for the client,enabling them to offer predictive maintenance services to their customer base.38Data and AI in logisticsWhitepaperstatworx2024 08222024 0822WhitepaperstatworxFuturistic advances and down-to-earth upgradesThe future of data science and AI in logistics will continue to be shaped by emerging trends,technological advance-ments,and potential transformative impacts.At statworx we subscribe to the following outlook:Autonomous Vehicles:One of the most significant impacts of AI in transportation is the development of self-driving cars and trucks.These vehicles use AI and machine learning algorithms to perceive their environment,make decisions,and navigate without human intervention,pro-mising to increase safety and efficiency on the roads.39 Traffic Management:AI assists in managing traffic pat-terns by predicting congestion and optimizing traffic flow.This application of AI can significantly reduce travel time and contribute to safer road conditions.40 Vehicle Maintenance:Through AI,its possible to moni-tor vehicle performance and predict maintenance needs.This predictive maintenance helps in reducing downtime and saving costs associated with repairs.41 Customer Service:In the transportation industry,AI impro-ves customer service by providing real-time information on schedules,delays,and allowing for seamless interac-tions through chatbots and virtual assistants.42 Big Data Analytics:Big data is being used more than ever to predict supply chain risks and make the supply chains more agile,helping businesses anticipate disruptions and opti-mize operations for resilience.43 IoT for Supply Chain Visibility:IoT technology is crucial for connecting every link in the supply chain,providing trans-parency,efficiency,and responsiveness.Innovations like smart labels are expected to significantly impact logis-tics.44Human-AI Collaboration:AI is evolving to impact various logistics areas,such as route planning,demand forecas-ting,and asset management.The collaboration of humans Data and AI in logisticsand AI will lead to smarter inventory management and the standardization of tools like computer vision in logistics.45 Sustainability as a Priority:Sustainable logistics are becoming a key economic factor,with a focus on green solutions like alternative fuels and electric vehicles.AI can enhance efficiency and sustainability by optimizing opera-tions and reducing resource consumption.46 Conclusion:The sweet spot of human-machine co-operationAI is poised to become the most pivotal force in logistics and supply chain management as digitization and auto-mation progress.Over the next few years,we can expect to see an increased incorporation of AI into a wide range of logistics processes,enhancing sustainability through more efficient,energy-saving operations that are mind-ful of natural resource conservation.Furthermore,the transformative impact of AI in logistics promises to increase efficiency,reduce costs,and improve custo-mer experiences.Nonetheless,the sector must navigate challenges including data privacy,cybersecurity,and the associated costs of technological upgrades and work-force training.It is essential that AI integration is con-ducted in a manner that supports rather than supplants human labor.The first insights into the trajectory of AI-driven improvements are set to come to the fore in the immediate future,facilitating innovation and setting new standards for the movement of goods and people.ConclusionData and AI in logisticsWhitepaperstatworx2024 0823Creating valuefrom Data&AI.Facts and figuresAbout usWe are more than just a service provider-we are your partner for the entire AI transformation.We advise,we develop,we educate-for more than 10 years,in over 500 data&AI projects and for over 100 clients from almost all industries.Our experts understand which tech trends will really make your company better.As a leading consulting and development company for Data and AI,statworx supports companies in all aspects of digital transformation-from strategic AI consulting and targeted AI training to the development of state-of-the-art AI solutions.Some of our customers2024 0823WhitepaperstatworxData and AI in logisticsData and AI in logisticsWhitepaperstatworx2024 0824We help companies in the logistics industry to use data and AI effectively to improve products and services,optimize processes and identify new business models.Start your journey into the future with Data and AIDaniel LttgauHead of AI DevelopmentYour contact personDaniel Lttgau is responsible for AI Develop-ment at statworx and is an expert in the use of AI to generate added value for compa-nies.The logistics industry is facing a digital revolution in which AI and data offer enor-mous potential for optimization.We analyze your existing processes,develop targe-ted measures and help you to efficiently design and sustainably integrate the use of AI throughout the entire supply chain.CONTACT USOur offersSolution and DevelopmentDevelopment of customized data and AI solutions.SERVICESInfrastructure and EngineeringDevelopment of data infrastructures,-pipelines and platforms.SERVICESStrategy and ConsultingStrategic consulting around data and AI in companies.SERVICESTrainings and UpskillingData and AI trainingfor companies.SERVICESStarter OfferingsData and AI entry-level offers.SERVICESData and AI in logisticsWhitepaperstatworx2024 08252024 0825WhitepaperstatworxSourcesSources and further information on the content of this whitepaper.Data and AI in logistics1 https:/unctad.org/system/files/official-document/ditcinf2022d1_en.pdf2 https:/ https:/ https:/is.gd/ylyIdW5 https:/www.codept.de/blog/5-ways-to-use-artificial-intelligence-in-logistics6 https:/www.codept.de/blog/5-ways-to-use-artificial-intelligence-in-logistics7 https:/www.codept.de/blog/5-ways-to-use-artificial-intelligence-in-logistics8 https:/ https:/ https:/ https:/ https:/ https:/ https:/ https:/tms- https:/ https:/ https:/ https:/ https:/tms- https:/ https:/tms- https:/is.gd/h51nVX24 https:/ https:/ https:/ https:/ https:/ https:/ https:/ https:/www.brisklogic.co/benefits-challenges-of-ai-in-the-supply-chain/32 https:/ https:/is.gd/5vW0Mj34 https:/www.dvz.de/dossiers/zukunft-der-lieferketten/detail/news/lieferkettengesetz-wie-ki-bei-der-umsetzung-hilft.html35 https:/ https:/ 37 https:/ https:/ https:/ https:/ https:/ https:/ https:/ https:/ https:/ https:/ and AI in logisticsWhitepaperstatworx2024 08262024 0826WhitepaperstatworxData and AI in logisticsGrafiken:https:/ in:https:/ https:/ zitiert in:https:/ https:/ https:/ and further information on the content of this whitepaper.Data and AI in logisticsWhitepaperstatworx2024 08272024 0827Whitepaperstatworxstatworx GmbHHanauer Landstr.15060314 Frankfurt am M 49(0)69 6783 067-51Data and AI in logistics
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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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Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China1KE CHEN,LULU XUETECHNO-ECONOMIC FEASIBILITY ANALYSIS OF ZERO-EMISSION TRUCKS IN URBAN AND REGIONAL DELIVERY USE CASES:A CASE STUDY OF GUANGDONG PROVINCE,CHINAWRI.ORG.CN2WRIDesign and Layout by:Harry Zhang ACKNOWLEDGEMENTS Suggested Citation:Chen,K.,and L.Xue.2024.“Techno-Economic Feasibility Analysis of Zero-Emission Trucks in Urban and Regional Delivery Use Cases:A Case Study of Guangdong Province,China.”Report.Beijing:World Resources Institute.Available online at https:/doi.org/10.46830/wrirpt.24.00006.This project is part of the NDC Transport Initiative for Asia(NDC-TIA).NDC-TIA is part of the International Climate Initiative(IKI).IKI is working under the leadership of the Federal Ministry for Economic Affairs and Climate Action,in close cooperation with its founder,the Federal Ministry of Environment and the Federal Foreign Office.For more visit:https:/www.ndctransportinitiativeforasia.org/.The authors would like to thank the Shenzhen Xieli Innovation Center of New Energy and Intelligent Connected Vehicle and Foshan Institute of Environmental and Energy Technol-ogy for their tremendous support in facilitating the interviews for this study.The authors would like to thank World Resources Institute internal reviewers:Stephanie Ly,Pawan Mulukutla,Sharvari Patki,Cristina Albuquerque,Weiqi Zhou,and Daiyang Zhang.We would also like to thank our external reviewers:Craglia Matteo(International Transport Fo-rum),Owen MacDonnell(CALSTART),Elizabeth Connelly(International Energy Agency),Hei Chiu(the World Bank),Huanhuan Ren(China Automotive Technology and Research Center),Chunxiao Hao(Vehicle Emission Control Center),Rui Wu(Transport Planning Research Institute of the Ministry of Transport),Zhenhong Lin(South China University of Technology),and Xiuli Zhang(Energy Innovation).Their reviews do not imply endorsement of the content of this report.Any errors are the authors own.Thank you also to Li Fang,Hong Miao,Zhe Liu,Adriana Kocornik-Mina,Anne Maassen,Caroline Taylor,Ye Zhang,Romain Warnault,and Allison Meyer for advice,editing,design,and administrative support.Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaITABLE OF CONTENTSIII Executive Summary1 Introduction7 Research methodology9 Definition of use cases12 Method of ZETs key component sizing18 Method of purchase cost estimation 21 Method of TCO estimation27 Research results28 Results for 202233 Results from MY2022 to MY203066 Applicability to other Chinese cities should be treated with caution69 Conclusions and recommendations73 Appendices73 Appendix A.Access privileges for new energy trucks in selected cities in Guangdong74 Appendix B.Interviews conducted for this study75 Abbreviations75 Endnotes76 ReferencesIIWRITechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaIIIEXECUTIVE SUMMARYHIGHLIGHTS To tackle small fleet operators concerns and accelerate zero-emission truck(ZET)adoption,we assessed the techno-economic feasibility of ZETs over the time frame of 20222030 across use cases in different model years(MYs)for Shenzhen and Foshan in Guangdong Province.The promotion of battery electric trucks(BET)in urban delivery,port operation,and drayage duty cycles should be prioritized because their total cost of ownership(TCO)parity with diesel trucks will be reached before MY2025,particularly with comprehensive policy incentives.Proposed comprehensive policies in this study are effective to move ZET TCO parity years with diesel trucks earlier than MY2025 in most use cases.BETs benefited more from the comprehensive policies in TCO parity year reduction than fuel-cell electric trucks(FCETs).Choosing BETs with smaller batteries,ensuring that charging facilities are sufficiently available,and adjusting operation schedules to allow for multiple within-day charges are important to reduce BETs TCO.Gaps in purchase costs between ZETs and internal combustion engine vehicles(ICEVs)remain large by MY2030,although TCO parity is reached in most use cases.Therefore,financing mechanisms like leasing are essential to ease ZETs up-front cost burdens.Given the day-to-day operational variability of small fleet operators,it is critical to design BETs to ensure operational flexibility,cost effectiveness,and mass production.IVWRIAbout this report To reduce carbon and air pollutant emissions,promoting ZETsreferring to battery electric trucks and fuel-cell electric trucksis important(Xue and Liu 2022).Unlike buses and private cars,the trucking industry is dominated by small-and medium-sized enterprises(SMEs)in China(TUC 2022a).Currently,ZETs in Chinese cities were primarily adopted by large fleet operators that were less cost-sensitive.Now,to further promote ZETs,addressing the demand side,particularly more cost-conscious and less technology-savvy SMEs concerns,is critical for ZETs future uptake.From the demand perspective,small fleet operators are often concerned about the following issues related to ZET transition:(1)whether the operation of ZETs is technologically feasible where range constraints or payload loss can be avoided;(2)whether purchase cost gaps between ZETs and ICEVs are acceptably small;and(3)whether TCO parity with equivalent ICE trucks can be reached(Tol et al.2022).To tackle demand-side concerns and ramp up ZET adoption,it is important to understand the current operational and cost challenges of ZETs,what interventions are effective in overcoming the challenges,and which use case and zero-emission technology to prioritize and when.To address the questions mentioned earlier,this study chooses one of Chinas front-runner regions of ZET transition,Guangdong Province,as an example.To reduce the data collection efforts,we choose the cities of Shenzhen and Foshan in Guangdong for in-depth analysis.The two cities are not only leading ZET transitions in Guangdong,but also set ambitious goals for ZET adoption.We assessed the techno-economic feasibility of ZETs over the time frame of 20222030 across different use cases and MYs.The base year is set to 2022 where the most recent data are available.The analysis was carried out for 14 localized use cases:Five truck segments,including delivery vans,4.5-t(ton)light-duty trucks(LDTs),18-t straight trucks,31-t dump trucks,and 42-t tractor trailers.Four duty cycles,namely,urban delivery(UD),regional delivery(RD),port operation(PO),and drayage duty cycles(DDC).Two types of goods transported,including light cargo and heavy cargo.In this study,the techno-economic feasibility of ZETs is assessed in different use cases,based on three variables essential for small fleet operators to decide if ZET transition is feasible(Hunter et al.2021;Tol et al.2022):ZETs operational feasibility.In this study,operational feasibility is evaluated by the Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaVsizes of key components for ZETs,including energy storage capacities,peak power outputs,and curb weights,to meet the ranges and wheel power demands in different use cases during MY2022 and MY2030.The resulting component sizing is useful to find the proper ZET models for the given use case that can come at a reasonable cost and meet the day-to-day operational requirements.Differences of purchase costs between ZETs and ICEVs.Here,ZETs purchase costs are projected based on the technology progress of key components(such as battery packs,electric drives,fuel cell(FC)systems,and hydrogen storage tanks)characterized by the learning curve outlined by Yelle(1979)in which the reduction in unit costs of each key component is a function of accumulated production volumes.We further employed existing literature and market predictions to validate and adjust the projections.TCO gaps between ZETs and ICEVs.TCO was evaluated by adding up the capital,operation,and maintenance expenditure of the vehicles;the mid-life replacement costs of key components(such as battery packs);and the opportunity costs of the loss in ZETs payload capacity.Due to limited data availability,costs such as vehicle residual values and refueling labor costs are not considered in this study.The use cases with near-term opportunities for ZET transition are identified,based on ZETs TCO parity years with ICEVs.Further,we evaluate the possible roles played by different interventionsincluding technological development,policy incentives,operational improvements,and business modelsin affecting the previously mentioned decision variables and in accelerating the achievement or advances of TCO parity years relative to diesel trucks.Further,we used an example to illustrate if the conclusions could be applied to other cities and discussed the caveats and uncertainties of the analysis.Research findingsA.Without ZET incentives,BET promotion in PO,DDC,and urban delivery(UD)could be prioritized,given that the TCO parity with ICE trucks in these use cases will be reached earlier than other use cases.1.BETs,except for dump trucks,have TCO cost advantages in PO,DDC,and UD in absence of ZET incentives.In these use cases,BETs will reach TCO parity relative to ICEV counterparts before MY2027.This is because BETs are much more energy efficient than ICEVs in PO and UD by taking advantage of frequent stop-and-goes to recoup energies from regenerative braking.By contrast,battery electric dump trucks are less cost advantageous,because of the prominent payload loss issue.Particularly in two instances:Battery-electric 42-t tractor trailers in PO,DDC,and UD will reach TCO parity with diesel tractor trailers before MY2025,representing one of the most promising truck segments to be electrified at the moment.This is because:(1)BET tractor trailers in Shenzhen and Foshan mostly carry lightweight goods and(2)operational optimization measures taken by fleet operators in DDCincluding using small battery capacities to fulfill the operation and matching BET configurations with charging facility availabilityare helpful for BET to reach TCO parity early,relative to diesel trucks.Battery-electric 4.5-t LDTs and straight trucks in UD will reach TCO parity relative to their diesel counterparts by MY2027.Particularly,when carrying lightweight goods,both vehicle segments have achieved cost parity now(MY20222023),whereas when transporting heavy goods,the parity years will be postponed to MY20252027 after being penalized for the payload losses.By contrast,FCETs TCO are lower than BETs in RD.In RD,ZETs TCO cost parity relative to ICEVs will be achieved around MY20282030,much later than UD.BETs are less cost advantageous in RD because:(1)ICEVs are relatively more energy-efficient for high-speed highway driving than urban driving;(2)for simplicity,this study does not differentiate FCETs energy efficiency between UD and RD;therefore,we may have given FCETs more cost advantages in RD.VIWRIFigure ES-1|ZET TCO parity relative to ICEVs for all use casesNote:This study assumes that the useful life of the 31-t dump truck is five years and that of other vehicle segments are six years based on Pers.Comm.(2023a).Abbreviations:TCO=total cost of ownership;BET=battery electric truck;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;H2-only=hydrogen-only mode;hybrid=hybrid mode;VKT=vehicle kilometers traveled;UD=urban delivery;RD=regional delivery;PO_TRIP=port operation(using the trip distance method);PO_DVKT=port operation(using the daily VKT method);DDC_TRIP=drayage duty cycle(using the trip distance method);DDC_DVKT=drayage duty cycle(using the daily VKT method).Source:WRI authors calculation.VEHICLE DUTY CYCLE CARGO TYPEDAILY VKT(KM)4.5-t LDTUDLight goods 200300Heavy goods200300RDLight goods 300400500Heavy goods30040050018-t straight truckUDLight goods 200300Heavy goods200300RDLight goods 300400500Heavy goods30040050031-t dump truckUDHeavy goods20030042-t tractor trailerPO_TRIPLight goods 200300PO_DVKT200300DDC_TRIP200300400500DDC_DVKT200300400500UD200300RD300400500BETFCET(H2-only)FCET(hybrid)2022202620242028202320272030Above 203020252029Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaVII2.Changes in energy prices will greatly affect ZETs parity years with ICE trucks in some use cases.The previously mentioned conclusion on TCO parity years is valid when the diesel price is at the 2022 level of 8.1 Chinese Yuan(CNY)/liter and the charging cost is fixed at 1.2 CNY/kWh.If diesel prices drop to the 2019 and 2021 average price of 6.5 CNY/L,and charging costs rises to 1.4 CNY/kWh and above(due to widespread adoption of ultra-fast chargers),battery electric trucks will achieve TCO parity with diesel trucks at a much later time for 42-t tractor trailers in DDC(parity year=MY2030)and 18-t ton straight trucks in UD with light goods transportation(parity year=MY2030).Similarly,for FCETs,if the diesel prices remain at the 2022 level,the break-even green hydrogen price in MY2030 is around 30 CNY/kg.However,if the diesel prices drop to the 2021 average price,FCETs are unlikely to achieve TCO parity with diesel trucks at any time before MY2030.Therefore,with lower diesel prices,removal of diesel subsidies(Black et al.2023),increased taxes on diesel prices(OECD 2022),or alternative energy incentives(on electricity and hydrogen)should be considered,to maintain the cost competitiveness of ZETs.B.Comprehensive policies are effective to move ZET TCO parity years with ICE trucks earlier,especially for BETs.In this study,we focus on the comprehensive(national and local)policies the impacts of which on TCO can be quantified under this studys TCO methodology framework,including purchase subsidy,tax exemption,energy(electricity/hydrogen fuel)incentives,carbon pricing on conventional fuels,road access privileges,reduction of expressway road tolls,increases of maximum authorized weights of ZETs(also known as ZET weight allowance),and financing cost reductions.1.There is no silver bullet.Comprehensive policy incentives are more effective to bringing forward ZETs TCO parity years to an earlier date than single measures.BETs TCO parity years benefit more from the proposed comprehensive policies in this study.Under the combination of the proposed policies in this study(without a BET purchase subsidy),BETs will reach TCO parity with diesel counterparts in most use cases before MY2025,zero to nine years earlier than the case without policy incentives.By contrast,even with greater amounts of subsidies(including an FCET purchase subsidy),FCETs will reach TCO parity with diesel counterparts by MY20222028,three to six years earlier than the case without policy incentives.Overall,with the eight proposed policy incentives,the TCO parity years of BETs are zero to six years earlier than FCETs in most use cases,making BETs the most cost-competitive ZET option.2.The impacts of policies on ZETs TCO parity years and TCO reduction are use-case-specific.ZETs benefit from the proposed policies of tax exemption,energy incentives,road access privileges,reduction of expressway road tolls,financing cost reduction,and increases of maximum authorized vehicle weights in this study in TCO reduction.The improvement in cost parity is not significant when applying the carbon pricing measure due to Chinas current low carbon prices.Specifically,the proposed purchase and ownership tax exemption and energy incentives are essential to bridge the TCO gaps between ZETs and ICEVs,for most use cases;road access privileges for ZETs are more effective in RD and DDC because we assume that the policy works on vehicle kilometers traveled(VKTs),and both use cases have long VKTs;the reduction of expressway road tolls is more influential for 42-ton tractor trailers RD and DDC because the two use cases have large shares of VKTs on expressways and high toll rates;the ZET weight allowance is useful for heavy goods transportation;and the financing cost reduction is conducive to moving forward TCO parity years in UD.3.The FCET purchase subsidy analyzed in this study is found to be one of the most influential policy interventions for FCETs TCO reduction;but governments VIIIWRIshould refrain from using large purchase subsidies to boost ZET adoption to avoid oversupply of truck capacities in the market.With the purchase subsidy assumed in this study,FCETs time to TCO parity is reduced by zero to two years for all use cases,achieving TCO parity with its diesel counterpart by MY20262030.Of note,considering that large public subsidies to promote ZETs would distort the market supply of truck capacities and reduce ZETs cost competitiveness(Pers.Comm.2023a),governments should refrain from using large purchase subsidies to stimulate ZET adoption.Instead,scrappage subsidies or other non-subsidy measures such as road access privileges offer viable alternatives.Figure ES-2|ZET TCO parity relative to ICEVs with policy incentivesa.18-t straight truckFCET(H2-only)Above 2030Above 2030202720272030203020262026202920292025202520282028202420242023202320222022No policy BETNo policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageUDRDLight goods-200 kmLight goods-500 kmHeavy goods-200 kmHeavy goods-500 kmCharging subsidyFinancing cost reduction Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaIXFigure ES-2|ZET TCO parity relative to ICEVs with policy incentives(cont.)b.31-t dump truckAbove 2030FCET(H2-only)202720302026202920252028202420232022No policy BETNo policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageUDHeavy goods-200 kmHeavy goods-300 kmCharging subsidyFinancing cost reduction XWRIFigure ES-2|ZET TCO parity relative to ICEVs with policy incentives(cont.)c.42-t tractor trailerNote:For a 42-t tractor trailer,DDC denotes the DDC_TRIP use cases for BETs and the DDC_DVKT use cases for FCETs.Source:WRI authors calculation.FCET(H2-only)202720272027203020302030Above 2030Above 2030Above 2030202620262026202920292029202520252025202820282028202420242024202320232023202220222022No policy BET No policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Charging subsidyFinancing cost reduction Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageDDCUDRDLight goods-200 kmLight goods-200 kmLight goods-500 kmLight goods-500 kmTechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaXIC.Apart from policies,financing mechanisms,operational optimization,and technology improvements are also essential to accelerate the adoption of ZETs.1.Financing mechanisms are essential to ease ZETs up-front purchase costs.Although the TCO parity with ICE trucks is reached in most use cases by MY2030,tremendous gaps in purchase costs between ZETs and ICEVs remain.By MY2030,the purchase costs of ZETs are still 53 to 181 percent higher than those of ICEVs in all use cases examined by this study.To ease fleet operators burden on costly up-front expenses of ZETsparticularly for small fleet operatorsand allocate the risks of ZET transition to appropriate stakeholders,it is necessary for private and public players to take actions,including reducing the minimum down payment requirements on ZET loans;encouraging ZET leasing or battery swapping;unlocking green Figure ES-3|Percentage differences in purchase costs between ZETs and ICEVs for MY2030finance(through reduced interested rates and extended repayment terms)and blended finance for ZET financing;and providing tax benefits,flexible depreciation,or first loss guarantees for new business models.2.Operational optimization is a necessary measure to reduce costs and improve operational feasibility.As in the case of DDC,choosing BETs with smaller batteries,ensuring charging facilities are sufficiently available,and adjusting operation schedules to allow BETs for more than one charge a day are important to reduce BETs TCO.For this type of operation to work,it is crucial to have:(1)broad availability of(ultra)-fast charging facilities,parking spaces,and grid capacities at the DDCs customer locations(Kotz et al.2022);and(2)BETs operation schedules that allow for sufficient charging time windowsfor example,timing charging with loading(or unloading)of trucks or break times of drivers.Note:The percentage represents the difference in the purchase costs between ZETs and comparable ICEVs divided by the purchase costs of ICEVs,that is,(ZET-ICEV)/ICEV.Zero percent indicates no difference between the purchase costs of ZETs and ICEVs.No purchase subsidy or tax is considered for the purchase costs.Abbreviations:BET=battery electric truck;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;VKT=vehicle kilometers traveled;UD=urban delivery;RD=regional delivery;PO_TRIP=port operation(using the trip distance method);DDC_DVKT=drayage duty cycle(using the daily VKT method);DDC_TRIP=drayage duty cycle(using the trip distance method).Source:WRI authors calculation.a.4.5-t LDT b.42-t tractor trailer 00200 00000000000 %UDUDPO_TRIPDDC_DVKTPO_DVKTRDRDDDC_TRIPBETFCETXIIWRI3.Accelerating technology developments is essential to reduce ZETs TCO and move its parity years to an earlier date.Battery cost reduction,vehicle energy-efficiency improvement,and battery energy density increases are critical for reducing BETs TCO,while the cost reduction of the FC systems and green hydrogen prices are essential to bring down FCETs TCO(FC system costs are more influential for UD,while hydrogen prices are more important for RD).4.It is important to design BETs with flexibility.Significant variations in BET battery capacities exist.For example,even within the same-use case,the differences in battery capacities of BETs examined in this study could vary by 51 kWh to 322 kWh in MY2025.Given the day-to-day operational variability of small fleet operators,designing a broadly applicable BET that is capable of meeting the majority operation(in terms of ranges)in an often-applied use case is critical.This means both Original Equipment Manufacturers(OEMs)and fleet operators should have a thorough understanding of existing diesel fleets daily mileage profiles.D.Data-driven and multi-dimensional policymaking is necessary.1.Data on ZETs energy efficiency and existing diesel truck fleets mileage are important to improve the TCO estimation and to inform policymaking.Energy efficiency would greatly affect ZETs parity years and determine which use case to prioritize ZET promotion.Further,truck fleets mileage profiles are also critical to the design of broadly applicable ZETs.Therefore,it is important for governments to gather ZETs real-world energy-efficiency and ICEVs mileage data by use case and share among key stakeholders,such as OEMs.2.Fleet operators in reality would also take multiple factors into consideration,such as the safety and security of ZETs,shippers requirements,market demands and profitability,and customers awareness of the recent development of ZETs when deciding if ZET transition is feasible(QTLC and MOV3MENT 2022).Therefore,it is also necessary to go beyond the policies examined in this study to consider more policy options,such as enhancing ZETs fire safety,enforcing air pollution prevention policies,improving ZETs residual values,and organizing public education campaigns(particularly for small fleet operators).E.The conclusions from the study would be applicable to cities with similar use case characteristics,including truck segment deployed,type of goods transported,driving cycles,and ambient temperature.Cities with different characteristics should be cautious when applying this studys conclusions.For example,a 49-ton BET100 tractor trailer in Tangshans DDC had reached TCO parity with its diesel counterpart in MY2022,earlier than Shenzhen examined in this study.This is because tractor trailers in Tangshan do not require large battery capacities(trip distances within 100 km)and have a large proportion of the daily VKTs performed near docks or in the urban environment(Mao et al.2023).Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,ChinaXIIIFigure ES-4|ZETs TCO parity years relative to ICE trucks for the DDC use case in Shenzhen and TangshanNote:This study assumes that the trip distance for Tangshans DDC use case is 100 km,while that for Shenzhen is 200 km.Further,the energy consumption of a MY2022 49-t diesel tractor trailer is 64L/100 km,a BET is 230kWh/100 km,and an FCET is 18kg/100 km.Abbreviations:BET=battery electric truck;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;DDC_TRIP=drayage duty cycle(using the trip distance method).Source:WRI authors calculation.VEHICLE DUTY CYCLE CARGO TYPEDAILY VKT(KM)49-t tractor trailer(Tangshan)DDC_TRIPHeavy goods200300400500DDC_DVKT20030040050042-t tractor trailer(Shenzhen)DDC_TRIPLight goods 200300400500DDC_DVKT200300400500BETFCET(H2-only)FCET(hybrid)2022202620242028202320272030Above 203020252029XIVWRITechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China1INTRODUCTIONAddressing the demand side,particularly cost-conscious and less technology-savvy SMEs concerns,is critical for ZETs future uptake.The study aims to tackle the research questions that what ZET operational feasibility,purchase costs,and TCO challenges are confronted by fleet operators(particularly,SMEs)now;what interventions are effective in overcoming the challenges;and what roles would different interventions play.SECTION 12WRITrucks represented 52,84,and 91 percent of road transport-related CO2,NOx,and PM emissions in China in 2020(Xue and Liu 2022;MEE 2021).Promoting ZETsreferring to battery electric trucks and fuel-cell electric trucksis important to reduce carbon and air pollutant emissions(Xue and Liu 2022).Unlike buses and private cars,the trucking industry in China is dominated by SMEs,including affiliated individuals and self-emp.loyed individuals(TUC 2022a).In 2020,these SMEs represented around 75 percent of Chinas fleet operators,referred to as carriers,own-account third-party logistic providers,and own-account shippers in this study.Seventy-eight percent of these individuals had an annual income at about Chinas average level in 2020(97,379 CNY)(SINOIOV and Changan University 2022).By contrast,the median income for tractor trailer drivers in the United States was US$47,130,38 percent higher than the US average income in 2020(USBLS 2020;USCB 2020).In the past,ZETs in Chinese cities were primarily adopted by large fleet operators that were less cost-sensitive.Now,to further promote ZETs,addressing the demand side,particularly more cost-conscious and less technology-savvy SMEs concerns,is critical for ZETs future uptake.From the demand perspective,small fleet operators are often concerned about the following aspects for ZET transition:(1)whether the operation of ZETs is technologically feasible where range constraints or payload loss can be avoided;(2)whether purchase cost gaps between ZETs and ICEVs are acceptably small;and(3)whether TCO parity with equivalent ICE trucks can be reached(Tol et al.2022).To tackle the previously mentioned concerns,it is important to understand what ZET operational feasibility,purchase costs,and TCO challenges are confronted by fleet operators now;what interventions are effective in overcoming the challenges;and what roles would different interventions play.Policy incentives:Although policy incentives are effective to incentivize ZET adoption,with the complete phase-out of national new energy vehicle(NEV)1 purchase subsidies,China lacks policy incentives to bridge the cost gaps between ZETs and ICEVs.Lingering questions remain as to what policies would be needed to maintain the rapid growth of ZETs.Technology improvements:Current zero-emission technologies encounter technical issues in many use cases,such as high costs,range constraints,payload loss,peak power deficiency,and long downtime due to prolonged charging or maintenance time,compared with their ICEV equivalents(QTLC and MOV3MENT 2022).When and to what degree technological advances would resolve ZETs techno-economic challenges remain unanswered.Business models and operational optimization:Despite current technological challenges and lack of policy incentives,battery swapping and leasing of ZETs have pushed ZET adoption in China(Shen and Mao 2023;Z.Wang et al.2020).For example,the annual sales of battery-swapping heavy-duty trucks(HDTs)in 2022 reached 12,431,higher than battery electric HDTs(Sohu 2023).The Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China3model of battery swapping works because fleet operators only pay for the vehicle body without batteries,and the locations of battery swapping stations are coordinated with truck operation schedules(Ren et al.2024).In the future as technologies develop,whether operational improvements and business models would still be useful would need investigation.Adding to the complexity is the wide variety of truck use cases awaiting ZET transition,and policymakers(and fleet operators)remain unclear about which use-case and zero-emission technology to prioritize.For example,the Shenzhen government offered an 800,000 CNY purchase subsidy per vehicle to facilitate the adoption of 4,200 battery-electric dump trucks in 2019,about one third of the citys dump truck fleet(NEICV 2022).However,the effort was deemed unsuccessful partly due to the high costs associated with battery-electric dump trucks(Pers.Comm.2023a).Now,rather than electrifying the rest of the dump truck fleet,the Shenzhen government has changed the focus to tractor trailers operated in the seaport(Shenzhen MTB 2021).To address the questions raised earlier,this study uses one of Chinas frontrunner regions of ZET transition,Guangdong province,as an example,to tackle the following questions:What are the current challenges with ZET adoption?In the near term,which vehicle segment and use case should be prioritized and at what time?Which zero-emission technology to transition to?What interventions would be helpful to overcome ZETs techno-economic challenges?Would Guangdongs findings be applicable to other Chinese regions?Guangdong has been leading Chinas ZET adoption for years.From 2019 to 2022,its new ZET sales ranked the first among 31 Chinese provinces in China(Niu et al.2023).To reduce the data collection efforts,we chose the cities of Shenzhen and Foshan for in-depth analysis.Among 21 cities in Guangdong,the two cities accounted for 27 percent of the provinces LDT stocks and 30 percent of HDT stocks in 2021(Guangdong Stats 2023).Guangdong also established ambitious goals for ZET transition:Shenzhen aims to reach 80 percent NEVs in new sales of urban delivery LDTs and 100 percent NEVs or clean energy vehicles2 in the fleet of tractor trailers operated in Shenzhen Port by 2025(MIIT et al.2023;Shenzhen MEEB 2022).As the leading city of Guangdong FCEV city cluster,Foshan(and the Guangdong City Cluster)aims to adopt 10,000 FCEVs by 2025(Guangdong DRC et al.2022).Since Guangdong is spearheading ZET transition in emerging use cases,its experiences shed light on the ZET transition in other Chinese regions.This study also examined whether Guangdongs findings would be applicable to other Chinese regions.4WRIBATTERY ELECTRIC DELIVERY VANBATTERY ELECTRIC LDTBATTERY ELECTRIC HDTFC ELECTRIC TRUCKNational incentivesPurchase and ownership tax exemptionZETs are exempted from the purchase tax until the end of 2025 and will receive a 50%tax waiver during 2026 and 2027;ZETs are exempted from ownership tax(MOF,STA,and MIIT 2023,2018)Purchase subsidyXXX3000 CNY/kW based on rated power of FC systems(capped at 110kW)(Guangdong DRC et al.2022)Alternative energy subsidyDemand charges waived for ZETs(State Council 2023)3-12 CNY/kg hydrogen(MOF,MIIT,MOST,NDRC,and NEA 2020)Local incentives:ShenzhenPurchase subsidy (or scrappage scheme)XX50,000-70,000 CNY/vehicle to scrap diesel tractors and replace with ZETs at Shenzhen Port(Shenzhen MTB 2023).Operation subsidyXX5,000 CNY/month for BETs and 3,000 CNY/month for FCETs,for tractor trailers operated in Shenzhen Port(Shenzhen MTB 2023).Alternative energy subsidyXPreferential electricity rates for electrolysis(Shenzhen DRC 2022)Road access privilegeThe city introduced 16 zero-emission freight zones in the city centers that ban the access of diesel LDTs from entering throughout the day.Further,it grants access to new-energy light-and medium-duty trucks to enter some areas within the city but forbids diesel trucks from entering at a particular time of a day(Shenzhen PSB 2022,2023a,2023b,2023c)(see Appendix A).Local incentives:FoshanScrappage schemeXXX30,000-70,000 CNY/vehicle(Foshan Nanhai Government 2021).Operation subsidy0.2-0.4 CNY/km(capped at 30,000 km per year)(Foshan MTB 2022)0.6 CNY/km(capped at 30,000 km per year)(Foshan MTB 2022)X1.5 CNY/km for LDTs(capped at 50,000 km per year)(Foshan MTB 2022)Alternative energy subsidyX18 CNY/kg hydrogen(Foshan Nanhai Government 2022)Road access privilegeThe city introduced four zero-emission freight zones in the city center that ban the access of diesel trucks(some zones also banned diesel HDTs)from entering throughout the day.Further,it grants access to new-energy light-and medium-duty trucks to enter some areas within the city but forbids diesel trucks from entering at a particular time of day.FC LDTs and construction trucks are allowed to enter Nanhai District throughout the day,while the diesel equivalents are banned from access throughout the day(Foshan MEEB and Foshan PSB 2022;Foshan Nanhai Government 2021)(see Appendix A).Table 1|Current policy incentives for ZET adoption at the national level and in Shenzhen and FoshanNotes:The purchase subsidy is the lump sum of national and local purchase subsidies of the Guangdong FCEV City Cluster.X=no policies.Source:WRI authors summary.Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China56WRITechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China7RESEARCH METHODOLOGYThis section outlines the methods to quantify three decision variables that are important for ZET transition across 14 use cases,including operational feasibility,purchase cost gaps between ZETs and ICEVs,and TCO parity years with ICE trucks.It further elaborates the method to evaluate how different interventionsincluding technological development,policy incentives,operational improvements,and financing mechanisms would affect the three decision variables,particularly in facilitating the achievement of TCO parity years relative to diesel trucks.SECTION 28WRIWe assessed the techno-economic feasibility of ZETs over the time frame of 20222030 across use cases in different MYs for Shenzhen and Foshan.The scope of analysis and the methodology framework are summarized as follows:Time frame:The base year of this study is set to 2022,when the most recent data are available.The MY is set to MY20222030,since we focus on near-term solutions,and near-term projections are relatively more accurate than long-term projections.Alternative fuels or powertrains:Given that limited public resources should be prioritized,only zero-emission and ICE powertrains are considered.Other alternative powertrains,such as plug-in hybrid electric vehicles and natural gas or low-carbon fuel powered internal combustion engines are not covered,due to lack of data or limited applications in Guangdong.Techno-economic analysis:This study focuses on quantifying the decision variables that are important for small fleet operators to support ZET transition,including operational feasibility of ZETs,purchase cost gaps between ZETs and ICEVs,and TCO parity with ICE trucks(Tol et al.2022).Other decision variables that are difficult to quantify,such as vehicle fire safety,are not covered.Following the existing literatures practices(Basma et al.2023;CARB 2019;Hunter et al.2021;Mao et al.2021;Tol et al.2022),the use cases with near-term opportunities for ZET transition are identified,based on ZETs TCO parity years with ICEVs.Further,we evaluate the possible roles played by different interventionsincluding technological development,policy incentives,operational improvements,and financing mechanismsin affecting the previously mentioned decision variables,particularly the roles they played to facilitate the achievement or advances of TCO parity years relative to diesel trucks.Other interventions,such as shippers requirements that are not readily quantifiable and have limited impacts,are not examined.Further,we used an example to illustrate if the conclusions would be applied to other cities and discussed the caveats and uncertainties of the analysis.Data sources:Data used to perform the above analysis include the authors extensive interviews with key local stakeholders in Shenzhen and Foshan(see Appendix B);a literature review of future technology and cost projections,status quo,and best practices on ZET promotion;and a policy document review Figure 1|Relationship among the four types of interventions and fleet operators decision variablesSource:WRI Authors.Operation feasibility(key component sizing)Decision variablesPurchase costsTechnology advancesPolicy incentivesBusiness modelsOperation optimizationTCOTechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China9of domestic and international policies and mainstreamed ZET make-and-models.The detailed methods and data sources for techno-economic analysis are explained as follows:2.1 Definition of use casesThe techno-economic analysis is performed for each use case.In this study,use cases are characterized by factors relevant to ZETs operational feasibility and cost competitiveness,including vehicle segments,types of goods transported,and duty cycles.We identified prevailing truck use cases in Shenzhen and Foshan,using the following methodsTruck segments:Based on statistical yearbooks,the 2022 Catalogue of New Energy Vehicle Models Exempt from Vehicle Purchase Tax(hereinafter referred to as“NEV Catalogue”)(MIIT 2022),and Pers.Comm.(2023a),the analysis selected truck segments that are common in Shenzhen and Foshan(see Table 2).Truck segments with limited GVW/GCWSHARE OF TRUCK STOCK IN SHENZHEN IN 2022SHARE OF TRUCK STOCK IN FOSHAN IN 2022NUMBER OF ZET MODELS IN 2022 NEV CATALOGUETHIS STUDYMini truckRegular truckGVW1.8t0.2%0.05%X(Few stocks)Refrigerated truckGVW1.8tXLight-duty truckVans1.8tGVW4.5t75x%XRegular truck4.2tGVW4.5t372Refrigerated truck2.2tGVW4.5t47(Few stocks)Dump truck2.2tGVW4.5t1(Few stocks and limited ZET models)Medium-duty truckStraight truck4.5tGVW12t2%4(Few stocks and limited ZET models)Refrigerated truck4.5tGVW12t11Dump truck4.5tGVW20306.0020222022202220222022202220222023202420252026202820302030 20305.752022202220222022202220222023202420252026202820302030 2030 20305.50202220222022202220222023202420252026202820302030 2030 2030 20305.2520222022202220222023202420252026202820302030 2030 2030 2030 20305.002022202220222023202420252026202820302030 2030 2030 2030 2030 20300.40.50.60.70.80.91.01.11.21.31.41.51.61.71.8Electricity price(CNY/kWh)Diesel price(CNY/L)Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China51Figure 19|BETs TCO parity years relative to ICEVs with different diesel prices and charging costs in selected use cases(cont.)b.42-t tractor trailer in DDC_TRIP(daily VKT=400 km)c.18-t straight truck in UD(daily VKT=200 km;light goods transportation)Notes:This study assumes that the useful life of tractor trailers and straight trucks is six years(Pers.Comm.2023a).Green denotes ZETs parity year relative to ICEVs in 2022;yellow and orange in 20232029;and red in 2030 or later.Abbreviations:TCO=total cost of ownership;BET=battery electric truck;ICEV=internal combustion engine vehicle;UD=urban delivery;PO_TRIP=port operation(using the“trip distance”method);DDC_TRIP=drayage duty cycle(using the“trip distance”method).Source:WRI authors calculation.9.002022202220222022202220222022202220222022202220232024202620298.752022202220222022202220222022202220222022202220242025202820308.502022202220222022202220222022202220222022202320252027203020308.2520222022202220222022202220222022202220232024202620282030 20308.0020222022202220222022202220222022202220232025202720302030 20307.75202220222022202220222022202220222023202420262030 2030 2030 20307.50202220222022202220222022202220222024202520282030 2030 2030 20307.25202220222022202220222022202220232024202720302030 2030 2030 20307.0020222022202220222022202220222024202620282030 2030 2030 2030 20306.7520222022202220222022202220232025202720302030 2030 2030 2030 20306.502022202220222022202220232024202620292030 2030 2030 2030 2030 20306.25202220222022202220222023202520282030 2030 2030 2030 2030 2030 20306.00202220222022202220232024202620302030 2030 2030 2030 2030 2030 20305.7520222022202220222024202520282030 2030 2030 2030 2030 2030 2030 20305.502022202220222023202520272030 2030 2030 2030 2030 2030 2030 2030 20305.252022202220222024202620292030 2030 2030 2030 2030 2030 2030 2030 20305.00202220222023202520282030 2030 2030 2030 2030 2030 2030 2030 2030 20300.40.50.60.70.80.91.01.11.21.31.41.51.61.71.8Electricity price(CNY/kWh)9.002022202220222022202220222022202220222022202320242025202620278.752022202220222022202220222022202220222023202320242025202720298.502022202220222022202220222022202220232023202420252026202820308.252022202220222022202220222022202220232024202520262028203020308.0020222022202220222022202220222023202420252026202720292030 20307.752022202220222022202220222023202320242025202720292030 2030 20307.502022202220222022202220232023202420252026202820302030 2030 20307.25202220222022202220222023202420252026202820302030 2030 2030 20307.0020222022202220222023202420242026202720292030 2030 2030 2030 20306.752022202220222023202320242025202720292030 2030 2030 2030 2030 20306.50202220222022202320242025202620282030 2030 2030 2030 2030 2030 20306.25202220222023202420252026202820302030 2030 2030 2030 2030 2030 20306.0020222023202320242026202720302030 2030 2030 2030 2030 2030 2030 20305.752023202320242025202720292030 2030 2030 2030 2030 2030 2030 2030 20305.50202320242025202620282030 2030 2030 2030 2030 2030 2030 2030 2030 20305.25202420252026202820302030 2030 2030 2030 2030 2030 2030 2030 2030 20305.0020242026202720302030 2030 2030 2030 2030 2030 2030 2030 2030 2030 20300.40.50.60.70.80.91.01.11.21.31.41.51.61.71.8Electricity price(CNY/kWh)Diesel price(CNY/L)Diesel price(CNY/L)52WRIFigure 20|FCETs TCO parity years relative to ICEVs with different diesel prices and hydrogen prices in selected use casesa.4.5-t LDT in RD(daily VKT=500 km;heavy goods transportation)b.42-t tractor trailer in RD(daily VKT=500 km)9.002027202820292030203020302030203020308.752027202820292030203020302030203020308.502027202820302030203020302030203020308.252027202920302030203020302030203020308.002028202920302030203020302030203020307.752028202920302030203020302030203020307.502028203020302030203020302030203020307.252029203020302030203020302030203020307.002029203020302030203020302030203020306.752029203020302030203020302030203020306.502030203020302030203020302030203020306.252030203020302030203020302030203020306.002030203020302030203020302030203020305.752030203020302030203020302030203020305.502030203020302030203020302030203020305.252030203020302030203020302030203020305.00203020302030203020302030203020302030202530354045505560Hydrogen price(CNY/kg)9.002024202520272030203020302030203020308.752024202620282030203020302030203020308.502024202620282030203020302030203020308.252025202620292030203020302030203020308.002025202720292030203020302030203020307.752025202720302030203020302030203020307.502026202820302030203020302030203020307.252026202820302030203020302030203020307.002027202920302030203020302030203020306.752027203020302030203020302030203020306.502028203020302030203020302030203020306.252028203020302030203020302030203020306.002029203020302030203020302030203020305.752029203020302030203020302030203020305.502030203020302030203020302030203020305.252030203020302030203020302030203020305.00203020302030203020302030203020302030202530354045505560Hydrogen price(CNY/kg)Diesel price(CNY/L)Diesel price(CNY/L)Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China53Operational optimization and technology leapfrogs are essential for ZETs to achieve TCO parity earlyWithout policy incentives,the driving forces for the decline in TCO could be attributed to operational optimization and technology advances.First,optimization measures taken by fleet operators,including matching BET configurations with charging facility availability and improving operational efficiency,are important for ZETs to reach TCO parity relative to diesel trucks early.Our analysis shows that choosing BETs with smaller batteries,ensuring that charging facilities are sufficiently available,and adjusting operation schedules to allow BETs more than one charge a day are important in reducing BETs TCO.This is especially the case for the PO and DDC use cases.For example,in DDC,if fleet operators choose a 288-kWh MY2025 battery-electric tractor trailer with a 200 km range(BET200)to perform 200500 km daily VKTs,the BET200s vehicle price would be 300,000440,000 CNY lower than the BET400 or BET500s price(with 576720 kWh battery capacities).Therefore,BET200 is likely to reach TCO parity with diesel trucks earlier(parity year=MY20222025)than BET400 or BET500(parity year=after MY2030).In this case,rapid charging at customer locations(or employing the battery-swapping model)is necessary.Although frequent high-power charging of BETs(two to three charges per day)would lead to costly midlife battery replacement and increased energy costs(for BETs to charge at peak hours and higher power rates),these expenses will be offset by cheaper BET prices as a result of small battery capacities(Figure 21).To make this type of operation a reality,it is crucial to have:(1)broad availability of(ultra)-Figure 20|FCETs TCO parity years relative to ICEVs with different diesel prices and hydrogen prices in selected use cases(cont.)c.18-t straight truck in RD(daily VKT=500 km;heavy goods transportation)Notes:This study assumes that the useful life of tractor trailers and straight trucks is six years(Pers.Comm.2023a).The TCO of FCETs reflects the hydrogen-only mode.Unlike the previous analysis,for simplicity of the sensitivity analysis,prices of green hydrogen are fixed throughout the FCETs useful life.Green denotes ZETs parity year relative to ICEVs in 20242026;yellow and orange in 20272029;and red in 2030 or later.Abbreviations:TCO=total cost of ownership;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;RD=regional delivery.Source:WRI authors calculation.9.002024202520262028203020302030203020308.752024202520272029203020302030203020308.502024202520272029203020302030203020308.252024202620282030203020302030203020308.002025202620282030203020302030203020307.752025202720292030203020302030203020307.502025202720292030203020302030203020307.252026202720302030203020302030203020307.002026202820302030203020302030203020306.752026202920302030203020302030203020306.502027202920302030203020302030203020306.252027203020302030203020302030203020306.002028203020302030203020302030203020305.752029203020302030203020302030203020305.502029203020302030203020302030203020305.252030203020302030203020302030203020305.00203020302030203020302030203020302030202530354045505560Hydrogen price(CNY/kg)Diesel price(CNY/L)54WRIfast charging facilities,parking spaces,and grid capacities at customer locations(Kotz et al.2022)and(2)BETs operation schedules that allow for sufficient charging time windowsfor example,timing charging with loading(or unloading)of trucks or break times of drivers.The other important operational aspect is operational efficiency improvement.Because BETs energy costs are lower than ICEVs,the longer daily VKTs of BETs,the fewer TCO gaps between BETs and ICEVs.This explains why in DDC_TRIP with a 200-km daily VKT,the TCO of a battery-electric 42-t tractor trailer is still 100,000 CNY and 20,000 CNY higher than the diesel equivalent in MY2025 and MY2030,respectively.Trucks often do not have sufficiently long daily VKTs because of inefficient operation by fleet operators or excessive supply of truck capacity resulting from soft demand or large public subsidies(Pers.Comm.2023a).To enhance vehicle utilization and avoid market oversupply,fleet operators should optimize fleet asset management,route planning,and dispatch operations(Mii et al.2022),while governments should refrain from using large amounts of purchase subsidies to boost ZEV supplies.Second,accelerating technology developments in key ZET components is essential to reduce ZETs TCO and move its parity years to an earlier date.The following analysis shows the modelled percentage reduction in TCO from MY2022 through MY2030 due to technology improvements(Figure 22)with the results as follows:For BETs,the largest TCO reduction comes from:(1)a drop in battery costs;(2)improvements in vehicle energy efficiency(like using more efficient thermal management,active aerodynamic,low rolling resistance tires,and light weighting)(National Petroleum Council 2012;Yang 2018);and(3)the reduction of payload losses from battery energy density improvement,better integration of powertrain components,and the usage of lightweight structural materials(EUCAR 2019).Figure 21|TCO gaps between BETs and ICEVs for 42-t tractor trailers in the DDC_TRIP and DDC_DVKT in MY2025Notes:Abbreviations:TCO=total cost of ownership;BET=battery electric truck;ICEV=internal combustion engine vehicle;DDC_TRIP=drayage duty cycle(using the“trip distance”method);DDC_DVKT=drayage duty cycle(using the“daily VKT”method).Source:WRI authors calculation.(1,000,000)(500,000)0500,0001,000,0001,500,000CNYBET200BET200BET300BET300BET400BET400BET500BET500DDC_DVKTDDC_TRIPVehicleRoad chargePayloadTaxInsuranceFinancingMaintenanceTCO gapEnergyBattery replacementTechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China55Technology contributors to BETs TCO reduction vary by use case,particularly with the type of cargo transported.For example,for light goods transportation,battery costs and energy efficiency are determining factors,contributing to a 4665 percent and 1842 percent BETs TCO reduction during MY2022 and MY2030,respectively.However,for heavy goods transportation,battery energy density improvement is more significant,responsible for 12 to 78 percent of BETs TCO reduction.Because in the real world small fleet operators transport assorted cargos,battery costs,energy efficiency,and battery energy density all play integral roles when it comes to technology-driven cost reduction.For FCETs,the largest TCO reduction is attributed to the cost reduction of the FC systems and the decline of green hydrogen prices(due to the lower cost of renewable energy and more efficient and cost-effective electrolyzers(IRENA 2020).Technology contributors to FCETs TCO reduction also vary significantly by use case.For UD,fuel cell system cost is the most influential parameter,accounting for 5070 percent of FCETs TCO reduction during MY2022 and MY2030;whereas for RD,hydrogen prices will play a more important role,contributing to 1640 percent of FCETs TCO reduction,and the cost-reduction contribution of hydrogen prices grows as FCETs daily VKTs increase.Figure 22|Contributions of technology improvements to ZET TCO reduction between MY2022 and MY2030 in selected use casesa.BETVEHICLECARGO TYPETECHNOLOGY IMPROVEMENTSUDRDDDC_TRIP200 km300 km300 km500 km200 km500 km4.5-t LDTLight goodsBattery cost(CNY/kWh)46HIQ%N.A.E-drive cost(CNY/kW)17%7%Energy efficiency(kWh/100km)37B%Heavy goodsBattery cost(CNY/kWh)29!%1%N.A.E-drive cost(CNY/kW)10%5%4%0%Energy efficiency(kWh/100km)28# %9ttery energy density(Wh/kg)24Gx%Lightweighting10-t straight truckLight goodsBattery cost(CNY/kWh)56be%N.A.E-drive cost(CNY/kW)22%9%Energy efficiency(kWh/100km)22$&%Heavy goodsBattery cost(CNY/kWh)4296$%N.A.E-drive cost(CNY/kW)14%9%7%3%Energy efficiency(kWh/100km)18ttery energy density(Wh/kg)12 %C%Lightweighting13B-t tractor trailerLight goodsBattery cost(CNY/kWh)54XcSX%E-drive cost(CNY/kW)28 &%Energy efficiency(kWh/100km)18 #%!VWRINote:The text highlighted in blue denotes the technical parameters that are included in“reduction of payload losses.”Abbreviations:BET=battery electric truck;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;UD=urban delivery;N.A.=not applicable.Source:WRI authors calculation.Figure 22|Contributions of technology improvements to ZET TCO reduction between MY2022 and MY2030 in selected use cases(cont.)b.FCET VEHICLECARGO TYPETECHNOLOGY IMPROVEMENTSUDRD200 km500 km4.5-t LDTLight goodsFC system cost(CNY/kW)70Q%Hydrogen storage cost(CNY/kg)3%6ttery cost(CNY/kWh)2%1%E-drive cost(CNY/kW)2%2%Energy efficiency(kg/100km)9%Hydrogen fuel price(CNY/kg)14$%Heavy goodsFC system cost(CNY/kW)583%Hydrogen storage cost(CNY/kg)3%4ttery cost(CNY/kWh)2%1%E-drive cost(CNY/kW)2%1%Energy efficiency(kg/100km)10%Hydrogen fuel price(CNY/kg)15%Hydrogen storage gravimetric capacity(wt%)1%4 system specific power(W/kg)1%2ttery energy density(Wh/kg)1%2%Lightweighting7-t straight truckLight goodsFC system cost(CNY/kW)555%Hydrogen storage cost(CNY/kg)5%8ttery cost(CNY/kWh)4%3%E-drive cost(CNY/kW)4%2%Energy efficiency(kg/100km)8%Hydrogen fuel price(CNY/kg)259%Heavy goodsFC system cost(CNY/kW)500%Hydrogen storage cost(CNY/kg)5%7ttery cost(CNY/kWh)4%2%E-drive cost(CNY/kW)3%2%Energy efficiency(kg/100km)8%Hydrogen fuel price(CNY/kg)258%Hydrogen storage gravimetric capacity(wt%)1%2 system specific power(W/kg)0%0ttery energy density(Wh/kg)1%2%Lightweighting3%5B-t tractor trailerLight goodsFC system cost(CNY/kW)533%Hydrogen storage cost(CNY/kg)6%9ttery cost(CNY/kWh)4%2%E-drive cost(CNY/kW)5%3%Energy efficiency(kg/100km)8%Hydrogen fuel price(CNY/kg)25%Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China57BETs TCO parity is likely to be advanced to MY20222025 with a suite of ZET incentives Apart from operation and technology improvements,policy incentives are important to reduce ZETs TCO.Based on literature review(C40 2020;Concept Consulting Group 2022;WEF 2021),this study enumerates policies at the disposal of national and local governments to accelerate the deployment of ZETs,including financial incentives,regulations,and infrastructure safeguards.We choose to focus on eight types of policies the impacts of which on TCO can be quantified under this studys TCO methodology framework.The eight policies were formulated in the China(and Guangdong)s context,with the aim to reduce government expenditure on ZET promotion.The assumptions for the eight policies during 2022 and 2030 are listed as follows:Purchase subsidies:China has phased out NEVs purchase subsidies since 2023 and only offered the FCEV City Cluster subsidies in five city clusters(MOF et al.2020;2021).This study considers no purchase incentives for BETs during 2022 and 2030.Considering that the TCO of FCETs remains high,we assume future Guangdong City Clusters FCEV purchase subsidies will be reduced to 20 percent of the 2022 level during MY2022 and MY2030.Based on the projected power ratings of the FC systems(see the section,“Results from MY2022 to MY2030”),FCETs will receive 50,40090,000 CNY purchase subsidies per vehicle,representing 1122 percent of FCETs purchase costs in MY2030.Tax benefits:At present,diesel trucks in China are subject to a purchase tax(10 percent tax rate)and an ownership tax(tax rates vary by city).However,ZETs are exempted from the purchase tax until the end of 2025 and will receive a 50 percent tax waiver during 2026 and 2027,and the ownership tax will continue to be fully waived(MOF et al.2018;2023).This study assumes that both taxes will be fully waived for ZETs from 2026 onward.Incentives on alternative fuels and charging or refueling infrastructure expansion:Currently,China has waived demand charges for ZET charging and offered various subsidies on energy prices and the construction and operation of charging or refueling infrastructure.For example,Fujian and Jiangsu provinces provided 0.10.3 CNY/kWh subsidies for ZETs that charge on public chargers,and the City of Foshan offers 18 CNY/kg subsidies on hydrogen prices(Changzhou Government 2024;Foshan Nanhai Government 2022;Fujian DRC et al.2022).Henan Province offered grants to cover 40 percent of charging equipment capital investments for public charging stations(Henan Government 2020).This study assumes that in addition to waiving demand charges,local governments will offer 0.1 CNY/kWh incentives on BETs charging.Further,1 to 20 CNY/kg incentives on green hydrogen are also considered in this study to keep the prices of green hydrogen within 30 CNY/kg during 2023 and 2030a target set by the Guangdong FCEV City Cluster(Guangdong DRC et al.2022).Carbon pricing on conventional fuels:At present,China does not have carbon pricing on transportation fuels.In this study,we assume that a carbon tax will be imposed on tailpipe carbon emissions from diesel trucks.The rate is set at the 2022 average price of the Guangdong Emission Trading Scheme(ETS)(80 CNY/ton CO2),17 which is 45 percent higher than the carbon price of Chinas national ETS in 2022(Jinan University 2022).Reduction of expressway road tolls:Distance-based road tolls are common for expressways in China(Guangdong DOT 2020).To incentivize the adoption of ZETs,some regions in China have offered ZETs with reduced toll rates.For example,Gansu Province waived 15 percent tolls for NEVs traveling along expressways within the province;Tianjin went further to exempt 100 percent of road tolls for zero-emission tractor trailers serving Tianjin seaport(i.e.,the DDC use case)(Gansu DOT et al.2021;Tianjin MTC and Tianjin DRC 2021).Considering that road charges are widely used for recovering expressway capital,operation,and maintenance costs in China(Reja et al.2013),this study assumes only a modest 58WRIreduction of 15 percent in expressway tolls for ZETs to ensure sustainable financing of highway operation and maintenance.Road access privilege:To curb traffic congestion,trucks face stringent access restrictions in Chinese cities.For example,in Shenzhen,some expressways ban drayage HDTs,including zero-emission HDTs,from access(see Appendix A).To grant access privilege to ZETs,some cities relax the access restrictions for ZETs while maintaining the restrictions for diesel trucks.This measure would lead to detours of ICE trucks that equate to reduced daily VKTs for ZETs,or longer operating hours and increased earnings for ZETs.To quantify the benefits of the measure,this study takes a simplified approach and only examines the VKTs that were reduced,compared to ICE trucks.Based on our estimation,the relaxation of expressway access for zero-emission drayage trucks in Shenzhen would lead to a 46 percent daily VKT reduction,compared to their diesel counterparts.A 5 percent daily VKT reduction is assumed for the following analysis.ZET weight allowance:The EUs Weights and Dimensions Directive(EU 2019)provides ZETs with an additional weight of 2 tons compared to a reference diesel truck,up to 42-t GVW,and a proposal to grant a 4-ton additional weight allowance is under discussion(Soone 2023).China does not yet have additional weight allowances for ZETs;only a few provinces such as Henan allow trucks,including both ZETs and ICEVs,to be exempt from overloading penalties if exceeding the maximum GVW(or GCW)by 10 percent(Henan Peoples Congress 2023).Here,we assume that the national government will grant an additional 500-kg weight allowance for LDTs and an additional 2-t allowance for HDTs,provided that the increases in ZETs GVW will not exceed the vehicles maximum axle loads.Financing cost reduction:Financing a truck instead of directly purchasing the vehicle is common in China.The loan interest rates vary with the sizes of fleet operators and their creditworthiness.Large fleet operators have lower annual interest rates(around 4 to 7 percent),while small fleet operators and self-employed individual truck drivers would face higher annual interest rates(710 percent)for the three year-loan period(Pers.Comm.2023b).This study assumes that the national government allows small operators to buy ZETs at the loan prime rate of 4.2 percent(Bank of China n.d.),reduced from 10 percent used in the previous analysis.Table 12|Policy incentives to bridge ZETs and ICEVs TCO gaps in Chinas contextMEASURESSELECTED GLOBAL CASESNATIONAL GOVERNMENTLOCAL GOVERNMENTINDUSTRYSupply sideFinancial incentivesZET mandate California:ZEV sales of 40%(tractors),55%(Class 2b-3 truck),75%(Class 4-8 straight trucks),and 100%(drayage trucks)by 2035(CARB 2021b,Advanced Clean Trucks;CARB 2023,Advanced Clean Fleets).EU:100%CO2 emissions reduction for new vans from 2035 onwards(EU 2023b)and proposed targets for new heavy-duty vehicles in 2030(-45%),2035(-65%),and 2040(-90%)(EU 2023a).China:none for truck segments.Research and development EU:Zero Emission Freight EcoSystem in Horizon Europe(ZEFES n.d.).China:National Key R&D Program of China(HTRDC n.d.).Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China59Table 12|Policy incentives to bridge ZETs and ICEVs TCO gaps in Chinas context(cont.)MEASURESSELECTED GLOBAL CASESNATIONAL GOVERNMENTLOCAL GOVERNMENTINDUSTRYDemand sideFinancial incentivesPurchase subsidies(or scrappage scheme)California:up to$200,000 vouchers for terminal tractors(CARB n.d.,Clean Off-Road Equipment Vouchers).Germany:80%of the ZET price difference with diesel counterparts(BALM 2022).China:none,except for FCEV subsidies in five FCEV city clusters(MOF et al.2020;2021).Tax benefits US:clean vehicle tax credit of up to$40,000(USDOT n.d.,Commercial Clean Vehicle Credit).Germany:non-hybrid electric cars exempt from motor vehicle tax(German Bundestag 2012).China:ZEVs are exempted from the purchase tax until the end of 2025 and will receive a 50%tax waiver during 2026 and 2027;ZETs are exempted from vehicle ownership tax(MOF et al.2018;2023).Carbon pricing on conventional fuels California:emission-based credit for transportation fuel(CARB n.d.,Low Carbon Fuel Standard).China:no carbon pricing on conventional fuels.Reduction of expressways tolls Germany:ZEVs exempt from tolls.China:Some regions in China have provided ZETs with 15100%road toll reduction(Gansu DOT et al.2021;Tianjin MTC and Tianjin DRC 2021).Innovative business model Industry:Lease of battery electric trucks in U.S.(Penske 2023)and a pay-per-use model to rent hydrogen fuel cell trucks in Switzerland and Germany(Hyundai n.d.;Shell Corporation 2023).China:The national government rolled out the“NEV Battery Swapping Mode Application and Demonstration”program(MIIT 2021).Operational efficiency improvements Industry:delivery route optimization for lectricit de France(AnyLogic n.d.).Residual value guarantee US:Used clean vehicles can receive 30%of the sale price up to$4,000(USDOT n.d.,Used Clean Vehicle Credit)Industry(China):DST Electric Vehicle Rental provided residual value guarantees for certain ZET models(Evpartner 2023).Financing cost reduction California:Access to low-cost capital through loan loss reserve for small businesses(CARB n.d.,Zero-Emission Truck Loan Pilot Project).60WRIMEASURESSELECTED GLOBAL CASESNATIONAL GOVERNMENTLOCAL GOVERNMENTINDUSTRYDemand sideRegulations Road access privilege US and EU:Zero-emission freight zones were introduced in Los Angeles,Santa Monica,Rotterdam,Amsterdam,Oslo,and other cities(Xue et al.2023).China:Relaxed the road access restrictions for ZETs(Xue et al.2023).ZET weight allowance EU:2 tons additional weight for ZETs(or GCW)(EU 2019)and proposed 4 tons additional weight for long-haul transportation.U.S.:2,000 pounds additional weight(California Constitution 2019).China:None.Infrastructure safeguardsIncentives to alternative fuels and charging/refueling infrastructure expansion US:grants to deploy charging and fueling infrastructure dedicated to heavy-duty ZEVs along highways(FHWA 2024;USEPA 2022).China:Waived demand charges(State Council 2023);purchase and operation subsidies to charging/refueling infrastructure(Henan Government 2020;Otog Government 2023).Distribution and consolidation centers Rotterdam:Optimization of the locations of distribution and consolidation centers to improve operational efficiency and reduce emissions(City of Rotterdam 2020).China:Cities such as Foshan and Suzhou planned new logistic hubs in the city centers to improve logistical efficiency(JLL 2021)Table 12|Policy incentives to bridge ZETs and ICEVs TCO gaps in Chinas context(cont.)The results:Comprehensive policy incentives(that is,the previously mentioned eight policies combined)are more effective in bringing forward ZETs TCO parity years to an earlier date than single measures.These benefits are more significant for BETs.Under the combination of the eight policies,BETs will reach TCO parity with their diesel counterparts in the most-use cases by MY20222025,zero to nine years earlier than the case without policy incentives.By contrast,even with greater amounts of subsidies(particularly the purchase subsidy),FCETs will reach TCO parity with diesel counterparts by MY20222028,three to six years earlier than the case without policy incentives.Overall,with the eight proposed policy incentives,the TCO parity years of BETs are zero to six years earlier than FCETs in most use cases(except for a 4.5-t BET500 LDT when transporting heavy goods),making BETs the most cost competitive ZET option.For example,without policy incentives,the TCO parity point of FC 18-t straight trucks in RD is earlier than the BET equivalent.However,with the comprehensive policy incentives,the TCO parity point of battery electric 18-t straight trucks in RD Notes:The table shows the policy-making jurisdictions in Chinas context.Green indicates that the TCO impacts of the policy incentives were quantitatively evaluated in this study.The letter“”denotes the policy or measure has not yet been taken by relevant stakeholders in China.“”denotes the policy or measure has been taken by relevant stakeholders in China.Sources:WRI authors summary based on C40 2020;Concept Consulting Group 2022;WEF 2021.Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China61is moved to MY20222024,surpassing FC 18-t straight trucks parity point of MY20242027.For BETs,the proposed policies exert varying degrees of impact on BETs TCO parity years across different use cases.Based on this studys policy assumption,BETs benefit most from tax exemption,electricity incentives,road access privileges,reduction of expressway tolls ZET weight allowances,and reductions on financing costs in reducing the TCO parity years.Nonetheless,the improvement in cost parity is not significant when applying the proposed carbon-pricing measure,because of low carbon prices in Guangdong.Six assumed policies are more influential:Tax exemption and electricity incentives for BETs are found to be essential to bridge the TCO gaps between BETs and ICEVs for all use cases.Compared to the case without incentives,BETs TCO parity point will be reduced by zero to three years with tax exemption or electricity incentives.Tax exemption is particularly useful for battery-electric HDTs,such as 18-t straight trucks(in RD light goods transportation),31-t dump trucks,and 42-t tractor trailer(in RD).An approximately 100,000 CNY tax deduction per vehicle is sufficient to bridge the TCO gaps and move the TCO parity point of BETs(MY20262028)two to three years earlier than the case without incentives.Financing cost reductions is particularly effective in reducing TCO parity years in UD,where with the proposed policy,BETs time to TCO parity will be reduced by zero to two years.Road access privileges for BETs are more effective in use cases of long daily VKTs and large shares of operating expenses,such as RD and DDC,because this study assumes that the policy works on VKTs.With road access privileges,the TCO parity years of battery-electric 42-t tractor trailers will be reduced by three years in RD.Reduction of expressway tolls is more influential for 42-t tractor trailers operating in RD and DDC because 42-t tractor trailers in the two use cases have large shares of VKTs on expressways and high toll rates.Road charges represent around 18 to 27 percent of battery-electric 42-t tractor trailers TCO in RD and DDC,making the two use cases most easily affected by the measure of road toll reduction.As a result,the time for battery-electric 42-t tractor trailers to achieve TCO parity is moved zero to four years earlier,compared to the case without incentives.ZET weight allowance is useful for heavy goods transportation,reducing the BETs parity points by zero to four years in these use cases.Although the measure fails to move the TCO parity years of some heavy-goods use cases before MY2030(such as 18-t BET500 straight trucks and 4.5-t BET500 LDTs in RD),it is the most effective approach to TCO reduction for the heavy-goods use cases.For example,with the 2-t weight allowance,the TCO of 18-t BET500 straight trucks will be reduced by about 330,000 CNY,compared with other incentives 40,000 to 110,000 CNY effects on TCO reduction.For FCETs,the proposed policies exert similar impacts on FCETs TCO parity years across all use cases,reducing the FCETs time to reach TCO parity by only zero to one year in most use cases.However,these policies impacts on TCO reduction vary by use case,specifically:Although BETs are cost competitive without purchase subsidies,the proposed FCET purchase subsidy is found to be one of the most influential policy interventions in reducing TCO in all use cases.The measure is particularly effective in UD,where it leads to the largest TCO reduction.However,due to large TCO gaps between FCETs and ICEVs,this policys effect on advancing TCO parity years is limited:FCETs time to TCO parity is only reduced by only zero to two years,achieving TCO parity with the diesel counterparts by MY20262030 for all use cases.The proposed tax exemption and financing cost reductions are particularly effective to bridge the TCO gaps between FCETs and ICEVs in UD,with their effect on TCO reduction only following the purchase subsidy.However,as daily VKTs increase,both policies become less effective.62WRI The proposed road access privilege and road toll reduction measures rise to become the most effective policy in long-distance use cases like RD and DDC in reducing TCO,whereas the ZET weight allowance is useful for heavy goods transportation,particularly in RD.Although in many use cases,the proposed hydrogen fuel incentive fails to move the TCO parity years earlier,it is the most influential policy in TCO reduction in the early years of FCET adoption.Because this study assumes that the hydrogen incentive will keep at-pump green hydrogen prices no greater than 30 CNY/kg,the benefit of the incentive decreases drastically over time.For example,the incentive for an 18-t FCET500 straight truck in RD will drop from about 100,000 CNY in MY2026 to 0 CNY in MY2030,insufficient to bridge the TCO gaps during the time period.On the other hand,in the early years of FCET adoption(during MY20222025),the benefit of the hydrogen fuel incentive is the highest among the eight policies in most use cases(except for 4.5-t LDTs),making the policy most effective in bridging the TCO gaps between FCETs and ICEVs.Like BETs,due to the low carbon price adopted in this study,carbon pricing makes a limited contribution to FCETs TCO reduction.Figure 23|ZET TCO parity relative to ICEVs with policy incentivesa.4.5-t LDTFCET(H2-only)Above 2030Above 2030202720272030203020262026202920292025202520282028202420242023202320222022No policy BETNo policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Carbon pricingHydrogen subsidy Purchase subsidyFinancing cost reduction Carbon pricingPolicy packageUDRDLight goods-200 kmLight goods-500 kmHeavy goods-200 kmHeavy goods-500 kmCharging subsidyFinancing cost reduction Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China63Figure 23|ZET TCO parity relative to ICEVs with policy incentives(cont.)b.18-t straight truck FCET(H2-only)Above 2030Above 2030202720272030203020262026202920292025202520282028202420242023202320222022No policy BET No policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageUDRDLight goods-200 kmLight goods-500 kmHeavy goods-200 kmHeavy goods-500 kmCharging subsidyFinancing cost reduction 64WRIFigure 23|ZET TCO parity relative to ICEVs with policy incentives(cont.)c.31-t dump truck Above 2030FCET(H2-only)202720302026202920252028202420232022No policy BETNo policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageUDHeavy goods-200 kmHeavy goods-300 kmCharging subsidyFinancing cost reduction Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China65Figure 23|ZET TCO parity relative to ICEVs with policy incentives(cont.)d.42-t tractor trailer Notes:For the 42-t tractor trailer,DDC denotes the DDC_TRIP use cases for BETs and the DDC_DVKT use cases for FCETs.Source:WRI authors calculation.FCET(H2-only)202720272027203020302030Above 2030Above 2030Above 2030202620262026202920292029202520252025202820282028202420242024202320232023202220222022No policy BETNo policy Policy packageRoad charge reductionRoad access privilege Tax exemptionZET weight allowanceTax exemptionZET weight allowanceRoad charge reductionRoad access privilege Charging subsidyFinancing cost reduction Carbon pricingHydrogen subsidy Financing cost reduction Purchase subsidyCarbon pricingPolicy packageDDCUDRDLight goods-200 kmLight goods-200 kmLight goods-500 kmLight goods-500 km66WRI3.3 Applicability to other Chinese cities should be treated with cautionIt is noteworthy that even in the same use case,the vehicle model deployed,the types of goods transported,and driving cycles differ by cities.Therefore,readers should be cautious when applying this studys conclusions to other Chinese cities.Here,we use DDC as an example to illustrate possible regional disparities in ZET configurations and TCO parity years.The reason for choosing DDC is because the previous analysis shows that BETs are likely to reach TCO parity with their diesel counterparts before MY2025 in Shenzhen.The case is different in Tangshan,Hebei Province.Tangshan is another important port city in China,home of the worlds second largest bulk commodity port(Hebei Government 2023).Although Shenzhen Port often employs 42-t tractors trailers for container transportation,Tangshan Port uses 49-t tractor trailers for iron ore and steel products(that are,heavy goods)shipments(Mao et al.2023).Further,because some trucks in Tangshan serve local factories with trip distances within 100km(Mao et al.2023),BET100 would be sufficient to meet daily operational needs,contrary to a BET200 adopted in this study for Shenzhen.Further,because the 49-t tractor trailers in Tangshan have a large proportion of the daily VKTs performed near dock or in the urban environment(Mao et al.2023),their EER(2.8)is higher than it is in Shenzhen in 2022(EER=2.3).This means ZETs are relatively more energy-efficient than their diesel counterparts in Tangshan.Therefore,a 49-t BET100 tractor trailer can reach immediate TCO parity with its diesel counterpart in MY2022 in Tangshan,earlier than in Shenzhen.Even so,the conclusions from the study would be applicable to cities with similar use-case characteristics,including truck segments deployed,types of goods transported,driving cycles,and ambient temperature.Figure 24|ZETs TCO parity years relative to diesel trucks for the DDC use case in Shenzhen and TangshanNotes:This study assumes that the trip distance for Tangshans DDC use case is 100 km,while that for Shenzhen is 200 km.Further,the energy consumption of a MY2022 49-t diesel tractor trailer is 64L/100 km,BET is 230kWh/100 km,and FCET is 18kg/100 km.Abbreviations:BET=battery electric truck;FCET=fuel cell electric truck;ICEV=internal combustion engine vehicle;DDC_TRIP=drayage duty cycle(using the“trip distance”method).Source:WRI authors calculation.BETFCET(H2-only)FCET(hybrid)VEHICLE DUTY CYCLE CARGO TYPEDAILY VKT(KM)49-t tractor trailer(Tangshan)DDC_TRIPHeavy goods200300400500DDC_DVKT20030040050042-t tractor trailer(Shenzhen)DDC_TRIPLight goods 200300400500DDC_DVKT2003004005002022202620242028202320272030Above 203020252029Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China67Although the methodology of this study is universally applicable,this study remains a simplified version of reality with caveats in the research scope and methodology and possible uncertainties in the research conclusions:First,from the demand side,intangible factorssuch as non-cost elements,revenue gains from ZET transition,and the supply-side limitations of ZET manufacturingwould also affect ZET TCO.For example,except for operation feasibility and costs,fleet operators in reality would also take the following factors into consideration:safety and security of ZETs,shippers requirements,market demands and profitability,and customers awareness of the recent development in ZETs when deciding if ZET transition is feasible(QTLC and MOV3MENT 2022).Further,the resilience of the global supply chain for ZET manufacturing and the prices of critical materials would also affect ZETs costs(BNEF 2022).Second,improvements on the TCO analytical framework are needed to capture perceived TCO by small fleet operators and draw more comprehensive recommendations.For example,estimating the costs associated with the downtime incurred by prolonged charging time or maintenance time is useful to inform charging network expansion and after-sale service improvements for ZETs.Evaluating the TCO impacts from a low-temperature or hilly-terrain operation would also be instrumental in expanding the analysiss geographic applicability.Further,taking into consideration the differences in residual values between ZETs and ICEVs will be helpful in improving TCO estimation and develop measures to guarantee ZETs residual values.Third,data are important to improve the TCO estimation and to inform policymaking.Energy efficiency and EER would greatly affect ZETs parity years and use case to prioritize ZET promotion;therefore,it is important to gather ZETs real-world energy efficiency by use case.Further,the mileage profiles of current truck fleets are also critical to the design of broadly applicable ZETs.These areas could serve as future avenues to improve the robustness and applicability of our conclusions.68WRITechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China69CONCLUSIONS AND RECOMMENDATIONS The results indicate that policy incentives,operational optimization,technology improvements,and financing mechanisms are critical for the future uptake of ZETs in Chinese cities.To accelerate ZET adoption,both private and public entities play important roles.SECTION 470WRIThis study assessed the techno-economic feasibility of ZETs over the time frame of 20222030 across 14 use cases for Shenzhen and Foshan.The results indicate that policy incentives,operational optimization,technology improvements,and financing mechanisms are critical for the future uptake of ZETs in Chinese cities.To accelerate ZET adoption,both private and public entities play important roles:First,without policy incentives,BET promotion in PO,DDC,and UD could be prioritized,given that the TCO parity with diesel trucks in these use cases will be reached as early as MY20222025.To achieve TCO parity,both operational optimization and technology improvements are important:For fleet operators,OEMs,and local governments,choosing BETs with smaller batteries,ensuring that charging facilities are sufficiently available,and adjusting operation schedules(for example,timing charging with loading or unloading of trucks or break times of drivers)are important to reduce BETs TCO.In the near term(up to 2030 in this study),DDC would be an ideal use case for operational optimization because of predictable destinations and operation schedules,return-to-base operation,as well as relatively small geographic coverage relative to RD.Over the long term,with ample charging facilities along the highway network,ZETs in RD would also benefit from operational optimization to reduce TCO.For OEMs and key component manufacturers,accelerating technology developments is essential.Battery cost reduction,vehicle energy efficiency improvement,and battery energy density increases are critical for reducing BETs TCO,while the cost reduction of the fuel cell systems and green hydrogen prices are essential to bring down FCETs TCO.Further,given the day-to-day operation variability of small fleet operators,OEMs should design broadly applicable BETs capable of meeting the majority operation in terms of range.For financial institutions and other private stakeholders,providing new business models(such as leasing and battery swapping)is useful to ease ZETs up-front purchase costs.Second,comprehensive policy incentives are important to close TCO gaps between ZETs and ICEVs.Further,policies are also essential to unlock the potentials of business models and operational optimization.With the comprehensive policies analyzed in this study,the TCO parity years of BETs in most use cases are earlier than FCETs,making BETs the most cost competitive ZET option.ZETs benefit from most measures analyzed in this study,except for carbon pricing.Because the impacts of policies on ZETs TCO parity years and TCO reduction are use-case-specific,comprehensive policy incentives are more effective to bringing forward ZETs TCO parity years to an earlier date than single measures.Subsidies analyzed in this studyincluding purchase subsidies and hydrogen fuel incentivesare one of the most influential policy interventions to bridge FCETs and ICEVs TCO gaps;however,governments should refrain from using large purchase subsidies to boost ZET adoption to avoid flooding the freight market with excessive truck capacity.Because changes in energy prices will greatly affect ZETs parity years with diesel trucks,removal of diesel subsidies(Black et al.2023),carbon taxes on diesel prices(OECD 2022),or alternative energy incentives should be considered to maintain the cost competitiveness of ZETs.Although charging facilities can be delivered by the private sector or through public-private partnerships,public support is essential to enable BETs operational optimization.This public support takes the form of land-use planning,land acquisition,grid capacity expansion,and capital grants or energy incentives to install or operate ultra-fast charging facilities.To guide government investments,fleet operators should provide information on charging hotspots,such as depots and warehouses.Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China71 To foster the proliferation of business models,governments and financial institutions could consider reducing the minimum down payment requirements on ZET loans,unlocking green finance(through reduced interested rates and extended repayment terms)for ZET financing,and providing tax benefits or flexible depreciation for ZET leasing.Data on ZETs energy efficiency and existing diesel truck fleet mileages are important to inform both policymaking and ZETs design.Therefore,it is useful for governments to gather ZETs real-world energy efficiency and ICEVs mileage data by use case and share this information with key stakeholders like OEMs to facilitate ZETs real-world application and technology advances.It is also necessary to go beyond the policies examined in this study to consider other policy options,such as enhancing ZETs fire safety,enforcing air pollution prevention policies,improving ZETs residual values,and organizing public education campaigns,particularly for small fleet operators.Last,the conclusions from the study would be applicable to cities with similar use-case characteristics,including truck segments deployed,types of goods transported,driving cycles,and ambient temperature.City with different characteristics should be cautious when applying this studys conclusions.72WRITechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China73APPENDICES APPENDIX A.ACCESS PRIVILEGES FOR NEW ENERGY TRUCKS IN SELECTED CITIES IN GUANGDONG Note:a In Foshan,for ICE trucks,medium-duty box trucks with a vehicle length within 6 meters and a GVW within 8 tons have the same access restrictions as light-duty trucks.For new energy trucks registered in Guangdong Province,those with a payload capacity within 5 tons(including light-duty trucks)and medium-duty box trucks with a vehicle length within 6 meters and a GVW within 8 tons are not subject to access restrictions.(Foshan MEEB and Foshan PSB 2022).b In Shenzhen,battery electric medium-and heavy-duty trucks with a vehicle length within 6 meters have the same access restrictions as light-duty ICE trucks.Battery electric medium and heavy-duty trucks with a vehicle length exceeding 6 meters have the same access restrictions as medium-and heavy-duty ICE trucks(Shenzhen PSB 2023a).c In Foshan,among the four zero-emission freight zones,two have restricted the access of medium-and heavy-duty diesel trucks.In Shenzhen,the zero-emission freight zones only restrict the access of light-duty diesel trucks(Shenzhen PSB 2023b).d Access restrictions on non-local trucks are not included in the table.Abbreviations:ICE=internal combustion engine;LDTs=light-duty trucks;MDT=medium-duty trucks;HDTs=heavy-duty trucks;X=no policy.Source:WRI authors summary.FOSHANSHENZHENGUANGZHOUDONGGUANICE truckNew energy truckICE truckNew energy truckICE truckNew energy truckICE truckNew energy truckLDT,certain MDTaMDT&HDTLDT,certain MDTaMDT&HDTLDTMDT&HDTLDTCertainMDT&HDTbMDT&HDTbLDT&MDTHDTLDT&MDTHDTLDTMDT&HDTLDTMDT&HDTZero-emission freight z onescXXXXCity centerCity peripheralTable A-1|Access privileges for new energy trucks in selected cities in Guangdong ProvinceAll-day restriction in all regionsNo restrictionPermits to enter restricted areas are availableAll-day restriction in some regionsDaytime restriction in some regionsPeak-hour restriction in some regions74WRIAPPENDIX B.INTERVIEWS CONDUCTED FOR THIS STUDY We conducted semi-structured online and offline interviews to the following stakeholders.The detailed interview methods are explained in Table B-1.Note:The Authors also managed to include four small fleet operators in the interviews to obtain information about the unique challenges faced by small fleet operators.Source:Authors summary.RESPONDENTS SAMPLING METHODNUMBER OF RESPONDENTSINTERVIEW QUESTIONS Fleet operators of different sizes Convenient sampling by use case 10 operators specialized in 4.5-t LDTs UD and RD operations in Shenzhen and Foshan.7 operators on 42-t tractor trailers DDC in Shenzhen.2 operators for PO in Shenzhen.7 operators specialized in 42-t tractor trailers RD and long-haul operation in Shenzhen and Foshan.5 operators specialized in 18-t straight trucks UD and RD operation in Shenzhen.Typical use cases,status quo on ZET adoption and challenges,energy consumption,purchase costs,TCO(such as maintenance costs)Truck dealersConvenient sampling 3 truck dealers in Shenzhen and Foshan.Energy consumption,purchase costs,TCO(such as loan and insurance costs)OEMs and key component manufacturersConvenient sampling 2 OEMs and key ZET component manufacturers Weights and cost of key components,mainstreamed design of ZETs,TCO(such as replacement costs of key components)Table B-1|Interviews conducted for this studyTechno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China75ABBREVIATIONSBET battery electric truckBEV battery electric vehicleCNY Chinese yuanDDC drayage duty cycleDMC direct manufacturing costEER energy efficiency ratioFC fuel cellFCET fuel cell electric truckFCEV fuel cell electric vehicle HDT heavy-duty truckICEV internal combustion engine vehicleICM indirect cost multiplierGVW gross vehicle weightGCW gross combined weightLDT light-duty truckMY model yearNEV new energy vehiclePO port operationRD regional deliveryTCO total cost of ownership UD urban deliveryVKT vehicle kilometer traveled ZET zero-emission truckENDNOTES1.NEVs include battery electric vehicles(BEVs),plug-in hybrid elec-tric vehicles(PHEVs),and fuel cell electric vehicles(FCEVs).2.Clean-energy vehicles include NEVs and natural gas vehicles.3.Freight density is calculated by dividing the volume by the weight of the cargo.4.This is estimated by assuming that the FCEV uses the hydrogen-only mode.5.C-rate is the rate at which a battery is discharged relative to its maximum capacity.6.How to predict the future capacities of battery packs is explained in the previous section.7.The costs are assumed to be 486 CNY/kW for the OBC and 389 CNY/kW for the DC/DC converter.Further,these costs are assumed to be constant over time.8.Vehicle purchase costs are assumed to be the same in Shenzhen and Foshan.9.BETs often need to be charged over two charges per day,when using the“trip distance”method to size the battery capacities.10.This means the future cost reduction in battery packs are not considered.11.This means that for the case without policy incentives,demand charges are also waived for ZETs.12.The low(green)hydrogen prices can be made possible with low-cost renewable energies(0.13-0.22 CNY/kWh)(Yu et al.2024)and pipeline transportation in 2030.13.Non-native electric vehicles are BETs or FCEVs that use existing platforms from ICEVs;whereas native electric vehicles are BETs or FCEVs that are designed from the ground up.14.The cost is the tractors cost,excluding trailers price.15.Currency exchange rate:1 US dollar=7.0 CNY.16.This study doesnt differentiate FCEVs energy efficiency in UD and RD due to the lack of empirical evidence.17.Guangdong Province is one of seven regional ETS pilots in China;it is characterized by the largest trading volume among all the pilots.76WRIREFERENCESAjanovic,A.,and R.Haas.2018.“Economic Prospects and Policy Framework for Hydrogen as Fuel in the Transport Sector.”Energy Policy 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Government.2022.Interim Measures for Promoting the Development of the Hydrogen Energy Industry in Daxing District(Revised Edition 2022).https:/ August 17,2023.Beijing MEITB(Municipal Bureau of Economy and Information Tech-nology).2022.“Notice on the Implementation of the 2021-2022 Beijing Fuel Cell Vehicle Demonstration and Application Project Applica-tion Process.”https:/ August 17,2023.Berckmans,G.,M.Messagie,J.Smekens,N.Omar,L.Vanhaverbeke,and J.Van Mierlo.2017.“Cost Projection of State of the Art Lithium-Ion Batteries for Electric Vehicles Up to 2030.”Energies 10(9):1314.doi:10.3390/en10091314.Black,S.,A.A.Liu,I.Parry,and N.Vernon.2023.“IMF Fossil Fuel Subsidies Data:2023 Update.”IMF Working Papers 2023(169):1.doi:10.5089/9798400249006.001.BNEF(BloombergNEF).2022.“Lithium-Ion Battery Pack Prices Rise for First Time to an Average of$151/kWh.”Blog.December 6.https:/ Hydrogen Levelized Cost Update:Green Beats Gray.”Blog.July 25.https:/ A.K.Sinha.2020.Technology,Sustainability,and Market-ing of Battery Electric and Hydrogen Fuel Cell Medium-Duty and Heavy-Duty Trucks and Buses in 20202040.Davis,CA;UC Davis.doi:10.7922/G2H993FJ.Burnham,A.,D.Gohlke,L.Rush,T.Stephens,Y.Zhou,M.Delucchi,A.Birky,et al.2021.Comprehensive Total Cost of Ownership Quantification for Vehicles with Different Size Classes and Powertrains.Lemont,IL:Argonne National Laboratory.doi:10.2172/1780970.C40.2020.“Zero-Emission Freight:Vehicle Market and Policy Develop-ment Briefing for C40 Cities.”https:/www.c40knowledgehub.org/s/article/Zero-emission-freight-Vehicle-market-and-policy-develop-ment-briefing-for-C40-cities?language=en_US.Accessed August 17,2023.CALB(China Aviation Lithium Battery Technology).2022.CALB Global Offering.https:/invest.calb- Air Resources Board).2018.Battery Electric Truck and Bus Energy Efficiency Compared to Conventional Die-sel Vehicles.https:/ww2.arb.ca.gov/sites/default/files/2018-11/180124hdbevefficiency.pdf.CARB.2019.“Advanced Clean Trucks Total Cost of Ownership Discus-sion Document.”https:/ww2.arb.ca.gov/sites/default/files/2020-06/190225tco_ADA.pdf.CARB.2021a.“Draft Advanced Clean Fleets Total Cost of Ownership Discussion Document.”2021.https:/ww2.arb.ca.gov/sites/default/files/2021-08/210909costdoc_ADA.pdf.CARB.2021b.“Advanced Clean Trucks.”https:/ww2.arb.ca.gov/our-work/programs/advanced-clean-trucks.Accessed January 18,2024.CARB.2023.“Advanced Clean Fleets RegulationDrayage Truck Requirements.”https:/ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-fleets-regulation-drayage-truck-requirements.Ac-cessed January 18,2024.CARB.n.d.“Clean Off-Road Equipment Vouchers.”https:/ww2.arb.ca.gov/our-work/programs/clean-off-road-equipment-voucher-incen-tive-project.Accessed January 18,2024.Techno-economic feasibility analysis of zero-emission trucks in urban and regional delivery use cases:a case study of Guangdong Province,China77CARB.n.d.“Low Carbon Fuel Standard.”https:/ww2.arb.ca.gov/our-work/programs/low-carbon-fuel-standard.Accessed January 17,2024.CARB.n.d.“Zero-Emission Truck Loan Pilot Project|California Air Resources Board.”https:/ww2.arb.ca.gov/our-work/programs/zero-emission-truck-loan-pilot/about.Accessed December 14,2023.California Constitution.2019.“Vehicle Code-VEH.”2019.https:/leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=VEH&tocTitle= Vehicle Code - VEH.Accessed August 18,2023.CATARC(China Automotive Technology and Research Center).2017.Assessment of Freight System in China.https:/theicct.org/wp-content/uploads/2022/01/中国货体系评估项目报告-2017.11.9.pdf.CATARC.2022.Research on TCO of Commercial Vehicles in China and Comparison between China and US.https:/www.efchina.org/Reports-zh/report-ctp-20220701-zh.Accessed February 1,2024.CFLP(China Federation of Logistics and Purchasing).2022.Report on the Small-and Medium-Sized Logistics Enterprises.http:/ Febru-ary 1,2024.Changzhou Government.2024.“Changzhou City Implements Subsidies for New Energy Vehicle Charging Services.”https:/ February 1,2024.Chen,Y.,and M.Melaina.2019.“Model-Based Techno-Economic Evaluation of Fuel Cell Vehicles Considering Technology Uncertain-ties.”Transportation Research Part D:Transport and Environment 74(September):23444.doi:10.1016/j.trd.2019.08.002.Cheng,Q.,R.Zhang,Z.Shi,and J.Lin.2024.“Review of Common Hydrogen Storage Tanks and Current Manufacturing Methods for Aluminium Alloy Tank Liners.”International Journal of Lightweight Ma-terials and Manufacture 7(2):26984.doi:10.1016/j.ijlmm.2023.08.002.China SAE(China Society of Automotive Engineers).2021.Technology Roadmap for Energy Saving and New Energy Vehicles 2.0.Beijing,China:China Machine Press.China SAE.2024.Technology Roa
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1 Eric Schiff by Chris Sherwood Abstract A broad overview of the advanced air mobility industry to support understanding by the public and relevant stakeholders.It may be useful prior to the upcoming certification and entry into service of advanced air mobility products.DEMYSTIFYING ADVANCED AIR MOBILITY(AAM)WHITE PAPER JULY 15,2024 V1.1 REVISED AUGUST 7,2024 2 i Table of contents Prologue.iii Chapter 1:Introduction to advanced air mobility.1 Why should I care about advanced air mobility?.1 Will advanced air mobility aircraft and air taxi services save people time?.3 Wont advanced air mobility aircraft be loud?.4 Will advanced air mobility aircraft benefit people like me?.5 If advanced air mobility aircraft are so great,why dont I know anything about them?.6 Will advanced air mobility aircraft be good for the environment and public health?.7 How safe are advanced air mobility aircraft?.12 Advanced air mobility aircraft certifications.12 Advanced air mobility pilot certifications.15 Certification considerations for non-commercial advanced air mobility aircraft.18 Chapter 2:Advanced air mobility ecosystem.19 Product.19 Component Suppliers.19 Infrastructure Providers.22 Charging.22 Facilities Providers.26 Labor.30 Operators.31 Commercial.34 Finance.34 Investors.34 Lessors.34 Insurance.34 Government.35 Certification Authorities and Regulators.35 Air Traffic Controllers.36 Other Government Agencies.36 Consumers.36 Chapter 3:Advanced air mobility passenger aircraft market.40 Chapter 4:Cargo market for advanced air mobility.59 Chapter 5:The military market for advanced air mobility.64 Chapter 6:Personal eVTOL market.69 Chapter 7:Public service market.75 Chapter 8:Innovations in control,design,and energy.80 Control.80 Economics.81 Operations.81 Safety.81 Design.82 eCTOL.83 ii eSTOL.84 eVTOL.85 Electric Propulsion System Elements.92 Batteries.93 Electric motors.95 Fans,propellers,or rotors.96 Energy.96 Chapter 9:Conclusion.99 Chapter 10:Supplemental Information.101 Websites of Relevant or Mentioned Organizations and Publications.102 Websites of Companies Mentioned.102 Glossary.105 About the Author.108 Acknowledgements.108 Note on white paper title.109 Disclaimer.109 iii Prologue During my nearly 30-year career in entertainment technology(semiconductors,including turnkey reference designs with both hardware and full software,and intellectual property licensing for immersive audio and video),Ive focused on product management and ecosystem partnerships.I was drawn to apply my skills in the entirely new(to me),highly disruptive advanced air mobility industry to help address climate change.I found the advanced air mobility industry,the Vertical Flight Societys Transformative Vertical Flight conference,and other members of the Vertical Flight Society.They share my passion-and have also selflessly shared their hard-earned knowledge.I have enjoyed learning and researching this industry as I have before with semiconductors and audio and video technology for a wide range of consumer products.My business background and extensive product management experience in technology provided me a unique perspective in assessing the advanced air mobility market.As a product manager,I solicited inputs from a broad group of internal and external stakeholders and applied my judgment to find the right balance between features,resources,risks,and schedules.I studied product-market fit,created products that delivered compelling experiences,and communicated value propositions to colleagues,customers,and partners around the globe.I collaborated closely with critical ecosystem partners.I collaborated with teams of account managers,application engineers,business owners,hardware and software engineers,program managers,and technical writers.I wrote thousands of pages of documentation.I worked closely with many teams to create and grow businesses based on these products.Ive applied these skills to understand some of the competitors,customers,partners,and stakeholders in the advanced air mobility industry.In highly complex and technical industries,industry participants are often highly risk-averse and highly interdependent for success.Success for the advanced air mobility industry requires deep collaboration among the various ecosystem participants and a great deal of public education.This white paper summarizes these challenges.I received helpful input from a range of subject matter experts and companies(see Acknowledgements).I loved the message in the film Field of Dreams that if you build it,they will come.This white paper was a passion project and I hope that others find it useful and that it supports the success of the advanced air mobility industry.1 Chapter 1:Introduction to advanced air mobility While flying cars are no longer in the distant future if you have$300,000 or so to spare,the same underlying technology can be applied to reach an average consumer through other forms of advanced air mobility(AAM)aircraft.The AAM Institute defines AAM as“the emerging aviation ecosystem that leverages revolutionary new aircraft and a broad array of innovative technologies to safely,quickly,affordably,and sustainably move people and goods among local destinations to connect communities underserved by existing modes of transportation.”1 This white paper describes the advanced air mobility industry,associated benefits,the overall ecosystem and its participants,market segments,use cases and manufacturers and the new technologies that advanced air mobility brings.Based on public statements from the advanced air mobility industry,service launches are starting this year with others following soon(2024 2026 for 1st group;2026-2030 for others).This white paper focuses on advanced air mobility in terms of fundamental new approaches compared with existing airplanes and helicopters in one or more areas including:Control(for example,autonomous,semi-autonomous flight and piloted)Design(for example,lift-plus-cruise,multicopter,and vectored thrust)Energy(for example,non-CO2 emitting power sources)This white paper is broad in scope rather than highly technical or comprehensive.See the resources referenced under Additional Information for further details.Why should I care about advanced air mobility?1)Advanced air mobility aircraft are coming to market relatively soon.For example,the EHang EH216-S aircraft has already received its Type Certificate,its Standard Airworthiness Certificate,and its Production Certificate,and its Air Operator Certificate for entities operating in Guandong and Heifei from the Civil Aviation Administration of China(CAAC).2,3 EHang claims it is now actively preparing for commercial passenger operations for the aerial sightseeing use case in China adhering to the conventional principle for the introduction of new aircraft of 1 https:/aaminstitute.org/mission 2 EHang Press Release,“EHang Secures Production Certificate from CAAC,Clearing Path for Mass Production of EH216-S Pilotless eVTOL Aircraft,”April 7,2024,See.3 EHang Press Release,“EHangs Pilotless eVTOL Air Operator Certificate Application Accepted by CAAC,July 22,2024.See.2 imposing prudent restrictions first and progressively lifting applicable restrictions(such as limitations on defining flight routes,scheduling,operational assurances for commercial operations of airliners,etc.).As EHang announced,it will gradually lift these operational limitations with the ultimate goal to realize comprehensive autonomous commercial operations across urban areas.4 Among other advanced air mobility aircraft manufacturers,Archer,BETA,Joby,Lilium,and Volocopter appear to be the most advanced in the certification process.These manufacturers are projecting to be type certified and enter into service in the range of 2024 to 2026.However,as advanced air mobility aircraft include significant technical innovations,and certification requirements are still new or being updated,delays relative to company certification targets are quite possible.Similarly,service launches involve a broad range of dependencies beyond aircraft airworthiness certification dates including operating and training certification,access to vertiports in suitable locations,permitting to build vertiports,manufacturing ramp-ups,creation of maintenance facilities,and pilot training,etc.2)The advanced air mobility aircraft ecosystem will generate jobs and provide investment opportunities as aircraft and associated companies enter the market.For reference,a Morgan Stanley report projects a$1 trillion total addressable market opportunity for 2040 growing to a$9 trillion in 20505.Another example that suggests the potential for this market is the order backlogs which some publicly traded,early advanced air mobility aircraft manufacturers have reported.Table 1:AAM aircraft order backlog for selected companies(as of Q1 2024 or Q4 CY23 based on latest reporting)6 Company Aircraft orders(firm and options)Order value(at list prices)Eve Air Mobility 2,850$14.5 billion Electra.aero 2,000$8.0 billion 4 EHang press release,“EHang Continues to Promote Operations and Commercial Deployment of EH216-S Passenger-Carrying Unmanned Aerial Vehicle System”,October 30,2023.See.5 Morgan Stanley,“eVTOL/Urban Air Mobility TAM Update:A Slow Take-Off,But Skys the Limit”,May 6,2021.See.6 Published information from ;www.electra.aero,;and www.vertical- and public filings on ;www.electra.aero/news,;www.https:/;and www.investor.vertical-.3 Vertical Aerospace 1,500$6.0 billion Lilium 780 Not announced Archer Aviation 700 $3.5 billion Will advanced air mobility aircraft and air taxi services save people time?Air taxi services using advanced air mobility aircraft are expected to enable significant time savings compared with ground transportation by avoiding roadway congestion and faster inherent speed of these aircraft(anywhere from 100 to 200 mph for a number of models and as high as 280 mph in some cases)7.As an added benefit,use of advanced air mobility aircraft can potentially mitigate the need for some additional investments in roadways.Depending on the local level of traffic,distance traveled,and time for any connecting ride shares and entering and exiting advanced air mobility aircraft,reductions in total travel time of 50 to 75%could be realized.Figure 1:Lilium examples of time savings in different markets8 7 Published information on company websites and public filings for companies mentioned in this white paper.8 Slide 11 of Lilium Equity Story v2.0 Investor Presentation Jan 4,2024.4 The Joby Aviation website provides an example for New York City showing a seven-minute Joby flight compared to a circuitous 49-minute car drive.9 Wont advanced air mobility aircraft be loud?In fact,advanced air mobility aircraft are quiet,and much quieter than helicopters.For example,advanced air mobility aircraft include design features related to their propellers(number,size and speed)that result in dramatically lower noise levels than a helicopter.An air mobility aircraft has the potential to produce as little as 1/100th of the noise of a helicopter.The noise level of an advanced air mobility aircraft during liftoff is approximately 60dB10(comparable to a conversation)and during hover of approximately 45dB11(less than the sound of a refrigerator).A helicopter generates approximately 100dB of peak take-off noise and approximately 78dB of noise at cruising altitude of 1,000 feet12.Joby Aviation has created some very clear videos on this topic13.Loudness is measured in Decibels(denoted dB)using a logarithmic scale so every 10dB increase represents a 10 x increase in sound energy(for example,40dB is 10 times as loud as 30dB).This image from AAAudioLab shows sound levels for a range of common activities where over 80dB is considered to be very loud.9 Published information from and public filings on .10 Published information on company websites and public filings for companies mentioned in this white paper 11 Published information on company websites and public filings for companies mentioned in this white paper 12 New Atlas,Loz Blain,NASA acoustic testing puts real numbers on Joby EVTOL noise signature”,May 10,2022.See.13 See here and here.5 Figure 2:AAA AudioLab Decibel Scale14 Will advanced air mobility aircraft benefit people like me?Advanced air mobility aircraft providers have discussed expected pricing after launches in the range of ride-sharing services from a cost per mile/kilometer perspective.This would position air taxi services for mass market adoption.However,as is typical with other technical innovations,it is expected that companies may charge premium prices in the initial 5-10 years of service so that they can recover their very large investments while they scale.The CEO of Joby Aviation,JoeBen Bevirt in a recent interview15 said“We want a price thats comparable to what you would pay for a taxi or Uber.”Given the broad adoption of ride-sharing services,this sets a clear expectation that travel involving advanced air mobility aircraft will be able to reach a mass market within a reasonable time from their launch(for example,within a decade,if not earlier).He continued“Were building vertiport infrastructure at JFK and LaGuardia and LAX to give that really fantastic customer experience of a tight integration between your Delta flight and your Joby flight.”It is important to ensure smooth integration of travel between advanced air 14 https:/ Axios,Shauneen Miranda,“Exclusive:This electric aircraft CEO wants you to fly for the price of an Uber”,March 19,2024 See.6 mobility aircraft and airline flights so this close planned coordination with Delta will further the development of a mass market for travel involving advanced air mobility aircraft.Advanced air mobility aircraft can also serve a variety of other important,non-passenger markets for instance,cargo,military,and public service missions(where faster response time can save lives).These other markets add to the important public benefits that advanced air mobility aircraft bring.If advanced air mobility aircraft are so great,why dont I know anything about them?It is not surprising that the public is not aware of advanced air mobility aircraft as,with the exception of the EHang EH216-S aircraft,aircraft are still in the certification process and associated services have not yet launched.One purpose of this white paper is to provide more information and understanding about and acceptance of the advanced air mobility industry.Recent studies suggest that awareness and understanding lead to acceptance.Beginning in October 2021,Maven conducted a 90-day study that investigated public awareness of advanced air mobility in Los Angeles and Ohio16.Their findings related to awareness of advanced air mobility indicate a need for more public education about advanced air mobility to describe the benefits which advanced air mobility may bring to passengers and communities,and to clarify the expected noise advanced air mobility aircraft produce:Approximately 45%of respondents“had never heard of this concept before”(“advanced air mobility”)and an additional approximately 30%of respondents had“heard of this concept before but knew very little about it”17 Advanced air mobility acceptance increased by 14 to 22 percentage points with additional information.18 “About 20%of survey respondents said they would never fly in an eVTOL.”19 Additional research on consumer willingness to travel on advanced air mobility aircraft found that“Approximately half of the respondents were willing to travel on AAM 16 Maven,Optimal Locations for Air Mobility Vertiports,January 2022.Page 6.See.17 Maven,Page 66.18 Maven,page 21.19 Maven page 23.7 aircraft,while one-third indicated they might be willing.”20 For more details,see the following article on this topic.Will advanced air mobility aircraft be good for the environment and public health?AAM aircraft can offer significant environmental and public health benefits,especially compared to hydrocarbon-based airplanes,automobiles,and helicopters.Overall,transportation is the second largest source of greenhouse gasses by industry(20.7%of total)after the power industry(38%of total)21.Fortunately,progress is being made to decarbonize both of these sectors,most prominently through electric vehicles,solar energy,and wind energy which will result in greenhouse gas emission declines.Within the transportation industry,aviation represents 11%of the total22 making decarbonizing aviation an especially important focus area for further progress in greenhouse gas emissions.20 Ison,D.C.(2023).Public Opinion Concerning the Siting of Vertiports.International Journal of Aviation,Aeronautics,and Aerospace,10(4).See DOI,Page 5.21 Source IEA Statista,2024.See.22 Source:IEA Statista,2022.See.8 Figure 3:CO2 emissions by transportation sector23 A recent New York Times article indicates that the environmental impact of aviation is more than its top-line percentage of global CO2 emissions:Air travel is responsible for 3 percent of global carbon emissions,and those emissions are growing faster than those of rail,cars and trucks,or ships.Finding a way to lower that number is one of the most difficult pieces of the energy 23 Source:IEA Statista,2022.See.9 transition,in part because the technology isnt quite there yet to provide a solution on the scale we need.Airplanes,Hiroko told me,also emit other pollution like nitrogen oxide and soot,and form contrails,all of which warm the planet further.Scientists estimate that the net warming effect of these may be up to three times as great as the warming caused by aviations carbon dioxide emissions alone.24 Fortunately,most advanced air mobility aircraft referenced in this white paper use either batteries or hydrogen fuel cells in addition to their batteries(referred to as hydrogen-electric)as their energy sources so they do not emit any greenhouse gasses during their operation.As advanced air mobility aircraft are deployed and displace travel by cars using internal combustion engines and traditional aircraft,greenhouse gas emissions will be reduced.In addition,these advanced air mobility aircraft do not generate other pollution including smog or other particulate matter during operations.Some of the advanced air mobility aircraft mentioned in this white paper are hybrid aircraft which might include electric batteries and motors along with a fossil fuel-based internal combustion or turbine engine in order to meet their critical missions.However,these hybrid aircraft still incorporate innovations in control and design that may make them more environmentally friendly than traditional aircraft,or that may make them more effective in their public service missions.For instance,in the case of a public service advanced air mobility aircraft for fire-fighting or air ambulance service the benefit of the supplemental energy source may outweigh the environmental benefits of a non-carbon emitting energy source.That is,more effective fire-fighting using a hybrid aircraft may enable fires to be contained more quickly thereby reducing carbon emissions from the fire that far offset the carbon emissions from the aircraft.Similarly,more effective urgent air ambulance care using a hybrid aircraft may enable more lives to be saved,which is prioritized over reducing carbon emissions.While displacing hydrocarbon-based travel can reduce risks to health associated with breathing this pollution,there are some other potential environmental impacts for electric advanced air mobility aircraft compared with those using hydrogen fuel cells.For electric or hydrogen fuel advanced air mobility aircraft,if the supporting electricity generation and distribution infrastructure used to charge these aircraft or create the hydrogen is renewable(for example,hydropower,solar or wind)then recharging or refueling electric conventional take off and landing aircraft(eCTOLs)and electric vertical 24 New York Times,Manuela Andreoni,“Making flying cleaner”,May 2,2024.See.10 take off and landing aircraft(eVTOLs)also does not emit greenhouse gasses.Conversely,if other electricity generation sources(for example,coal,natural gas,or oil)are used then those generation facilities generate greenhouse gas emissions.The International Energy Agency projects that renewable energy sources will become the largest source of global energy generation in 2025 overtaking coal and generating roughly one third of global electricity.25 Figure 4:Global Electricity Generation Sources26 Other IEA studies also project that renewables will grow from“just under 30%of electricity supply in 2020 to nearly 70%in 2025,while coal-fired generation steadily decreases.”27 25 International Energy Agency(“IEA”)“Net-Zero by 2050:A Roadmap For the Global Energy Sector”Updated October,2021,Page 46.(Used under CC By 4.0 License see https:/creativecommons.org/licenses/by/4.0.)26 Ibid 27 Ibid 11 Figure 5:Global electricity generation by source28 In 2022,approximately 60%of U.S.and global electricity was generated using fossil fuels.29 However,the global trend in electricity generation is moving heavily toward renewables in new electric generation capacity.In the US approximately 86%of U.S.utility additional capacity in 2023(56.1GW)was either solar(52%),batteries(17%),wind(13%),or nuclear(4%)while all of U.S utility retired capacity in 2023(14.5GW)was carbon-based30.In addition,”The United States has set a goal to reach 100 percent carbon pollution-free electricity by 2035”31 Hydrogen fuel can be produced using a number of methods-including using renewable energy or natural gas.28 Ibid 29 New York Times,Nadja Popovich,“How Electricity Is Changing,Country by Country”,November 20,2023.See.30 U.S.Department of Energy(“DOE”),“FOTW#1304,August 21,2023:In 2023,Non-Fossil Fuel Sources Will Account for 86%of New Electric Utility Generation Capacity in the United States”.See.31 The White House,April 22,2021,“FACT SHEET:President Biden Sets 2030 Greenhouse Gas Pollution Reduction Target Aimed at Creating Good-Paying Union Jobs and Securing U.S.Leadership on Clean Energy Technologies”.See.12 Figure 6:Hydrogen production methods32 How safe are advanced air mobility aircraft?AAM aircraft designs provide enhanced safety in a number of areas.For instance,redundancies in batteries,motors,fans,propellers,and rotors enable AAM aircraft to operate safely even if there is a failure with a component of one of those electric propulsion subsystems.Electric propulsion systems refer to any energy source(battery electric,hybrid electric,or hydrogen fuel cell electric)which uses electric motors to transmit power to the propulsion system.Formal government certifications exist for commercial aircraft.The overall system of certifications governs the aircraft itself(covering type,production,and airworthiness),operating the aircraft(for instance,by an airline),and piloting the aircraft.These certifications are expected to achieve comparable safety levels as with other commercial aircraft.The certification portion of this white paper primarily focuses on commercial markets(for example,advanced air mobility aircraft for commercial use with passengers).Advanced air mobility aircraft certifications In general,the certification process for commercial aircraft by the U.S.Federal Aviation Administration(FAA)involves five broad stages:32 World Economic Forum,“Grey,blue,green why are there so many colours of hydrogen?”,July 27,2021.See.Note that there are other hydrogen color schemes which involve even greater complexity including the use of nuclear energy as an energy source for creating hydrogen fuel.13 Figure 7:Aircraft Certification Process Summary Stage 1(Certification Basis):An agreed set of airworthiness requirements to be met for the certification of the advanced air mobility aircraft.Stage 2(Means of Compliance):A design standard for the airworthiness requirements to be met for the advanced air mobility aircraft.Stage 3(Certification Plans):Approve plan to conduct certification testing for entire advanced air mobility aircraft.Stage 4(Testing&Analysis):Tests and analysis to confirm that certification plans have been met for the various systems of the advanced air mobility aircraft.Stage 5(Show&Verify):Flight tests to confirm overall performance of the advanced air mobility aircraft.With the outcome of success through these stages being the following aircraft certifications-listed below in their customary sequence:Type Certification:Confirmation by the certification authority that a specific aircraft and all of its component parts have been verified to be compliant with the regulatory certification Basis.Production Certificate:Authorization by certification authority to produce a specific aircraft for commercial use.Airworthiness Certificate:Authorization by certification authority for an aircraft to be operated in flight.Repair Certificate:Authorization by certification authority for an aircraft operator to perform specialized repair services on an aircraft.14 Once an aircraft has achieved these milestones,specific air service certifications are possible.The most relevant of these is currently Part 135 Operation which permits scheduled commuter and non-scheduled air-taxi(on demand)flights using the advanced air mobility aircraft effectively“Entry into Service”.Note that the term“Part 135 Operation”above is somewhat of a simplification related to commercial air service operations issued by the FAA,which will be the example regulator used in this section.The FAA actually grants a number of distinct operating licenses for different purposes and with different authorizations.For instance,large airlines typically operate under Part 121 licenses while regional airlines typically operate under Part 135 licenses.At this point,the operating certificate for eVTOL aircraft for hire is not yet determined but it is possible they may be governed under Part 135 licenses.This is suggested by the fact that Archer Aviation33 and Joby Aviation34 have both received Part 135 licenses to operate aircraft commercially from the FAA.However,it is also possible that some other categories of aircraft for smaller cargo operators,or corporate air operators may instead operate under Part 91 licenses,for instance,private or personal aircraft.The FAA also requires additional certifications that are pertinent for maintenance and repair and also for pilot training.For instance,Part 145 certificates are for maintaining and repairing aircraft as approved under type certification.Both Archer Aviation35 and Joby Aviation36 have received Part 145 certifications from the FAA.Part 60 certificates are for approved simulators to train pilots for certification.While the U.S.FAA is specifically referenced above,the same process broadly applies for other major regional certification authorities.A reasonable question is how commercial aircraft which are shipped in multiple regions handle certification by these various regulatory authorities.In general,a certification by one major regional certification authority serves as a reference for consideration by other regional certification authorities though each will take an independent determination of their own certifications.The U.S.FAA and the European EASA have recently tried to collaborate related to advanced air mobility-related certifications.Sergio Cecutta,partner of SMG Consulting and author of the AAM Reality Index has noted that collaboration between 33 Archer Aviation press release,“Archer Receives FAA Certification to Begin Operating Commercial Airline”,June 5,2024.See.34 Joby Aviation press release,“Joby Receives Part 135 Certification from the FAA”,March 26,2022.See.35 Archer Aviation press release,“Archer Receives Part 145 Certification From The Federal Aviation Administration”,February 8,2024.See.36 Joby Aviation press release,”Joby Receives Part 145 Maintenance Certificate from FAA”,February 8,2024.See.15 EASA and the FAA is looking less likely to be a common approach than an agreement for each to certify aircraft which have been certified by the other certification entity.37 On June 10,2024 both EASA and the FAA introduced updated guidance related to their plans for certification of eVTOL aircraft.38,39,40 In general,both agencies are now moving forward with their certification plans and some coordination has occurred between them.41 However,this process may be subject to changes due to:Large numbers of advanced air mobility aircraft which are already in the Type Certification process or expected to enter that process during the next 24 months.Significant changes that advanced air mobility aircraft represent versus existing airplanes and helicopters.Modification of Type Certification process given any recent product and program-related field issues.Advanced air mobility pilot certifications The complexity of completing pilot certification can be illustrated by comparing the number of flight hours needed for the certification.However,a number of supplemental requirements exist in some cases so any prospective pilot needs to review official certification documentation and consult with the authorized pilot trainer.Table 2:Aircraft pilot licensing certification summary42 Pilot License Category Total Flight Hours Comments Airline Transport 1500 hours Incl.250 hours in command Commercial 250 hours Incl.10 hours in command (Same for helicopters&fly for hire)37 Future of Flight Investor Podcast,Jaafar Asri,“Air Taxis:Discussion with Sergio Cecutta”,May 10,2024.See.38 Flying,Jack Daleo,“FAA,EASA Release New Certification Criteria for Air Taxis”,June 11,2024.See.39 EASA,“Special Condition for VTOL and Means of Compliance”,June 10,2024.See.40 FAA,“DRAFT Advisory Circular:Type Certification-Powered Lift”,June 10,2024.See.41 FAA,“FAA and EASA Pledge Strong Cooperation to Address Aviation Challenges of the Next Decade”,June 13,2024.See.42 Wikipedia.See.This table is intended to capture the FAA pilot license certifications but regional differences in pilot license certifications likely exist.16 Pilot License Category Total Flight Hours Comments Private 40 hours Incl.10 hours in command Recreational 30 hours Incl.3 hours in command Sport 20 hours Incl.5 hours in command Student None Prerequisite for other pilot licenses and limited to specific makes and models of aircraft Commercial eVTOL-related pilot requirements are not yet finalized by the FAA but those may be issued by the end of 202443.However,at this point the authors expectation is that any commercial passenger services involving advanced air mobility aircraft would require pilots who have been licensed as commercial pilots.By comparison,the Part 103“Ultralight Aircraft category does not require any pilot certification or approval because the FAA does not consider them to be“aircraft”and they have even more significant use restrictions.The FAAs proposed MOSAIC(Modernization of Special Airworthiness Certification)Light Sport Aircraft category once finalized will allow electric aircraft up to four seats to be operated with an LSA Pilot or Private Pilot License,but may not be used to carry commercial passengers,and other restrictions apply.In addition to being licensed by pilot category,pilots are also licensed by type of aircraft.43 Under Industry review with FAA rules expected to be finalized by the end of 2024.See.17 Table 3:Categories of aircraft pilots(per FAA44)Aircraft Pilot Category Classes Powered Lift None Rotorcraft Gyroplane Helicopter Airplane Single-engine land(ASEL)Multi-engine land(AMEL)Single-engine sea(ASES)Multi-engine sea(AMES)Glider None Lighter-than-air Airship Balloon Powered Parachute Parachute land Powered parachute sea Weight-shift-control Weight-shift-control land Weight-shift-control sea 44 Wikipedia.See.18 Certification considerations for non-commercial advanced air mobility aircraft Some segments of the advanced air mobility industry(for example,personal eVTOLs)involve AAM aircraft which are not permitted for commercial use.These non-commercial personal AAM aircraft have a different certification process.Some personal eVTOL manufacturers plan to sell personal eVTOLs as light sport aircraft with an electric propulsion system under the new MOSAIC regulations.Light sport aircraft can be approved by the Light Aircraft Manufacturing Association(LAMA),or another recognized organization,rather than by a government certification authority.Light sport aircraft involve significant restrictions on their flight to offset risks from these aircraft not being certified.The FAA recently closed their second round of comments from the industry on MOSAIC and is reviewing feedback.See the initial FAA proposal information and a summary of the status and feedback.Also for an excellent summary of the current status and a summary of feedback for various industry stakeholders like the General Aviation Manufacturers Association.19 Chapter 2:Advanced air mobility ecosystem Successfully developing and launching advanced air mobility aircraft requires a complex ecosystem of companies and government stakeholders.Figure 8:Advanced air mobility ecosystem Product There are two primary sub-categories of product companies:component suppliers and advanced air mobility aircraft developers.Component Suppliers Suppliers of critical components to advanced air mobility aircraft perform a fundamental role in maintaining a strict level of safety.These suppliers help ensure quality and safety,which makes it easier for aircraft to be certified.In addition,they share the large investments needed to develop,test,and launch new advanced air mobility aircraft.A number of advanced air mobility aircraft companies have partnered with established automotive and aerospace companies to help with manufacturing and investment.Automotive companies bring deep manufacturing expertise to Archer with Stellantis,Joby with Toyota,SkyDrive with Suzuki,and Supernal which is owned by Hyundai.The worlds largest aerospace companies are either owners or key partners for other 20 advanced air mobility aircraft companies,including Airbus,Bell,Boeing,Embraer,Leonardo and Lockheed.Component suppliers provide materials for airframe and wings,avionics and control systems,batteries,fuel cells,electric motors,and propellers Highly specialized materials are used for airframe and wings(for example,Hexcel and Toray make carbon fiber and composite engineered materials),which provide high strength at a lower weight than most metals.Weight is a critical parameter for aircraft including advanced air mobility aircraft,as higher weight either reduces payload,range,and speed or triggers a need for more battery capacity to offset thereby further adding to cost and weight.Avionics and critical flight control systems(for example,those made by Garmin,Honeywell,L3Harris,Parker Aerospace,Raytheon,Safran,and Thales)are widely used in already certificated aircraft.Utilizing these proven components reduces advanced air mobility aircraft development and certification risk and thereby accelerates time for those advanced air mobility aircraft to enter into service.Battery suppliers provide the core energy used to power electric advanced air mobility aircraft.Most advanced air mobility aircraft providers are using traditional chemistry lithium-ion batteries or more advanced variations.These traditional chemistry batteries use liquid electrolytes to store the batteries energy for transfer to the advanced air mobility aircraft.For instance,Archer45 and Vertical46 both use lithium-Ion batteries sourced from Molicel.By comparison,Lilium is using newer lithium batteries with silicon components developed by a company called Ionblox47.Solid state batteries are another emerging technology which shows great promise for advanced air mobility aircraft in the future once they scale to volume manufacturing and lower costs.Solid state batteries appear to offer many benefits for advanced air mobility aircraft including higher energy density,faster charging and discharging speed,greater longevity,and lower fire risks.Hybrid-electric battery suppliers like VerdeGo Aero develop hybrid-electric power plants for aviation.45 Published information from and public filings on .See 46 Vertical Aerospace website.See 47 The New Atlas,“The extraordinary batteries Lilium will use for its odd EVTOL approach”,February 13,2023.See 21 Hydrogen fuel cells produce electricity in an electrochemical cell using hydrogen which is stored in tanks as an input.Some hydrogen fuel cell suppliers for advanced air mobility aircraft include:48 o Doosan Mobility Innovation(South Korea)o H3 Dynamics(Singapore)o Intelligent Energy Limited(UK)o ZeroAvia Inc.(US)For instance,ZeroAvia is developing hydrogen-electric powertrains and shows a roadmap on their website for the following49:o ZA600:“600kW hydrogen-electric powertrain for 10-20 seat regional turboprops by 2025”o ZA2000:“2-5MW modular hydrogen-electric powertrain for 40-80 seat regional turboprops by 2027”o ZA2000 RJ:“5MW hydrogen-electric powertrain for up to 90 seat regional jets by 2029”Can ZeroAvia successfully develop and deploy their hydrogen-electric powertrains in regional commercial aircraft which are certified and enter into service in roughly these timeframes?If they succeed,those aircraft can progressively displace existing fossil fuel-based regional aircraft and have a larger impact on greenhouse gas emissions from aviation.Electric motors sometimes referred to as electric engines or electric propulsion units(EPUs)translate the energy from batteries,generators or hydrogen fuel cells to the kinetic energy which drives the rotors or propellers.Electric motors which deliver more power to weight(more kW/kg)increase the overall throughput of the electric propulsion system thereby resulting in more power when needed or better overall energy delivery which increases payload,range,and speed.Alternatively,the same amount of power can be generated with a lower weight motor.For instance,Lilium has stated they achieved 100kW from a 4kg motor(so 25kW/kg)50,while Archer has claimed to achieve a higher output of 125kW but using heavier 25kg motors(so 5kW/kg)51.Advanced air mobility aircraft electric motor suppliers include Denso,H3X,Honeywell,mMagniXx,and 48 Marketsandmarkets,“Aircraft Fuel Cell Companies Zero Avia(US)and Intelligent Energy(UK)are the key suppliers”.See 49 ZeroAvia Website.See.50 Lilium Press Release,“Lilium Gears Up for Production of the Lilium Jets Revolutionary Electric Propulsion Units”,Feb 26,2024.See 51 Aviation International News,Hanneke Weitering,“Archer Details Motor and Battery Design for the Midnight eVTOL Air Taxi“,November 18,2022.See 22 Rolls-Royce.For instance,Denso and Honeywell have announced they are jointly developing e-motors for electric aircraft and Lilium has announced it will use this electric motor in the Lilium Jet.52 In the future,electric motors using superconductors may provide a significant boost to the electric propulsion system.Propellers,fans and rotors may be manufactured by the advanced air mobility aircraft providers,or they may be provided by traditional suppliers.Infrastructure Providers There are three primary sub-categories of infrastructure providers:charging,facilities and maintenance.Charging The advanced air mobility industry currently offers three primary charging solutions:SAE International ARP6968(based on the Chinese GB/T automotive connector),Combined Charging System(CCS)and Global Electric Aviation Charging System(GEACS).However,other charging solutions like the proposed SAE AIR7357 based on the in-work megawatt charging system(MCS)standard for heavy-duty electric buses and trucks are also possible options for use with advanced air mobility aircraft-in particular to charge those vehicles(aircraft and commercial trucks which have larger payload capacity and larger batteries).For instance,Sora plans to adopt megawatt level charging solutions,such as MCS or a derivative like SAE AIR7357,for the S-1 eVTOL bus53 and Joby has developed its own megawatt-level charging solution,GEACS(see below).CCS CCS is a standardized solution which has been used for EV charging stations;CCS1 is used in North America,while the incompatible CCS2 is used in the European Union.This solution has been endorsed by the General Aviation Manufacturers Association(GAMA)for use in the advanced air mobility industry,at least for the first generation of electric aircraft54.The solution is supported by the following companies as of the publication date of this white paper:Archer Autoflight 52 Denso,Honeywell,Lilium Press Release,“DENSO,Honeywell Co-Develop E-Motor For Liliums All-Electric Jet”,May 24,2022.See.53 Sora Aviation,direct communications,June 5,2024.54 General Aviation Manufacturers Association(GAMA),“Interoperability of Electric Charging Infrastructure”,2023.See.23 BETA55 Embraer Eve Eviation Lilium56 Overair Pipistrel Skyports Textron Volocopter Wisk Additionally,AIR has confirmed that the AIR AIR ONE Personal eVTOL will also support CCS or equivalent charging.Benefits of a CCS charging solution include interoperability,broad adoption,and functional separation.Interoperability:A CCS charger can also charge ground electric vehicles parked at the same locations.Broad adoption:The broad number of advanced air mobility partners which have adopted CCS make it likely to be the de facto solution offered by charging and facilities providers and may enable lower costs through greater economies of scale.Functional separation:Battery charging can be separated from other systems like battery thermal management and cabin air.This may reduce some cost for the charging-only device that can be used by charging and facilities providers for either EVs or advanced air mobility aircraft.For instance,BETA will provide three independent ground support systems:a CCS1 charger cube,a battery thermal management system,and a cabin air cube.57 55 In addition,BETA manufactures and sells two charging solutions:BETAs Charge Cube which is UL Certified and BETAs Mini Cube which both support CCS1.For details,see.56 Lilium press release,“Lilium partners with Star Charge to develop best-in-class charging system for eVTOL operations”,February 20,2024.See.57 Image courtesy of BETA Technologies.24 Figure 9:A BETA CCS1 charger cube Figure 10 BETAs modular approach58 58 Image courtesy of BETA Technologies.25 GEACS GEACS is a solution developed by Joby to be optimized for use with electric aircraft.It combines one cable with electric charging(two channels),cooling and communications and is available for licensing by other advanced air mobility industry participants.This design may offer some additional benefits such as a more compact infrastructure for advanced air mobility aircraft and facilities providers who only provide service for a single landing and take-off.Another advantage of GEACS vs CCS1 is the higher charging capability as summarized below.Table 4:CCS1 vs GEACS Charging Capability59 CCS1 GEACS DC Voltage(V)Up to 1000 150 to 1000 Current(A)350 Up to 600(300 per channel)Joby provides more information on the GEACS solution including its key inputs and outputs on its website60.GEACS is essential for Joby S4 advanced air mobility aircraft flight,and Joby is expected to deploy it in conjunction with its Facilities Providers(for example,Atlantic Aviation and US Air Forces Edwards Air Force Base).61 GEACS was announced to the public on November 7,2023 but as of the publishing date,no other AAM aircraft manufacturers have publicly stated that they have adopted it.North American Charging Standard(NACS)and other solutions:This solution was originally created by Tesla for Tesla EVs and the Tesla Supercharger Network.It has since become formally standardized as SAE J3400 with broad adoption among EVs,residential chargers,and commercial EV chargers for the North American market.One benefit of adopting this solution for advanced air mobility aircraft is leveraging the broad range of NACS chargers used for EVs.For instance,Personal eVTOLs and public service eVTOLs may be well-served by the relative ubiquity of NACS charging infrastructure.It is possible that some companies,especially for Personal eVTOLs and public service eVTOLs,may design their advanced air mobility aircraft to be able to utilize NACS infrastructure for their charging.59 Electric VTOL News,Mike Hirschberg,“Competing Standards”,December 18,2023.See.Note CCS references are for BETA Charge Cube as per BETA Research website,See.60 Published information from and public filings on .See 61 Published information from and public filings on .see links embedded in text 26 AS6968 is a SAE International charging standard that other companies are considering.Electro Aero in Australia have shipped numerous portable chargers worldwide that have the AS6968,GB/T and CCS charging connectors.Dr.Carl Dietrich,Jump Aero CEO,noted that Jump Aero expects to use the SAE charging standard AS6968 as Jump Aero feels it is better suited for public service aircraft and they do not expect to be flying into the same locations as eVTOL air taxis.As a result,Jump Aero doesnt see this incompatibility as a problem for our business.62 As mentioned above,MCS is a standard being developed for heavy duty electric trucks and buses.The SAE AIR7357 standard is exploring leveraging the MCS coupler and this may be used for some advanced air mobility aircraft models.For instance,Sora Aviation plans to adopt for its Sora S-1 eVTOL bus.63,64 Jetson provided the following response related to the charging approach for their Jetson ONE aircraft:“Jetson has removable batteries,which you can charge during two hours at home using any standard 110V outlet.”65 Nalwa Aero provided the following response related to their charging solution:“Nalwa Aero is currently evaluating various charging standards,including CCS and GEACS,to ensure compatibility and interoperability with the global eVTOL charging infrastructure.The company is committed to aligning with a standard that promotes efficiency,safety,and standardization within the AAM industry.Nalwa Aero recognizes the importance of adopting the most widely accepted standard in the market to ensure seamless integration”66 Facilities Providers Advanced air mobility aircraft require facilities(often leased from airports or other locations)provided by fixed base operators(FBOs)from which to take off and land as well as re-charge(or refuel in the case of Hybrid-Electric or Hydrogen Fuel Cell advanced air mobility aircraft).Depending on the aircraft design and circumstances involved,this might occur at any of the following:Helicopter heliports Vertiports Emergency use locations 62 Jump Aero,direct communications,March 11,2024.63 Sora Aviation,direct communications,June 5,2024.64 eVTOL News,Mike Hirschberg,“Competing Standards”,December 18,2023.See.65 Jetson,direct communications,May 1,2024.66 Nalwa Aero,direct communications,April 15,2024.27 Fixed base operators or infrastructure companies which have announced partnerships with a variety of advanced air mobility aircraft companies for vertiports include Atlantic Aviation,Falcon Aviation,Ferrovial,Reef,Signature Aviation,and Skyports.Other fixed base operators include Jet Aviation,Jetex,Swissport,and Universal Aviation.Table 5:Selected fixed base operators67 Company Headquarters Count Geographic Coverage Atlantic Aviation U.S.A.100 U.S.Falcon Aviation U.A.E.9 Middle East Ferrovial Spain 6 U.K.Groupe ADP France 23 Europe and Middle East Jet Aviation Switzerland 11=U.S.Jetex U.A.E.45 Asia,Europe,Latin America,Middle East Luxaviation Group(ExecuJet Parent)Belgium 141 Africa,Asia Pacific,Europe,Latin America,Middle East Signature Aviation U.S.A.200 Most continents Skyports U.K.1 London68 Swissport Switzerland 285 Most continents Universal Aviation U.S.A.50 Most continents Many of these companies have made announcements with leading advanced air mobility aircraft companies for specific locations.67 Published information on company websites and public filings for companies in Table 68 Published information on Skyports websites and public filings indicate they also have developments ongoing in the following sites which are not yet commercially deployed:Dubai(U.A.E.);Marina,California(U.S.A.);Paris,France(E.U),28 Table 6:Selected partnerships between fixed base operators and advanced air mobility aircraft companies Fixed Base Operator Announced Advanced Air Mobility Aircraft Partner Announced Partnership Location(s)Atlantic Aviation Archer Aviation69 Various-see press releases BETA Technologies70 Joby Aviation71 Lilium72 Falcon Aviation Archer Aviation73 U.A.E.(both Abu Dhabi&Dubai)Group ADP Lilium74 France,India,Saudia Arabia,and Turkey Luxaviation Group(ExecuJet Parent)Lilium75“Key markets across Europe initially,with further sites in the Middle East planned.”76(see previous footnote)Signature Aviation Archer Aviation Los Angeles,New York,San Francisco Bay Area and 69 Press release on Atlantic Aviation public website.See here.70 Press release on Atlantic Aviation public website.See here.71 Press release on Atlantic Aviation public website.See here.72 Press release on Atlantic Aviation public website.See here.73 Falcon Aviation Press Release,“ARCHER AVIATION AND FALCON AVIATION ARE TO JOINTLY DEVELOP A VERTIPORT NETWORK IN DUBAI AND ABU DHABI“,March 12,2024.See.74 Group ADP and Lilium Joint Press Release,“Lilium partners with leading global airport operator Groupe ADP to expand infrastructure network for the Lilium Jet”,July 24,2024.See.75 Lilium Press Release,“Lilium and Luxaviation Take Partnership to Next Phase Focused on Operations and Ground Infrastructure”,May 29,2024.See.76 Lilium Press Release,“Lilium and Luxaviation Take Partnership to Next Phase Focused on Operations and Ground Infrastructure”,May 29,2024.See.29 Texas77 BETA Technologies U.S.East Coast78 Skyports Joby Aviation,U.A.E.79 Vertical Aerospace U.K.80 Volocopter Paris81 Wisk Aero South East Queensland,Australia82 Beyond the partnerships mentioned in the table shown above,VPorts is also targeting to deploy a large network of vertiports(1,500 across five continents by 2045)83.Another interesting company,though not formally a fixed base operator today,is Reef Technologies,which owns over 4,800 parking garages in North America.Reef Technologies is exploring creating vertiports on some of their rooftop locations.Reef has announced collaborations with both Archer Aviation(initially focused on Los Angeles and Miami markets)84 and Joby Aviation(initially focused on Los Angeles,77 Archer Aviation Press Release,“Archer Announces Landmark Infrastructure Deal With Signature Aviation;Gains Access To Largest Network Of Private Aviation Terminals In The World”,June 17,2024.See.78 Signature Aviation Press Release,“Signature Aviation Partners with Beta Technologies to Install Electric Chargers“,March 7,2024.See.79 Skyports Infrastructure Press Release,“Skyports,RTA and Joby to launch air taxi service in Dubai”,February 11,2024.See.80 Skyports Infrastructure Press Release,“Skyports and Bicester Motion unveil plans for UKs first vertiport testbed for air taxi industry“,March 5,2024.See.81 Skyports Infrastructure Press Release,“Mobility testing inaugurated in Paris,November 10,2022.See.82 Skyports and Wisk Aero Joint Press Release,“Wisk and Skyports Expand Partnership to Bring Wisks Autonomous Generation 6 Aircraft to South East Queensland,Australia”,July 22,2024.See.83 Vports company website 84 Archer Press Release,“Archer And REEF Team Up To Tackle Urban Congestion With Vertiports And Urban Air Mobility Networks“,August 24,2021.See.30 Miami,New York City,and San Francisco Bay area markets)85 which are expected to utilize some of these locations as vertiports.In addition to charging and fueling,some larger facilities may also support advanced air mobility aircraft maintenance,public restrooms,along with public WiFi and charging for electronic devices.Access to convenient,ubiquitous facilities providers is a critical enabler to the success of the broader advanced air mobility industry.For example,various studies mention the importance of building vertiports close to homes:“To be considered a practical alternative to other forms of transportation,most respondents would like vertiports to be located within 20 minutes of their homes,although Urbanites expressed willingness to spend longer(average 27 minutes)getting to one.”86 “Respondents stated that they want a location that is convenient to their home,perhaps within 20 minutes,yet not in their neighborhood or near schools or parks.”87 Labor Labor in this industry broadly falls into two key categories:pilots and maintenance.All advanced air mobility markets will require trained pilots and the advanced air mobility industry will need to take measures to substantially increase the number of suitably trained pilots.Semi-autonomous advanced air mobility aircraft will still require pilots.Only fully autonomous advanced air mobility aircraft will not require pilots onboard,though operators on the ground may remotely support multiple simultaneous flights.Given that the number of pilots needed in the future as advanced air mobility aircraft broadly enter the market may represent a very significant increase,pilots are a critical resource for the growth of the advanced air mobility market.Conversely,without sufficient pilot training and capacity,advanced air mobility market growth may be significantly limited.Some personal-use eVTOL aircraft are designed to be flown without a pilots license(under FAA Part 103 Ultralight category)and are subject to some limits on flight.As a 85 Joby Press Release,“Joby Aviation Announces Infrastructure Partnership With Largest Mobility Hub Operator in North America“,June 2,2021.See.86 Maven,page 11 87 Ison,D.C.,Page 6.31 result,they are likely to involve less training than other aircraft markets which require formal pilots licenses with strict certification requirements.Advanced air mobility aircraft require periodic maintenance so advanced air mobility aircraft providers,and service providers will need to ensure there are locations where maintenance can be performed efficiently and safely.It is also important that the advanced air mobility industry hires and trains sufficient maintenance staff to support its growth.While some of these will be at advanced air mobility aircraft provider facilities,in some cases,for convenience,this may be co-hosted with facilities providers.Operators Broadly speaking,advanced air mobility aircraft have critical dependencies on air service operators including air taxi services,traditional airlines and ride-share operators.Apps:A passenger would ideally book and manage the travel shown for regional air mobility,and urban air mobility using a single app.Creating such apps is a complex effort as they will require a number of separate,interconnected elements.These include the consumer app,a back-end marketplace system,and interfaces to partner systems(for instance airlines and rideshare services).The consumer app will order and book air taxi flights and show the status.The back-end marketplace system would provide a database tracking availability of aircraft,pilots,and vertiports so those can be efficiently matched to consumer demand and assets can be optimized.The interfaces to partner systems enable ordering air taxis through airline or rideshare partners-or to book airline flights or rideshares to enable an end-to-end trip.Doing so would maximize convenience(and potential travel benefits associated with any loyalty programs),minimize cost,and synchronize all travel legs(for example,in the case of flight delays,ride share drivers would not be sent prematurely).For instance,Joby recently announced their ElevateOS software suite which is an optimized software solution to address this need.88 Two examples of operators are airlines and air taxi services.Airlines:Airlines can operate routes,and partner with other services:o buying advanced air mobility aircraft for some routes as advanced air mobility aircraft may be or become more cost effective compared with other small aircraft operated by airline partners(for example,on lower demand rural routes)88 Joby Press Release,“Joby Announces ElevateOS Software Suite for Air Taxi Operations“,June 20,2024.See.32 o collaborating to offer combined services for passengers who will have flights involving both air taxi services and traditional airlines.o A large number of partnerships have been announced between advanced air mobility aircraft manufacturers and major airlines which provide a guide to what may be expected once the relevant aircraft complete type certification and are able to enter service.Some of these will involve aircraft purchases while others will involve more strategic coordination between airline and air taxi flights.As one recent example,on July 12,2024,Archer announced a partnership with Southwest Airlines to pursue longer distances via a multi flight journey between two California destinations,Santa Monica and Napa(roughly 400 miles),which could be flown in less than three hours combined but broken into three separate flights:Santa Monica to Burbank(via Archer),Burbank to Oakland(via Southwest Airlines)and Oakland to Napa(via Archer).89 Table 7:Selected partnerships between advanced air mobility aircraft manufacturers and major airlines Advanced Air Mobility Aircraft Company Announced Major Airline Partner Archer Etihad90 IndiGo(InterGlobe parent)91 Southwest Airlines92 United Airlines93 89 Archer Aviation and Southwest Airlines Joint Press Release,“Southwest Airlines Signs Memorandum Of Understanding With Archer Aviation To Develop Operational Concepts For Air Taxi Network”,July 12,2024.See.90Archer Press Release,“Archer Aviation Partners With Etihad Aviation Training For eVTOL Pilot Training Operations Based In Abu Dhabi”,May 20,2024.See.91 Archer and InterGlobe Enterprises Joint Press Release,“InterGlobe Enterprises and Archer Aviation Announce Plans to Launch All-Electric Air Taxi Service Across India in 2026”,November 9,2023.See.92 Archer and Southwest Airlines Joint Press Release,“Southwest Airlines Signs Memorandum Of Understanding With Archer Aviation To Develop Operational Concepts For Air Taxi Network”,July 12,2024.See.93 Archer and United Airlines Joint Press Release,“United Airlines and Archer Announce First Commercial Electric Air Taxi Route in Chicago”,March 23,2023.See.33 Joby Delta Airlines94 Lilium Lufthansa95 Saudia96,97 Vertical Aerospace American Airlines98 Air taxi services:There is now an official designation for services involving short distance(less than 100 miles)and small passenger count(4 or less)for instance between suburbs and cities,or across congested cities.99 Air taxis might disrupt short-distance travel similarly to how ride-sharing disrupted the legacy taxi market by offering greater convenience and transparency via mobile phone apps,air taxi services provide a parallel.For instance,Blade has placed an order for up to 20 eVTOL aircraft from BETA Technologies100 and Helijet has also placed orders for eVTOL aircraft from BETA Technologies101.Other:Other categories of operators might provide service for targeted vertical markets(such as eco-tourism,oil and gas,and public service).For instance,Bristow Group serves the offshore energy and government service markets and has announced that it is evaluating AAM aircraft from BETA Technologies,Electra.aero,Elroy Air,Embraers Eve(88%owned by Embraer),Lilium,Overair,Vertical,and 94 Delta Airlines and Joby Joint Press Release,“Delta,Joby Aviation Partner to Pioneer Home-to-Airport Transportation to Customers“,October 11,2022.See.95 Lilium Press Release,“Lufthansa Group and Lilium sign Memorandum of Understanding for strategic partnership”,December 7,2023.See.96 Lilium and Saudia Joint Press Release,“Lilium and SAUDIA announce plan to bring Electric Air Mobility to Saudi Arabia”,October 26,2022.See.97 Lilium and Saudia Joint Press Release,“Saudia Group Signs Industry-Leading Sales Agreement With Lilium to Acquire Up to 100 eVTOL Jets“,July 18,2024.See.98 American Airlines Press Release,“American Airlines Invests in the Future of Urban Air Mobility”,June 10,2021.See.99 Aviation International News,Colleen Mondor,“The Not-so-New Vision of Air Taxis”,September 5,2023.See.100 Blade press release,“Blade Air Mobility and BETA Technologies complete historic Electric Vertical Aircraft flight in New York”,February 14,2023.See.101 Helijet press release,“Helijet Places Order With BETA Technologies For First Passenger Service eVTOL Aircraft in Canada”,October 21,2023.See.34 Volocopter102.Bristow has placed a firm order with BETA Technologies for 5 eVTOL aircraft with the option to purchase 50 additional aircraft103.Commercial Commercial partners play an essential though behind-the-scenes role in the AAM industry by providing capital and mitigating risk in a similar manner as with the existing air transportation industry.These financial participants may benefit from the background into the advanced air mobility industry which is provided in this document.Finance The advanced air mobility industry needs a number of forms of financing which is provided by various 3rd parties(investors and lessors)as described below.Investors The advanced air mobility industry is a new industry involving new aircraft and infrastructure which must be designed,certified,manufactured,launched,and maintained.This will require up to tens of billions of dollars of investment.Investors in advanced air mobility industry company debt and equity are taking long-term risk in exchange for longer-term returns and this risk capital is foundational.Lessors Many of the aircraft used by airlines today are not owned by the airlines but rather by airline leasing companies(lessors)such as AerCap(the largest company which acquired the previous leader,GE Capital Aviation Services)and Avolon.These and other lessors own hundreds of airplanes and lease them for use by airlines in exchange for lease payments under contract.Insurance Naturally,even when well-designed,extensively certified,and properly maintained operating aircraft involves risk,for instance,various degrees of equipment failures and associated commercial and/or human loss.In the worst case,such failures could trigger extremely large overall claims(for example,hundreds of millions of dollars).Just as consumers purchase insurance to cover potential losses for their automobiles against accidents and for their homes against earthquakes,fires,and other risks,airlines purchase insurance to apply capital across large numbers of aircraft and flights to 102 Mandy Nelson,Bristow Director of Strategic Relations,Presentation to Vertical Flight Societys Transformative Vertical Flight Conference in Santa Clara,February 8,2024.103 Vertical Magazine,“Bristow places firm order for Betas ALIA eVTOL aircraft”,August 9,2022.See.35 manage this risk.Insurers do this using actuarial tables to assess risk and charge their customers insurance to profitably cover these risks.For established industries,Insurers are able to utilize historical data to characterize this risk.As the advanced air mobility industry is a new industry its risk profile is less certain(for example,risks associated with electrical propulsion systems,and new aircraft designs)so Insurers need to undertake more risk until it is established by doing so they enable the advanced air mobility industry to become established and grow.Some insurers which appear to be focusing resources on insuring the advanced air mobility industry include Global Aerospace,Newfront Insurance,and Skyrisks104.For additional information,see a recent podcast with Alistair Bundy,CEO of Skyrisks,on insuring the advanced air mobility industry.Of course,over time as the advanced air mobility market grows and its risk profile becomes more clear,large historic Insurers for the aviation industry are likely to become prominent insurers for the advanced air mobility industry.These include:AIG,Allianz,Chubb,Lloyds of London,and Starr.Government A variety of government entities play an essential role in existing aviation markets and are expected to do the same for the advanced air mobility industry.In general,two broad categories of government entities will be described briefly:certification authorities(including regulators),and air traffic controllers.Certification Authorities and Regulators These government organizations ensure safety by defining processes and rules to certify,inspect,regulate,and supervise aircraft,engines,and pilots.They will do the same for the advanced air mobility industry through a combination of existing and new processes and rules.There is not a single global certification authority but instead a number of national and regional entities though some degree of collaboration exists.Certification authorities include:Civil Aviation Administration of China(CAAC,China)Civil Aviation Authority(CAA,U.K.)Directorate General of Civil Aviation(DGCA,India)European Union Aviation Safety Agency(EASA,European Union)Federal Aviation Administration(FAA,U.S.)General Civil Aviation Authority(GCAA,U.A.E.)104 Presentations at the Vertical Flight Societys Transformative Vertical Flight conference in Santa Clara on February 8,2024 from the named representatives of Global Aerospace(Connor Haarhuls,Senior Underwriter),Newfront Insurance(Scott Gault,Senior VP)and Skyrisks(Allistair Blundy,CEO).36 Japan Civil Aviation Board(JCAB,Japan)Korean Office of Civil Aviation(KOCA,Korea)National Civil Aviation Agency(ANAC,Brazil)Air Traffic Controllers Air traffic controllers monitor the airspace and flight paths of aircraft in controlled airspace(for example,near airports).Air traffic controllers use radar,visual observation from air traffic control towers and other tools to provide route guidance via radio to ensure smooth and safe movement of the various aircraft.Air traffic controllers enforce traffic separation rules to maintain safe distances between the aircraft they are monitoring.Globally this responsibility is managed by the International Civil Aviation Organization(ICAO,a U.N.entity which coordinates safe navigation through the air)in cooperation with the International Air Transport Association(IATA,an airline trade organization)and other organizations.Other Government Agencies Other government agencies can also play a very important role in the current stage of the advanced air mobility industry.For instance,in the U.S.the National Aeronautics and Space Administration(NASA)has been very proactive in working with the advanced air mobility industry.NASA has developed highly complex tools for modeling and simulation(for example,noise,flow dynamics,wind tunnels,electric propulsion,and crash dynamics).These tools are provided to U.S.-based advanced air mobility aircraft companies to assist with their development105.For instance,NASAs OVERFLOW simulation program“predicts aircraft noise and aerodynamic performance”.106 NASA also innovates in future areas of air traffic control.107 Consumers When consumers(or aircraft passengers)purchase tickets,they create demand for air transportation,thereby supporting the economic viability of the broader air transportation industry including the advanced air mobility industry.Without consumers generating significant demand for advanced air mobility flights,the advanced air mobility industry will not achieve significant scale.A few key criteria which are expected 105 Christopher Silva,“Updates to NASA Urban Air Mobility Reference Vehicles:Incorporating Recent Technology,Policy and Economic Developments”,Presented at the Vertical Flight Societys Transformative Vertical Flight Conference in Santa Clara,California on February 7,2024),106 FlyingM,Jack Dalio,“Electric Air Taxi Manufacturers Turn to NASA to Model Noise”,April 9,2024.See.107 Dr.Parimal Kopardekar,Advanced Air Mobility Mission Integration Manager,NASA,Presented at the Vertical Flight Societys Transformative Vertical Flight Conference in Santa Clara,California on February 7,2024)37 to impact consumer demand for advanced air mobility flights include awareness,safety,price,convenience,and comfort.Awareness:Consumer awareness of the advanced air mobility industry and related aspects of it are fairly minimal today.This is a fairly fundamental problem as consumers dont purchase what they arent aware of or dont understand.Addressing this problem will require industry outreach through explanation(for example,this white paper),live demonstrations of advanced air mobility aircraft,local community outreach,and advertising.Once consumers begin to use advanced air mobility aircraft,if their experience is good then they are likely to provide“free advertising”by telling their friends and colleagues about their experiences.Safety:Until consumers are confident that advanced air mobility aircraft are safe to fly in,they will not use them.The various government agencies must ensure that procedures and rules governing safety for advanced air mobility aircraft and pilots of advanced air mobility aircraft meet rigorous safety levels.Then the advanced air mobility Industry and various government agencies must communicate this effectively so consumers have confidence.Without getting into details,consumers perception of safety may also be affected by the advanced air mobility aircraft design and they may prefer some advanced air mobility aircraft over others.As with other industries,there will be consumers who are both technology enthusiasts and skeptics.Geoffrey Moore describes these groups of consumers and their behavior in his insightful 1992 book Crossing the Chasm108.A figure from that book details the stages of new technology adoption.108 Geoffrey Moore,Crossing the Chasm(New York:HarperCollins,1991)38 Figure 11:Crossing the Chasm109 Pricing:Consumer purchase intent is strong when the benefit is compelling and weak when the benefit is modest.Price is one highly visible indicator of the perceived consumer benefit.In simple terms,low pricing attracts demand and high pricing deters it.The advanced air mobility industry has been referencing future pricing that relates to the cost of taking a ride share service for that same ride but with a significant reduction in travel time.If this is realized,that will likely be attractive to enable the advanced air mobility market to start with early adopters and migrate to a potentially large market if the“chasm”is successfully crossed.However,if actual launch pricing is a significant premium versus the price to use a ride share service,then the demand will likely be limited to a far smaller market of affluent consumers.Convenience:Integration and infrastructure are key convenience elements for consumers.Integration between the air taxi service and associated ride sharing services ensures convenience for the consumer.If a single booking can be easily managed and synchronized(for example,rides to and from the air taxi flight)that will encourage demand.However,if a consumer needs to book three separate reservations(rideshare 1,air taxi service,and rideshare 2)that triggers some purchase friction.Suitable advanced air mobility infrastructure(for example,109 www.images.app.goo.gl/zbtLZA2F2U5BcckV6 39 vertiports)located near both the origin and destination both maximizes the benefit of the air taxi service and the convenience for the consumer.Overall time savings:The consumer is likely to compare the travel time for their various options.If the time savings for using an air taxi is significant then the air taxi option will be attractive.However,if the savings is marginal then the familiar option of using the rideshare will likely be selected instead.For instance,some consumers may consider a 50-75%time savings to be significant and a 10-25%time savings to be marginal but this assessment will vary by consumer.Comfort:Some consumers will be enticed by a comfortable air taxi experience,particularly more affluent consumers.Less affluent consumers may be willing to compromise comfort for lower prices.Comfort in this context is multi-faceted and includes perceptions of seating,environment(climate and noise),storage,and connectivity.In-cabin experience designs for advanced air mobility aircraft should keep consumer comfort in mind though the design decisions related to comfort will vary depending on the consumer segmentation they are targeting.Accessibility:A broad range of accessibility needs and levels of accessibility need to be considered in AAM aircraft products include auditory,language,mobility,and visual.Ideally these can be addressed to maximize the number of consumers who will be able to access advanced air mobility aircraft.However,it may not be feasible to address all of these in initial advanced air mobility aircraft product offerings due to other critical certification and business priorities.Potential solutions include:o Auditory:sign language videos and closed captioning o Language:range of languages in menus prioritized based on markets o Mobile:ramps and door width o Visual:braille signs and larger font sizes Passenger information:Passenger air services will likely need to provide safety information to reassure passengers and comply with any applicable regulations.It may also be helpful to provide expected arrival times,and other information about their route.Other design considerations:Advanced air mobility aircraft which are designed for longer missions of greater than one hour,for instance the regional air mobility market,may need to include other considerations in their design including toilets,audio and video entertainment options,and WiFi access.Cost,space and weight implications may make some of these challenging,especially in advanced air mobility aircraft which are smaller or more cost-constrained.40 Chapter 3:Advanced air mobility passenger aircraft market The passenger market serves passengers using commercial advanced air mobility aircraft.Broadly,there are two current markets which have been commonly targeted:urban air mobility,and regional air mobility.The urban air mobility market may be served by air taxis and air shuttle buses.Air taxis provide passengers with a customized experience in terms of their arrival and departure locations,departure time,and reserving the aircraft for an individual or known group of people traveling together.By comparison,air shuttle buses provide a standardized experience in terms of fixed arrival and departure locations,fixed departure times,and travel involving unknown passengers.Air shuttle buses are expected to use aircraft which can carry more passengers thus benefit from economies of scale,lower costs per passenger seat mile,and thus potentially serve a more mass-market demographic.For instance,Sora Aviation is targeting the airport shuttle segment of the urban air mobility market.110 The U.K.government has funded an excellent report on the eVTOL airport shuttle market which provides additional context on the market opportunity,benefits and operations.111 Urban air mobility targets shorter-range(for example,10 to 100 miles)travel.This short travel might be trunk routes with known demand and infrastructure like airports to city centers thereby crossing heavily congested urban traffic areas.These trunk routes might be followed by branch routes between suburban areas and city centers.Archer,EHang,Joby,SkyDrive,Supernal,Volocopter,and Wisk are companies that appear to be targeting urban air mobility.110 Published information on website 111 Frazer-Nash Consultancy,“Scaling Advanced Air Mobility in the UK”,November 2023.See.41 Figure 12:Urban Air Mobility Air Taxi Use Case112 Figure 13:Urban Air Mobility Air Shuttle Bus Use Case113 Urban air mobility is expected to become a significant market in the future based on the large populations living in urban areas.Nikhil Goel,Archer Aviations Chief Commercial 112 Air taxi examples:Top image:Archer,courtesy of Archer;Bottom image:Joby,courtesy of Joby.113 Air taxi example:Sora,courtesy of Sora.42 Officer,elaborated on the March 8,2024 episode of the“Fix This”podcast.He described a number of key points related to urban air mobility114:o Today roughly half of the worlds population lives in cities but in 2045 this will proportion will increase to roughly two-third(approximately 6 billion people)o Three dimensional travel(via air)can scale exponentially at low cost versus expanding our ground transportation network o eVTOL aircraft provide many benefits versus helicopters:o roughly 1/100 the noise o roughly 1/10 the cost and roughly comparable to price of an Uber ride o much greater levels of component redundancy to enhance safety.o Archer Midnight eVTOL design is optimized for the urban air mobility market in terms of range and speed.Regional air mobility involves medium length flights,likely in the range of 50 to 500 miles,thereby covering flights between cities.The greater range of regional air mobility flights enables more passenger transportation to be addressed using advanced air mobility aircraft.Currently lift-plus-cruise or hydrogen fuel cell aircraft seem better able to meet the higher end of the regional air mobility range but other advanced air mobility aircraft may be able to achieve this range over time with greater battery density and more efficient electric motors.Alakai,BETA115,Electra.aero,Eviation,Joby,and Lilium116 are companies with announced plans to pursue regional air mobility either initially or as a secondary market though BETA is expected to pursue urban air mobility markets for both passengers and cargo.On July 11,2024 Joby announced that they have demonstrated a hydrogen fuel cell version of their S4 eVTOL aircraft,leveraging technology from H2FLY,a Joby subsidiary.They have test flown a technology demonstrator aircraft using this technology over 500 miles.A future product with this range would enable flights between San Francisco and San Diego or Boston and Baltimore.117,118 Lilium has also publicly stated recently that they expect that the 114 Fix This Podcast#81,Annie Evans,“Elevating Urban Transportation with Archer Aviation”,March 8,2024.See 115 Published information on www.beta.team and public filings(See which references Victoria Harbor to Vancouver Harbor flights of approximately 73 miles).116 Electrek,Scooter Doll,“Lilium(LILM)signs partnership to bring its unique EVTOL jets to Asia beginning in the Philippines”,February 20,2024.See.117 Joby Aviation Press Release,“Joby demonstrates potential for emissions-free regional journeys with landmark 523-mile hydrogen-electric flight”,July 11,2024.See.118 Vertical Magazine,Jen Nevans,“Joby completes landmark 523-mile hydrogen-electric VTOL flight”,July 11,2024.See.43“premium”market will be prioritized for early deliveries119,120.BETA has indicated publicly that both the BETA ALIA eCTOL(CX300)and the BETA ALIA eVTOL(A250)will initially enter the market in a cargo capacity,but will enter into the passenger market as a“fast follow”.Nalwa Aero advises that“Nalwa Aeros 5X tilt-fan AAM aircraft is designed to serve both the urban air mobility and short-range regional air mobility markets.With a maximum range of 280 miles(450 km)and a top speed of 249 mph(400 kph),the aircraft is capable of efficiently transporting passengers within urban areas and between nearby cities and regions,offering greater flexibility and accessibility for various use cases.121 Figure 14:Regional Air Mobility Advanced Air Mobility Use Case122 Depending on the distances involved,this journey may instead be completed using a single advanced air mobility flight.Another regional air mobility use case,involves travel between islands(for example,in Hawaii,Indonesia,and the Philippines).These inter-island trips are excellent candidates for service using cleaner advanced air mobility aircraft to replace existing fossil fuel based aircraft.Companies are pursuing the advanced air mobility air taxi market using a range of design approaches.119 Published information on and public filings on 120 eVTOL News,“Joby Aviation SHy4(technology demonstrator)”,July 12,2024.See.121 Nalwa Aero,direct communications,April 15,2024.122 Air taxi example courtesy of Lilium 44 Figure 15:Archer Midnight123 Figure 16:Joby S4124 123 Image Courtesy of Archer Aviation 124 Image Courtesy of Joby Aviation 45 Figure 17:Supernal S-A2125 Figure 18:Wisk Generation 6126 125 Image Courtesy of Supernal 126 Image Courtesy of Wisk Aero 46 Table 8 Select tilt-propeller vectored-thrust air taxis127 Archer Midnight Joby S4 Supernal S-A2 Wisk Generation 6 Headquarters San Jose,CA(U.S.A.)Santa Cruz,CA(U.S.A.)Washington,D.C.(U.S.A.)Mountain View,CA(U.S.A.)Aircraft design type Tilt-propeller Vectored-thrust eVTOL Autonomous or piloted Piloted Autonomous Seating capacity(passengers)4 Max Range with reserves(miles/km)128 100/161 150/241 40/64 90/145 Max speed(mph/kph)150/241 200/322 120/193 138/222 Max noise(cruising dB)45 45129 65 Not Reported Max noise(hover dB)Not Reported 65130 Not Reported Number of Propellers or Fans 6 tilting(front)6 fixed(rear)6 tilting 8 tilting 6 tilting(front)6 fixed(rear)127 Published information on company websites and public filings unless noted otherwise(for example,battery and motor details).128 These reported numbers may involve some discrepancy depending on how the various companies calculate reserve numbers since the methodology for that is not broadly standardized.129 Joby Website,“Joby Confirms Revolutionary Low Noise Footprint Following NASA Testing”,May 10,2022.See.130 Joby Website,“Joby Confirms Revolutionary Low Noise Footprint Following NASA Testing”,May 10,2022.See.47 Archer Midnight Joby S4 Supernal S-A2 Wisk Generation 6 Number of electric motors 12 6 8 12 Battery capacity(kWH)142 Not Reported Not Reported Not Reported Charger type CCS GEACS CCS Charger time (80%,Level 2,minutes)12 10 15 Payload(pounds/kg)1000/454 1000/454 1000/454 Target Certification year 2024131 2024 Within this decade Target Entry into Service Year 2025132 2025 131 Archer target certification year as of November 2022(https:/ Archer target entry into service year as of February 2024(https:/ Figure 19:BETA ALIA CX300133 Figure 20:Eviation Alice134 133 Image from https:/www.beta.team/timeline.134 Image courtesy of Eviation.49 Figure 21:Electra.aero135 Table 9:Select eCTOL and eSTOL aircraft136 BETA Technologies ALIA CX300 Eviation Alice Electra.aero Headquarters South Burlington,VT(U.S.A.)Arlington,WA(U.S.A.)Manassas,VA(U.S.A.)Aircraft design type eCTOL Hybrid-electric eSTOL Autonomous or piloted Piloted Piloted(2 pilots)Piloted 135 Image courtesy of Electra.aero.136 Published information on company websites and public filings unless noted otherwise(for example,battery and motor details).50 BETA Technologies ALIA CX300 Eviation Alice Electra.aero Seating capacity(passengers)=5 50 mile)between cities.Type Certification:Confirmation by the certification authority that a specific aircraft and all of its component parts have been verified to be compliant with the regulatory certification Basis.UAM:Abbreviation for Urban Air Mobility.UAM involves an advanced air mobility aircraft which targets shorter-range(for example,20 to 50 miles)travel that may move between suburban areas and city centers or crossing heavily congested urban traffic areas.Vertiport:A facility containing one or more take-off and landing pads for helicopters or eVTOLs along with charging facilities for eVTOLs.252 eVTOL News,Mike Hirschberg,“Competing Standards”,December 18,2023.See.108 About the Author Eric Schiff has held a range of product management,product line management and partnership roles in the technology industry since 1995.Mr.Schiff worked at Dolby Labs,National Semiconductor,Trident Microsystems and Zoran where he worked with industry leaders on products used in Airplanes(in-flight entertainment),Automobiles,PCs,Set-top Boxes,Streaming Media Players,and Televisions.Mr.Schiff holds a Bachelors degree in Business Economics from Brown University and an MBA from the University of Virginia.Mr.Schiff believes in the Advanced Air Mobility industrys potential,attended the Vertical Flight Societys Transformative Vertical Flight Conference in February 2024 and is a member of the Vertical Flight Society.For more information,see I would like to thank my wife,Julia,and my daughters,Bailey and Lily,for supporting me during this journey.I also thank several for their thoughtful review,clarifications and insights.My editor,Chris Sherwood,for his detailed review and dedication to clarity.Angelo Collins and Mike Hirschberg of the Vertical Flight Society for helping me distribute and promote this white paper.The following industry reviewers for sharing their seasoned perspectives and invaluable comments to ensure I captured accurately the complexities and subtleties of a range of topics covered in this white paper:Andrew Mearns,Johnny Doo,Mike Hirschberg,and Rex Alexander.While I have made a genuine effort to contact the companies which are prominently mentioned in this white paper to confirm the accuracy of specific company and product-related content,unfortunately,not all companies responded.However,it is with sincere thanks that Id like to recognize the following companies for their review and feedback to ensure the accuracy of information contained here related to their companies and their advanced air mobility-related products:Alakai Technologies,EHang,Electra.aero,Jetson,Jump Aero,Nalwa Aero,Skyports Infrastructure,Sora Aviation,and Wisk Aero.I would also like to thank the other companies which shared their feedback though I respect their desire to remain anonymous due to their corporate policies.109 Note on white paper title While the use of“Demystifying”as part of the title came to the author independently,the author subsequently became aware of Brian Yutko(Wisk CEO)s excellent,informative podcast“Demystifying Autonomy”which is available for reference here.Disclaimer The information provided here is an opinion piece based on the authors current understanding of available information.The author has made efforts to review this information and images for accuracy with companies mentioned but apologizes for any unintentional inaccuracies of data or perspective that readers may observe.Copyrights This document is copyrighted by Eric T.Schiff but distributed under the Creative Commons Attribution-Sharealike 4.0 International license(CC BY-SA 4.0),meaning it may be shared as long as attribution is given to the author and the source.Images provided in this document may be protected by their original creators and are included here under“Fair Use.”
2024-12-29
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AUTOMOTIVE IMMERSIVE ENGINEERINGCONTENTSKEY FINDINGS.1STATE OF THE EXTENDED REALITY MARKET:SCALE AND GROWTH AREAS.1XR HARDWARE DIFFERENTIATORS.2AUTOMOTIVE TRENDS:SUPPLY CHAIN COMPLEXITY AND RETIRING WORKFORCE.3MARKET PAIN POINTS AND SOLUTIONS.4PAIN POINTS.4SOLUTIONS.5MIXED REALITY CAPABILITIES,APPLICATIONS,AND USE CASES.6KEY XR CAPABILITIES FOR AUTOMOTIVE:COLLABORATION,REVIEW,AND CREATION.6END USERS.6CASE STUDY:BAC.7RECOMMENDATIONS AND CONCLUSIONS.8ADOPTION BEST PRACTICES.8KEY TIMELINES.8AUTOMOTIVE IMMERSIVE ENGINEERINGMatilda Beinat,Research AnalystKEY FINDINGSSTATE OF THE EXTENDED REALITY MARKET:SCALE AND GROWTH AREASABI Research values the total market for connected cars at US$38.5 billion,reaching US$52.9 billion in 2030.Connected car hardware revenue reached US$15.3 billion in 2024,while services revenue reached US$26.8 billion in 2024.Within this market,Extended Reality(XR)usage in the transportation and automotive sector is expected to see an increase in revenue from US$290 million in 2024,reaching US$2.9 billion in 2030.Some key reasons for this increase in revenue are due to a noticeable shift in Electric Vehicles(EVs),as well as rapidly increasing product complexity and customer customization.For EVs at the moment,BYD and Tesla are key drivers for vehicle electrification.Governments worldwide are also encouraging this adoption through subsidies and stricter emissions regulations.The improved range of EVs is also making them more appealing to consumers.Increasing customizability,parts lists,material needs,and overall portfolio complexity is growing for both EVs and Internal Combustion Engine(ICE)vehicles.AUTOMOTIVE IMMERSIVE ENGINEERINGXR is an umbrella term that includes Augmented Reality(AR),Mixed Reality(MR),and Virtual Reality(VR),increasing by magnitude of immersivity,respectively.ABI Research has seen greater adoption of AR and MR compared to VR in enterprises,although VR adoption is quickening.Industries such as healthcare,manufacturing,automotive,and education have been adopting a variety of XR software and services,especially for high-value use cases like training and remote assistance purposes.Those dealing with high product and workflow complexity,especially automotive and manufacturing,are quicker to adopt XR.Technological advancements,supply chain resilience post-COVID-19 pandemic,and digital transformations such as XR adoption,are improving the manufacturing and engineering processes in the automotive sector significantly.Specifically,VR has proven valuable in several key use cases,such as training,collaboration,and data visualization.There is enhanced training and education possible with XR due to immersive environments.This allows for improved data retention,which decreases mistakes encountered due to passive learning on the job.Virtual simulations,manufacturing processes,and accurate data visualization have been key in the enterprise XR market.Chart 1:Virtual Reality Head-Mounted Displays Revenue by Top Verticals in the XR Market World Markets:2021 to 2030(Source:ABI Research)XR HARDWARE DIFFERENTIATORSAugmented Reality versus Virtual RealityIn the spectrum of XR,AR is the overlay of digital information onto the real world,minimally occluding the field of vision.Input methods for AR include gesture controls,voice commands,and haptic feedback.AR smart glasses are tailored to be lightweight and hands-free form factors,allowing frontline workers and designers to visualize products and items in real time comfortably and accurately.2024 ABI Research The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including,without limitation,to persons within the same corporate or other entity as such Licensee,without the express written permission of Licensor.4 CR-SIEGY-134:AUTOMOTIVE IMMERSIVE ENGINEERING XR HARDWARE DIFFERENTIATORS Augmented Reality versus Virtual Reality In the spectrum of XR,AR is the overlay of digital information onto the real world,minimally occluding the field of vision.Input methods for AR include gesture controls,voice commands,and haptic feedback.AR smart glasses are tailored to be lightweight and hands-free form factors,allowing frontline workers and designers to visualize products and items in real time comfortably and accurately.VR is on the opposite end of the XR spectrum,providing a fully-immersive environment,often used for detailed design reviews,virtual prototyping,education,and immersive training simulations.VR hardware differentiates itself with its high-resolution displays,advanced motion tracking,and the option of either controllers or hands-free usage.AR and VR as form factors have very different use cases,each evolving the workstation and workflow significantly.It is important to note that XRs adoption is meant to enhance the mode of work,rather than revolutionize and alter each method of working.It is not necessary to be working in an immersive environment consistently throughout the day.As form factors develop,the use of AR and VR may become more common within the workplace.AUTOMOTIVE TRENDS:SUPPLY CHAIN COMPLEXITY AND RETIRING WORKFORCE The automotive industry is facing significant challenges related to supply chain complexity and an aging workforce.A major shift toward vertical integration is underway as automakers -1 2 3 4 5 62021202220232024202520262027202820292030(US$Billions)HealthcareAEC&Real EstateTransportation&AutomotiveEducationManufacturing&CPGAUTOMOTIVE IMMERSIVE ENGINEERINGVR is on the opposite end of the XR spectrum,providing a fully-immersive environment,often used for detailed design reviews,virtual prototyping,education,and immersive training simulations.VR hardware differentiates itself with its high-resolution displays,advanced motion tracking,and the option of either controllers or hands-free usage.AR and VR as form factors have very different use cases,each evolving the workstation and workflow significantly.It is important to note that XRs adoption is meant to enhance the mode of work,rather than revolutionize and alter each method of working.It is not necessary to be working in an immersive environment consistently throughout the day.As form factors develop,the use of AR and VR may become more common within the workplace.AUTOMOTIVE TRENDS:SUPPLY CHAIN COMPLEXITY AND RETIRING WORKFORCEThe automotive industry is facing significant challenges related to supply chain complexity and an aging workforce.A major shift toward vertical integration is underway as automakers increasingly bring software development in-house or collaborate closely with Tier One suppliers.This shift is driven by the rise of Software-Defined Vehicles(SDVs)and relying on external software components,which has proven problematic due to a lack of transparency.The failure of Volkswagens(VW)CARIAD software initiative highlights the difficulties that Original Equipment Manufacturers(OEMs)face in transforming into software-centric companies.OEMs have ambitious targets regarding software revenue,which requires enhanced capabilities,more data acquisition,and a highly skilled workforce.Electrification of vehicles is further complicating the supply chain.As EVs replace traditional ICE vehicles,many old components are no longer needed.However,automakers cannot simply discard the expertise tied to these components.This situation has led to increased vertical integration as companies try to adapt to the new landscape.Autonomous driving technology also requires automakers to find ways to monetize the vast amounts of data generated,adding another layer of complexity.The semiconductor shortage has exposed vulnerabilities in the supply chain,pushing OEMs to demand greater transparency and resilience from their suppliers.As the value of vehicles shifts increasingly to batteries and software,automakers must secure reliable sources for these critical components.To address the impending retirement of experienced workers,automakers are increasingly outsourcing tasks and collaborating on open-source projects.This approach helps them attract younger talent and bring new skills into the industry,which is essential for navigating the technological changes ahead.AUTOMOTIVE IMMERSIVE ENGINEERINGMARKET PAIN POINTS AND SOLUTIONSPAIN POINTSSupply Chain and Product ComplexityEV demands in 2023 and 2024,especially in Europe,decreased due to the European automotive industry being unable to build competitively on price with its ICEs.While this is true,it is expected that demand for EVs and SDVs will increase,climbing from 13.5 million in 2023 to 80.2 million in 2035 at a Compound Annual Growth Rate(CAGR)of 15.9%.Managing the high demand of EVs and SDVs can cause problems for ensuring high product quality.Furthermore,regulatory requirements will be increasingly difficult to meet.While EVs and SDVs will require fewer components,the raw materials that are required for EV batteries,such as lithium,cobalt,and nickel,are experiencing a shortage,simply due to the high demand of EVs,as well as the environmental concerns about the mining methods for these materials.Retiring Workforce and Loss of ExpertiseWith talent shortages and high vacancy rates across the automotive industry,an effort to adopt new strategies is required to help the aftermarket business make a direct and rapid impact on the profitability of operations.Advancements in EVs and SDVs has required the automotive industry to adopt new skills.The current workforce is not equipped to meet these demands on a whole,and recruiting young talent to address these requirements has been very slow.With vacancy rates of 4.3 per 100 employees,the automotive industry is facing 43%higher than average vacancies,depicting a significant skills gap that could affect the sector in the future.Alongside this,more experienced workers will soon be retiring from the workforce,and their retirement will leave a knowledge gap.As cars are quickly becoming computers on wheels,roles such as software engineers,data scientists,and cybersecurity experts are now highly sought after in the automotive industry,yet the recruitment for these roles has not been successful.A reason for this seems to be centralized on the targeted software engineers not perceiving these positions as exciting as a tech or startup environment.Downtime CostsUnplanned downtime costs have been increasing significantly.For instance,Siemens overview of downtime and its costs reports that Fortune 500 companies are spending 11%of their yearly turnover on unplanned downtime costs.The annual downtime costs in 2024 reached US$695 million a year.The cost of a single lost hour of downtime can cost,on average,US$36,000 to US$2.3 million an hour,particularly in the automotive sector.These numbers depict the urgency of downtime cuts,and most companies have succeeded in this feat.However,these efforts have only prevented the issue from spiraling.Internet of Things(IoT)and Predictive Maintenance(PdM)have helped prevent downtime costs from reaching a tipping point.Production downtime can be extremely costly,requiring quick,effective solutions to minimize these disruptionsimmersive realities are a solution that have proven effective and reliable in this industry.AUTOMOTIVE IMMERSIVE ENGINEERINGSOLUTIONSIntegrationXR integration can help automotive manufacturers address supply chain disruptions,workforce shortages,and raw material constraints by creating a two-way data flow between platforms and users.This enables real-time monitoring and enhanced decision-making throughout the supply chain.XR technologies,such as AR and VR,can simulate supply chain environments,allowing companies to identify potential bottlenecks and inefficiencies,while also facilitating remote collaboration and training for an aging/retiring workforce.Additionally,XR tools can optimize inventory management and help mitigate semiconductor and raw material shortages by providing immersive data visualization for procurement and production planning.Integrating XR visualization into the design and engineering stages of product development can also streamline these areas through streamlined data visualization and collaboration.Persistence and Data Accuracy XR environments rely on accurate,up-to-date data to support interactivity and content creation.For the automotive industry,ensuring data accuracy is vital for maintaining real-time simulations,virtual trainings,and design processes within XR platforms.Persistent XR environments allow users to maintain continuity between sessions,ensuring that the progress made in design or training remains intact and accessible for further iterations.This persistence enhances employee training by allowing workers to engage in immersive learning experiences that build on prior knowledge.In design processes,it enables seamless collaboration and iteration across teams,as the data remain consistent across different devices and user sessions.Maintaining accurate,persistent data in XR not only improves decision-making,but also ensures efficiency and reliability in critical processes like product design and supply chain management.User Education and AcceptanceAdopting XR technology in the automotive industry can be greatly enhanced by advocating for its integration.Individuals and companies that have succeeded in its integration already serve as early adopters able to demonstrate the value of XR tools in practical applications,helping to drive wider organizational acceptance.In parallel,streamlining the onboarding process for XR devices is crucial for minimizing friction and accelerating user adoption.Simplified setups and intuitive user interfaces reduce the learning curve,making it easier for employees to see the benefits of XR technologies without the frustration of complex onboarding.A survey conducted by ABI Research(Industrial and Manufacturing Survey 1H 2024:Extended Reality(XR)shows that one of the main barriers holding back adoption of XR lies with insufficient time to conduct planning to scale these innovations and a lack of expertise in these technologies to grasp their potential.The top process barriers mostly lie with the inability to articulate the companys needs,struggles to align technology investments with commercial objectives,and Return on Investment(ROI)for digital transformation projects that are not easily articulated.Ensuring user comfort and knowledge of solutions can reduce these barriers.AUTOMOTIVE IMMERSIVE ENGINEERINGMIXED REALITY CAPABILITIES,APPLICATIONS,AND USE CASESKEY XR CAPABILITIES FOR AUTOMOTIVE:COLLABORATION,REVIEW,AND CREATIONXR technologies bring significant benefits to the automotive industry by enhancing collaboration,improving review processes,and supporting creation through immersive,real-time interaction.Collaboration:XR facilitates seamless real-time collaboration between geographically dispersed teams,allowing engineers,designers,and project managers to work together in virtual environments.This eliminates the constraints of physical distance,enabling teams to communicate more effectively and make faster,more informed decisions.For example,a design team in one country can collaborate with manufacturing experts in another to assess product designs simultaneously,ensuring that any adjustments can be made in real time without waiting for physical meetings.Review:XR tools allow for detailed design and engineering reviews.By visualizing Three-Dimensional(3D)models,teams can interact with virtual prototypes,detect potential issues early in the design process,and address them before creating physical prototypes.This capability not only reduces development costs,but also shortens production timelines by preventing costly errors and delays.Detailed reviews of parts and systems,which would traditionally require multiple rounds of physical prototypes,can now be done in virtual environments with greater accuracy and flexibility.Creation:XR supports the rapid creation and iteration of virtual prototypes and simulations.Engineers and designers can build,test,and modify designs quickly,without waiting for physical components to be manufactured.This iterative process enables faster innovation,as new ideas can be explored in a low-cost,low-risk environment.Additionally,XR environments allow teams to simulate real-world conditions and stress tests on virtual prototypes,providing valuable feedback on performance long before physical testing begins.This accelerates product development and ensures that designs are optimized for production.END USERSAutomotive companies are increasingly leveraging XR technologies to enhance customer engagement and product experience,transforming the way potential buyers interact with vehicles before they are built:Virtual Showrooms:XR technologies allow customers to explore new vehicle models in immersive virtual environments.This enables potential buyers to walk around,inspect,and even“test drive”a car,all without needing to be physically present in a showroom.This approach not only provides a highly engaging experience,but also allows companies to showcase models that have not yet been produced,giving customers early access to future designs.AUTOMOTIVE IMMERSIVE ENGINEERING Personalization:XR environments enable customers to customize their vehicles in real time,adjusting features such as color,interior materials,and technological add-ons.This highly interactive experience can enhance customer satisfaction by providing a clear visualization of their desired options,which can help drive purchasing decisions.Customers can see how their choices look and feel in a virtual environment before committing to a purchase.This is especially valuable as the number of options and customization points increase for most OEMs.Remote Engagement:With XR,automotive companies can reach potential customers around the world,eliminating the need for physical visits to showrooms.This is especially valuable for luxury or limited-edition models,where direct interaction with the car may be difficult or impossible before purchase.XR experiences can be offered through apps or VR setups in pop-up stores or trade shows,increasing brand reach and engagement.CASE STUDY:BACBriggs Automotive Company(BAC)will be utilizing the Sony XR headset in tandem with NX Immersive Designer,a module available as part of Siemens NX X,to streamline its design and engineering processes,leading to reduced development time and enhanced product quality.Siemens NX is a comprehensive digital design and engineering software platform for engineering analysis,product design,and manufacturing.The NX X series is a cloud-based software solution for product engineering,integrating Computer-Aided Design(CAD),Computed-Aided Manufacturing(CAM),and Computer-Aided Engineering(CAE)functionalities to enable full digital production development.NX X as a differentiator lies with the integration with digital twins,allowing engineers to create real-time replicas of physical assets,and flexible deployments,allowing users to leverage NXs capabilities without requiring local computing resources.This cloud-based software also allows for seamless collaboration.NX uses AI-driven design methodologies,3D printing manufacturing,and CAE tools to perform real-world simulations,which is all included in the NX X series.BAC designs custom automobiles,treating them as sports equipment,akin to skis or a high-performance bike,tailored to the drivers needs.By integrating Siemens NX and Sonys XR into its workflow,BAC aims to enhance collaboration,visualize real-time changes to car components,and improve 3D CAD modeling for more realistic and workable designs.With teams split between Liverpool and Germany,collaboration has been challenging.XR will bridge this gap,enabling immersive remote design experiences and virtual factory walkthroughs.BACs team of five designers and five engineers rely heavily on CAD models,and XR will streamline the process by displaying both Two-Dimensional(2D)and 3D CAD models simultaneously,providing realistic renderings that guide engineers efficiently and save time.A major challenge for BAC is managing driver-specific changes,with each vehicle being unique.XR allows designers to modify the 3D CAD model in real time without physical adjustments,using it as the primary reference for all modifications.This central CAD model becomes the foundation for resolving design issues and ensuring smooth collaboration.BAC expects to use Sonys XR headset as needed to support workflows,particularly in integrating production feedback during the design phase.This process,combined with Siemens NX software and the central CAD model,ensures smoother design iterations and adjustments,regardless of the teams location.AUTOMOTIVE IMMERSIVE ENGINEERINGRECOMMENDATIONS AND CONCLUSIONSADOPTION BEST PRACTICESAlongside the key timelines shown below,it is important to start small when adopting immersive technologies;for example,start with pilot programs to demonstrate the value of the technologies and gain internal buy-in before scaling XR initiatives across verticals.Investing in user training and creating a culture of innovation to drive acceptance and effective use of XR technologies is crucial.This is potentially because of fewer barriers to adoption and greater impact per employee for a given implementation.Alongside this,especially for long-term adoption best practices,ensuring strong collaborations between Information Technology(IT)and business units to integrate XR solutions seamlessly into existing workflows is important,as it allows for seamless integration,alignment of objectives,scalability,and flexibility,as well as resource optimization.KEY TIMELINESShort term(12 years)Medium term(35 years)Long term(5 years)Focus on pilot projects,user training,and integration of XR with current systems.Vertical-specific implementations,understandings of how digital twins,training,and education can be facilitated with the use of XR and immersive technologies.Scale successful pilots across the organization,increase investment in advanced XR hardware,and refine data management practices.Invest in more pilots in new areas and teams;be specific with goals and targets for immersive solutions.Deep and broad integration of XR into the automotive value chain,with widespread usage across design,manufacturing,and customer engagement processes.WE EMPOWER TECHNOLOGY INNOVATION AND STRATEGIC IMPLEMENTATION ABI Research is uniquely positioned at the intersection of end-market companies and technology solution providers,serving as the bridge that seamlessly connects these two segments by driving successful technology implementations and delivering strategies that are proven to attract and retain customers.2024 ABI Research.Used by permission.ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection.The opinions of ABI Research or its analysts on any subject are continually revised based on the most current data available.The information contained herein has been obtained from sources believed to be reliable.ABI Research disclaims all warranties,express or implied,with respect to this research,including any warranties of merchantability or fitness for a particular purpose.November 2024 157 Columbus AvenueNew York,NY 10023Tel: 1 516-624-
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AGMA Robotics CommitteeWHITE PAPER:Gear Backlash in Robotics ApplicationsThe search for flexibility,performance,and economical systemsRecent headlines at technology conferences confirm that quantum computing with Artificial Intelligence(AI),biotechnology,nanotechnology,and robotics have the potential to reshape the world for the second quarter of the 21st century.This is certainly good news for gear manufacturers and allows them to be at the forefront of the technological history trajectory,as robots joints and handling apparatus are made of motors,actuators,controllers,sensors,and gear drives.According to the International Federation of Robotics(ref.1),in 2023,the industrial robot market is expected to grow by 7%to more than 590,000 units worldwide.During the recent RoboBusiness Conference(ref.8)industry experts agreed that over the next 10-15 years,personal and collaborative robots(cobots)will exceed the industrial robot market and become common in homes,aiding with tasks such as cleaning,cooking,and caring for children or the elderly.These robots will be equipped with advanced artificial intelligence,allowing them to perform a wide range of tasks and provide personalized assistance to individuals.The annual production rate of 10 to 30 million robots per year is in the realm of possibility,and ramping up capacity to meet this exponential demand is a priority for US gear manufacturer leaders.Robert Kufner,President/CEO at Designatronics,mentioned that,“At Designatronics,investing in automated high performance machining centers and industry 4.0 with the integration of intelligent digital technologies into manufacturing and industrial processes would be key to meet the future gear demand for robotics.”We also reached out to Denis Rancourt,Professor in Bio-Mechanical Engineering at Sherbrooke University in Quebec to learn more about future humanoid robots and exoskeletons and seek ideas for areas of potential improvement for gear drives.Dr.Rancourt revealed that,“We elected to go direct drive on the majority of our bio-engineering mechatronics projects because gearbox backlash,lost motion,and impedance introduce uncertainties and are difficult to model for accurate and safe motion control.”Is the future of gear drives in robotics to grow exponentially or is it doomed because of the intrinsic problems with backlash,wear,unpredictability,size,and high cost?Over the past few months,we conducted research and interviews with leaders in the robotics and gear drive industry to understand the challenges and opportunities with robotics applications.We tried to understand how gear backlash problems could be overcome with better motion control,sensors,AI,and new drive technologies for robotics applications.This white paper does not provide a roadmap for overcoming backlash errors in motion control.Instead,it does examine gear drive backlash and the specific requirements of the robotics industry.It looks at current technology transformation and provides recommendations to the gear industry so they can gain a better understanding of current and future needs and have greater participation in the robotics market.This white paper hopes to generate a discussion,so the gear industry remains technically and commercially viable,and flexible in the future.IntroductionFebruary 2024AGMA Emerging Technology Committees2Industry experts agree that over the next 10-15 years,personal and collaborative robots will exceed the industrial robot market and become common in homes.BACKGROUNDGear backlash refers to the clearance,or play,between the teeth of gears in a mechanical transmission system,as shown in Figure 1.Gear designers have strived to minimize gearing systems backlash due to the impact on precision,efficiency,noise,vibrations,wear,motion control,system complexity,and safety.Their significance varies depending on the applications,but designers need to carefully consider these factors when developing robotics systems to ensure they meet the desired performance and safety standards.Precision and accuracyIn high-precision applications such as industrial robots or CNC machines,minimizing gear backlash is crucial.Excessive backlash can lead to inaccuracies in positioning and reduced repeatability.This can result in poor performance in tasks that demand tight tolerances.Higher gearing ratio reduces the output position uncertainties,to the detriment of desired lower output mechanical impedance in certain applications.Efficiency and hysteresisTorsional stiffness and backlash determine the surface contact area between the loading and unloading gears and correspond to the gearboxs efficiency.The phenomenon is called hysteresis.As a general term,hysteresis means a lag between input and output in a system upon a change in direction.Whenever these hysteresis curves are not available from the manufacturer,lost motion and stiffness variation can be used as alternative parameters to assess the hysteresis of the gearbox.Proper characterization of the hysteresis curves is critical for accuracy and results from the interaction of concentricity and other assembly errors with indexing errors,tooth corrections,stiffness variations during meshing,and other geometrical deviations.(ref.7)Oscillations and vibrationsBacklash can contribute to oscillations and vibrations in the robotic system,especially when the robot changes direction or stops and starts suddenly.These vibrations can affect the overall stability of the system and its ability to handle delicate tasks,as demonstrated in 2022 by Giovannitti(ref.2)in the Journal of Intelligent Manufacturing 2022 and shown in Figure 2,below.Wear and tearOver time,gear backlash can lead to increased wear and tear on the gear components,reducing the lifespan of the system and potentially leading to maintenance issues.Gear Backlashrefers to the clearance or play between the teeth of gears in a mechanical transmission system.3Figure 1-Gear BacklashFigure 2-Noise and vibration due to gear backlashControl and manufacturing complexityCompensation for backlash in control algorithms can be complex and may require additional sensors and software to account for the mechanical play.This adds to the complexity of the control system.In addition,the search for near-zero backlash increases design complexity and gearbox cost.Position controlPosition control is a fundamental aspect of robotics,and it involves accurately and reliably control is done on the moving loads with a fixed mechanical and electrical characteristics system that uses an encoder on the motor shaft to provide the position and velocity information for control,as shown for closed-loop Proportional,Integral,and Derivative(PID)position control systems in Figure 3,where the errors come from the gearbox and associated backlash.Depending on the direction of movement,the gear backlash may result in a different load position on the output side,causing delays and oscillations at the start or stop of the movement.The first solution that comes to mind is to mount a second encoder on the gear output shaft,and base the control on a double feedback loop,increasing the complexity and errors compensation.The controller first closes the inner loop,which is the velocity control loop,and then a second load position loop.See Figure 4(ref 3).The velocity control loop receives feedback from the motor encoder,and this feedback determines the appropriate velocity feedback gain,which imparts a damping effect on the system to reduce oscillations.Position errors can also be reduced with a higher gear ratio by increasing resolution and therefore minimizing the effect of gear backlash.The increased resolution is due to finer control of the systems output for a given input.With more teeth on the gears,the system can make smaller and more precise movements,resulting in improved resolution.This finer control helps minimize position errors.Lastly in a PID control system,higher gear ratios can enhance the overall rigidity of the mechanical system and improve the 4Figure 3-Basic PID control block diagramcontrolling the position of robot joints or end-effectors.Backlash causes a discrepancy between where the load should be and where the load is actually located.Position control is also crucial for various reasons.In many robotic applications,precise positioning is essential for the successful execution of tasks.This includes tasks such as pick-and-place operations,welding,assembly,and more.Poor position control can lead to errors in task execution.Typically,the Figure 4-Standard dual Loop PID control block diagramstability during position control,minimizing the impact of vibrations or external disturbances that could introduce errors.Backdrivability for safety and human interactionSafety is a primary concern in robotics.Accurate position control ensures that the robot operates within its defined workspace and avoids collisions or accidents.Robots that work alongside humans require agile position control to ensure that they do not pose a safety risk to human operators.As such,backdrivability(i.e.low impedance system)is essential for mechanical compliance to be driven from the load side,managing contact with humans and undefined objects(Figure 5,ref 4).The backdrivability is characterized by its mechanical impedance consisting of the gearbox inertia,stiffness,and losses due to backlash and friction.DISCUSSIONFor most industrial robot applications,gearing backlash is an issue robot manufacturers have been able to work around by using strain wave gearing(also known as harmonic gearing),introduced in 1957,and later,cycloidal drive or cycloidal.Strain wave gearing uses a flexible spline with external teeth,which is deformed by a rotating elliptical plug to engage with the internal gear teeth of an outer spline,as shown in Figure 6.These drive systems provide compactness,relative light weight,high gear ratios,and high torque capacity.John Tuohy(Manager,Business Development at FANUC America)mentioned that FANUC,with their gear partner Nabtesco,have been able to produce robots with less than half of an arc-minute backlash under load and positioning precision of 0.02 mm at high velocity using large gear ratios ranging from 100:1 to 300:1.The challenge for gear manufacturers in the industrial robot market remains the predictability,limitation of material to minimize weight,size,inertia,and longevity of gear components.The advent and the significant growth in the next 8-10 years of human-centered robots(humanoid and collaborative robots)has a significant impact on how the mechanical drive should be integrated.In conventional industrial robots,robustness and performance 5The challenge for gear manufacturers in the industrial robot market remains the predictability,limitation of material to minimize weight,size,inertia,and longevity of gear components.Figure 5-Backdrivability-Mechanical compliance from the input sideFigure 6-Strain Wave Gearing(Harmonic Drive)6are linked to the robots ability to maintain its position trajectory under an external disturbance force.In contrast,in human-centered robotics,the close interaction between robots and humans requires low forces when there is a deviation from the position trajectory.Therefore,they require low mechanical impedance or backdrivability for safety reasons,as discussed in the background section(paragraph g),above.In addition,human-centered robots are required to operate in an unpredictable environment with an undefined sequence of operations/tasks.The table below summarizes the differences in gear drive requirements and challenges for gear manufacturers for industrial and human-centered robots.We can see that gear backlash is one of the most important elements in robotics systems,but near-zero backlash may not be sufficient to meet the future need in human-centered robotics.New technologies,such as the Archimedes Drive from Innovative Mechatronics Systems with a Wolfrom drive and traction rollers(see Figure 9),is at the forefront of zero-backlash innovation.Thibaud Verschoor,founder at IM Systems,recognizes that true zero backlash is difficult.Engineers working on servo applications generally consider“zero backlash”to be between 0.5-5 arc min.(ref.6).Verschoor offers the following classification for backlash accuracy:-Micro accuracy:1 arc-minute-Increased accuracy:3 arc-minutes-Standard accuracy:6 arc-minutesFigure 9-Compound planetary traction system inside the Archimedes DriveFigure 7-FANUC Industrial Robots7The unpredictability of human-centered robots will require sophisticated integration of the electromechanical hardware with artificial general intelligence to achieve the connection between a humans physical and cognitive behavior.Within the human environment AI database,the human-centered robot will evolve and learn from the information collected from the environment.These parameters,such as backlash,are needed to modify the motion control models from the initial build throughout its life,as components wear out and patterns and rules of operations change.As Robert James,Vice President Product Technology at Motus Labs mentioned,“The software will be driving the gear drive robotics joint.With AI,we will have to be able to predict drive degradation,feedback errors,and maintenance issues.The essence of the gear drive will be to understand the DNA of the gear profiles,its backlash,and performance over time.We are the widget of the software industry.”The drive backlash can no longer be considered an error in the system that will be compensated for,but instead it should be integrated into the future human-centered robot blueprint.As human-centered robots become a motion-control computing problem,calculating errors from backlash range becomes the Achilles heel of drive systems.With computing power increasing drastically and the ability to collect large databases of data during gear manufacturing,the next generation of gears will have to go beyond backlash range to cognitive gear modeling.In this approach,the gear manufacturer and robot designer recognize that each gear is part of a more complex AI control system model,and each can be characterized with its own DNA,from the embryonic material science to the final manufacturing process and assembly.The proposed future cognitive gear model recognizes the backlash and mechanical impedance in the design and fabrication,but also serves as an evolving function within the human robot software model.Figure 8-Human-centered RobotsFigure 10-Proposed Future Cognitive Gear Model8CONCLUSIONDespite recent progress in the range and accuracy of robot sensors and more powerful computing controllers,drive backlash remains one of the most significant problems in robotics.This is especially true for human-centered robots where gear ratios are generally lower than the industrial robots and backdrivability is required for safety.Gear backlash causes errors in the position and force control loop that affect the robots mechanical impedance,generate noise,lose efficiency,and induce vibrations.From micro to standard accuracy gearboxes,the backlash value is sold with a zero to max range where the lower and upper limit might provide significant difference in the motor/gear PID model.To further compound the issue,the backlash range changes over time due to wear in materials,lubricants,and environmental conditions.The environmental conditions and usage of human-centered robots are much more highly unpredictable than industrial robots.Backlash remains an unknown factor that the present robotics software cant insert into its motion-control model.Today,robotics is a computer problem but“transmissions are where the problem starts”(ref.9)as Sangbae Kim,director of the Biomimetic Robotics Laboratory and a professor of Mechanical Engineering at MIT said.To play a major part in the next 10 years of human-centered robotics,the mechanical drive industry needs to develop a means to leverage next-generation computing power with a large AI database and capture gear digital mechanical DNA to allow computer modeling to account for errors in backlash and cognitive AI gears.These new gear drive digital models should be augmented by the research and development of new lighter anisotropic materials,a smaller drive envelop,and performance modeling in unpredictable environments.The global robot market is expected to grow 50-fold in the near future.Increasing production capacity with the integration of intelligent digital technologies into manufacturing and industrial processes,such as IoT networks,AI,robotics,and automation will maximize operational returns and lower the cost of industrial robots drives.9ContributorsSpecial thanks for the following contributors to this article(in alphabetical order)Pablo Lopez Garcia,Robotics&Multibody Mechanics Group-Vrije Universiteit BrusselKel Guerin,Co-Founder-READY RoboticsDavid Harroun,Vice President-Helios Gear ProductsRobert James,Vice President Product Technology-Motus LabsRobert Kufner,President and CEO-Designatronics Inc.Jason Lazar,NabtescoTim Pirie,Chief Technology Officer-CGI IncDenis Rancourt,Professor in Bio-Mechanical Engineering Universit de SherbrookeJohn Tuohy,Business Development Manager-FANUC AmericaThibaud Verschoor,Co-founder and Head of Product-Innovative Mechatronics Systems B.V.AGMA Staff Liaison to Emerging Tech CommitteesMary Ellen Doran,AGMA Director Emerging TechnologyReferences1)International Federation of Robotics World Robotics 2023 Report:Asia ahead of Europe and the Americas,September 26,20232)Eliana Giovannitti1 Sayyidshahab Nabavi2 Giovanni Squillero3 Alberto Tonda4 Journal of Intelligent Manufacturing(2022)33:192119373)Galil Motion Control:Advanced Control Techniques for Real World Drivetrains June 20174)High-ratio PLANETARY gearboxes for the next ROBOT generation AGMA-2022 Fall Technical Meeting(FTM)Dr.Ir.Pablo Lpez Garca5)Factors influencing actuators backdrivability in human-centered robotics,MATEC Web of Conferences 366,01002(2022)Pablo Lopez Garcia6)IMSystems White Paper Drive Precision in Robotics:Tackling The Issues Of Backlash And Lost Motion,September 6,20237)On the Potential of High-Ratio Planetary Gearboxes for Next-Generation Robotics,Pablo Lopez Garcia,Power Transmission Engineering April 20238)RoboBusiness Conference October 18-19,2023 Santa Clara Convention Center9)RI Seminar:Sangbae Kim:Actuation,structure and control of the MIT cheetah robot,October 2013Photo CreditsFigure 1 AGMAFigure 2 Journal of Intelligent Manufacturing(2022)33:1921-1937 Eliana Giovannitti1,Sayyidshahab Nabavi2,Giovanni Squillero3,Alberto Tonda4Figure 3 Scientific Figure on ResearchGate.Available from:https:/ 4 Galil Motion Control,Kaushal Shah,Figure 5 Pablo Lopez Garcia 2022 AGMA Fall Technical Meeting PresentationFigure 6 Encyclopdia Britannica,https:/ 7 FANUC America via John Tuohy,Business Development ManagerFigure 8 AdobeStockFigure 9 Innovative Mechantronics Systems via Thibaud Verschoor,Co-founder and Head of ProductFigure 10 AGMA Emerging Technology Robotic Committee,December 2023,Jacques Lemire,P.Eng.Other photos Adobestock.About the AuthorJacques Lemire is a professional engineer with over three decades of technical and business management experience in mechatronics and motion control in the US,Canada,Europe,and Asia for the aerospace,robotics,and medical device industries.Currently Principal at Lemire PBD Consulting,he lives in Cary,NC with his wife,Linda.He can be reached at Lemire.PBDC
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Carbon footprint report Volvo C40 Recharge 1Carbon footprint report Volvo C40 Recharge Contents Executive summary 3Authors and contacts 7Terms and definitions 81.General description of life cycle assessment(LCA)111.1 Principles of LCA 111.2 LCA standards 122.Methodology 132.1 The products 132.2 Way of working overview 142.3 Methodology to define vehicle material composition 152.4 Goal and scope definition 16 2.4.1 Intended audience 16 2.4.2 System boundaries 16 2.4.3 Functional unit 17 2.4.4 Allocations 17 2.4.5 System expansion 17 2.4.6 Assumptions and limitations 173.Life cycle inventory analysis(LCI)183.1 Material production and refining 18 3.1.1 Aluminium production and refining 19 3.1.2 Steel production and refining 19 3.1.3 Electronics production and refining 19 3.1.4 Plastics production and refining 20 3.1.5 Minor material categories,production and refining 20 3.1.6 Electricity use in materials production and refining 203.2 Battery modules 203.3 Manufacturing and logistics at Volvo Cars 20 3.3.1 Logistics 20 3.3.2 Volvo Cars factories 213.4 Use phase 213.5 End-of-life of the vehicle 224.Results 244.1 C40 Recharge compared with XC40 ICE(E5 petrol)244.2 C40 Recharge compared with XC40 Recharge 274.3 Production of materials and components 285.Sensitivity analysis 305.1 Explore future electricity grid mix for EU-28 for use phase 305.2 Explore regionalised datasets for material production(EU compared to global)316.Discussion 326.1 The importance of electricity mix choice for charging the car 326.2 Shift of focus 336.3 Energy sources for materials production and refining 336.4 Technical development of materials production and refining 336.5 Battery development 336.6 The effects of the methodological choices 336.7 Need for more transparency and traceability 347.Conclusions 35Appendix 1 Complete list of Volvo Cars material library material categories 362 Summary of data Choices and assumptions for component manufacturing 383 End-of-life assumptions and method 39 A4.1 Transport 39 A4.2 Disassembly 39 A4.3 Pre-treatment 39 A4.4 Shredding 39 A4.5 Material recycling 40 A4.6 Final disposal incineration and landfill 40 A4.7 Data collection 404 Chosen datasets 41Carbon footprint report Volvo C40 Recharge 3Volvo Cars has committed to only sell fully electric cars by 2030.This is the most ambitious transformation into electrification from any established car manufacturer and it is a key step for Volvo Cars to reach full climate neutrality across its entire value chain by 2040.In the short-term Volvo Cars is working towards reducing its life cycle carbon footprint per average vehicle by 40 per cent between 2018 and 2025.This plan,one of the most ambitious in the industry,is validated by the Science Based Target Initiative to be in line with the Paris Agreement1 of 2015,which seeks to limit global temperature rise to 1.5C above pre-industrial levels.Volvo Cars has also committed to communicating improvements from concrete short-term actions in a trustworthy way,including the disclosure of the carbon footprint of all new models.The Volvo C40 Recharge is Volvo Cars second fully electric car,and the first model Volvo Cars launches that is only available as a fully electric version.The carbon footprint shows a great reduction in greenhouse gas emissions compared to that of an internal combustion engine(ICE)vehicle,especially if the car is charged with renewable electricity.The carbon footprint is also lower than that of the XC40 Recharge,mainly thanks to improved aerodynamics.This report presents the carbon footprint of the new fully electric Volvo C40 Recharge with production start in autumn 2021,in comparisons with the fully electric Volvo XC40 Recharge and Volvo XC40 ICE,both launched in 2020.The carbon footprints for these XC40 models were published in 2020 but are now updated.Executive summary1 https:/unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreementCarbon footprint report Volvo C40 Recharge 4C40 Recharge EU-28 electricity mixEnd-of-lifeUse phase emissionsVolvo Cars manufacturing*Li-ion battery modulesMaterials production and refiningXC40 Recharge EU-28 electricity mixC40 Recharge wind electricityXC40 Recharge wind electricity10420203040442727The methodology is based on life cycle assessment(LCA)according to ISO LCA standards2.Driving distance is assumed to be 200,000km.In general,assumptions are made in a conservative way in this study,to not underestimate the impact from uncertain data.Therefore care should be taken when comparing these results with those from other vehicle manufacturers.The carbon footprints of C40 Recharge,XC40 Recharge,both charged with EU-28 electricity mix,and XC40 ICE fuelled with petrol containing 5 per cent ethanol(E5),are approximately 42,44 and 59 tonnes CO2-equivalents respectively.See figures i (for the Recharge models)and ii(for XC40 ICE result compared with C40 Recharge).Thus,C40 Recharge has a roughly 5 per cent lower carbon footprint than XC40 Recharge over its life cycle when charged with EU-28 electricity mix and slightly more than 10 per cent lower carbon footprint in its use phase.The reason for the lower carbon footprint of C40 Recharge compared with XC40 Recharge is mainly because of better aerodynamic properties of the C40 Recharge.Figure ii shows a breakdown of the carbon footprint for the C40 Recharge with different electricity mixes in the use phase.The carbon footprint becomes approximately 50,42 and 27 tonnes CO2-equivalents when charging C40 Recharge with global electricity mix,EU-28 electricity mix or wind power respectively.Thus,the choice of electricity mix is crucial for the carbon footprint.Furthermore,the results assume a constant carbon intensity throughout the vehicle lifetime.The effect of a more realistic trend of future reduction of carbon intensity in EU-28 electricity mix is tested in a sensitivity analysis and the life cycle carbon footprint is reduced as expected,but not as much as in the case of nearly 100 per cent renewable electricity,such as wind power.Figure i.Carbon footprint for C40 Recharge and XC40 Recharge,with different electricity mixes.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values).2 ISO 14044:2006“Environmental management Life cycle assessment Requirements and guidelines”and *Volvo Cars manufacturing includes both factories as well as inbound and outbound logistics.ISO 14040:2006“Environmental management Life cycle assessment Principles and framework”Carbon footprint report Volvo C40 Recharge 5XC40 ICE E5 petrolEnd-of-lifeUse phase emissionsVolvo Cars manufacturing*Li-ion battery modulesMaterials production and refiningC40 Recharge Global electricity mixC40 Recharge EU-28 electricity mixC40 Recharge wind electricity595042276040200The accumulated emissions from the Materials production and refining,Li-ion battery modules and Volvo Cars manufacturing phases of C40 Recharge are nearly 70 per cent higher than for XC40 ICE.However,the use phase emissions for a battery electric vehicle(BEV)per distance driven are lower than for an ICE.This is illustrated in figure iii,where it is also possible to read out,depending on the electricity mix used to charge the BEV,the distance at which the total carbon footprint of C40 becomes lower than the footprint of the XC40.Electrification of cars causes a shift of focus from the use phase to the materials production and refining phase.Volvo Cars has a strategy of working towards reducing the greenhouse gas(GHG)emissions from this phase by 25 per cent per average vehicle from 2018 to 2025 which is an ambitious start towards achieving climate neutrality by 2040.Production of aluminium,the Li-ion battery modules and steel are the main emission contributors.Hence Volvo Cars is actively striving to reduce carbon footprint of materials and parts e.g.,through increase of the degree of recycled content in the materials.Li-ion battery technology is relatively young implying a relatively high potential for improvements.It is hoped that conclusions from this study will provide further guidance on how to prioritise the efforts.It should be noted that the carbon footprint calculations are performed to represent a globally sourced version of the models.The results of using data for regional sourcing in EU for some materials are tested in a sensitivity analysis and indicate that the effect of more regional data can be significant.Another methodological choice that has a large impact on the result is the choice of allocation method for production scrap.This study accredits the GHG emissions for the scrapped materials to the car,although a lot of the material will be used in other products through materials recycling.Although this report is relative transparent,it is important for future improvements to have even more transparency and traceability of data from the supply chains and in carbon footprint reports.Figure ii.Carbon footprint for C40 Recharge and XC40 ICE,with different electricity mixes.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values).*Volvo Cars manufacturing includes both factories as well as inbound and outbound logistics.Carbon footprint report Volvo C40 Recharge 6Key Findings50ICE(E5 petrol,XC40)Global electricity mixEU-28 electricity mixWind electricityUse phase(1,000km)10015020025049 0903060771100Figure iii.Break-even diagram:Total amount of GHG emissions,depending on total kilometres driven,from XC40 ICE(dashed line)and C40 Recharge(with different electricity mixes in the use phase).Where the lines cross,break-even between the two vehicles occurs.All life cycle phases except use phase are summarized and set as the starting point for each line at zero distance.The C40 Recharge has approximately 5 per cent lower total carbon footprint than XC40 Recharge when charged with EU-28 electricity mix in the use phase,which is mainly because of better aerodynamic properties.The C40 Recharge has a lower total carbon footprint than the XC40 ICE(E5 petrol)for all the analysed sources of electricity for the use phase.Materials production and refining,battery module production and manufacturing at Volvo Cars for a C40 Recharge results in nearly 70 per cent higher GHG emissions compared to an XC40 ICE(E5 petrol).The highly probable future reduction of carbon intensity of the EU-28 electricity mix will reduce the carbon footprint of C40 Recharge when using this mix for driving.However,a significantly lower carbon footprint is achieved when charging the car with renewable electricity,such as wind power.Production of aluminium and the Li-ion battery modules have relative high carbon footprints,with a contribution of approximately 30 per cent each to the total footprint of all materials and components in the C40 Recharge.Choice of methodology has a significant impact on the total carbon footprint.Therefore,care should be taken when comparing results from this report with those from other vehicle manufacturers.Carbon footprint report Volvo C40 Recharge 7Elisabeth Evrard,Sustainability Centre at Volvo CarsJennifer Davis,Sustainability Centre at Volvo CarsKarl-Henrik Hagdahl,Sustainability Centre at Volvo CarsRei Palm,Sustainability Centre at Volvo CarsJulia Lindholm,IVL Swedish Environmental Research InstituteLisbeth Dahllf,IVL Swedish Environmental Research InstituteAuthorsContactsRei Palm,Sustainability Centre,Volvo Cars The authors would like to thank Andrea Egeskog,Christoffer Krewer and Ingrid Rde for their valuable contribution.Carbon footprint report Volvo C40 Recharge 8Terms and definitionsAttributional approach An attributional approach to an LCA means that it estimates what share of the global environmental burdens belongs to a product.This in contrary to a consequential approach that gives an estimate of how the global environmental burdens are affected by the production and use of the product3.BEV Battery electric vehicle.A BEV is a type of electric vehicle that exclusively uses chemical energy stored in rechargeable battery packs,with no secondary source of propulsion.Carbon footprint The total greenhouse gas(GHG)emissions caused by e.g.,a product expressed as CO2-equivalents,usually calculated with life cycle assessment(LCA)methodology.CharacterisationA calculation procedure in LCA where all emissions contributing to a certain impact category,e.g.,greenhouse gases(GHGs)that contribute to climate change,are characterised into a single currency.For climate change,the carbon footprint is often expressed as mass unit of CO2-equivalents.Cradle-to-gate A cradle-to-gate assessment includes parts of the products life cycle,i.e.,from the cradle to the factory gate.It includes primary production of materials and the production of the studied product,but it excludes the use and end-of-life phases of the product.A supplier can provide a component,part or sub-assembly cradle-to-gate LCA to an OEM,for the OEM to include in the LCA of the OEMs product.Cradle-to-grave A cradle-to-grave assessment,compared to a cradle-to-gate assessment,also includes the use and end-of-life phases of the product,i.e.,it covers the full life cycle of the product.Dataset(LCI or LCIA dataset)A dataset containing life cycle information of a specified product or other reference(e.g.,site,process),covering descriptive metadata and quantitative life cycle inventory and/or life cycleimpact assessment data,respectively.4End-of-lifeEnd-of-life means the end of a products life cycle.Traditionally it includes waste collection and waste treatment,e.g.,reuse,recycling,incineration,landfill,etc.EU-28 and EU-28 electricity mix Data used in the LCA comes from the GaBi Professional and ecoinvent databases.The term EU-28 is used to describe the geographic region of the generic data and include all 27 member states in EU plus United Kingdom.The electricity mix for the use phase of the BEVs can be chosen either as country grid mix or for a specific energy source.The most recent electricity grid mix in GaBi,with reference year 2017,is used.Functional unit Quantified performance of a product system for use as a reference unit.GaBi GaBi is an LCA modelling software,provided by Sphera,and has been used for the modelling in this study.53 Ekvall T.,2019.Attributional and Consequential Life Cycle Assessment|IntechOpen4 “The Shonan guidelines”,https:/www.lifecycleinitiative.org/wp-content/uploads/2012/12/2011 - Global Guidance Principles.pdf5 GaBi,Sphera,http:/www.gabi- footprint report Volvo C40 Recharge 9GHGsGreenhouse gases.Greenhouse gases are gases that contribute to global warming(climate change),e.g.,carbon dioxide(CO2),methane(CH4),nitrous oxide/laughing gas(N2O),but also freons/CFCs.Greenhouse gases are often quantified as mass unit of CO2-equivalents.See characterisation for further description.ICE vehicle Internal combustion engine vehicle.An ICE vehicle uses exclusively chemical energy stored in a fuel,with no secondary source of propulsion.Impact category Class representing environmental aspects of concern to which life cycle inventory analysis results may be assigned.Li-ion batteryLithium-ion battery,a type of rechargeable battery in which lithium ions move from the negative electrode through an electrolyte to the positive electrode during discharge,and back when charging.Life cycleConsecutive and interlinked phases of a product system,from raw material acquisition or generation from natural resources to final disposal.Life cycle assessment,LCA Compilation and evaluation of the inputs,outputs and the potential environmental impacts of a product system throughout its life cycle.LCA modelling softwareLCA modelling software,e.g.,GaBi,is used to perform LCA.It is used for modelling,managing internal databases,containing databases from database providers,calculating LCA results etc.Life cycle inventory analysis,LCIPhase of life cycle assessment involving the compilation and quantification of inputs and outputs for a product throughout its life cycle.Life cycle impact assessment,LCIAPhase of life cycle assessment aiming to understand and evaluate the magnitude and significance of the potential environmental impacts for a product system throughout the life cycle of the product.Life cycle interpretationPhase of life cycle assessment in which the findings of either the inventory analysis or the impact assessment,or both,are evaluated in relation tothe defined goal and scope in order to reach conclusions and recommendations.Material utilisation degree,MUDThe share of utilised material of the total amount needed for producing a part.For example,if 100kg of steel is needed to produce a steel part of 70kg due to that scrap is generated in the manufacturing,the MUD is 0.7.PCBPrinted circuit board.ProcessSet of interrelated or interacting activities that transforms inputs into outputs.Processes can be divided into categories,depending on the output of the process,e.g.,material,energy,transport,or other service.Raw materialPrimary or secondary material that is used to produce a product.Carbon footprint report Volvo C40 Recharge 10Simple cut-offThe simple cut-off is a method for modelling recycling.It implies that each product is assigned the environmental burdens of the processes in the life cycle of that product.It means that using recycled material comes with the burdens from the collection and recycling of the material,which often are less than for production of primary material.At the same time no credits are given for recycling or creating recycled material.It is also called the recycled content approach and the 100/0 method.System boundarySet of criteria specifying which unit processes are part of a product system.WasteSubstances or objects which the holder intends or is required to dispose of.Carbon footprint report Volvo C40 Recharge 116 Communication on Integrated Product Policy(COM(2003)302)1.General description of life cycle assessment(LCA)1.1 Principles of LCAThe life cycle assessment(LCA)methodology is used to determine what impact a product or a service has on the environment,and according to the European Commission life cycle assessments provide the best framework for assessing the potential environmental impacts for products that are currently available.6 The methodology was developed because there was a need to consider the whole life cycle of a product when examining environmental impacts,instead of just looking into one process at a time.A peril with focusing only on one process at a time is that a decrease in environmental impact in one area can lead to increased environmental impact in another.To prevent this phenomenon,otherwise known as sub-optimisation,an LCA aims to include all processes from cradle to grave.However,an LCA is always a study of the environmental impacts for the processes within the system boundary,defined in the goal and scope of the LCA.Therefore,it is important to remember that all environmental impacts,from a product or service,can never be considered.In Figure 1 the different phases of LCA are shown.First,the goal and scope of the LCA should be defined.The system boundaries must be clearly stated since it has a direct impact on the result of the LCA.When the goal and scope are defined the inventory analysis can start.This is where data regarding all processes inside the system boundaries are gathered;these data can be presented in a report and are then called LCI(life cycle inventory).In addition,the data from the inventory analysis are further processed in the impact assessment phase,where different emissions(e.g.,CO2,SO2,NOx etc.)are sorted into different categories depending on what environmental impact they contribute to.These categories can be,for example,climate change,acidification and eutrophication.Through the impact assessment the total environmental impact of the studied system can be quantified.LCA is an iterative process where,for example,interpretation of results may necessitate refining the goal and scope definition,inventory analysis or impact assessment,in order to create a final assessment that in the best way addresses the question that one wants to answer.Carbon footprint report Volvo C40 Recharge 12Goal and scopedefinitionInventoryanalysisImpactassessmentInterpretationA fourth step,called weighting,may also be included in LCA.In this step,results are further aggregated.The different environmental impacts are weighed against each other based on,for example,political goals,economical goals or the critical load of different substances in the environment.The LCA methodology undertaken for this study does not include weighting since only one environmental impact category(climate change)is studied.1.2 LCA standardsThe methodology follows the standards set by ISO 14044:2006“Environmental management Life cycle assessment Requirements and guidelines”and ISO 14040:2006“Environmental management Life cycle assessment Principles and framework”.These standards differ from other standards that are commonly used by the vehicle industry,e.g.for testing or certification of the products,since they contain very few strict requirements.Instead,they mostly provide guidelines for LCA including:definition of the goal and scope of the LCA,the life cycle inventory analysis(LCI)phase,the life cycle impact assessment(LCIA)phase,the life cycle interpretation phase,reporting and critical review of the LCA,limitations of the LCA,relationship between the LCA functional phases and conditions for use of value choices and optional elements.The standards are valid for LCAs of all products and services and do not provide details enough to make LCAs of vehicles from different OEMs comparable.In addition to ISO 14044,the“Product Life Cycle Accounting and Reporting Standard7”which is part of the GHG protocol framework,has been used for guidance in methodological choices.These standards differ from other standards commonly used by the vehicle industry,for example for testing or certification of the products,since they contain very few strict requirementsFigure 1.Illustration of the general phases of a life cycle assessment,as defined in ISO 14040.7 Product Life Cycle Accounting Reporting Standard.Published by World Resources Institute and World Business Council for Sustainable Development.Product-Life-Cycle-Accounting-Reporting-Standard_041613.pdfCarbon footprint report Volvo C40 Recharge 13C40 RechargeXC40 RechargeXC40 ICE 218021701690VehicleTotal weight(kg)2.1 The productsThe Volvo Cars vehicles in this study can be categorised as:BEV battery electric vehicle ICE vehicle internal combustion engine vehicle The methodology in this study is the same as was used in 2020 when performing LCAs of the vehicles XC40 Recharge and XC40 ICE(E5 petrol).The studied vehicles are presented in Table 1.The total pack energy for C40 Recharge and XC40 Recharge is 7178 kWh.2.MethodologyTable 1.Studied vehicles and their corresponding weight in kg.Carbon footprint report Volvo C40 Recharge 142.2 Way of working overviewFigure 2 provides a high-level overview of how the work to obtain the carbon footprints of the vehicles is carried out according to the methodology at Volvo Cars.Four main ways are used to retrieve the data needed for the final LCA.The import to GaBi(see Terms and definitions)is made in a specific mapping tool,provided by Sphera,called GaBi-DFX8.The input to GaBi comes from:8 GaBi DfX,http:/www.gabi- IMDS,10 ecoinvent,www.ecoinvent.org11 GaBi LCI databases,http:/www.gabi- databasesDatabases containing LCA data on a large variety of materials,production,logistics and energy from primary production to material,e.g.wrought aluminium,copper wire,etc.This is referred to as generic,average or literature data.IMDS materiallibraryIMDS material data per component representing a specific vehicle.The 10 000 incoming materials are aggregated into 70 materials.LCA in GaBiMatchingInternal dataA variety of internal data such as emissions from logistics and manufacturing per average vehicle,energy and fuel consumption,etc.Battery module dataThe battery module suppliers have,based on methodological guidelines from Volvo Cars,performed supplier specific LCAs and provided the results to Volvo Cars.Figure 2.Overview of LCA way of working.IMDS9(International Material Data System)datasheets which contain information on material compositions of the components The LCI databases ecoinvent10 3.7.1 and GaBi LCA database 2021.1 version(GaBi Professional)11 Data from operations run by Volvo Cars,such as factories and logistics LCA of battery modules,performed by our battery suppliers with guidance and support by Volvo Cars and PolestarCarbon footprint report Volvo C40 Recharge 152.3 Methodology to define vehicle material compositionThe bill of materials(BOM)is an important input to the LCA and consists of the parts used in the vehicle and their respective weights and materials composition.The part number vehicle BOM is extracted from Volvo Cars product data management system KDP.However,this BOM cannot be used as direct input to the LCA model in GaBi but must be developed and aggregated in several steps into a suitable material BOM.The material information,except for the Li-ion battery modules,comes from datasheets in IMDS.A complete vehicle in IMDS consists of about 10,000 different materials.To make the number of materials manageable in GaBi,they are aggregated into approximately 70 material categories defined by Volvo Cars in a materials library developed by Volvo Cars,Volvo IMDS ML.The part number BOM from KDP is uploaded to Volvo Cars IMDS in-house system iPoint Compliance Agent(iPCA).In iPCA a materials BOM is generated and imported into Volvo IMDS ML where all materials are mapped into the by Volvo Cars defined material categories.In order to have an effective and systematic approach,this mapping is automated.The rules for categorising the materials are determined by IMDS material category,material name and substance content.It is also possible to manually allocate materials in the Volvo IMDS ML,however,this is done as restrictively as possible.For these LCAs,Volvo IMDS ML release 8 is used with the material categories listed in Table 2.For the complete list of material categories see“Appendix 3 Complete list of Volvo Cars material library material categories”.The BOM from Volvo IMDS ML must then be formatted further order to allow import into GaBi.A formatting tool is used to apply the format required by GaBi and this step is also automated.The import to GaBi is made in a specific mapping tool,provided by Sphera,called GaBi DfX.In the mapping,each material is connected to a specific life cycle inventory dataset and,if relevant,a manufacturing process dataset.For the Li-ion battery modules,supplier specific carbon footprint data were used instead of IMDS data.The production of the Li-ion battery modules consists of complex manufacturing steps and has therefore high impact on the result.Also,the variety and accuracy of datasets available is limited for Li-ion batteries.Steel and ironAluminiumMagnesiumCopperZincLead,batteryMagnetPolymersNatural materialsGlassElectronicsFluidsUndefinedNumber of material categoriesMaterial type5112112About 40*431111Table 2.Material categories defined by Volvo Cars in Volvo IMDS ML release 8.Note that Li-ion battery modules are treated separately and therefore not included in the table.*Including filled/unfilled.Carbon footprint report Volvo C40 Recharge 162.4 Goal and scope definitionThe main goal of the methodology in this study is to evaluate the carbon footprint of C40 Recharge and compare with the carbon footprints of XC40 Recharge and XC40 ICE(petrol containing 5 per cent ethanol (E5 petrol).Another goal is to be able to use the complete vehicle carbon footprint of C40 Recharge to examine the effects of changes in electricity mix used for charging the battery and data choice for production of materials.This methodology follows an attributional approach and is developed considering exclusively the environmental impact category climate change with its characterisation factor global warming potential(GWP)12 and on the detail level of a complete vehicle.2.4.1 Intended audienceThe intended audience is decision makers,car customers,researchers,public and internal R&D.2.4.2 System boundariesThe study performed is a life cycle assessment(LCA)for greenhouse gas emissions only:a so-called carbon footprint.Regarding the tail-pipe emissions from the ICE vehicles,only carbon dioxide emissions are included whereas methane and nitrous oxide emissions (CH4 and N2O)are excluded.CH4 and N2O contribute a minor fraction of total tailpipe GHG emissions from a petrol vehicle and exclusion of these emissions has no influence on the conclusions of this study.13The study includes the vehicle life cycle from cradle-to-grave,starting at extracting and refining of raw materials and ending with the end-of-life of the vehicle,see Figure 3.Major assumptions,uncertainties and cut-offs are described under ”2.4.6 Assumptions and limitations”.The emissions from the life cycles of infrastructure are included when they are available in the LCA databases.No active data collection or modelling of infrastructure has been carried out in this study.Generic data,as opposed to supplier specific data,are used for most of the upstream processes,such as raw materials production and manufacturing processes.Thus,there are steps in some of the manufacturing value chains,specific to vehicle components,that might not be included.Energy and natural resourcesMaterials production and refining Extraction of raw materials from earth crust Refining of raw materials into parts bought by Volvo CarsManufacturing Manufacturing in Volvo Cars factoriesUse phase Use of the car driving200,000 kmEnd-of-life Dismantling of the car Waste management of the carSystem boundaryInboundtransportsTransport from Tier 1 supplier to factoryOutboundtransportsTransport from Volvo Cars factory to dealerGHG emissions 12 CML2001-Aug.2016,global warming potential(GWP 100 years,thus calculated for 100 years of impact from the day of emissions)excluding biogenic carbon 13 Analysis of GaBi data for passenger car,EURO 6Figure 3.Schematic description of the studied system and its different life cycle phases.Carbon footprint report Volvo C40 Recharge 17It is likely that these processes are assembly processes at the tier 1 suppliers of Volvo Cars and the contribution to the total carbon footprint from these processes are likely to be very small.The production data are for the current situation,which means that the carbon intensity of the electricity mix for driving is also recent,although it will probably change during the cars estimated lifetime of 15 years.The effect of this approach was tested in the sensitivity analysis,see page 30.The study was carried out with a global approach,which means that the generic datasets used for raw materials production and refining are not specific for any region.As far as possible global averages have been applied.How this principle for data choice may affect the results is tested in the sensitivity analysis,see page 31.2.4.3 Functional unit The functional unit defines precisely what is being studied.It defines and quantifies the main function of the product under study,provides a reference to which the inputs and outputs can be related,and is the basis for comparing/analysing alternative goods or services.The functional unit of this study is:The use of a specific Volvo vehicle driving 200,000kmThe results are being presented as kg CO2-equivalents per functional unit.2.4.4 Allocations100 per cent of total emissions from scrap has been allocated to the vehicles.Thus,for example,the produced amount of steel and aluminium included in the carbon footprint calculation does not only include the amount of material in the vehicle,but also the scrap generated in the whole manufacturing chain.More specifically,the methodology uses the cut-off approach,which is the recommended method according to the EPD14 system.This method follows the“polluters pay principle”meaning that if there areseveral product systems sharing the same material,the product causing the waste shall carry the environmental impact.In other words the system boundary is specified to occur at the point of“lowest market value”.Also,if the material does not go to a new product system,the final disposal is included within the life cycle of the vehicle.2.4.5 System expansionNo system expansion has been applied in this studyi.e.,no credits have been given for e.g.,materials being recycled and offsetting other material production,or for energy generated in waste incineration offsetting other energy production.2.4.6 Assumptions and limitationsIn general,assumptions have been made in a conservative fashion following the precautionary principle,in order not to underestimate the impact from uncertain data.Additional processes have been added to the model when judged needed to represent actual emissions more accurately.The inventory does not include:Processes at Volvo Cars such as business travels,R&D activities or other indirect emissions Volvo Cars infrastructure e.g.,the production and maintenance of buildings,inventories or other equipment used in the production Construction and maintenance of roads in the use phase Emissions from tyres and road wear in the use phase Maintenance of the vehicles in the use phaseThis study does not investigate changes,i.e.,it is not consequential15,nor takes rebound effects16 into consideration.Carbon footprints developed using this methodology should not be broken down to lower levels,e.g.,system or component level,without reassuring that an acceptable level of detail is also reached on the studied subsystem.14 https:/ 15 Consequential LCA,https:/consequential-lca.org/clca/why-and-when/16 https:/esrc.ukri.org/about-us/50-years-of-esrc/50-achievements/the-rebound-effect/Carbon footprint report Volvo C40 Recharge 18In this chapter all input data and methodological choices concerning the inventory are presented.3.1 Material production and refiningMaterial production and refining(see figure 3)are based on a BOM containing material composition and material weight.The BOM used for modelling in GaBi is specifically developed for LCA modelling in GaBi and reports the composition of the vehicle based on about 70 material categories.The total weight of the vehicle is divided into these material categories.In GaBi,each material has been coupled with one or several datasets(containing LCI data)representing the production and refining of the material in each specific material category.See Appendix 4 Chosen datasets.Material production and refining are modelled using datasets from GaBi Professional database 2021.1 and ecoinvent 3.7.1 database,system model cut-off.The datasets have been chosen according to the Volvo Cars methodology for choosing generic datasets.For some raw materials there were no datasets for the exact materials.In those cases,data sets for similar materials have been used.The material content corresponding to the entire weight of the vehicle is included in the LCA,but for the different vehicles a small amount of materials have been categorised as undefined material in Volvo IMDS ML.Table 3 shows the share of undefined material of the total vehicle weight(including battery modules)for each vehicle.3.Life cycle inventory analysis(LCI)C40 RechargeXC40 RechargeXC40 ICE 1.6%1.0%0.9%Vehicle modelShare of undefined materialSince the undefined category seems to contain mostly undefined polymers,a dataset for polyamide(Nylon 6)has been used as approximation.This assumption is made since polyamide is the polymer with the highest Table 3.Share of undefined material in the different vehicles.Carbon footprint report Volvo C40 Recharge 19carbon footprint,out of the polymer data used in the LCA.All filled polymers have been assumed to contain 78 per cent polymer,14 per cent glass fibre and 8 per cent talc representing an average of filled polymers as reported in IMDS.In most cases,datasets that include both production of raw material as well as component manufacturing ready to be assembled in the vehicle are not available.Therefore,several datasets representing the refining and production of parts have been used for most material categories.The datasets used to represent further refining and manufacturing of parts are listed in Appendix 2 Summary of data-choices and assumptions for component manufacturing.For most database datasets representing materials production and refining processes it has not been possible to modify the electricity,thus the built-in electricity mix has been used.3.1.1 Aluminium production and refiningThe share of aluminium that is cast aluminium and wrought aluminium was assumed to be 65 per cent and 35 per cent respectively.This is based on the report“Aluminium content in European passenger cars”17.All wrought aluminium was assumed to go through the process of making aluminium sheets.The assumption of wrought aluminium being aluminium sheets is a conservative assumption since sheet production generates a higher amount of scrap than most other wrought processes.The cast aluminium goes through a process for die casting aluminium.The scrap generated in the processes of making the aluminium parts for the vehicle is included in the carbon footprint,and since a cut-off is applied at the point of scrap being generated in the factory,the total footprint of generating the scrap is allocated to the vehicle even though the aluminium scrap is sent to recycling and used in other products.The material utilisation rate(MUD,the degree of utilised material of the total amount needed for producing a part)for the manufacturing processes of both cast aluminium and wrought aluminium can be seen in Appendix 2 Summary of data-choices and assumptions for component manufacturing.All aluminium is assumed to be produced as primary,thus produced from bauxite ore.3.1.2 Steel production and refiningThe raw material dataset used for the material category“unalloyed steel”is rolled and galvanised steel.A manufacturing process was added to all steel.Which manufacturing process was chosen depends on whether the steel is stamped by Volvo Cars or not.Hence,the steel categorised as unalloyed steel in the material library has been divided into two sub-groups depending on the manufacturing process following the rolling and galvanising of the steel:1.The steel that is processed and stamped in Volvo Cars factories.The MUD is according to data at Volvo Cars.2.The rest of the steel,which is distributed in various components of the car.The MUD is according to the chosen database dataset,i.e.,literature value.The scrap generated the processes of making the steel parts for the car,independent of processes,is included in the carbon footprint,and the same cut-off as for aluminium is applied.The MUD for the manufacturing processes of steel can be seen in Appendix 2 Summary of data-choices and assumptions for component manufacturing.3.1.3 Electronics production and refiningThe material category“Electronics”includes printed circuit boards(PCBs)and the components mounted on them.It does not include chassis,cables or other parts that are present in electronic components.All materials that are used in electronic devices that are not PCBs have been sorted into other categories,such as copper or different types of polymers.For the category“Electronics”a generic dataset from ecoinvent 3.7.1 has been used.This dataset represents the production of lead-free,mounted PCBs.17 https:/www.european-aluminium.eu/media/2714/aluminum-content-in-european-cars_european-aluminium_public-summary_101019-1.pdfCarbon footprint report Volvo C40 Recharge 203.1.4 Plastics production and refiningFor polymer materials an injection moulding process has been used to represent the processing of plastic parts from a polymer raw material.The material utilisation rate for the manufacturing processesof plastics can be seen in Appendix 2 Summary of data-choices and assumptions for component manufacturing.3.1.5 Minor material categories,production and refiningThere are raw materials for which data on processing is missing in the LCA databases.In those cases,the material weight was doubled as an estimation forthe processing.This means that the manufacturing process is assumed to have the same carbon footprint as the production of the raw material itself.This has been applied only for minor materials(by weight).3.1.6 Electricity use in materials production and refiningA global average electricity mix has been applied for materials production and refining.This was modelled using statistics from the International Energy Agency(IEA)18 and electricity datasets in GaBi,since there is no existing dataset for global electricity mix in the GaBi database.This electricity mix is used for a few19 partially aggregated processes in the GaBi databases where it is possible to add an electricity mix by choice as well as the use phase of the BEVs.3.1.7 Differences in materials production data compared to the previous LCA reportSince re-calculations with updated production data have been performed to make the car models comparable,improvements have also been implemented.There is now a higher degree of defined materials and an adjustment has been made regarding ratio between wrought and cast aluminium.The average composition of filled polymers is adjusted and data in the databases are generally updated.Logistics and Volvo Cars production site data have also been updated.3.2 Battery modulesA BEV battery pack consists of a carrier,battery management system,cooling system,busbars,(cell)modules,thermal barriers,manual service disconnect and a lid.Volvo Cars purchases modules from CATL and LG Chem,who,in collaboration with the report authors,performed cradle-to-gate(up until Volvo Cars logistics take over the part)carbon footprint LCAs of their modules.The modules have therefore been removed from the BOM based on IMDS data and modelled separately in the complete vehicle LCA.All other parts of the battery pack are included in the materials BOM,based on IMDS data.3.3 Manufacturing and logistics at Volvo Cars3.3.1 LogisticsFor GHG emissions from transports from Tier 1 suppliers to Volvo Cars manufacturing sites(inbound transport),Volvo Cars total emissions from inbound transports divided by the total number of cars produced during the same year has been applied.In the same way,emissions from transports from Volvo Cars manufacturing sites to the dealer(outbound transport),have been compiled based on Volvo Cars total emissions from outbound transports per the total number of cars sold during the same year.Network for Transport Measures(NTM)20 has been used as a basis for the calculations.18 https:/www.iea.org/data-and-statistics/charts/world-gross-electricity-production-by-source-201919 The processes that use the electricity mix are cast iron production,rubber vulcanization and five additional manufacturing processes.20 https:/www.transportmeasures.org/en/Carbon footprint report Volvo C40 Recharge 213.3.2 Volvo Cars factoriesGHG emissions from electricity usage,heat usage and use of different fuels in each of the factories were calculated using site-specific input data.The GHG emissions per vehicle were then calculated by dividing the total GHG emissions from the factory by the total amount of vehicles or engines produced in that factory during the same year.The C40 Recharge will initially be produced in Ghent in Belgium.XC40 ICE and XC40 Recharge are produced in both Luqiao in China and Ghent in Belgium.The emissions from the Volvo Cars manufacturing have been calculated in proportion to the number of cars produced in the car factories between May 2020 and April 2021.For engine factories,data from 2019 were used.This was done to avoid the months of March-April 2020 during the corona pandemic which had a significant impact on the production.3.4 Use phaseThe calculation of the emissions in the use phase of the car is based on the distance driven,tailpipe emissions per driven kilometre,and the well-to-tank emissions from fuel and electricity production.The driving distance for Volvo vehicles has been set to 200,000 km,which is also the functional unit in this study.The fuel and energy related GHG emissions associated with the actual driving of the vehicle are divided into two categories:Well-to-tank(WTT)Includes the environmental impact caused during production and distribution of the fuel or electricity to the fuel tank or traction battery in the vehicle.The fuel used in the ICE vehicle is assumed to be petrol blended with 5 per cent ethanol,and the production related emissions from both fuels are included.Electricity production is modelled according to global or EU-28 grid mix or as specific energy source(wind).The calculations for achieving the global electricity mix dataset are described in chapter 3.1.5.Tank-to-wheel(TTW)Includes the tailpipe emissions during use.This is zero for C40 Recharge and XC40 Recharge and calculated to be 173g CO2/km for the XC40 ICE(based on an average of produced XC40 ICE petrol cars).The TTW emission data for the XC40 ICE is based on the WLTP driving cycle(Worldwide Harmonised Light Vehicles Test Procedure,used for certification of vehicles in EU).WLTP data are also used for obtaining energy consumption figures for C40 Recharge and XC40 Recharge.Losses during charging in the electricity use of the BEVs are included.The electricity use for C40 Recharge in this study is 211 Wh/km which is based on estimated average certified energy consumption of future produced C40 Recharge cars.The electricity use for XC40 Recharge is slightly higher,241 Wh/km,which is based on an average of the XC40 Recharge vehicles produced.The weight of the vehicles is similar,but C40 Recharge uses less energy for driving mainly because of better aerodynamic properties of the car body.Carbon footprint report Volvo C40 Recharge 223.5 End-of-life of the vehicle3.5.1 Process descriptionAt their end-of-life,it is assumed that all vehicles are collected and sent for end-of-life treatment.The same methodology as described in chapter 2.4.4 Allocations,is applied.Focusing on the point of lowest market value,according to the polluter pays principle,implies inclusion of steps such as dismantling and pre-treatment(shredding and specific component pre-treatment),while excluding material separation,refining or any credit for reuse in another product system.End-of-life was modelled to represent global average situations as far as possible.Handling consists of a disassembly step to remove hazardous components and components that are candidates for specific recycling efforts.The disassembled parts are treated and the remaining vehicle is shredded.Depending on material type the resulting fractions go either to material recycling,incineration,or landfill.Figure 4 gives an overview of the entire phase.In the disassembly stage,hazardous and/or valuable components are removed from the vehicle.These include:Batteries Fuel Wheels,tyres Liquids:coolants antifreeze brake fluid air-conditioning gas shock absorber fluid windscreen wash Oils:engine gearbox transmission hydraulic oils Oil filters Catalytic converter Airbags and seat belt pretensioners DisassemblyDisassembledpartsRemainingvehicleCombustiblematerialsBoundary with cut-off approachNon-combustiblematerialsTreatment of disassembledpartsShreddingLandfillIncinerationMaterialrecyclingFigure 4.End-of-life system boundaries.Carbon footprint report Volvo C40 Recharge 23From a global perspective the treatment of fuels,oils and coolants generally implies incineration.The tyres are assumed to be salvaged for rubber recovery,and the lead batteries for lead recovery.The catalytic converter contains valuable metals and is disassembled for further recycling efforts.Oil filters are assumed to be incinerated,as are airbags and seat belt pretensioners,which are disassembled for safety reasons rather than the potential recycling value.The Li-ion battery is assumed to be taken out of the vehicle and sent to recycling.All other parts of the vehicle are sent to shredding.In this process the materials in the vehicle are shredded and then divided into fractions depending on different physical and magnetic properties.Typical fractions are:ferrous metals(steel,cast iron,etc)non-ferrous metals(aluminium,copper,etc)shredder light fraction(plastics,ceramics,etc)The metal fractions can be sent for further refining and in the end material recycling.The combustible part of the light fraction can be incinerated for energy,or the entire fraction can end up in landfill.For the purpose of this study,it is assumed the combustible streams of materials are incinerated,while the non-combustible materials are landfilled.Due to the global focus,no energy recovery is included for the incineration steps,even though in some Volvo Cars markets,there is indeed energy recovery from incineration of waste.This somewhat conservative assumption has been made since there are many markets with no energy recovery taking place,and data on how common the case with energy recovery is for the combustible streams is unknown.Assessment of material losses after shredding and in refining are outside the system boundaries set by the cut-off approach.More information about end-of-life is found in Appendix 3 End-of-life assumptions and method.Carbon footprint report Volvo C40 Recharge 244.1 C40 Recharge compared with XC40 ICE(E5 petrol)The comparison of carbon footprint between C40 Recharge and XC40 ICE(E5 petrol)shows that the C40 Recharge has a 15 per cent lower carbon footprint than the XC40 ICE,calculated with a global electricity mix for driving(figure 5 and table 4).Charging the C40 Recharge with an EU-28 electricity mix,the footprint is nearly 30 per cent lower compared to XC40 ICE and charging with wind power gives a reduction of more than 50 per cent.The“Materials production and refining”phase(excluding Li-ion battery modules production)causes almost 30 per cent more GHG emissions for the C40 Recharge compared with the XC40 ICE,mainly due to the increased materials of the C40 Recharge and the increased share of aluminium.When also including the Li-ion battery modules and Volvo Cars manufacturing,the GHG emissions are nearly 70 per cent higher for the C40 Recharge compared with XC40 ICE.However,when including the emissions from the use phase,the total carbon footprint is still lower for the C40 Recharge compared to the XC40 ICE for all three electricity mixes analysed.Manufacturing at Volvo Cars and the end-of-life treatment only give a small contribution to the total carbon footprint.4.ResultsIf the Li-ion battery is included in the Materials production and refining category,the increase in carbon footprint is nearly 70 per cent.Carbon footprint report Volvo C40 Recharge 25XC40 ICE E5 petrolEnd-of-lifeUse phase emissionsVolvo Cars manufacturing*Li-ion battery modulesMaterials production and refiningC40 Recharge Global electricity mixC40 Recharge EU-28 electricity mixC40 Recharge wind electricity595042276040200XC40 ICE(E5 petrol)C40 Recharge(global electricity mix)C40 Recharge(EU-28 electricity mix)C40 Recharge(wind electricity)Materials productionand refiningLi-ion battery modules14181818-7771.71.41.41.44324160.40.60.50.50.559504227Volvo Cars manufacturingUse phase emissionsEnd-of-lifeTotalVehicle type Figure 5.Carbon footprint for C40 Recharge and XC40 ICE with different electricity mixes used for the C40 Recharge.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values).Table 4.Carbon footprint for XC40 ICE and C40 Recharge,with different electricity mixes used for the C40 Recharge.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values)and per phase in the life cycle.*Volvo Cars manufacturing includes both factories as well as inbound and outbound logistics.Carbon footprint report Volvo C40 Recharge 26Although total emissions from all phases except the use phase of the C40 Recharge are higher than for the XC40 ICE,the C40 Recharge will over the span of its lifetime cause less emissions thanks to lower emissions in the use phase.Where this break-even occurs depends on the difference in GHG emissions from the production of the car,and how carbon intense the electricity mix is in the use phase.For all three electricity mixes in the LCA,the break-even occurs at 49,000,77,000 and 110,000km respectively,all within the assumed life cycle of the vehicle(200,000km).50ICE(E5 petrol,XC40)Global electricity mixEU-28 electricity mixWind electricityUse phase(1,000km)10015020025049 0903060771100C40 Recharge,Global electricity mix/XC40 ICEC40 Recharge,EU-28 electricity mix/XC40 ICEC40 Recharge,wind electricity mix/XC40 ICEBreak-even(km)110,00077,00049,000Vehicle typeFigure 6.Break-even diagram:Total amount of GHG emissions,depending on total kilometres driven,from XC40 ICE(dashed line)and C40 Recharge(with different electricity mixes in the use phase).Where the lines cross,break-even between the two vehicles occurs.All life cycle phases except use phase are summarised and set as the starting point for each line at zero distance.Table 5.Number of kilometres driven at break-even between C40 Recharge and XC40 ICE(E5 petrol)with different electricity mixes.Carbon footprint report Volvo C40 Recharge 274.2 C40 Recharge compared with XC40 RechargeC40 Recharge has a slightly lower carbon footprint compared with XC40 Recharge when EU-28 electricity mix is used for charging the car.This is mainly because of better aerodynamics.See comparison in figure 7 and table 6 below.C40 Recharge EU-28 electricity mixEnd-of-lifeUse phase emissionsVolvo Cars manufacturing*Li-ion battery modulesMaterials production and refiningXC40 Recharge EU-28 electricity mixC40 Recharge wind electricityXC40 Recharge wind electricity1042020304050442727Figure 7.Carbon footprint for C40 Recharge and XC40 Recharge,with different electricity mixes.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values).C40 Recharge(global)C40 Recharge(EU-28)C40 Recharge Recharge(wind)XC40 Recharge(global)XC40 Recharge(EU-28)XC40 Recharge(wind)Materials productionand refiningLi-ion battery modules1818181717177777771.41.41.41.51.51.524160.428180.40.50.50.50.50.50.5504227544427Volvo Cars manufacturingUse phase emissionsEnd-of-lifeTotalVehicle type(electricity mix in the use phase)Table 6.Carbon footprint for C40 Recharge and XC40 Recharge with different electricity mixes for charging the car.Results are shown in tonnes CO-equivalents per functional unit(200,000km total distance,rounded values).*Volvo Cars manufacturing includes both factories as well as inbound and outbound logistics.Carbon footprint report Volvo C40 Recharge 28GHG emissions in the“Materials and refining”phase for C40 Recharge is approximately 1 per cent higher compared to XC40 Recharge.This is mainly due to more aluminium in the car compared with XC40 Recharge and some more“undefined”materials.This is more than compensated when e.g.,EU-28 or global electricity mix is used for driving the car.However,using wind power,the total carbon footprint becomes roughly the same,27 tonnes CO2-equivalents,because of the low carbon footprint of the use phase.The level of GHG emissions in the use phase with EU-28 electricity mix is nearly 13 per cent lower for the C40 Recharge,and the corresponding level in life cycle carbon footprint is roughly 5 per cent lower.Figure 8.C40 Recharge.Contribution to GHG emissions from production of different material types and Li-ion battery modules in the“Materials production and refining”phase.4.3 Production of materials and components This chapter gives an insight into how different material types and components contribute to the GHG emissions in the materials production and refining phase including Li-ion battery modules production.See figures 810 for the relative contributions to the GHG emissions for the different material types.Figure 8 shows C40 Recharge,figure 9 XC40 Recharge and figure 10 XC40 ICE(E5 petrol).Aluminium30%Li-ion battery modules28%Steel and iron19%Electronics9%Fluids and undefined 3%Polymers 7%Other metals 2%Natural materials 0%Glass 0%Copper 1%Tyres 1rbon footprint report Volvo C40 Recharge 29Figure 9.XC40 Recharge.Contribution to GHG emissions from production of different material types and Li-ion battery modules in the“Materials production and refining”phase.Figure 10.XC40 ICE.Contribution to GHG emissions from production of different material types and Li-ion battery modules in the“Materials production and refining”phase.Aluminium29%Li-ion battery modules29%Steel and iron19%Electronics9%Fluids and undefined 2%Polymers 7%Other metals 2%Natural materials 1%Glass 0%Copper 1%Tyres 1%Aluminium34%Steel and iron35%Electronics13%Polymers 11%Fluids and undefined 2%Other metals 1%Natural materials 1%Glass 1%Copper 1%Tyres 1%For C40 Recharge,the GHG emissions from aluminium and Li-ion battery pack production make up the biggest share,30 per cent and 28 per cent respectively while steel,iron and polymer materials contribute 19 per cent,9 per cent and 7 per cent respectively.The emissions from the production of materials and components for XC40 are similar.For XC40 ICE however,the main contributions to GHG emissions come from steel and iron(35 per cent)and aluminium(34 per cent).More of how the carbon footprint can be reduced and what actions Volvo Cars has taken,can be found in chapter 5.2,sensitivity analysis and chapter 6,discussion.Carbon footprint report Volvo C40 Recharge 305.Sensitivity analysisSince most data in this study are conservative,it is interesting to investigate the effect of more probable data on the carbon footprint results.One example is the highly probable scenario that the carbon intensity of the electricity mix in Europe will be reduced during the assumed lifetime of the BEVs.Another example that is tested is the effect of using European material production data instead of the global one.This is especially relevant given that the first C40 Recharge will be produced in Europe with many regionally sourced parts and materials.5.1 Explore future electricity grid mix for EU-28 for use phase During the lifetime of the C40 Recharge,the European electricity mix will probably increase its share of renewable energy sources.However,a conservative approach for the electricity mix is chosen in the study,by using the current European(EU-28)electricity mix for the whole lifetime of the car.Therefore,a test on how a more realistic trend of the increased renewable share in the electricity mix affects the total carbon footprint was performed.See figure 11 for the aggregated GHG emissions during the use phase of the C40 Recharge.The different EU-28 scenarios are from IEA21 and modelled in GaBi.Stated policies scenario reflects the impact of existing policy frameworks and todays announced policy intentions and sustainable development scenario maps out a way to meet sustainable energy goals,fully aligned with the Paris Agreement by holding the rise in global temperatures to“well below 2C degrees”.The figure shows how the increased use of renewable energy sources in the scenarios for the European electricity mix affects the GHG emissions in a positive way,but also that new policies are needed to meet the climate goals set in the Paris agreement.The most efficient way to reduce GHG emissions are however clearly to change to electricity with much lower carbon intensity,such as wind with an emission factor of only approximately 3 per cent of the emission factor for the current EU-28 mix(according to the GaBi database).21 World Energy Outlook 2017 Analysis IEA Carbon footprint report Volvo C40 Recharge 31EU-28 electricity mix without improvementsEU-28 electricity mix,stated policies scenarioEU-28 electricity mix,sustainable development scenarioWind electricity2729313335373941202120232025202720292035203320314543Figure 11.The total GHG emissions for the estimated lifetime of C40 Recharge.All life cycle phases except use phase are summarised and set as the starting point for each line at year 2021.5.2 Explore regionalised datasets for material production (EU compared to global)In this sensitivity analysis,it is assumed that some materials for the C40 Recharge are produced in Europe instead of globally sourced as in the base case.In fact,this car will be manufactured in Ghent in Belgium to start with,and materials will be partly regionally sourced.The main data for materials production that were changed to European average instead of global average are aluminium,steel,iron,polymers and tyres.Electronics and Li-ion battery modules data were not changed.The emission factors of European data compared to global data are lower for these chosen datasets;roughly 50 per cent for aluminium,10 per cent for steel and iron,10 per cent for polymers and 5 per cent for tyres.This calculation gives an approximate reduction of 17 per cent for the GHG emissions in the“Materials production and refining”phase and“Li-ion battery modules”.This result clearly demonstrates that sourcing from suppliers that have products and materials with a lower carbon footprint today has a great potential to reduce the overall carbon footprint of the vehicle.This potential will likely increase,as other companies are likely to decarbonise their value chains as well.It also shows that the geographical scope of the study has a significant effect on the overall results,why an LCA could show an overly conservative or an overly optimistic result compared to the real-world situation.The results also indicate that the reduction potential differs a lot for different materials.The carbon footprint of the production of primary aluminium is heavily dependent on the electricity mix used and thus the generic data varies quite a lot between regions.Whereas the regional differences of producing steel are significantly less than for aluminium,the carbon footprint reduction will require both a technology change and a decarbonisation of the global energy system.This is further elaborated in the discussion chapter.Carbon footprint report Volvo C40 Recharge 326.1 The importance of electricity mix choice for charging the carTesting of alternative electricity mixes for the C40 Recharge in the use phase shows that the choice of electricity source when charging the car is a crucial factor in determining the total life cycle carbon footprint.A C40 Recharge that runs on wind power has only half the carbon footprint of an XC40 ICE for the function of 200,000km total driving distance.Scenarios for the European market indicate that the carbon intensity of electricity production may further decrease there.This would mean that there will likely be a continuous reduction of the BEVs carbon footprints even if no active choice of using renewable energy in the use phase is made,although an active choice for renewable electricity gives a much larger positive difference for the climate.6.Discussion This carbon footprint study of C40 Recharge,XC40 Recharge and XC40 ICE provides insight into both the relative contribution to the carbon footprint from different life cycle phases(see figures 5 and 7)as well as the underlying causes for the emissions.In turn,these insights can be used to guide efforts into understanding and reducing the emissions.The comparisons show the differences and similarities between the BEV and the ICE vehicle technology,and the potential benefits of electrification.Carbon footprint report Volvo C40 Recharge 336.2 Shift of focus When considering a global average electricity mix,the life cycle impact is split roughly 50/50 between the materials production and refining phases and the use phase(figure 5).In contrast,choosing wind based electricity for car charging reduces the life cycle carbon footprint significantly compared to driving with EU-28 or global electricity mix,and consequently the“Materials production and refining”phase dominates.This will shift the focus to the“Materials production and refining”phase and further emphasise the importance of efforts to reduce the GHG emissions in this phase.Volvo Cars is working towards reducing the GHG emissions from the“Materials production and refining”phase by 25 per cent per average vehicle from 2018 to 2025,which is an ambitious start towards achieving climate neutrality by 2040.6.3 Energy sources for materials production and refining The choice of energy source in the“Materials production and refining phase”also has an impact on the total carbon footprint,e.g.,some metal production processes like the smelting process of primary aluminium production and the electrical furnace for steel production from recycled steel are very electricity intensive.However,changing electricity source has not yet been tested in the calculations since many of the background datasets are aggregated and therefore not possible to change.An indication of the possible effect of electricity choice was however given in the sensitivity analysis where regional average data for materials production was tested instead of global including these metals.6.4 Technical development of materials production and refining Reducing the impact of materials requires more efficient production,increased use of recycled content and more renewable energy in production.Therefore,Volvo Cars is currently exploring the use of fossil free steel in our products,having very low GHG emissions,as well as increasing the share of recycled content.The GHG emissions from production of polymers for different plastics are currently also significant.These emissions can be reduced by increasing the use of recycled plastics and bioplastics which in turn also would reduce the emissions of fossil GHGs when incinerated after use.Volvo Cars aims to use at least 25 per cent recycled or bio-based plastics by year 2025 in their products22.6.5 Battery development BEV driveline technology is still young compared to the ICE driveline implying a relatively higher potential for improvements.Recent studies have shown a general decrease in carbon footprint of battery production over recent years,and it is likely that it will continue decreasing.The strategy of Volvo Cars working towards reducing the carbon footprint from the materials production and refining phase by 25 per cent per average vehicle from 2018 to 2025,which is an ambitiousstart towards achievingclimate neutrality by 2040.22 Volvo sets goal of 25 percent recycled plastics in cars from 2025|Reuters Carbon footprint report Volvo C40 Recharge 3423 E.g.,GREET calculation model,https:/greet.es.anl.gov/24 Material Economics,2020.Preserving value in EU industrial materials A value perspective on the use of steel,plastics and aluminium.https:/ 25 https:/www.iea.org/reports/aluminium26 Dai,Q.,Kelly,J.C.,Gaines,L.&Wang,M.,2019.Life Cycle Analysis of Lithium-Ion Batteries for Automotive Applications.Batteries 2019,5(48)Batteries|Free Full-Text|Life Cycle Analysis of Lithium-Ion Batteries for Automotive Applications()27 A European Green Deal|European Commission(europa.eu)6.6 The effects of the methodological choices The choice of allocation method gives the result that all GHG emissions from scrap generation are allocated to the vehicles.This in turn results in a relatively high carbon footprint of the vehicles produced by Volvo Cars compared to some other studies where production of material ending up as scrap in the manufacturing is excluded23.Furthermore,the metal production datasets that have been used are average data,and further investigation is needed to assess to what extent this data differs from the supply network of Volvo Cars.The sensitivity analysis shows,that if data for some of the material production,especially aluminium,is European instead of global,a significant reduction of carbon footprint is achieved an indication of how important sourcing of materials with low carbon footprint is.Important to remember is that this study is conservative.Therefore,all aluminium is set to be primary,thus produced from bauxite ore,although it is highly probably that a large part of the cast aluminium production is based on recycled metal24.Primary aluminium production is much more energy-intensive to produce than recycled25,so the real GHG emissions from aluminium production are probably lower.6.7 Need for more transparency and traceability Transparency and traceability of the value chains need to be improved and this is especially a challenge for complex products such as vehicles,electronics and Li-ion batteries.For example,data for production of electronics have a large uncertainty due to their production complexity with many different,raw materials and suppliers.Specific LCI data for electronic parts are lacking and this problem is paid attention to by e.g.,the Argonne National Laboratory26.The proposed new Li-ion battery regulation sets a requirement for battery“passports”which will push for tracing the supply chain.Also,more specific LCI data from the actual production sites,thus moving from industry average data,is also pushed for.Acknowledging the extreme complexity to harmonise methods and data,these improvements are a must for securing more precise carbon footprint reporting in the future,which in turn is needed to build trust for societies struggle to fight global warming.Several actions in this direction are ongoing with digitalisation as an enabler,e.g.,by the European Commission and their so called“Green Deal27”.Carbon footprint report Volvo C40 Recharge 35The carbon footprints of a C40 Recharge,XC40 Recharge,both charged with EU-28 electricity mix,and XC40 ICE fuelled with E5 petrol are 42,44 and 59 tonnes CO2-equivalents respectively for a total driving distance of 200,000km.The reason for the lower carbon footprint of the Recharge models compared with XC40 ICE is due to lower emissions of greenhouse gases in the use phase.C40 Recharge has a 5 per cent lower carbon footprint than XC40 for the same driving distance and for charging with EU-28 electricity,42 tons compared with 44 tons.For the lower carbon footprint of C40 Recharge compared with XC40 Recharge,this is due to the better aerodynamic properties of the car body.Comparing different electricity mixes,the carbon footprint for C40 Recharge when charging with global electricity mix,EU-28 electricity mix and wind power are 50,42 and 27 tonnes CO2-equivalents respectively.The carbon footprint of C40 Recharge and BEVs in general could soon be even lower thanks to potential improvements in,e.g.battery technology,global energy systems and lower carbon footprints for materials and parts production in general.The break-even analysis in the study investigates at what driving distance the carbon footprints of the C40 Recharge become less than the XC40 ICE(E5 petrol)based on alternative electricity mix.It shows that all break-even points for the tested electricity mixes occur within the used total driving distance of 200,000km.After the break-even point the carbon footprint of the C40 Recharge improves linearly compared with the XC40 ICE.The longer the lifetime,the better the relative carbon footprint of the C40 Recharge.It should be noted that a BEV sold on a market with carbon intensive electricity production indeed can be charged with electricity from renewable energy,which would decrease the carbon footprint substantially.Furthermore,the results assumed a constant carbon intensity within the alternate electricity mix throughout the vehicle lifetime as shown likely to overestimate the total carbon footprint at least in Europe,as shown in the sensitivity analysis for the EU-28 electricity mix.7.Conclusions The C40 Recharge has approximately 5 per cent lower total carbon footprint than XC40 Recharge when charged with EU-28 electricity mix.It has also a lower total carbon footprint than the XC40 ICE(E5 petrol)for all the analysed sources of electricity for the use phase.Carbon footprint report Volvo C40 Recharge 36Appendix 1 Complete list of Volvo Cars material library material categoriesMaterial nameMaterial groupABS(filled)PolymersABS(unfilled)PolymersAdBlueFluidsAluminium(matcat)AluminiumAnode*AramidPolymersASA(filled)PolymersASA(unfilled)PolymersBrake fluidFluidsCast iron(matcat)Steel and ironCatalytic coatingGlassCathode*CopperCopperCopper alloysCopperCottonNatural materialsDamperPolymersDieselFluidsE/P(filled)PolymersE/P(unfilled)PolymersElastomerPolymersElectronicsElectronicsEPDMPolymersEVAC(filled)PolymersEVAC(unfilled)PolymersFerrite magnetOther metalsFloat glassGlassFrictionNatural materialsGF-fibreGlassGlycolFluidsLead,batteryOther metalsLeatherNatural materialsLubricants(matcat)FluidsMagnesiumOther metalsNdFeBOther metalsNRPolymersPA(filled)PolymersPA(unfilled)PolymersPBT(filled)PolymersPBT(unfilled)PolymersPC(filled)PolymersPC(unfilled)PolymersPC ABS(filled)PolymersPC ABS(unfilled)PolymersPE(filled)PolymersPE(unfilled)PolymersPET(filled)PolymersPET(unfilled)PolymersPetrolFluidsPMMA(filled)PolymersPMMA(unfilled)PolymersPolyesterPolymersPolyurethane(matcat)PolymersPOM(filled)PolymersPOM(unfilled)PolymersPP(filled)PolymersPP(unfilled)PolymersPVB(filled)PolymersPVB(unfilled)PolymersPVC(filled)PolymersPVC(unfilled)PolymersR-1234yfFluidsR-134aFluidsMaterial nameMaterial groupCarbon footprint report Volvo C40 Recharge 37SBRPolymersSeparator,Li battery*Silicone rubberPolymersSteel,sinteredSteel and ironSteel,stainless,austeniticSteel and ironSteel,stainless,ferriticSteel and ironSteel,unalloyedSteel and ironSulphuric acidFluidsThermoplastic elastomers(matcat)PolymersThermoplastics(matcat)PolymersTyrePolymersUndefinedFluidsWasher fluidFluidsWood(paper,cellulose.)Natural materialsZincOther metals*Not used in any carbon footprint reporting presented in this report,since the Li-ion battery modules are modelled separately.Material nameMaterial groupCarbon footprint report Volvo C40 Recharge 38Appendix 2 Summary of data Choices and assumptions for component manufacturingMaterialAssumption on component manufacturingCommentMaterial utilisation change to degree in additional component manufacturingCast ironNo extra manufacturing processesThe chosen dataset already includes the production of a finished part to be used in automotive applicationsFluidsNo extra manufacturing processesAssumed that fluids do not need further refining after production of the raw material(the fluid itself)TyresNo extra manufacturing processesAssumed that the processes after vulcanisation only have minor GHG-emissionsCopper(wire)No extra manufacturing processesAssumed that processing after manufacturing into copper wire has negligible emissions and wasteNdFeB magnetsNo extra manufacturing processesThe chosen dataset already includes the production of a finished magnet to be used in electric motors for automotive applicationsElectronics(PCBs)No extra manufacturing processesThe chosen dataset already includes the production of a finished printed circuit boardCast aluminiumDie-casting process95%Wrought aluminiumRolling Aluminium sheet deep drawingAssumed to represent different types of wrought processes63%Steel(in parts,processed at suppliers)Steel sheet deep drawingSheet is assumed in line with the conservative approach63%Steel(stamped in a Volvo factory)Steel scrap generated at Volvo Cars factoriesThe steel scrap generated at stamping in the Volvo factories,that is the steel in workstream“vehicle structures”ConfidentialStainless steelSteel sheet deep drawingSheet is assumed in line with the conservative approach63%PolymersInjection moulding processAssumed to represent different types of processes98%Other materialsRaw material weight x2Emissions from raw material production has been multiplied by two,to compensate for further refining and processing50rbon footprint report Volvo C40 Recharge 39Appendix 3 End-of-life assumptions and methodA3.1 TransportTransportation of materials sent to material recycling is included and it is assumed the material is transported 1,500km by truck.A3.2 DisassemblyThe disassembly stage is globally still a mostly manual process.The energy consumption of this stage is therefore disregarded in this study.As the weight of the disassembled parts are low,potential additional transport of these components was disregarded.A3.3 Pre-treatmentPre-treatment was included for the following disassembled components:Lead acid battery Catalytic converter(only ICE vehicles)Tyres Li-ion batteries(only from electric vehicles)For the lead acid batteries,catalytic converter and tyres,ecoinvent datasets are used for the pre-treatment stage in this study.The Li-ion battery is assumed to be transported 1,500km by truck to the recycling facility.For the remaining disassembled parts,no inventory is made since their disassembly mainly is done as a safety precaution and they will after this be handled similarly to the rest of the vehicle.The fluids and oils that are incinerated likewise do not go through any pre-treatment.A3.4 ShreddingIn the shredding process the vehicles are milled to smaller fractions.This process uses electricity.In order to estimate the amount of energy needed,the energy consumption per kg in the dataset“treatment of used glider”,passenger car,shredding from ecoinvent 3.7.1 is used.The electricity used for this process is modelled as global average electricity grid mix as described in 3.1.6.Emissions of metals to water and air are omitted based on the scope focusing on climate change.The entire vehicle except the parts sent for specific pre-treatment is sent through the shredding process.No additional transport is included as shredding is modelled to occur at the same site as dismantling.A3.5 Material recyclingThis is the fate of the flows of metals from the shredding,as well as for the materials in the pre-treated components.Based on the choice of cut-off approach for end-of-life modelling,this stage is outside the boundaries of the life cycle and is not included in the inventory,except for the transportation to the material recycling,as mentioned above.A3.6 Final disposal incineration and landfill The disassembled fluids and oils,as well as the combustible part of the shredder light fraction are modelled to be incinerated without energy recovery.The choice to not include energy recovery relates to the global scope of the LCA.To model the incineration of the waste oils,an ecoinvent dataset for treatment of waste oil was used.To model the emissions from the combustion of material from the shredder,a dataset for incineration of mixed plastics is used,based on the main content of the flow going to this stage.The main part of the weight will be from the plastics in the vehicle.The dataset chosen was a GaBi Professional dataset of EU-28 incineration of mixed plastic.Non-combustible materials,like ceramics and glass,make up a small part of the vehicle but is the part of the shredder light fraction that cannot be combusted.This flow is either landfilled or recycled as filler material,in both cases modelled with a dataset for landfilling of glass/inert matter,from GaBi Professional.Carbon footprint report Volvo C40 Recharge 40Transportation of materials which are separated in the shredding processes and which are assumed to be recycled is estimated to 1,500km by truck.A3.7 Data collectionThis section provides an overview of the data collection activities relating to each life cycle stage.For a full list of datasets,see Appendix 4 Chosen datasets.According to the cut-off methodology,the processes presented in Table 7 are included in the data collection effort.BatteriesFuelTyresLiquids(coolants,brake fluid etc)Oils(engine,gearbox,etc)Oil filtersCatalytic converterAirbags and seat belt pretensionersRest of vehiclePre-processing stageDisassembly stageFinal disposalSeparate handling.Lead recovery from lead acid and designated Li-ion battery dismantlingPre-treatment for tyre recyclingPre-treatment to allow extraction of precious metalsDisarming of explosives.ShreddingShreddingAccording to material category*IncinerationNone(sent to material recycling)IncinerationIncinerationIncinerationNone(sent to material recycling)None(sent to material recycling)According to material category*Table 7.Processes included in the data collection effort for end-of-life.*Metals to material recycling,combustible material to incineration(mainly plastics)and residue to landfill.Carbon footprint report Volvo C40 Recharge 41Appendix 4 Chosen datasetsMaterialLocationNameTypeSourceDate usedABSABS(filled)ABS(filled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021ABS(filled)RERacrylonitrile-butadiene-styrene copolymer productionaggecoinvent 3.7.101-03-2021ABS(unfilled)ABS(unfilled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021ABS(unfilled)RERacrylonitrile-butadiene-styrene copolymer productionaggecoinvent 3.7.101-03-2021AdBlue AdBlueEU-28Urea(46%N)aggFertilizers Europe20-04-2020AdBlueEU-28Tap water from surface wateraggts20-04-2020Aluminium AluminiumGLOAluminium ingot mix IAI 2015aggIAI/Sphera01-02-2021AluminiumEU-28 EFTAPrimary aluminium ingot consumption mix(2015)aggEuropean Aluminium01-02-2021Aramid AramidDEAramide fiber(para aramid)aggts28-12-2020ASA(filled)ASA(filled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021ASA(filled)RERacrylonitrile-butadiene-styrene copolymer productionaggecoinvent 3.7.101-03-2021ASA(unfilled)ASA(unfilled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021ASA(unfilled)RERacrylonitrile-butadiene-styrene copolymer productionaggecoinvent 3.7.101-03-2021Brake fluid The latest ecoinvent database is 3.7.1 which is used in this study.All other sources are from GaBi professional and extension databases.Carbon footprint report Volvo C40 Recharge 42Brake fluidGLOmarket for diethylene glycolaggecoinvent 3.7.101-03-2021Cast iron Cast ironDECast iron part(automotive)open energy inputsp-aggSphera01-02-2021Catalytic coating Catalytic coatingZAmarket for platinum group metal concentrateaggecoinvent 3.7.101-03-2021Copper CopperEU-28Copper Wire Mix (Europe 2015)aggDKI/ECI01-02-2021Copper alloys Copper alloysGLOCopper mix(99,999%from electrolysis)aggSphera01-02-2021Copper alloysGLOmarket for zincaggecoinvent 3.7.101-03-2021Copper alloysGLOTinaggSphera01-02-2021Cotton CottonGLOmarket for textile,woven cottonaggecoinvent 3.7.101-03-2021Damper DamperRERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope01-02-2021Diesel DieselEU-28Diesel mix at filling stationaggSphera01-02-2021E/P(filled)E/P(filled)RoWpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021E/P(filled)RERpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021E/P(unfilled)E/P(unfilled)RoWpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021E/P(unfilled)RERpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021Elastomer ElastomerRoWmarket for calcium carbonate,precipitatedaggecoinvent 3.7.101-03-2021ElastomerRERmarket for calcium carbonate,precipitatedaggecoinvent 3.7.101-03-2021ElastomerRoWmarket for limeaggecoinvent 3.7.101-03-2021ElastomerRERmarket for limeaggecoinvent 3.7.101-03-2021ElastomerGLOmarket for carbon blackaggecoinvent 3.7.101-03-2021MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 43ElastomerGLOmarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.7.101-03-2021ElastomerGLOmarket for zinc oxideaggecoinvent 3.7.101-03-2021ElastomerRERzinc oxide productionaggecoinvent 3.7.101-03-2021ElastomerGLOmarket for synthetic rubberaggecoinvent 3.7.101-03-2021ElastomerRERsynthetic rubber productionaggecoinvent 3.7.101-03-2021Electronics ElectronicsGLOmarket for printed wiring board,surface mounted,unspecified,Pb containingaggecoinvent 3.7.101-03-2021EPDM EPDMDEEthylene Propylene Diene Elastomer(EPDM)aggSphera01-02-2021EVAC(filled)EVAC(filled)RoWmarket for ethylene vinyl acetate copolymeraggecoinvent 3.7.101-03-2021EVAC(filled)RERmarket for ethylene vinyl acetate copolymeraggecoinvent 3.7.101-03-2021EVAC(unfilled)EVAC(unfilled)RoWmarket for ethylene vinyl acetate copolymeraggecoinvent 3.7.101-03-2021Ferrite magnet Ferrite magnetGLOmarket for ferriteaggecoinvent 3.7.101-03-2021Float glass Float glassEU-28Float flat glassaggSphera01-02-2021Friction FrictionDECast iron part(automotive)-open energy inputsp-aggSphera01-02-2021FrictionGLOmarket for zirconium oxideaggecoinvent 3.7.101-03-2021FrictionGLOmarket for graphiteaggecoinvent 3.7.101-03-2021FrictionGLOmarket for barium sulfideaggecoinvent 3.7.101-03-2021FrictionGLOmarket for bariteaggecoinvent 3.7.101-03-2021FrictionGLOmarket for aluminium hydroxideaggecoinvent 3.7.101-03-2021FrictionGLOmarket for magnesium oxideaggecoinvent 3.7.101-03-2021FrictionGLOmarket for expanded vermiculiteaggecoinvent 3.7.101-03-2021FrictionEU-28Calcined petroleum cokeaggSphera01-02-2021GF-fibre MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 44MaterialLocationNameTypeSourceDate usedGF-fibreGLOmarket for glass fibreaggecoinvent 3.7.101-03-2021GF-fibreRERglass fibre productionaggecoinvent 3.7.101-03-2021Glycol GlycolEU-28Ethylene glycolaggPlasticsEurope01-02-2021Lead,battery Lead,batteryDELead(99,995%)aggSphera01-02-2021Leather LeatherDECattle hide,fresh,from slaughterhouse(economic allocation)aggSphera01-02-2021Lubricants LubricantsEU-28Lubricants at refineryaggSphera01-02-2021Magnesium,generic Magnesium,genericCNMagnesiumaggSphera01-02-2021NdFeB magnet NdFeB magnetGLOmarket for permanent magnet,electric passenger car motoraggecoinvent 3.7.101-03-2021NR NRDENatural rubber(NR)aggSphera01-02-2021PA(filled)PA(filled)RoWmarket for nylon 6aggecoinvent 3.7.101-03-2021PA(filled)RERmarket for nylon 6aggecoinvent 3.7.101-03-2021PA(unfilled)PA(unfilled)RoWmarket for nylon 6aggecoinvent 3.7.101-03-2021PA(unfilled)RERmarket for nylon 6aggecoinvent 3.7.101-03-2021PBT(filled)PBT(filled)DEPolybutylene Terephthalate Granulate(PBT)MixaggSphera01-02-2021PBT(unfilled)PBT(unfilled)DEPolybutylene Terephthalate Granulate(PBT)MixaggSphera01-02-2021PC(filled)PC(filled)GLOmarket for polycarbonateaggecoinvent 3.7.101-03-2021PC(unfilled)PC(unfilled)GLOmarket for polycarbonateaggecoinvent 3.7.101-03-2021PC ABS(filled)PC ABS(filled)GLOmarket for polycarbonateaggecoinvent 3.7.101-03-2021Carbon footprint report Volvo C40 Recharge 45PC ABS(filled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021PC ABS(unfilled)PC ABS(unfilled)GLOmarket for polycarbonateaggecoinvent 3.7.101-03-2021PC ABS(unfilled)GLOmarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.7.101-03-2021PE(filled)PE(filled)RoWpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021PE(filled)RERpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021PE(unfilled)PE(unfilled)RoWpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021PE(unfilled)RERpolyethylene production,low density,granulateaggecoinvent 3.7.101-03-2021PET(filled)PET(filled)GLOmarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.7.101-03-2021PET(unfilled)PET(unfilled)GLOmarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.7.101-03-2021Petrol PetrolEU-28Gasoline mix(regular)at refineryaggSphera01-02-2021PMMA(filled)PMMA(filled)RERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope01-02-2021PMMA(unfilled)PMMA(unfilled)RERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope01-02-2021Polyester PolyesterGLOmarket for fibre,polyesteraggecoinvent 3.7.101-03-2021Polyurethane(matcat)Polyurethane(matcat)RoWmarket for polyurethane,rigid foamaggecoinvent 3.7.101-03-2021Polyurethane(matcat)RERmarket for polyurethane,rigid foamaggecoinvent 3.7.101-03-2021POM(filled)POM(filled)EU-28Polyoxymethylene(POM)aggPlasticsEurope01-02-2021MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 46POM(unfilled)POM(unfilled)EU-28Polyoxymethylene(POM)aggPlasticsEurope01-02-2021PP(filled)PP(filled)GLOmarket for polypropylene,granulateaggecoinvent 3.7.101-03-2021PP(unfilled)PP(unfilled)GLOmarket for polypropylene,granulateaggecoinvent 3.7.101-03-2021PVB(filled)PVB(filled)DEPolyvinyl butyral granulate(PVB)by-product ethyl acetateaggSphera01-02-2021PVB(unfilled)PVB(unfilled)DEPolyvinyl butyral granulate(PVB)by-product ethyl acetateaggSphera01-02-2021PVC(filled)PVC(filled)RoWpolyvinylchloride production,suspension polymerisationaggecoinvent 3.7.101-03-2021PVC(filled)RERpolyvinylchloride production,suspension polymerisationaggecoinvent 3.7.101-03-2021PVC(unfilled)PVC(unfilled)RoWpolyvinylchloride production,suspension polymerisationaggecoinvent 3.7.101-03-2021PVC(unfilled)RERpolyvinylchloride production,suspension polymerisationaggecoinvent 3.7.101-03-2021R-1234yf R-1234yfDER-1234yf production(estimation)aggts30-11-2020R-134a R-134aGLOmarket for refrigerant R134aaggecoinvent 3.7.101-03-2021SBR SBRDEStyrene-butadiene rubber(S-SBR)mixaggSphera01-02-2021Silicon rubber Silicon rubberDESilicone rubber (RTV-2,condensation)aggSphera01-02-2021Steel,sintered Steel,sinteredGLOSteel hot dip galvanisedaggworldsteel01-02-2021Steel,sinteredEUSteel hot dip galvanisedaggworldsteel01-02-2021Steel,stainless,austenitic MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 47Steel,stainless,austeniticEU-28Stainless steel cold rolled coil(304)p-aggEurofer01-02-2021Steel,stainless,ferritic Steel,stainless,ferriticEU-28Stainless steel cold rolled coil(430)p-aggEurofer01-02-2021Steel,unalloyed Steel,unalloyedGLOSteel hot dip galvanisedaggworldsteel01-02-2021Steel,unalloyedEUSteel hot dip galvanisedaggworldsteel01-02-2021Sulphuric acid Sulphuric acidEU-28Sulphuric acid(96%)aggSphera01-02-2021Thermoplastic elastomers(matcat)Thermoplastic elastomers(matcat)DEPolypropylene/Ethylene Propylene Diene Elastomer Granulate(PP/EPDM,TPE-O)MixaggSphera01-02-2021Thermoplastics(matcat)Thermoplastics(matcat)RoWmarket for nylon 6aggecoinvent 3.7.101-03-2021Thermoplastics(matcat)RERmarket for nylon 6aggecoinvent 3.7.101-03-2021Tyre TyreDEStyrene-butadiene rubber(S-SBR)mixaggSphera01-02-2021TyreEU-28Water(deionised)aggSphera01-02-2021Undefined UndefinedRoWMarket for nylon 6aggecoinvent 3.7.101-03-2021UndefinedRERMarket for nylon 6aggecoinvent 3.7.101-03-2021Washer fluid Washer fluidDEEthanolaggSphera01-02-2021Wood WoodEU-28Laminated veneer lumber(EN15804 A1-A3)aggSphera01-02-2021Zinc alloys Zinc alloysGLOSpecial high grade zincp-aggIZA01-02-2021MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 48Aluminium,manufacturing (DE,EU-28)DEAluminium die-cast partu-sots01-01-2020 EU-28Aluminium sheet open input aluminium rolling ingotp-aggts20-04-2020 DEAluminium sheet deep drawingu-sots01-01-2020Manufacturing (general assumption)Manufacturing (general assumption)u-so15-05-2020Manufacturing,leather(general assumption)Manufacturing,leatheru-so01-06-2020Polymers(all categories)manufacturing(GLO)DEPlastic injection moulding part(unspecific)u-sots01-02-2019Stainless steel manufacturing(DE)DESteel sheet deep drawing(multi-level)u-sots01-01-2020Steel unalloyed,manufacturing (DE,VCC data)DESteel sheet deep drawing(multi-level)u-sots01-01-2020Steel manufacturing (VCC data)u-so11-05-2020DEAluminium die-cast partu-sots01-01-2020EU-28Aluminium sheet open input aluminium rolling ingotp-aggts20-04-2020DEAluminium sheet deep drawingu-sots01-01-2020MaterialLocationNameTypeSourceDate usedManufacturing processesCarbon footprint report Volvo C40 Recharge 49EU-28 electricity grid mix EU-28 electricity grid mixEU-28Electricity grid mix 1kV-60kVaggSphera01-03-2021Electricity from wind power Electricity from wind powerEU-28Electricity from wind poweraggSphera01-03-2021GLO electricity grid mix GLO electricity grid mixEU-28Electricity from ligniteaggSphera01-03-2021GLO electricity grid mixEU-28Electricity from natural gasaggSphera01-03-2021GLO electricity grid mixEU-28Electricity from hydro poweraggSphera01-03-2021GLO electricity grid mixEU-28Electricity from nuclearaggSphera01-03-2021GLO electricity grid mixEU-28Electricity from wind poweraggSphera01-03-2021GLO electricity grid mixEU-28Electricity from heavy fuel oil(HFO)aggSphera01-03-2021GLO electricity grid mixEU-28Electricity from photovoltaicaggSphera01-03-2021GLO electricity grid mixEU-28Electricity from wasteaggSphera01-03-2021GLO electricity grid mixEU-28Electricity from geothermalaggSphera01-03-2021EU-28 electricity grid mix stated policies 2025 EU-28 electricity grid mix stated policies 2025EU-28Electricity grid mix(2025)(little improvements in sustainability policy)aggSphera01-06-2021EU-28 electricity grid mix stated policies 2030 EU-28 electricity grid mix stated policies 2030EU-28Electricity grid mix(2030)(little improvements in sustainability policy)aggSphera01-06-2021EU-28 electricity grid mix stated policies 2040 EU-28 electricity grid mix stated policies 2040EU-28Electricity grid mix(2040)(little improvements in sustainability policy)aggSphera01-06-2021MaterialLocationNameTypeSourceDate usedElectricity grid mixCarbon footprint report Volvo C40 Recharge 50EU-28 electricity grid mix sustainable development 2025 EU-28 electricity grid mix sustainable development 2025EU-28Electricity grid mix(2025)(significant improvements in sustainability policy)aggSphera01-06-2021EU-28 electricity grid mix sustainable development 2030 EU-28 electricity grid mix sustainable development 2030EU-28Electricity grid mix(2030)(significant improvements in sustainability policy)aggSphera01-06-2021EU-28 electricity grid mix sustainable development 2040 EU-28 electricity grid mix sustainable development 2040EU-28Electricity grid mix(2040)(significant improvements in sustainability policy)aggSphera01-06-2021MaterialLocationNameTypeSourceDate usedCarbon footprint report Volvo C40 Recharge 51
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Carbon footprint report Volvo EX301.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 201.ContentsManufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48VOLVO CARS CARBON FOOTPRINT REPORT EX3022.List of abreviationsABS:Acrylonitrile Butadiene Styrene APS:Announced Pledges ScenarioBEV:Battery Electric VehicleBOM:Bill of Materials EoL:End-of-Life GEC:Global Energy and ClimateGHG:Greenhouse Gas GWP:Global Warming Potential IEA:International Energy Agency IMDS:International Material Data System IPCC:Intergovernmental Panel on Climate Change LCA:Life Cycle Assessment LFP:Lithium Iron PhosphateNMC:Nickel Manganese Cobalt NZE:Net Zero Emissions by 2050 scenarioOEM:Original Equipment Manufacturer PC:Polycarbonate PCB:Printed Circuit Board PET:Polyethylene Terephthalate PE:Polyethylene PP:Polypropylene RER:Rest of EuropeRWD:Rear-Wheel Drive STEPS:Stated Policies ScenarioVCC:Volvo Car CorporationWLTP:Worldwide Harmonized Light Vehicle Test Procedure WTW:Well-to-Wheel 1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3033.Executive summaryVOLVO CARS CARBON FOOTPRINT REPORT EX304At Volvo Cars,sustainability is as important as safety.We aim to be pioneers in protecting people and the planet by working towards net zero greenhouse gas(GHG)emissions by 2040,embracing the circular economy,and conducting business responsibly.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)5We plan to be a fully electric car company by 2030 and are committed to accompanying the release of each battery electric vehicle(BEV)with a comprehensive life cycle assessment(LCA)of its carbon footprint.In doing so,we intend to enhance transparency for our customers,employees,investors,other automotive companies,and stakeholders interested in our cars environmental performance.This report presents the carbon footprint of the new,fully electric Volvo EX30,which went into production in 2023 and possesses a carbon footprint that is significantly lower than any of our previous fully electric models.The EX30 comes with two battery options:a lithium iron phosphate(LFP)battery with a 51 kWh capacity and a nickel,cobalt,and manganese(NMC)option with a 69 kWh capacity.The scope of the report covers the cars life cycle from extracting and refining raw materials to end-of-life(EoL)solutions.This report uses an LCA methodology based on the ISO 14067 standard to focus exclusively on GHG emissions and global warming potential(GWP)over a driving distance of 200,000 kilometres.The LCA follows guidelines from the Intergovernmental Panel on Climate Change(IPCC,2021)for calculating the impact of these emissions.Figure 1 illustrates LCA results for the car traveling one kilometre,with two different batteries and three electricity mixes.Variations in GHG emissions are given for three electricity sources:global,European and wind power electricity.These findings reveal that in the scenarios studied,the global electricity mix produces the greatest impact,0.18 kg CO-eq for NMC 69 kWh battery-equipped cars and 0.16 kg CO-eq for LFP 51 kWh battery-equipped cars,throughout their life cycles.Looking specifically at the NMC-equipped model,when using a European electricity mix,there is a 23 per cent reduction in GHG emissions in comparison to the use of a global electricity mix.When using wind power electricity,there is a 40 per cent decrease during the use phase,relative to the use of a global electricity mix.In comparison,GHG emission reductions in the LFP-equipped model are approximately 26 per cent when opting for European electricity mix and 45 per cent when using wind power during the use phrase,relative to the use of a global electricity mix.3.EXECUTIVE SUMMARYKey findings Life cycle assessment(LCA)of the Volvo EX30s carbon footprint ranges from 0.11 to 0.18 kg CO2-eq/km(22 to 36 tonnes of CO2-eq per 200,000 km)for the NMC-equipped model and 0.089 to 0.16 kg CO2-eq/km(18 to 31 tonnes of CO2-eq per 200,000 km)for the LFP-equipped model.Over 200,000 km and based on use of charging electricity from the European electricity mix,the 51 kWh LFP battery-equipped model has a carbon footprint of 23 tonnes,relative to the 69 kWh NMC battery-equipped models 28 tonnes.On average,the LFP-equipped model has a 16 per cent lower carbon footprint than the NMC-equipped model.These differences are due to energy consumption in the material acquisition,refining and use phases,each impacting carbon intensity.Electricity sources in the use phase significantly impact the cars carbon footprint.Wind-generated electricity significantly reduces carbon footprint,compared to global or European electricity mixes.This underlines the need for accelerated global investment in renewable energy infrastructure.Future carbon footprint reductions in our battery supply chain could further mitigate the cars overall impact.By 2025,our battery suppliers plan to reduce emissions from manufacturing the LFP battery by 20 per cent and by 46 per cent in the case of the NMC battery.Figure 1 Climate impact from all included life cycle phases for the two vehicle models.25,00010,000035,00020,0005,00030,00015,000NMC69 kWhGlobal electricityMaterials production and refiningUse phaseLi-ion battery packEnd-of-lifeInbound/Outbound logisticsMaintenanceVolvo Cars manufacturingLFP51 kWhGlobal electricityNMC69 kWhEuropean electricityLFP51 kWhEuropean electricityNMC69 kWhWind power electricityLFP51 kWhWind power electricity0,140,080,0200,180,120,060,160,10,04kg COkg CO for 200,000 km1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX303.EXECUTIVE SUMMARYKristin FranssonSenior Sustainability Consultant,AFRY Management ConsultingLorena HuberSustainability Consultant,AFRY Management ConsultingKarl-Henrik HagdahlSustainability Centre at Volvo CarsJennifer DavisSustainability Centre at Volvo CarsJacob NslundSustainability Consultant,AFRY Management ConsultingJonas OtterheimSustainability Centre at Volvo Cars 46 728 AuthorsContacts61.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3064.MethodologyVOLVO CARS CARBON FOOTPRINT REPORT EX3071.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)4.1 The product This study assesses the climate impact of the battery electric vehicle(BEV)EX30.The EX30 can be delivered with different battery types and sizes.In this assessment,the following alternative battery configurations are assessed:To assess a baseline vehicle,a model with a total weight of 1,775 kg and NMC type battery modules with a capacity of 69 kWh is used.The development of the methodology for this study was initiated jointly by Volvo Cars and Polestar when performing carbon footprint studies of Volvo XC40 Recharge and Polestar 2 in 2020.This methodology has been further developed and significant changes will be explained in the sections below.4.2 Goal of the study Volvo Cars has the ambition to become a net zero greenhouse gas emissions(GHG)company by 2040 and strive to be transparent about the climate impact of its vehicles.The goal of this study is to contribute to transparency by disclosing the carbon footprint of the EX30,which has the intended function to transport passengers and their belongings.4.METHODOLOGYBattery pack size(kWh)Battery pack mass(kg)Battery type69390NMC(523)(Lithium Nickel Cobalt Manganese Oxide)51410LFP(Lithium Iron Phosphate)Table 1 Information about battery packs and types in the study.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3084.METHODOLOGYThe intended audience of this report are customers,employees at Volvo Cars,investors,automotive OEMs(original equipment manufacturers),and other stakeholders who are interested in the environmental performance of our vehicles.The study was carried out to increase understanding of the carbon footprint of the EX30,and which underlying materials and processes contribute the most.The aim is that this information can be used to make informed decisions,for example on where to put effort in reducing climate impact.4.3 Scope of the study The performed study is a life cycle assessment(LCA),but it only considers GHG emissions,making it a carbon footprint study.The study has been performed according to the carbon footprint standard ISO 14067 and explores the global warming potential(GWP),using characterisation factors for 100-year global warming potential(GWP)from the Intergovernmental Panel on Climate Change(IPCC,2021).According to ISO 14067,emissions and removals in the following categories are included:Fossil GHG emissions and removals Biogenic GHG emissions and removals GHG emissions and removals from direct land use and land use change Aircraft GHG emissionsThe biogenic carbon content of the vehicle is not reported since this is considered negligible as the main materials are metals and fossil-based plastics.No carbon offsetting is included within the system boundaries of this carbon footprint study.The GHG emissions and removals due to the net changes in soil and biomass carbon stocks are not assessed in this study as it has been considered as not applicable for this study.During the assessment period,greenhouse gas emissions and removals have been calculated as though they occurred at the beginning of the assessment period,without considering the impact of delayed emissions and removals of GHG emissions.The study follows an attributional approach,meaning that it is not aimed at capturing systemic changes.The study includes the vehicle life cycle from cradle-to-grave,starting at extracting and refining of raw materials and ending at the end-of-life of the vehicle(see Figure 2).In the use phase,planned maintenance of the vehicle is also considered,such as what is expected to be exchanged during the lifespan due to wear and tear of the vehicle.This includes change of tyres and windscreen wipers,but not changes due to accidents.Materials production and refiningManufacturingSystem boundaryEnergy and natural resourcesGHG-emissionsUse PhaseEnd-of-lifeExtraction of raw materials from earth crustRefining of raw materials into parts bought by Volvo CarsManufacturing in Volvo Cars factoriesInbound transportsTransport from Tier 1 supplier to factoryOutbound transportsTransport from Volvo Cars factory to dealerUse of the car driving 200,000 kmMaintenanceDismantling of the carWaste management of the carFigure 2 System boundary of study.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3094.METHODOLOGYNo cut-off criteria have been applied for the mass of the product content or energy use.In other words,the intent is that the included inventory together gives rise to the full carbon footprint.Mass that has not been declared as a specific material by the suppliers is still included and approximated by modelling it as a polymer material.In total,2 per cent of the total mass of the vehicle is not specified.For more information on how materials have been handled in modelling,see Section 5 Life cycle inventory analysis and Appendix 3 Chosen datasets.The time boundary of the study aims to reflect manufacturing in 2023 using recent manufacturing data and including electricity sources used.The use phase considers a lifespan of 15 years of the vehicle.The end-of-life handling aims to reflect global conditions in 2040,based on current conditions in 2023 in Sweden.This is despite the vehicles probably being scrapped closer to 2040 and represents a conservative approach,given end-of-life handling will likely have improved by 2040.On the other hand,the end-of-life handling varies in different countries,which is not captured in the modelling and might therefore underestimate the impact.Overall,this is assumed to be a reasonable approach.Generic data,as opposed to supplier-specific data,has been used for most of the upstream processes.This means that the modelling of production of components in the vehicle have been based on the material composition of the components,using generic datasets for materials,and adding a generic manufacturing process for each material.Hence,there are steps in some of the manufacturing value chains,specific to vehicle components,that might not be included,such as assembly processes at Tier 1 suppliers.However,the contribution of these processes to the total carbon footprint is likely to be very small.Regarding production,this study takes a regional approach.This means that the generic datasets used for raw material production/refining are specific to a certain region when it is known or likely that production/refining takes place in a certain region and that there are datasets available for the certain region.If the origin is not known,conservative datasets are used.This is one step towards better data quality.This study considers use of recycled aluminium,steel,and polymers,as well as use of primary aluminium produced with a high share of electricity from renewable energy sources in the smelting step.Use of biobased materials has been considered in the modelling of the tyres in the vehicles;due to lack of data on the specific amount of biobased material in the remainder of the vehicle,these materials have not been considered.This means that the climate impact is slightly overestimated for the polymers,but the effect on the overall result is minor.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3010Figure 3 Flowchart for the vehicle life cycle cradle to grave.For the use phase,the study explores use of the vehicle in Europe as well as a global average scenario.In addition,a scenario with electricity from wind power is included.Since the use phase considers a lifespan of 15 years of the vehicle,probable changes in the global and European electricity mix during this time are considered in the study based on the stated policies scenario(STEPS)from the International Energy Agency(IEA).For wind power,electricity during the use phase is based on technology level available in 2023.Battery suppliersInbound logisticsOutbound logisticsElectricity and fuelsCar manufacturingUse phaseNatural materialsMaintenance of parts&fluidsEnergy and resourcesEmissionsTransport of fractions to material recyclingTransportIncineration and landfillMaintenance parts&fluids wasteEnd-of life:Disassembly and shredding of vehicle partsProcesses and refining for raw materialsFluidsGlass and ceramicsElectronicsMetalsPolymers4.METHODOLOGYGeneric dataMix of specific data and generic dataSpecific data1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30114.METHODOLOGY4.4 Function and functional unitThe functional unit is one vehicle-kilometre(vkm).In previous carbon footprint studies from Volvo Cars,the vehicle lifetime mileage was used as the functional unit.The functional unit has been changed since vkm better captures the function of the vehicle(i.e.mobility),as well as capturing the effect of lifetime mileage of the vehicle;the longer the lifetime mileage,the lower life cycle impact per vkm.In practice,this means that the climate impact is calculated for the total life cycle and divided by the total km driven during the lifetime of the vehicle.For transparency,the result will also be provided per total lifetime climate impact of the vehicle.The effect of including the number of passengers in the functional unit will be explored in the sensitivity analysis.The reason for not including it in the main result is due to the lack of data on the number of passengers in Volvo vehicles across our markets.Still,by including it in the sensitivity analysis,the reader can assess the results in relation to their own practice of number of passengers in the vehicle.The reference flow1 in the study is the weight of the vehicle divided by the lifetime milage of 200,000 km.4.5 AllocationWhen it comes to material sent to recycling,the emissions from producing this material have been allocated to the vehicle.That means that,for example,the produced amount of steel and aluminium included in the carbon footprint calculation does not only include the amount of the material in the vehicle,but also any metal that is removed during processing and sent to recycling throughout the whole manufacturing chain.More specifically,this study uses the simple cut-off or recycled content approach,which is the recommended method according to the International EPD2 system.This method follows the“polluter pays”principle,meaning that if there are several product systems sharing the same material,the product causing the waste shall carry the environmental impact.This means that the system boundary is specified to occur at the point of“lowest market value”.However,if the material does not go to a new product system,the final disposal is included within the life cycle of the vehicle.The user of recycled material carries the burden of the recycling process,and no credit is given to the system that generates the material that is sent to recycling.This is applied both for the material that is sent to recycling from the manufacturing process and at end-of-life of the vehicle.In the vehicle manufacturing facility,the total number of completed cars is used as the allocation basis and no consideration is given to the mix of different models being manufactured.For the vehicle with 69 kWh battery,the battery cells are manufactured by two different suppliers.The impact of the battery cells has been allocated between these two based on estimated future sales.1Reference flow:Measure of the inputs to or outputs from processes in a given product system required to fulfil the function expressed by the functional unit.2https:/www.datocms- 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30124.METHODOLOGY4.6 System expansionNo system expansion has been applied in this study,meaning no credits have been given for materials being recycled and potentially avoiding other material production,or for energy generated in waste incineration potentially avoiding other energy production.4.7 Main assumptions,limitations and exclusionsIn general,assumptions have been made in a conservative fashion following the precautionary principle,to not underestimate the impact from unknown data.For example,when no suitable dataset has been available to represent the manufacturing process for a certain material(from raw material to finished vehicle component),the emissions from the raw material production has been multiplied by two to compensate for the emissions from further processing.This is explained more in Section 5 Life cycle inventory analysis.The use phase considers a lifespan of 15 years of the vehicle;probable changes in the global and European electricity mix during this time is considered in the study based on the stated policies scenario(STEPS)from the International Energy Agency(IEA).This scenario is a slightly conservative benchmark for the future,since it does not take for granted that governments will reach their announced commitments,Nationally Determined Contributions,or other long-term climate targets.Instead,it only considers forecasted effects of decided policies.For wind power,electricity during use phase is based on the technology level available in 2023.The energy use in the use phase of the vehicle is based on the Worldwide Harmonised Light Vehicle Test Procedure(WLTP)test cycle.This includes losses that occur during charging and in the drivetrain during driving,with only essential auxiliary systems running whilst driving(excluding infotainment,air conditioning).In evaluating the performance of the vehicles,differences between regulatory standards such as the WLTP and real-world operating conditions are important to note.As on-road performance is influenced by several dynamic factors such as driving habits,environmental conditions and differences in available infrastructure,the use phase could be affected by additional factors that are not expressed in the WLTP data.However,the reports scope is deliberately limited to the WLTP data so to conform to the scope of other LCA studies by Volvo Cars.The analysis delves into differences in geographical context when the impact from the use phase is quantified,encompassing European and global average geography.Additionally,the impact related to use phase maintenance is included in the study.In the sensitivity analysis the impact of changes in WLTP measurements are examined.The lifetime mileage of the vehicle is 200,000 km.The battery is assumed to last the full lifetime mileage of the vehicle.The study does not include:Data from infrastructure and capital goods as machinery or personnel food or transportation Non-manufacturing operations at Volvo Cars such as business travels,R&D activities,or other indirect emissions Volvo Cars infrastructure e.g.,the production and maintenance of buildings,inventories or other equipment used in the production Construction and maintenance of roads and production of charging infrastructure in the use phase1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30134.METHODOLOGY4.8 Data quality requirementsThe data quality requirements used in the study are shown in Table 2 below.Considering the data quality requirements,the data used in this study fulfil the requirements except for the following:Some of the datasets used in material production and refining are more than 10 years old.They AspectDescriptionRequirements in this studyTime-related coverageDesired age of data and the minimum length of time over which data should be collected.General data should represent the current situation of the date of study(2023),or as close as possible.All data should be less than 10 years old.Geographical coverageArea from which data for unit processes should be collected.Material production and refining should be representative of region where the material/component is produced,when known.Vehicle manufacturing should be representative of the manufacturing site location.The use phase data should be representative of the largest markets for the product,as well as a global average.End-of-life data should be representative of global average.Technology coverageType of technology(specific or average mix).Data should be representative of the technology used in production processes.RepresentativenessDegree to which the dataset reflects the true population of interest.Primary data that is representative of the process should be used for processes under VCC financial control.Secondary data may be used for upstream and downstream processes but fulfilling the requirements above on time-related,geographical and technology coverage.PrecisionMeasure of the variability of the data values.Data that is as representative as possible will be used.Data will be derived from credible sources,and references will be provided.CompletenessAssessment of whether all relevant input and output data are included for each dataset.Generic data will be derived from credible sources,such as recognised LCI databases.Internal data should cover all relevant inputs and outputs.The data collected from battery module supplier should be verified in close collaboration with the supplier.ReproducibilityAssessment of the method and data,and whether an independent practitioner will be able to reproduce the results.Information about the method and data(reference source)should be provided.Data sourcesAssessment of the data sources used.Data will be derived from credible sources,and references will be provided.Uncertainty of the informationFor example,data,models,and assumptions.Data will be derived from credible sources,and references will be provided.Table 2 Data quality requirements used in the study.are however,reviewed annually and updated to compensate for any changes,such as new energy mixes.Some of the datasets used in the material production and refining are not representing the location of production.This is due to both uncertainty of material origin,uncertainty of waste handling practises globally,and lack of geographical coverage in databases.For more details about the data quality assessment,see Appendix 4 Data quality assessment.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30144.METHODOLOGY4.9 Critical reviewCompliance with ISO 14067 has been critically reviewed by a third party,see Appendix 8.4.10 Way of working overviewFigure 4 shows a high-level overview of how Volvo cars works to derive carbon footprints of vehicles.There are four main ways that data needed for the final carbon footprint are retrieved.The import to LCA for Experts(LCA FE)(see Terms and definitions)is made in a specific mapping tool,provided by Sphera,called LCA BOM Import(GaBi-DFX)3.The input to LCA FE comes from:IMDS4(International Material Data System)datasheets which contain information on material compositions of the components in a car.LCI databases from Ecoinvent5(version 3.9.1)and Sphera6.Data from operations run by Volvo Cars,such as manufacturing plants and logistics.Carbon footprint of Li-ion battery modules,performed by the supplier with guidance and support from Volvo Cars.Figure 4 Overview of deriving the carbon footprint of the vehicles.3 https:/ IMDS,5 Ecoinvent,www.ecoinvent.org6 Sphera LCA databases https:/ material libraryLCI databasesMatchingInternal dataBattery modules10,000 incoming materials are aggregated into 70 materials(kg material)Generic data(kg CO2-eq./kg material or MJ energy)Emissions from logistics and manufacturing per average vehicle,electricity&fuel use etc.LCA modelling in GaBiCarbon footprint from supplier (kg CO2-eq./kWh)1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3015Table 3 Material categories defined by Volvo Cars in Volvo IMDS ML release 8.4.11 Methodology to define vehicle material compositionThe Bill of Materials(BoM)is an important component of the LCA and consists of the parts used in the vehicle and their respective weights and materials composition.The“part number vehicle BoM”is extracted from the product data management system.However,this BoM cannot be used as direct input to the LCA-model in LCA for Experts,but must be modified and aggregated in several steps towards a suitable“material BoM”.A mass balance was performed where the total weight of the car was checked with the information of IMDS datasheets for respective materials.The material information,except for the Li-ion battery modules,comes from datasheets in IMDS.A complete vehicle in IMDS consists of about 10,000 different materials.To make the number of materials manageable in LCA for Experts,they are aggregated to about 70 defined material categories in a material library developed by Volvo Cars(IMDS ML).The“part number BoM”from the product data management system is uploaded to the IMDS ML system iPoint Compliance Agent(iPCA).In iPCA a“material BoM”is generated that is imported to IMDS ML where all materials are mapped against the 70 defined material categories.To have an efficient and systematic approach,this mapping is done via automation.The rules to categorise the materials are set up based on IMDS material category,material name and substance content.It is also possible to manually allocate materials in the IMDS ML.However,this is done in the most restrictive way possible.For this carbon footprint study,IMDS ML release 8 is used with the material categories listed in Table 3.For the complete list of material categories,see Appendix 1.Material groupNumber of material categoriesSteel and Iron5Aluminium1Other metals4Copper2PolymersAbout 35(including filled/unfilled)Natural materials3Ceramics and glass4Electronics1Fluids and undefined7The material composition is visualised in Figure 5.The“materials BoM”from IMDS ML must then be further formatted to be imported into LCA for Experts.An automated formatting tool is used to apply the format required by LCA for Experts.The import to LCA for Experts is made in a specific mapping tool,provided by Sphera,called LCA BOM Import.In the mapping,each material is connected to a specific LCI dataset and,if relevant,a manufacturing process dataset.7 Dai et at.,2019.For the Li-ion battery modules,specific supplier carbon footprint data was used instead of IMDS data(see Figure 2).The production of the Li-ion battery modules and the ingoing materials potentially have a significant impact on the result and consists of complex manufacturing steps7.The variety and accuracy of generic datasets for Li-ion batteries is limited,but through collaboration with the battery module supplier the risk of inaccuracies has been minimised as best as we can.4.METHODOLOGY1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30165.Life cycle inventory analysisVOLVO CARS CARBON FOOTPRINT REPORT EX30171.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)5.LIFE CYCLE INVENTORY ANALYSIS5.1 Material production and refining Material production and refining(see Figure 2)is based on a Bill of Materials(BoM)containing material composition and material weight.The BoM used for the LCA model is specifically developed for the purpose of the LCA and states the composition of the vehicle divided into about 70 material categories.The total weight of the vehicle is then divided into these material categories.A mass balance was performed where the total weight of the car was controlled with the information of IMDS datasheets for respective materials.The source of the BoM data derives from IMDS sheets provided by the suppliers and is described in Section 4.10 Way of working overview.In the LCA software(LCA for Experts)and LCA BOM Import(GaBi Dfx),each material has been coupled with one or several datasets(containing LCI data)representing the production and refining of the material in each specific material category.See Appendix 4 Chosen datasets for more details on this.Material production and refining is modelled using datasets from Sphera Professional database and Ecoinvent 3.9.1 data.The datasets have been chosen according to the Volvo Cars methodology for choosing generic datasets.This methodology can be found in Appendix 3.The material content corresponding to the entire weight of the vehicle is included in the LCA,but a small number of materials have been categorised as“undefined material”.The share of undefined material of the total vehicle weight(including battery modules)for the car in this study is 2 per cent.Since the undefined category seems to contain mostly undefined polymers,a dataset for polyamide(nylon 6)has been used as an approximation.This assumption is based on the fact that polyamide is the polymer with the highest carbon footprint,out of the polymer data used in the LCA.In Figure 5 the share of each material category is visualised.In most cases,datasets that include both production of raw material as well as component manufacturing ready to be assembled in the vehicle are not available.Therefore,several datasets representing the refining and production of parts have been used for most material categories.The datasets used to represent further refining and manufacturing of parts are listed in Appendix 2.For most of the datasets representing materials production and refining processes,it has not been possible to modify the electricity or the built-in electricity that has been used.When changes have been possible,a Sphera dataset Electricity grid mix 1kV60kV(CN)has been used.5.2 Aluminium production and refining The share of aluminium that is cast aluminium and wrought aluminium has been calculated to be 37 per cent cast aluminium and 63 per cent wrought aluminium,according to specific VCC data.This is based on the aluminium contents in the entire car.All wrought aluminium has been assumed to go through the process of making aluminium sheets.The assumption of wrought aluminium being aluminium sheets is conservative since sheet production has a higher amount of losses than most other wrought processes.The cast aluminium undergoes a process for die-casting aluminium.The losses occurring from manufacturing aluminium parts for the car is included in the carbon footprint,and since a cut-off is applied at the point of scrap being produced in the factory,the total footprint of producing the scrap is allocated to the car even though the aluminium scrap is sent to recycling and Figure 5 Shares of material categories of the entire weight of the car.Steel and Iron 37%Fluids and undefined 5ttery pack 18%Copper 2%Polymers 14ramics and glass 2%Aluminium 12%Electronics 0%Other metals 10%Natural materials 0%1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30185.LIFE CYCLE INVENTORY ANALYSISused in other products.The material utilisation rate for the manufacturing processes of both cast aluminium and wrought aluminium can be seen in Appendix 2.In the EX30,37 per cent of the aluminium is primary aluminium,31 per cent is recycled,and 32 per cent is primary aluminium produced with renewable electricity.It has been assumed that the sourcing of all aluminium comes from China.5.3 Steel production and refining The raw material dataset used for the material category“unalloyed steel”has an output of rolled and galvanised steel.A processing dataset has then been added to all steel.Which manufacturing process that has been chosen depends on whether the steel is stamped in the factory or not.Hence,the steel categorised as unalloyed steel has been divided into two sub-groups depending on the manufacturing process following the rolling and galvanising of the steel:1.The steel that is processed and stamped in the VCC factory.The material utilisation degree is according to Volvo Cars data(see Appendix 2).2.The rest of the steel,which is distributed in various components of the car.The material utilisation degree is collected from suppliers and average values based on VCC data.The modelling of steel includes recycled and primary steel alongside hot-dip galvanised steel,it is assumed that all zinc in the car is accounted for in hot-dip galvanized steel.A list of the datasets used to model the different types of steel can be found in Appendix 3.The recycled steel has been both hot and cold rolled,and any losses that have occurred during these manufacturing steps have been accounted for.Because unrecycled steel datasets contain shares of recycled steel,the overestimation of recycled steel content has been addressed.According to the scrap content in the used datasets,the modelled recycled steel content has been adjusted in order to reduce the exceeding recycled content.Based on data from VCC,17.5 per cent of the steel in the EX30 is recycled.Additional data on shares of types of steel is presented in Table 29 in Appendix 6.5.4 Electronics production and refining The material category called“electronics”includes printed circuit boards(PCB)and the components mounted on them.It does not include chassis,cables or other parts that are present in electronic components.All materials that are used in electronic devices that are not PCBs have been sorted into other categories,such as copper or different types of polymers.For the category“electronics”a generic dataset from Ecoinvent 3.9.1 has been used.This dataset represents the production of lead-free,mounted PCBs.5.5 Plastics production and refining For polymer materials,an injection moulding process has been used to represent the manufacturing of plastic parts from a polymer raw material.Among the polymers,three materials contain recycled content based on VCC data.Filled polypropylene(PP),unfilled polyethylene terephthalate(PET),and unfilled polycarbonate and acrylonitrile butadiene styrene(PC ABS).The recycled plastics have been modelled with the Sphera dataset Plastic granulate secondary(low metal contamination)(RER).The average recycled content in the polymers in the EX30 is 19 per cent.The recycled content of the specific plastics can be seen in Table 30 in Appendix 6.All other plastics consist solely of virgin materials.The same dataset has been used to model the recycled plastics,as presented in Appendix 3.The material utilization rate for the manufacturing processes of plastics can be seen in Appendix 2 and the degree is according to the chosen database dataset.All filled polymers have been assumed to contain 80 per cent polymer,7 per cent glass fibre and 13 per cent talc representing an average of filled polymers based on information from VCC.5.6 Minor material categories,production and refining There are raw materials for which data on manufacturing is missing in the LCA databases.In those cases,the material weight was doubled as an estimation for the manufacturing.This means that the manufacturing process is assumed to have the same carbon footprint as the production of the raw material itself.This has been applied only for minor materials which together constitutes 5 per cent of the weight of the car.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30195.LIFE CYCLE INVENTORY ANALYSIS5.7 Electricity use in materials production and refiningThe electricity mix used in the manufacturing processes in the supply chain is based on the locations of the production facilities.All components are sourced from China,except one component which weighs 88 g,which is from Europe.As a basis for calculation,it is assumed that all raw materials in the vehicle are sourced from the country where the production takes place(China),and the assumption is based on the high probability expressed when discussing with VCC experts.The electricity used in manufacturing has been adjusted according to a Sphera dataset Electricity grid mix 1kV-60kV(CN),where possible.5.8 Battery packs The EX30 battery,also referred to as a battery pack,consists mostly of lithium-ion(Li-ion)battery cells assembled into battery modules,but also a tray/carrier,a battery management system,a thermal management system,a switch box,busbars,thermal barriers,and a lid.The cathode active material is either an oxide containing nickel,manganese,and cobalt(commonly referred to as NMC)or lithium iron phosphate(commonly referred to as LFP),while the anode active material consists of graphite.The LCA study include vehicles with two different battery types,P4 RWD 51 kWh(Li-ion LFP)for single motor and P6 RWD 69 kWh(Li-ion NMC-523)for single motor with extended range for markets in mid EU and the Nordics,and P6 RWD 69 kWh for overseas markets.The impacts from the P6 RWD 69 kWh are allocated based on market shares,i.e.the shares for overseas markets and EU and the Nordics.Each of the vehicle models are similar,except for the battery packs,and one component that is included in the NMC vehicle with 69 kWh battery.It is assumed that P6 RWD BoM adequately and conservatively reflects the materials used in the other model.The battery pack supplier has performed a cradle-to-gate(up until VCC logistics take over)carbon footprint assessment of their battery packs.The studies of all three batteries have been divided into Figure 6 Flowchart for battery manufacturing.impact from the packs and impact from the cells.The entire carbon footprint report from the battery pack manufacturer,which was conducted during 2024,has followed an LCA methodology framework.In Figure 6,a flowchart visualising the battery LCA is shown.The pack manufacturers have performed LCA studies following ISO14040:2006,ISO14044:2006,ISO14067:2018,GHG Protocol:Product Life Cycle Accounting and Reporting Standard,and Volvo Cars guideline on carbon footprint calculation of components and materials.Raw materials for cellsRaw materialsTransportTransportOther components for cellsTransportTransportOther components for bettery packsRaw materials for battery packsCell manufacturersBattery pack assemblyTransportEmissionsEnergy and resourcesSpecific dataGeneric data1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3020As a first step,a boundary cradle-to-gate was used,and the functional unit was 1 kWh.The life cycle main activity data has been acquired primarily from field research conducted by the company.Information regarding production and transportation stages has been calculated through allocation based on the annual production and operational circumstances of the pack manufacturers factory in 2022.Emission factor data concerning product raw materials is primarily drawn from databases such as Ecoinvent and Sphera.The activity data and emission factors selected for this evaluation are widely recognised and extensively used in LCA research.Module and pack assembly electricity impact is estimated by using a Sphera dataset for Chinese electricity grid mix,with an emission factor of 0.69 kg CO eq per kWh.The impacts from natural gas are retrieved from Sphera and IPCC datasets.The suppliers plan to gradually increase the amount of renewable energy purchased in the near future,based on market conditions.Cell manufacturers have provided to pack manufacturing the results of the carbon footprint in terms of emissions factors for the cells.The impacts from the additional 17 materials,which are included in the battery,have been assessed using Sphera datasets.The impacts from the materials are in line with the impacts calculated for each corresponding material within the current model,though slightly higher.The weight of the NMC battery pack is 390 kg and the LFP battery pack weighs 410 kg.5.LIFE CYCLE INVENTORY ANALYSIS1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30215.LIFE CYCLE INVENTORY ANALYSISassumptions are outlined in the regulation,delegated acts and other frameworks being referred to,and it is important to be aware that those are different from what has been used in this LCA study.Therefore,the carbon footprint for the battery pack presented in this report is not to be regarded as representative of the carbon footprint of the battery pack according to the EU battery regulation.5.9 Manufacturing and logistics 5.9.1 Logistics Volvo Cars specific data from production under 2022 has been used to calculate the impact for transports from Tier 1 suppliers to the manufacturing site(inbound transport).The impact related to the inbound logistics were calculated based on the distance shipped and weight of all items.Volvo Cars data has been used to calculate GHG emissions for transports from the manufacturing site to customer handover(outbound transport).Volvo Cars total emissions from transports of Volvo Cars vehicles from Volvo Cars manufacturing sites to Volvo Cars dealers divided by the total number of Volvo Cars vehicles sold during the same year has been applied,this amount to 601 kg CO-eq/vehicle.As the impact is not specified into emissions categories,such as biogenic emissions or fossil emissions.The impact has conservatively been assumed to be associated with fossil emissions.5.9.2 Manufacturing of vehiclesThe impact from use of auxiliary material(other than what is included in the vehicle),water,electricity,heat and different fuels in the manufacturing plant was calculated using site-specific input data from production 2022.The car is only manufactured in one factory in Zhangjiakou in China.The input per vehicle were then calculated by dividing the total input of auxiliary materials from the factory by the total amount of produced vehicles during the same year(2022).The same procedure was used for the output,e.g.manufacturing waste and wastewater.As the vehicle under study was not manufactured in the factory during 2022,an assumption was made that manufacturing energy,auxiliaries and waste for one vehicle produced in the factory during 2022 is applicable for EX-30.100%of the electricity used in manufacturing comes from wind power,certificate for this is presented in Appendix 9,which is a certificate of the power purchase agreement used.The electricity has been modelled by using the Sphera dataset from 2018 Electricity from wind power(CN).The emission factor corresponding to this dataset is 11.3 g CO-eq/kWh.5.10 Use phase 5.10.1 Electricity consumptionTo be able to calculate the emissions in the use phase of the car,the well-to-wheel emissions from electricity production are needed.During the lifetime of the car(15 years)it is expected to be driven 200,000 km.The energy-related emissions associated with the actual driving of the car consists of the environmental impact caused during production and distribution of the of the electricity used.Electricity production is modelled according to three cases:regional(global and Europe)grid mixes and a As battery suppliers have only given the value for total carbon footprint,it has been assumed that all impacts from battery raw materials and production are fossil,which is considered a conservative approach.The battery packs have therefore been removed from the BoM based on IMDS data and are modelled separately in the Complete Vehicle LCA.Both battery cell and battery pack suppliers have planned for large measures to substantially decrease carbon footprint from materials and production in the coming years.These measures are not considered in this study but are elaborated on in a sensitivity analysis.The climate impact per battery pack differs between the different chemistries.The NMC battery has an impact that is almost twice as high as the LFP battery,per pack.For the NMC battery the climate impact from the battery pack(excluding cells)is lower per kWh compared to the LFP variant.On the other hand,the impact from manufacturing the LFP battery cells is about half that of the impact from production of the NMC battery cells per kWh.This is because of the different impacts related to the different cathode materials used.The presented results suggest an impact from the NMC battery that is higher than expected in relation to similar batteries on the market.One possible explanation for this could be a higher use of fossil-based energy during manufacturing of the NMC battery cells.The reduction in emissions associated with LFP battery production is primarily attributable to the utilisation of aluminum sourced from smelters powered by renewable electricity.In the EU,a new battery regulation was adopted in summer 20238 which requires the disclosure of the carbon footprint of batteries.Goal and scope,methods,data requirements and various 8 https:/ 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30225.LIFE CYCLE INVENTORY ANALYSISincrease of renewable electricity from 2024),the emissions per year are expected decrease.The distances driven are multiplied with the specific emissions factor for the same year for the global and European electricity changes,which results in the chart in Figure 17.IEA uses the Global Energy and Climate(GEC)Model to explore possible future energy related scenarios based on different assumptions.For this study,the Stated Policies Scenario STEPS has been used to determine the electricity generation mixes used to charge the vehicles in the use phase.STEPS reflects current policy settings based on a sector-by-sector and country-by-country assessment of the specific policies that are in place,as well as those that have been announced by governments around the world.Two other IEA scenarios have been explored in a sensitivity analysis.Figure 8 Stated electricity mix development aggregated in three categories for Global mix.Figure 9 Stated electricity mix development aggregated in three categories for European mix.0 0Pp0 2420252026202720282029203020312032203320342035203620372038RenewableFossilNuclear0 0Pp0 2420252026202720282029203020312032203320342035203620372038RenewableFossilNuclear20,00015,000km10,0005,0000202420252026202720282029203020312032203320342035203620372038Figure 7 Assumed driving distances per year during the lifetime.specific energy source(wind).Current and future global and European electricity generation mixes are based on the World Energy Outlook 2022 Extended Dataset9 from the International Energy Agency(IEA).Amounts of electricity from different energy sources have been paired with appropriate LCI datasets from Ecoinvent(see Appendix 3)to determine the total impacts from different electricity generation mixes,both direct(at the site of electricity generation)and upstream.It has been assumed that 50 per cent of the lifetime milage of the vehicle is driven in the first five years(i.e.20,000 km per year in the first five years),and 30 per cent during the subsequent five years(i.e.12,000 km per year).During the last five years of the cars life,it is assumed that the annual milage is 8,000 km,as illustrated in Figure 7.By accounting for the changes in electricity production(i.e.reduction in fossil electricity and In Figure 8 and Figure 9,the presented development in electricity sources has been visualised.It shows that electricity generated from fossil sources will decline and electricity from renewable sources will take its place according to the IEA STEPS data.9 https:/www.iea.org/data-and-statistics/data-product/world-energy-outlook-2022-extended-dataset1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30235.LIFE CYCLE INVENTORY ANALYSISTable 4 Energy use in the use phase.Battery typeFor motorElectricity use kWh/100 kmVehicle unladen massP6 RWD NMC 69 kWhSingle motor extended range17.51,775 P4 RWD LFP 51 kWhSingle motor17.11,765The well-to-wheel(WTW)emission data for the EX30 electricity consumption figures for the two compositions are based on the WLTP driving cycle(Worldwide Harmonized Light Vehicle Test Procedure used for certification of vehicles in EU).Losses during charging are included in the electricity use of the BEV.The electricity use of the vehicles is shown in Table 4.5.10.2 MaintenanceDuring the 15-year lifespan of the car,it is assumed that some vehicle parts are required to be replaced.The data for maintenance of the car is based on maintenance figures associated with the EX90,which was chosen due to the accessibility of its LCA study.The maintenance list is presented in Table 32 in Appendix 6.It is assumed that the number of items represents groups of items.For example,one wiper blade represents the complete set of the three wiper blades(i.e.two front and one rear).The car tyres are all year tyres and are designed to last 40,000 km in the EU.It is assumed that the tyres are not changed just before end-of-life,therefore 16 tyres need to be changed during the lifetime.For each part,the corresponding item is found in the BoM and specific material data is used.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3024Figure 10 End-of-life system boundaries.DisassemblyTreatment of disassembled partsIncinerationMaterial recyclingShreddingLandfillBoundary with cut-off approachDisassembled partsRemaining vehicle5.LIFE CYCLE INVENTORY ANALYSISThe same mapping list as for the entire car has been used when importing the BoM to LCA for Experts.The same end-of-life treatments as for the entire car have been used.Four parts from the list did not appear in the BoM,including brake pads,steering joint,link arm,and cabin filter.The material compositions of these components have been found in the EX90,for which a corresponding LCA is being carried out and the easy accessibility of the information from this study.The difference in weight of the cabin filters have been scaled based on the difference in volume between the cars.For the other three components they have been reduced to 80 per cent of the weight,compared to the EX90.This reduction is due to the EX30 weighing about 40 per cent less than the EX90.We also assume that difference in mass is seen in other parts than the link arm,brake pads and steering joint.The data on cabin filters from IMDS suggests that 73 per cent of the composition is made up of undefined materials.It is assumed that one third of the unidentified materials could respectively be modelled as filled polypropylene(PP),polyamide(PA),and polyethylene(PE).Due to development in the brake discs performance,they do not need to be replaced within the lifetime milage of 200,000 km.5.11 End-of-life of the vehicle 5.11.1 Process description It is assumed that all vehicles,at their end-of-life,are collected and sent to end-of-life treatment.The same allocation methodology as described in Section 4.5 Allocation is applied.The“polluter pays principle”implies that several steps are included within the process,like dismantling and pre-treatment(including shredding and specific component pre-treatment).However,it does not include material separation,refining,or any credit for reuse in another product system.The end-of-life was modelled to represent global average situations as far as possible.The handling consists of a disassembly step to remove hazardous components and components that are candidates for specific recycling efforts.After this the disassembled parts are treated,and the remaining vehicle is shredded.According to material type the resulting fractions go either to material recycling,incineration,or landfill.Figure 10 gives an overview of the entire stage.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3025Figure 11 Percentage of mass of vehicle sent to different End-of-life treatments.Incineration 17%Recycling 81%Landfilling 2%5.LIFE CYCLE INVENTORY ANALYSISIn the disassembly stage,hazardous and/or valuable components are removed from the vehicle including:Batteries,wheels,tyres Liquids:coolants,antifreeze,brake fluid,air-conditioning gas,shock absorber fluid and windscreen wash Oils:transmission and hydraulic oils Oil filters Airbags and seat belt pretensioners removed or set offFrom a global perspective,the treatment of oils and coolant generally implies incineration.The tyres are assumed to be salvaged for rubber recovery,with potentially 55 per cent of the tyre being recycled.In the case of lead batteries,it has also been assumed that they can be sent for lead recovery.Oil filters are assumed to be incinerated,as are airbags and seat belt pretensioners,which are disassembled for safety reasons rather than their potential recycling value.The Li-ion battery is assumed to be taken out of the car and sent to recycling,given that the batteries contain valuable materials.The extraction and refinement of the materials are resource intensive and economically costly.Furthermore,legislation mandating recycling is likely to be put into effect,and it is assumed that the legislation will be more stringent at the end-of-life of the vehicle.All other parts of the vehicle are sent to shredding.In this process,the materials in the vehicle are shredded and then divided into fractions,depending on different physical and magnetic properties.The electricity requirements of the shredding are modelled with a global grid mix plan.Typical fractions are:Ferrous metals(steel,cast iron,stainless steel,etc.)Non-ferrous metals(aluminium,copper,etc.)Shredder light fraction(plastics,ceramics,etc.)The metal fractions can be sent for further refining and,in the end,material recycling.The combustible part of the light fraction can be incinerated for energy,or the entire fraction can end up in a landfill.For the purposes of this study,it is assumed the combustible streams of materials are incinerated,while the non-combustible materials are landfilled.In Figure 11 the different shares of end-of-life treatments per mass is presented.Most of the materials in the vehicle(81 per cent)is assumed to be recycled in the context of global averages.Due to the global focus of the study,no energy recovery is included for the incineration steps,even though in some VCC markets,there is indeed energy recovery from incineration of waste.This somewhat conservative assumption has been made due to there being many markets with no energy recovery,and data on how common energy recovery is for combustible streams is unknown.Assessment of material losses after shredding and in refining are outside the system boundaries set by the cut-off approach.Further methodological choices and assumptions are presented in Appendix 5.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30266.Impact assessmentVOLVO CARS CARBON FOOTPRINT REPORT EX3027For the impact assessment phase,where the inventory data is interpreted in terms of potential environmental impacts,the characterisation factors used in this assessment can be found in Appendix 7.The results are based on available data at the time of study.The results are considered to be representative until 15 years after publication(i.e.until 2038).1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)7.ResultsVOLVO CARS CARBON FOOTPRINT REPORT EX30281.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)7.RESULTSIn the following section the result of the study is presented.In adherence to ISO standards,the quantification results in this report have been rounded to two significant digits,a practice aimed at enhancing clarity and consistency in report.The rounding of the digits is used as to increase the readability of the report as well as acknowledging the inherent uncertainties in the results.7.1 LCIA resultsThe results of the life cycle assessment for one vehicle driving 1 km,with two different batteries and three different electricity mixes are shown in Figure 12.The results indicate that global electricity mix scenarios present the greatest impact with 0.18 kg CO-eq/vkm for the vehicle with the NMC 69 kWh battery and 0.16 kg CO2-eq/vkm for LFP 51 kWh battery,during the entire life cycle.The result shows that the use phase is the life cycle phase with the highest impact in the global electricity mix scenario.The use phase includes the energy consumption during the lifetime of the vehicle(15 years)and the distance(200,000 km).The materials production and refining phase has the second largest impact in the global electricity mix scenario and the greatest impact on a vehicles life cycle for the European and wind power electricity mixes.The impact from the materials production and refining phase amounts to 0.050 kg CO2-eq/vkm for both models;this stage includes all the resources and energy needed to extract,refine,and manufacture raw materials and components necessary for automobile production.The production of batteries has the second and third largest impacts respectively,with 0.039 kg CO2-eq/vkm for NMC 69 kwh battery and 0.018 kg CO2-eq/vkm for LFP 51 kWh battery.The other life cycle phases,such as production,logistics and end-of-life,each have a marginal impact.In Figure 12,GHG emissions are shown for three different scenarios with distinct types of electricity sources(global mix of production,European mix of production,and wind power production).With European mix electricity,23 per cent of GHG emissions are reduced,and 39 per cent if electricity from wind power sources is used during use phase,compared with global mix electricity for the car with a 69-kWh battery.In the case of 51 kWh battery vehicle,the decrease in emissions is about 25 per cent and 44 per cent for the use of European electricity and wind respectively,relative to the global mix electricity.In total,the impact of the NMC model with global electricity amount to 0.18 kg CO2-eq/vkm for the entire life cycle and the LFP model account for 0.16 kg CO-eq/vkm.Figure 12 Total climate footprint per vehicle-km and per total lifetime mileage,in kg CO2-eq.NMC69 kWhGlobal electricityLFP51 kWhGlobal electricityNMC69 kWhEuropean electricityLFP51 kWhEuropean electricityNMC69 kWhWind Power electricityLFP51 kWhWind power electricityMaterials production and refiningVolvo Cars manufacturingMaintenanceLi-ion battery packInbound/Outbound logisticsUse phaseEnd-of-life0,025,00025,0000020,0000,060,080,10,120,140,160,1815,00035,0000,0410,00030,000kg CO2-eq/vkmkg CO2-eq1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3029Table 5 Total impact in CO2-eq for the entire life cycle of the vehicles.Materials production and refiningLi-ion battery packInbound/Outbound logisticsVolvo Cars manufacturingUse phaseEnd-of-lifeMaintenanceTotalNMC 69 kWh Global electricityTonnes CO2-eq for the entire lifetime (200,000 km)107.80.860.29140.891.536kg CO2-eq per vehicle-km0.0500.0390.00430.00150.0720.00440.00730.18LFP 51 kWh Global electricityTonnes CO2 for the entire lifetime(200,000 km)103.50.860.29140.891.531kg CO2-eq per vehicle-km0.0500.0180.00430.00150.0700.00440.00730.16NMC 69 kWh European electricityTonnes CO2 for the entire lifetime(200,000 km)107.80.860.296.40.891.528kg CO2-eq per vehicle-km0.0500.0390.00430.00150.0320.00440.00730.14LFP 51 kWh European electricityTonnes CO2 for the entire lifetime(200,000 km)103.50.860.296.20.891.523kg CO2-eq per vehicle-km0.0500.0180.00430.00150.0310.00440.00730.12NMC 69 kWh Wind power electricityTonnes CO2 for the entire lifetime(200,000 km)107.80.860.290.480.891.522kg CO2-eq per vehicle-km0.0500.0390.00430.00150.00240.00440.00730.11LFP 51 kWh Wind power electricityTonnes CO2 for the entire lifetime(200,000 km)103.50.860.290.470.891.518kg CO2-eq per vehicle-km0.0500.0180.00430.00150.00240.00440.00730.088The same result is presented in Table 5 for both vehicle-km and for 200,000 km,lifetime milage.The impact is presented in kg CO2-eq and tonnes CO2-eq respectively.7.RESULTS1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX30307.RESULTSIn Figure 13,the impact per life cycle phase is presented for the different vehicles with a global electricity mix used during the use phase.Differences can be seen in the use phase and in the impact related to the batteries.The largest difference in impact between the models is seen in the batteries,where the difference is 54 per cent,with the 51 kWh battery model having the lowest impact.Figure 13 Impact per life cycle phase,per vehicle-km and per total lifetime mileage,in kg CO2-eq.The difference between the use phase emissions is 99.8%Nickel)5%aggICAGLOCopper(99.99%;cathode)14%aggNickel instituteCottonGLOMarket for textile,woven cottonaggEcoinventE/PRoWPolyethylene production,low density,granulateaggEcoinventElastomerRoWMarket for calcium carbonate,precipitated30%aggEcoinventCNLime(CaO;quicklime lumpy)20%aggSpheraGLO Market for carbon black7%aggEcoinventGLOMarket for polyethylene terephthalate,granulate,amorphous5%aggEcoinventGLOMarket for zinc oxide3%aggEcoinventGLOMarket for synthetic rubber35%aggEcoinvent10 Appendix 3 Chosen datasetsTable 15 Chosen datasets for material production and refining.1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use phase 22 Electricity consumption 22 Maintenance 24End-of-life of the vehicle 25 Process description 256.IMPACT ASSESSMENT 277.RESULTS 28LCIA results 29 Climate impact 32 Materials production and refining 33 Use phase 34Sensitivity analysis 34 Development of electricity generation mixes 35 Lifespan milage 39 Energy use in the use phase 40 Number of passengers 42 Battery 438.DISCUSSION 449.CONCLUSION 4610.APPENDIX 19 48Download printable A4 PDF(5,6 MB)VOLVO CARS CARBON FOOTPRINT REPORT EX3051Material categoryLocationName of LCI datasetInput per outputTypeLCI databaseElectrolyteGLOMarket for electrolyte,for Li-ion batteryaggEcoinventElectronicsGLOMarket for printed wiring board,surface mounted,unspecified,Pb containingaggEcoinventEPDMDEEthylene Propylene Diene Elastomer(EPDM)aggSpheraEVACRoWMarket for ethylene vinyl acetate copolymeraggEcoinventFerrite magnetGLOMarket for ferriteaggEcoinventFloat glassRERFloat flat glassaggSpheraFilled termoplasticsRoWMarket for nylon 6aggEcoinventFrictionDECast iron part(automotive)-open energy inputs(Modified to CN)48%p-aggSpheraGLOMarket for zirconium oxide12%aggEcoinventGLOMarket for graphite11%aggEcoinventGLOMarket for barium sulfide1%aggEcoinventGLOMarket for barite7%aggEcoinventGLOMarket for aluminium hydroxide5%aggEcoinventGLOMarket for magnesium oxide4%aggEcoinventGLOMarket for expanded vermiculite2%aggEcoinventRERCalcined petroleum coke2%aggSpheraGF-FibreRoWGlass fibre productionaggEcoinventGlycolCNEthylene glycol(MEG)via coal to ethylene glycol processaggSpheraLead,batteryGLOLead,primaryaggSpheraLubricants CNLubricants at refineryaggSpheraMagnesiumCNMagnesiumaggSpheraNdFeBGLOMarket for permanent magnet,for electric motoraggEcoinventNRDENatural rubber(NR)(excl.LUC emissions)aggSpheraPARoWMarket for nylon 6aggEcoinventPBTGLOPolybutylene terephthalate granulate(PBT)mixaggSpheraPCGLOMarket for polycarbonateaggEcoinvent10.APPENDIX1.CONTENTS 22.LIST OF ABREVIATIONS 33.EXECUTIVE SUMMARY 44.METHODOLOGY 7The product 8Goal of the study 8Scope of the study 9Function and functional unit 12Allocation 12System expansion 13Main assumptions,limitations and exclusions 13Data quality requirements 14Critical review 15Way of working overview 15Methodology to define vehicle material composition 165.LIFE CYCLE INVENTORY ANALYSIS 17Material production and refining 18Aluminium production and refining 18Steel production and refining 19Electronics production and refining 19Plastics production and refining 19Minor material categories,production and refining 19Electricity use in materials production and refining 20Battery packs 20Manufacturing and logistics 22 Logistics 22 Manufacturing of vehicles 22Use p
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Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE1Carbon footprint report Battery electric XC40 Recharge and the XC40 ICEContents Executive summary 3Authors and contacts 7Terms and definitions 81.General description of life cycle assessment(LCA)101.1 Principles of LCA 101.2 LCA standards 112.Methodology 122.1 The products 122.2 Way of working overview 132.3 Methodology to define vehicle material composition 142.4 Goal and scope definition 15 2.4.1 System boundaries 15 2.4.2 Function,functional unit and reference flows 16 2.4.3 Allocations 16 2.4.4 System expansion 16 2.4.5 Assumptions and Limitations 163.Life cycle inventory analysis(LCI)173.1 Material production and refining 17 3.1.1 Aluminium production and refining 18 3.1.2 Steel production and refining 18 3.1.3 Electronics production and refining 18 3.1.4 Plastics production and refining 19 3.1.5 Minor material categories,production and refining 19 3.1.6 Electricity use in materials production and refining 193.2 Battery modules 193.3 Volvo Cars Manufacturing and logistics 20 3.3.1 Logistics 20 3.3.2 Volvo Cars factories 20 3.4 Use phase 20 3.5 End-of-life of the vehicle 214.Results for XC40 ICE,XC40 Recharge 23 4.1 XC40 Recharge compared to XC40 ICE(petrol)235.Discussion 276.Conclusions 29Appendix 1 Chosen datasets 302 complete list of Volvo Cars Material Library material categories 383 Summary of data-choices and assumptions for component manufacturing 404 End-of-life assumptions and method 42 A4.1 Transport 42 A4.2 Disassembly 42 A4.3 Pre-treatment 42 A4.4 Shredding 42 A4.5 Material recycling 42 A4.6 Final disposal incineration and landfill 42 A4.7 Data collection 42Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE3In October 2019,Volvo Cars launched one of the most ambitious climate action plans in the automotive industry.It aims to reduce the lifecycle Carbon Footprint per average vehicle by 40 per cent between 2018 and 2025,as a first step towards becoming a climate neutral company by 2040.The plan represents concrete actions in line with the Paris Agreement1 of 2015,which seeks to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels.Volvo Cars also committed to communicating improvements from concrete short-term actions in a trustworthy way,including the disclosure of the Carbon Footprint of all new models,starting with the XC40 Recharge a battery electric vehicle(BEV).This report covers the Carbon Footprints of the fully electric XC40 Recharge and an XC40 with an internal combustion engine(ICE)for comparison.The Carbon Footprints presented in this report includes emissions from upstream supplier activities,manufacturing and logistics,the use phase of the vehicle and the end-of-life phase.The functional unit chosen is“The use of a specific Volvo vehicle driving 200,000 km”.The work was carried out during 2020 in collaboration with Polestar.The Carbon Footprints presented in this report are based on a Life Cycle Assessment(LCA),performed according to the ISO LCA standards2.In addition,the“Product Life Cycle Accounting and Reporting Standard”3 published by the Greenhouse Gas Protocol has been used as guidance in methodological choices.Given the great number of variables and possible methodological choices in LCA studies,these standards generally provide few strict requirements to be followed.Instead they mostly 1 https:/unfccc.int/process-and-meetings/the-paris-agreement/what-is-the-paris-agreement2 ISO 14044:2006 Environmental management Life cycle assessment Requirements and guidelines”and ISO 14040:2006 “Environmental management Life cycle assessment Principles and framework”3 https:/ghgprotocol.org/sites/default/files/standards/Product-Life-Cycle-Accounting-Reporting-Standard_041613.pdfExecutive summaryVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE4XC40 ICE petrolEnd of LifeUse phaseVolvo Cars manufacturingLi-ion battery modulesMaterials production and refiningXC40 RechargeGlobalXC40 RechargeEU28XC40 RechargeWind604020054452758Figure i.Carbon Footprint for XC40 ICE and XC40 Recharge,with different electricity-mixes in the use phase used for the XC40 Recharge.Results are shown in tonne CO2-equivalents per functional unit(200 000 km lifetime range).provide guidelines for the practitioner.For this reason,care should be taken when comparing these results with results from other vehicle manufacturers Carbon Footprints.In general,assumptions have been made in a conservative way,in order to not underestimate the impact from unknown data.The LCA and the underlying methodology will be used as the metric for assessing the Carbon Footprint of Volvo Cars vehicles.The assessment will be performed regularly and serve as a framework for measuring greenhouse gas(GHG)reduction related activities4.The methodology will be continuously developed and used to compile future Carbon Footprints for Volvo Cars vehicles.According to the methodology described in this report the Carbon Footprint of a XC40 ICE is 58 tonnes CO2e,whereas the footprint for the XC40 Recharge is between 2754 tonnes CO2e.The reason for the variation in the XC40 Recharge result is because different electricity mixes with varying carbon intensity in the use phase have been analysed.The size of the variation illustrates the impact of the choice of electricity mix on the result.Figure i shows a detailed breakdown of the Carbon Footprint for the XC40 Recharge and XC40 ICE,with different electricity mixes in the use phase used for the XC40 Recharge.As the production of the XC40 Recharges Li-ion battery has a relatively large Carbon Footprint and significant impact on the total Carbon Footprint of a vehicle,a separate Carbon Footprint study has been performed in collaboration with Volvo Cars battery module suppliers.The Carbon Footprint from the rest of the BEV battery pack is included in the category“Materials production and refining”.The two main differences in the Carbon Footprint between the XC40 Recharge and the XC40 ICE appear in the categories“materials production and refining”(including the Li-ion battery modules)and 4 GHG emissions,e.g.carbon dioxide(CO2),nitrous oxide(N2O)and methane(CH4)are measured in tonnes CO2e,where e stands for equivalents.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE550100150GlobalWindEU28ICEUse phase(1000 km)Figure ii.Total cumulated amount of GHG emissions,depending on total kilometres driven,from XC40 ICE(ICE in the diagram,dashed line)and XC40 Recharge(with different electricity mixes in the use phase).Where the lines cross,break-even between the two vehicles occurs.The functional unit for the LCA is“The use of a specific Volvo vehicle driving 200 000 km”.All life cycle phases except use phase are summarized and set as the starting point for each line at zero distance.2509060300200“use phase”.The emissions from Materials production and refining of the ICE are roughly 40 per cent less than for the BEV.Under“Materials production and refining”the five main contributors for the XC40 ICE are aluminum (34 per cent),steel and iron(34 per cent),electronics(13 per cent),polymers(11 per cent)and fluids and undefined(4 per cent)see Figure 7 in the main report for more details.For the XC40 Recharge the main contributors to the Carbon Footprint of the material production(including Li-ion battery modules)are aluminum(30 per cent),Li-ion battery modules(28 per cent),steel and iron(18 per cent),electronics(9 per cent)and polymers(7 per cent)see Figure 8 in the main report for more details.It should be noted that the Carbon Footprint measurement was performed to represent a globally sourced version of the models.Other methodological choices that have a large impact on the result are choice of allocation method regarding scrap,and choice of datasets for steel and aluminium production.Total use phase greenhouse gas(GHG)emissions from the XC40 Recharge vary greatly depending on the carbon intensity of the electricity used.It should be noted that a BEV sold on a market with carbon-intensive electricity production can be charged with electricity from renewable energy.This would decrease the Carbon Footprint substantially.Furthermore,the results assume a constant carbon intensity throughout the vehicle lifetime.Figure ii below shows the total GHG emissions,depending on kilometres driven,from the XC40 Recharge(with different electricity mixes in the use phase in the diagram),and the XC40 ICE(ICE in the diagram).Where the lines cross,the Carbon Footprint of the BEV becomes less than that of the ICE.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE6Key Findings The XC40 Recharge has a lower total Carbon Footprint than the XC40 ICE for all the analysed electricity mixes.The Carbon Footprint of a XC40 ICE is 58 tonnes CO2e,while the footprint for the XC40 Recharge is 2754 tonnes CO2e.The reason for the variation in the XC40 Recharge result is due to different electricity mixes with varying carbon intensity in the use phase.When considering GHG emissions from the materials production and refining phase,producing an XC40 Recharge and its battery pack results in roughly 70 per cent more carbon emissions than producing an XC40 ICE.The production of the XC40 Recharge Li-ion battery has a relatively large Carbon Footprint and constitutes 1030 per cent of the total Carbon Footprint,depending on the electricitymix in the use phase.Choice of methodology,for example inclusion of carbon emissions for scrap,has a significant impact on the total Carbon Footprint.Care should be taken when comparing results from this report with results from other vehicle manufacturers Carbon Footprints.XC40 Recharge,Global Electricity Mix/XC40 ICEXC40 Recharge,EU28 Electricity Mix/XC40 ICEXC40 Recharge,Wind Electricity/XC40 ICEBreak-even(km)146 00084 00047 000Table i.Number of kilometres driven at break-even between XC40 ICE(petrol)and XC40 Recharge with different electricity mixes in the use phaseTable i below shows the number of kilometres needed to be driven in order to reach break-even for the XC40 Recharge with different electricity mixes in the use phase compared to the XC40 ICE.This report contains a general description of the LCA methodology(Chapter 1),a description of the methodological choices(Chapter 2)as well as some specific input data(Chapter 3)and results concerning the Carbon Footprint connected to the XC40 ICE and XC40 Recharge(Chapter 4).It also contains a discussion and interpretation of results(Chapter 5)and the main conclusions(Chapter 6).Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE7AuthorsContactsAndrea Egeskog,Sustainability Center,Volvo CAndrea Egeskog,Sustainability Center,Volvo CarsKarl-Henrik Hagdahl,Sustainability Center at Volvo CarsChristoffer Krewer,Sustainability Center at Volvo CarsIngrid Rde,Sustainability Center at Volvo CarsLisa Bolin,Sustainability at PolestarIVL Swedish Environmental Research InstituteVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE8Terms and definitionsBEV Battery electric vehicle.A BEV is a type of electric vehicle that exclusively uses chemical energy stored in rechargeable battery packs,with no secondary source of propulsion.Characterization A calculation procedure in LCA where all emissions contributing to a certain impact category,e.g.greenhouse gases(GHGs)that contribute to global warming,are characterized into a single currency.For global warming,the carbon footprint is often expressed as mass unit of CO2e,where e is short for equivalents.Cradle-to-gate A cradle-to-gate assessment includes parts of the products life cycle,i.e.from the cradle to the factory gate.It includes primary production of materials and the production of the studied product,but it excludes the use and end-of-life stages of the product.A supplier can provide a component,part or sub-assembly cradle-to-gate LCA to an OEM,for the OEM to include in the LCA of the OEMs product.Cradle-to-grave A cradle-to-grave assessment,compared to a cradle-to-gate assessment,also includes the use and end-of-life stages of the product,i.e.it covers the full life cycle of the product.Dataset(LCI or LCIA dataset)A dataset containing life cycle information of a specified product or other reference(e.g.,site,process),covering descriptive metadata and quantitative life cycle inventory and/or life cycle impact assessment data,respectively.6End of life End of life means the end of a products life cycle.Traditionally it includes waste collection and waste treatment,e.g.reuse,recycling,incineration,land-fill etc.Functional unit Quantified performance of a product system for use as a reference unit.GaBi GaBi is a LCA modelling software,provided by Sphera,and has been used for the modelling in this study.7GHG Green house gases.Green house gases are gases that contributes to global warming,e.g.carbon dioxide(CO2),methane(CH4),nitrous oxide/laughing gas(N2O),but also freons/CFCs.Green house gases are often quantifed as mass unit of CO2e,where e is short for equivalents.See characterization for further description.ICE Internal combustion engine.Sometimes used as a category when referring to a vehicle running with an ICE.An ICE vehicle uses exclusively chemical energy stored in a fuel,with no secondary source of propulsion.Impact category Class representing environmental aspects of concern to which life cycle inventory analysis results may be assigned.6“The Shonan guidelines”,https:/www.lifecycleinitiative.org/wp-content/uploads/2012/12/2011 - Global Guidance Principles.pdf7 GaBi,Sphera,http:/www.gabi- Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE9Life cycle Consecutive and interlinked stages of a product system,from raw material acquisition or generation from natural resources to final disposal.Life Cycle Assessment LCA Compilation and evaluation of the inputs,outputs and the potential environmental impacts of a product system throughout its life cycle.LCA modelling software LCA modelling software,e.g.GaBi,is used to perform LCA.It is used for modelling,managing internal databases,contains databases from database providers,calculate LCA results etc.Life Cycle Inventory analysis LCIPhase of life cycle assessment involving the compilation and quantification of inputs and outputs for a product throughout its life cycle.Life Cycle Impact Assessment LCIA Phase of life cycle assessment aiming to understand and evaluate the magnitude and significance of the potential environmental impacts for a product system throughout the life cycle of the product.Life cycle interpretation Phase of life cycle assessment in which the findings of either the inventory analysis or the impact assessment,or both,are evaluated in relation to the defined goal and scope in order to reach conclusions and recommendations.Process Set of interrelated or interacting activities that transforms inputs into outputs.Processes can be divided into categories,depending on the output of the process,e.g.material,energy,transport or other service.Raw material Primary or secondary material that is used to produce a product.Simple cut-offThe simple cut-off is a method for modeling recycling.It implies that each product is assigned the environmental burdens of the processes in the life cycle of that product.It means that using recycled material comes with the burdens from the collection and recycling of the material,which often are less than for production of primary material.At the same time no credits are given for recycling or creating recycled material.It is also called the recycled content approach and the 100/0 method.System boundary Set of criteria specifying which unit processes are part of a product system.Waste Substances or objects which the holder intends or is required to dispose of.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE108 Communication on Integrated Product Policy(COM(2003)302)1.General description of Life Cycle Assessment (LCA)1.1 Principles of LCAThe Life Cycle Assessment methodology(LCA)is used to determine which impacts a product or a service has on the environment,and The European Commission has concluded that Life Cycle Assessments provide the best framework for assessing the potential environmental impacts of products currently available.8 The methodology was developed because there was a need to consider the whole life cycle of a product when examining environmental impacts,instead of just looking into one process at a time.A peril with focussing on only one process at a time is that a decrease in environmental impact in one area can lead to increased environmental impact in another.To prevent this phenomenon,known as sub-optimization,an LCA aims to include all processes from cradle to grave.However,an LCA is always a study of the environmental impacts from the processes inside the system boundary,defined in the goal and scope of the LCA.Therefore,it is important to remember that all environmental impacts,from a product or service,can never be considered.In Figure 1 the different stages of LCA are shown.First,the goal and scope of the LCA should be defined.The system boundaries must be clearly stated,since it has a direct impact on the result of the LCA.When the goal and scope are defined the inventory analysis can start.This is where data regarding all processes inside the system boundaries are gathered;these data can be presented in a report and are then called LCI(Life Cycle Inventory).In addition,in an LCA the data from the inventory analysis are further processed in the impact assessment phase,where different emissions(e.g.CO2,SO2,NOx etc.)are sorted into different categories depending on what environmental impact they contribute to.These categories can be for example,global warming,acidification and Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE11Goal and ScopeDefinitionInventoryAnalysisImpactAssessmentInterpretationFigure 1.Illustration of the general phases of a life-cycle assessment,as described by ISO 14040eutrophication.Through the impact assessment the total environmental impact of the studied system can be quantified.LCA is an iterative process where e.g.interpretation of the results might lead to a need to revisit goal and scope definition,inventory analysis or impact assessment,in order to create a final assessment that in the best way addresses the question that one wants to answer.A fourth step may also be included in LCA,called weighting.In this step,results are further aggregated.The different environmental impacts are weighed against each other based on e.g.political goals,economical goals or the critical load of different substances in the environment.The LCA methodology undertaken for this study does not include weighting as only one impact category(climate change)is studied.1.2 LCA standardsThe methodology developed for this study estimates the Carbon Footprints for Volvo Cars vehicle models XC40 ICE(petrol)and XC40 Recharge(BEV).The only impact category is“global warming potential”.The methodology can be further developed to include other environmental impacts,if needed.The methodology follows the standards set by ISO 14044:2006“Environmental management Life cycle assessment Requirements and guidelines”and ISO 14040:2006“Environmental management Life cycle assessment Principles and framework”2.These standards differ from other standards that are commonly used by the vehicle industry,e.g.for testing or certification of the products,since they contain very few strict requirements.Instead they mostly provide guidelines for LCA including:definition of the goal and scope of the LCA,the life cycle inventory analysis(LCI)phase,the life cycle impact assessment(LCIA)phase,the life cycle interpretation phase,reporting and critical review of the LCA,limitations of the LCA,relationship between the LCA phases and conditions for use of value choices and optional elements.The standards are valid for LCAs of all product and services,and do not provide detail enough to make LCAs of vehicles from different OEMs comparable.In addition to ISO 14044 the standard on“Product Life Cycle Accounting and Reporting Standard”published by the Greenhouse gas protocol3 has been used for guidance in methodological choices.These standards differ from other standards commonly used by the vehicle industry,e.g.for testing or certification of the products,since they contain very few strict requirementsVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE12XC40 RechargeXC40 ICE21701690Li-ion battery modules weight(7178kWh)VehiclesTotal weight350-Table 1.Studied vehicles and their corresponding weight in kg2.1 The productsVolvo Cars vehicles can be categorized as:ICE Internal Combustion Engine mHEV mild Hybrid Electric Vehicle PHEV Plug-in Hybrid Electric Vehicle BEV Battery Electric Vehicle The methodology in this study was developed when performing LCAs of the vehicles XC40 ICE(petrol)and XC40 Recharge,which only covers the vehicle types ICE and BEV.However,the methodology can also be used to perform Carbon Footprints for PHEVs and mHEVs.The studied vehicles are presented in Table 1.2.MethodologyVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE132.2 Way of working overviewFigure 2 provides a high-level overview of how the work to obtain the Carbon Footprints of the vehicles is carried out.There are four main ways that data needed for the final LCA is retrieved.The import to GaBi(see Terms and definitions)is made in a specific mapping tool,provided by Sphera,called GaBi-DFX9.The input to GaBi comes from;IMDS10(International Material Data System)datasheets which contains information on material compositions of the components The LCA databases ecoinvent11 3.6 and GaBi LCA databases12 Data from operations run by Volvo Cars,such as factories and logistics LCA of battery modules,performed by our battery suppliers with Volvo Cars and Polestar guidance and support9 GaBi DfX,http:/www.gabi- IMDS, 11 ecoinvent,www.ecoinvent.org12 GaBi LCA databases,http:/www.gabi- databasesDatabases containing LCA data on a large variety of materials,production,logistics and energy from cradle to material,e.g.wrought aluminium,copper wire etc.This is referred to as generic,average or literature data.IMDS-materiallibraryIMDS material data per component representing a specific vehicle.The 10 000 incoming materials are aggregated into 70 materials.(kg material)LCA in GaBiMatchingInternal dataA variety of internal data such as emissions from logistics and manufacturing per average vehicle,energy&fuel consumption etc.Battery module dataThe battery module suppliers have,based on methodological guidelines from Volvo Cars,performed supplier specific LCAs and provided the results to Volvo Cars.Figure 2.Overview of LCA“way of working”Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE142.3 Methodology to define vehicle material compositionThe Bill of Materials(BoM)is an important input to the LCA and consists of the parts used in the vehicle and their respective weights and materials composition.The part number vehicle BoM is extracted from Volvo Product data management system KDP.However,this BoM cannot be used as direct input to the LCA-model in GaBi but must be developed and aggregated in several steps into a suitable material BoM.The material information,except for the Li-ion battery modules,comes from datasheets in IMDS.A complete vehicle in IMDS consists of about 10 000 different materials.To make the number of materials manageable in GaBi,they are aggregated to about 70 Volvo Cars defined material categories in a Volvo Cars developed materials library,Volvo IMDS ML.The part number BoM from KDP is uploaded to Volvo Cars IMDS in-house system iPoint Compliance Agent(iPCA).In iPCA a materials BoM is generated that is imported into Volvo IMDS ML where all materials are mapped into the Volvo Cars defined material categories.In order to have an effective and systematic approach,this mapping is automated.The rules to categorise the materials are determined by IMDS material category,material name and substance content.It is also possible to manually allocate materials in the Volvo IMDS ML,however,this is done as restrictively as possible.For these LCAs,Volvo IMDS ML release 5 is used with the material categories listed in Table 2.For the complete list of material categories,see“Appendix 2 complete list of Volvo Cars Material Library material categories”.The BoM from Volvo IMDS ML must then be further formatted in order to be imported into GaBi.A formatting tool is used to apply the format required by GaBi and this step is also automated.The import to GaBi is made in a specific mapping tool,provided by Sphera,called GaBi-DFX.In the mapping,each material is connected to a specific Life Cycle Inventory dataset and,if relevant,a manufacturing process dataset.For the Li-ion battery modules,supplier specific Carbon Footprint data was used instead of IMDS data.The production of the Li-ion battery modules have a high impact on the result and consists of complex manufacturing steps.Also,the variety and accuracy of datasets available is limited for Li-ion batteries.SteelAluminiumMagnesiumCopperZincLead,batteryNeodymium magnetsPolymersNatural materialsCeramics&GlassElectronicsFluidsUndefinedNumber of material categoriesMaterial type5112111About 40*331101*Including filled/unfilledTable 2.Volvo Cars defined material categories in Volvo IMDS ML release 5Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE152.4 Goal and scope definitionThe goal of the methodology in this study is to be able to evaluate the Carbon Footprint of specific vehicle models.More specifically,the goal has been to develop a methodology that can be used to produce Carbon Footprints on complete vehicles to be communicated internally and externally.Another goal is to be able to use the complete vehicle Carbon Footprints to examine the effects of changes in e.g.material composition,efficiency of the vehicle or Volvo manufacturing,or changes in the energy systems.This methodology follows an attributional approach and is developed considering exclusively the environmental impact global warming potential(GWP)and on the detail level of a complete vehicle.2.4.1 System boundariesThe performed study is a life cycle assessment(LCA)for greenhouse-gas emissions only:a so-called Carbon Footprint.Regarding the tail-pipe emissions from the ICE vehicles,only carbon dioxide emissions are included whereas methane and nitrous oxide emissions(CH4 and N2O)are excluded.CH4 and N2O contribute a minor fraction of total tailpipe GHG emissions from a petrol vehicle and exclusion of these emissions is not considered to influence the conclusions of this study.14The study includes the vehicle life cycle from cradle-to-grave,starting at extracting and refining of raw materials and ends at the end-of-life of the vehicle,see Figure 3.Major assumptions,uncertainties and cut-offs are described under”2.4.5 Assumptions and Limitations”.The emissions from the life cycles of infra-structure have been included when it has been available in the LCA databases.No active data collection or modelling of infra-structure has been carried out in this study.Generic data,as opposed to supplier specific data,has been used for most of the upstream processes,such as raw materials production and manufacturing processes.Thus,there are steps in some of the manufacturing value chains,specific to vehicle components,that might not be included.It is likely that these processes are assembly processes at Volvo cars Tier 1 suppliers.Although the contribution to the total Carbon Footprint from these processes are likely to be very small.Energy and natural resourcesMaterials production and refining Extraction of raw materials from earth crust Refining of raw materials into parts bought by Volvo CarsManufacturing Manufacturing in Volvo Cars factoriesUse Phase Use of the car driving200 000 kmEnd-of-Life Dismantling of the car Waste management of the carSystem BoundaryInboundtransportsTransport from Tier 1 supplier to factoryOutboundtransportsTransport from Volvo Cars factory to dealerGHG-emissions Figure 3.Schematic description of the studied system and its different life cycle phases14 Analysis of GaBi data for passenger car,EURO 6Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE16The study is made with a global approach,which means that the generic datasets used for raw materials production and refining are not specific for any region.As far as possible global averages have been applied.2.4.2 Function,functional unit and reference flowsThe functional unit defines precisely what is being studied.It defines and quantifies the main function of the product under study,provides a reference to which the inputs and outputs can be related,and is the basis for comparing/analysing alternative goods or services.The functional unit of this study is:The use of a specific Volvo vehicle driving 200 000 km The results are being presented as kg CO2-equivalents per functional unit.2.4.3 Allocations100%of total emissions from scrap has been allocated to the vehicles.That means that for example the produced amount of steel and aluminum included in the Carbon Footprint calculation does not only include the amount of material in the vehicle,but also the scrap produced in the whole manufacturing chain.More specifically,the methodology uses the cut-off approach,which is the recommended method according to the EPD15 system.This method follows the“polluters pay principle”meaning that if there are several product systems sharing the same material,the product causing the waste shall carry environmental impact.This means that the system boundary is specified to occur at the point of“lowest market value”.However,if the material does not go to a new product system,the final disposal is included within the life cycle of the vehicle.2.4.4 System expansionNo system expansion has been applied in this study i.e.no credits have been given for e.g.materials being recycled and offsetting other material production,or for energy generated in waste incineration offsetting other energy production.2.4.5 Assumptions and LimitationsIn general,assumptions have been made in a conservative fashion following the precautionary principle,in order to not underestimate the impact from unknown data.Additional processes have been added to the model when judged needed to more accurately represent actual emissions.The inventory does not include:Volvo Cars processes such as business travels,R&D-activities or other indirect emissions Volvo Cars infrastructure e.g.the production and maintenance of buildings,inventories or other equipment used in the production Construction and maintenance of roads in the use phase Emissions from tires and road wear in the use phase Maintenance of the vehicles in the use phaseThis study does not investigate changes,i.e.it is not consequential16,nor take rebound effects into consideration.Carbon Footprints developed using this methodology should not be broken down to lower levels,e.g.system or component level,without reassuring that an acceptable level of detail is also reached on the studied sub-system.15 https:/ Consequential LCA,https:/consequential-lca.org/clca/why-and-when/Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE17In this chapter all input data and methodological choices concerning the inventory is presented.3.1 Material production and refiningMaterial production and refining(see Figure 3)are based on a BoM containing material composition and material weight.The BoM used for modelling in GaBi is specifically developed for LCA-modelling in GaBi and reports the composition of the vehicle based on about 70 material categories.The total weight of the vehicle is divided into these material categories.In GaBi,each material has been coupled with one or several datasets(containing LCI-data)representing the production and refining of the material in each specific material category.See Appendix 1 Chosen datasets.Material production and refining are modelled using datasets from GaBi Professional database and ecoinvent 3.6 database,system model cut-off.The datasets have been chosen according to the Volvo Cars methodology for choosing generic datasets.For some raw materials there were no datasets for the exact materials and have been approximated by using datasets for similar materials.The material content corresponding to the entire weight of the vehicle is included in the LCA,but for the different vehicles a small amount of materials have been categorized as undefined material in Volvo IMDS ML.Table 3 shows the share of undefined material of the total vehicle weight(including battery modules)for each vehicle.Since the undefined category seems to contain mostly undefined polymers,a dataset for Polyamide(Nylon 6)has been used as approximation.This assumption is based on the fact that Polyamide is the polymer with the highest Carbon Footprint,out of the polymer data used in the LCA.3.Life cycle inventory analysis(LCI)XC40 ICEXC40 RechargeShare of undefined materialVehicle model1.5%2.0%Table 3.Share of undefined material in the different vehiclesVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE18All filled polymers have been assumed to contain 81%polymer,11%glass fibre and 8%talc representing an average of filled polymers as reported in IMDS.In most cases datasets that include both production of raw material as well as component manufacturing ready to be assembled in the vehicle are not available.Therefore,several datasets representing the refining and production of parts have been used for most material categories.The datasets used to represent further refining and manufacturing of parts are listed in Appendix 3 Summary of data-choices and assumptions for component manufacturing.For most database datasets representing materials production and refining processes it has not been possible to modify the electricity,i.e.the built in electricity has been used.3.1.1 Aluminium production and refiningThe share of aluminium that is cast aluminium and wrought aluminium has been assumed to be 59st aluminium and 41%wrought aluminium.This is based on the report“Aluminium content in European passenger cars”17.All wrought aluminium has been assumed to go through the process of making aluminium sheets.The assumption of wrought aluminium being aluminium sheets is a conservative assumption,since sheet production has a higher amount of scrap than most other wrought processes.The cast aluminium goes through a process for die casting aluminium.The scrap produced in the processes of making the aluminium parts for the vehicle is included in the Carbon Footprint,and since a cut-off is applied at the point of scrap being produced in the factory,the total footprint of producing the scrap is allocated to the vehicle even though the aluminium scrap is sent to recycling and used in other products.The material utilization rate for the manufacturing processes of both cast aluminium and wrought aluminium can be seen in Appendix 3 Summary of data-choices and assumptions for component manufacturing.3.1.2 Steel production and refiningThe raw material dataset used for the material category“Unalloyed steel”has an output of rolled and galvanized steel.A manufacturing process was added to all steel.Which manufacturing process that was chosen depends on whether the steel is stamped by Volvo Cars or not.Hence,the steel categorised as unalloyed steel in the material library has been divided into two sub-groups depending on the manufacturing process following the rolling and galvanizing of the steel:1.The steel that is processed and stamped in Volvo Cars factories.The Material Utilization Degree is according to Volvo Cars data.2.The rest of the steel,which is distributed in various components of the car.The Material Utilization Degree is according to the chosen database dataset,i.e.literature value.The scrap produced in the processes of making the steel parts for the car,independent of processes,is included in the Carbon Footprint,and the same cut-off as for aluminium is applied.The material utilization rate for the manufacturing processes of steel processed at Volvo Cars and steel processed at suppliers can be seen in Appendix 3 Summary of data-choices and assumptions for component manufacturing.3.1.3 Electronics production and refiningThe material category“electronics”includes printed circuit boards(PCB)and the components mounted on them.It does not include chassis,cables or other parts that are present in electronic components.All materials that are used in electronic devices that are not PCBs have been sorted into other categories,such as copper or different types of polymers.For the category“electronics”a generic data set from ecoinvent 3.6 has been used.This dataset represents the production of lead-free,mounted PCBs.17 https:/www.european-aluminium.eu/media/2802/aluminum-content-in-european-cars_european-aluminium_ public-summary_101019-1.pdfVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE193.1.4 Plastics production and refiningFor polymer materials an injection moulding process has been used to represent the processing of plastic parts from a polymer raw material.The material utilization rate for the manufacturing processes of plastics can be seen in Appendix 3 Summary of data-choices and assumptions for component manufacturing.3.1.5 Minor material categories,production and refiningThere are raw materials for which data on processing is missing in the LCA-databases.In those cases,the material weight was doubled as an estimation for the processing.This means that the manufacturing process is assumed to have the same Carbon Footprint as the production of the raw material itself.This has been applied only for minor materials(by weight).3.1.6 Electricity use in materials production and refiningThe electricity-mix used in the manufacturing processes in the supply chain is based on the locations of Volvo Cars production facilities.As a basis for calculation it is assumed that a large part of the materials in the vehicle are sourced on the same continent where the production takes place.Although the general methodology for choosing datasets takes on a global perspective where the sourcing region is not considered,an electricity mix that is based on the number of cars produced in each region for one year has been compiled to better represent reality.Hence,this electricity-mix is not specific for any vehicle model,but specific for the company on a global level.The number of produced cars in Volvo Cars factories in 2019 is presented in Table 4.Based on these figures the supply chain manufacturing processes electricity mix consists of 69%EU-28 average electricity mix,26%Chinese average electricity mix and 5%US average electricity mix.This electricity mix is only used for a few18 partially aggregated processes in the GaBi databases where it is possible to add an electricity mix by choice.3.2 Battery modulesA BEV battery pack consists of a carrier,battery management system,cooling system,busbars,cell modules,thermal barriers,manual service disconnect and a lid.Volvo Cars purchase cell modules from CATL and LG Chem,who,in collaboration with the report authors,performed cradle to gate(up until Volvo Cars logistics take over)Carbon Footprint LCAs of their cell modules.The cell modules have therefore been removed from the BoM based on IMDS data and modelled separately in the Complete Vehicle LCA.All other parts of the battery pack are included in the materials BoM,based on IMDS data.18 The processes that use the special electricity mix are cast iron production,rubber vulcanization and five additional manufacturing processes.EuropeAsiaAmericasTotal2019 produced vehiclesShare4842361856403516070503669&%50%RegionTable 4.Produced Volvo vehicles in 2019Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE203.3 Volvo Cars Manufacturing and logistics3.3.1 LogisticsFor GHG emissions from transports from Tier 1 suppliers to Volvo Cars manufacturing sites(inbound transport),the Volvo Cars total emissions from inbound transports divided by the total number of cars produced during the same year has been applied.In the same way,emissions from transports from Volvo Cars manufacturing sites to the dealer(outbound transport),have been compiled based on the Volvo Cars total emissions from outbound transports divided by the total number of cars sold during the same year.Network for transport measures19 has been used as basis for the calculations.3.3.2 Volvo Cars factoriesGHG emissions from electricity usage,heat usage and use of different fuels in each of the factories was calculated using site-specific input data.The GHG emissions per vehicle was then calculated by dividing the total GHG emissions from the factory by the total amount of produced vehicles or engines from that factory during the same year.XC40 ICE and XC40 Recharge are produced in both Luqiao and Ghent.For the XC40 ICE the emissions from the Volvo Cars manufacturing have been calculated in proportion to the number of cars produced in each factory during 2019.For XC40 Recharge the emissions from the Volvo Cars manufacturing has been calculated in proportion to the planned production during 2020.3.4 Use phaseTo be able to calculate the emissions in the use phase of the car,the distance driven is needed together with the tailpipe emissions per driven kilometer and the well to tank emissions from fuel and electricity production.The vehicle driving distance for Volvo vehicles has been set to 200 000 km,which is also the functional unit in this study.The fuel and energy related GHG emissions associated with the actual driving of the vehicle are divided into two categories:Well-to-tank(WTT)Includes the environmental impact caused during production and distribution of the fuel or electricity used.The fuel used in the ICE is assumed to be gasoline blended with 5%ethanol,production related emissions from both fuels are included.Electricity production is modelled according to regional(global or EU28)grid mix or as specific energy source(wind)20.Tank-to-wheel(TTW)Includes the tailpipe emissions during use.This is zero for XC40 Recharge and assumed to be 163 g CO2/km for the XC40 ICE(based on an average of our XC40 ICE petrol vehicles).The TTW emission data for the XC40 ICE was based on the WLTP driving cycle(Worldwide Harmonized Light Vehicle Test Procedure used for certification of vehicles in EU).WLTP data was also used for obtaining energy consumption figures for the XC40 Recharge.Losses during charging are included in the electricity use of the BEVs.The electricity use for XC40 Recharge used in this study was 240 Wh/km(based on an average of our XC40 Recharge vehicles).19 https:/www.transportmeasures.org/en/20 The data on WTT emission for electricity used in BEVs comes from the GaBi professional data base and can be chosen either as country grid mixes or for a specific energy source.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE213.5 End-of-life of the vehicle3.5.1 Process descriptionAt their end of life,all vehicles are assumed to be collected and sent for end of life treatment.The same methodology as described in chapter 2.4.3 Allocations is applied.Focusing on the point of lowest market value,according to the polluter pays principle,implies inclusion of steps like dismantling and pre-treatment(like shredding and specific component pre-treatment),but it does not include material separation,refining or any credit for reuse in another product system.End of life was modelled to represent global average situations as far as possible.Handling consists of a disassembly step to remove hazardous components and components that are candidates for specific recycling efforts.After this the disassembled parts are treated,and the remaining vehicle is shredded.According to material type the resulting fractions go either to material recycling,incineration or landfill.Figure 4 gives an overview of the entire phase.In the disassembly stage hazardous and/or valuable components are removed from the vehicle including:Batteries Fuel Wheels,tyres Liquids:coolants,antifreeze,brake fluid,air-conditioning gas,shock absorber fluid and windscreen wash Oils:engine,gearbox,transmission and hydraulic oils oil filters catalytic converter Airbags and seat belt pretensioners removed or set offDisassemblyDisassembledpartsRemainingvehicleCombustiblematerialsBoundary with cut-off approachNon-combustiblematerialsTreatment of disassembledpartsShreddingLandfillIncinerationMaterialrecyclingFigure 4.End of life system boundariesVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE22In a global perspective the treatment of fuels,oils and coolant generally implies incineration.The tires are assumed to be salvaged for rubber recovery,and the lead batteries for lead recovery.The catalytic converter contains valuable metals and is disassembled for further recycling efforts.Oil filters are assumed to be incinerated,as are airbags and seat belt pretensioners,which are disassembled for safety reasons rather than the potential recycling value.The Li-ion battery is assumed to be taken out of the vehicle and sent to recycling.All other parts of the vehicle are sent to shredding.In this process the materials in the vehicle are shredded and then divided into fractions depending on different physical and magnetic properties.Typical fractions are ferrous metals(steel,cast iron etc)non-ferrous metals(stainless steel,aluminium,copper,etc)shredder light fraction(plastics,ceramics etc)The metal fractions can be sent for further refining and in the end material recycling.The combustible part of the light fraction can be incinerated for energy,or the entire fraction can end up in landfill.For the purpose of this study it is assumed the combustible streams of materials are incinerated,while the non-combustible materials are landfilled.Due to the global focus,no energy recovery is included for the incineration steps,even though in some Volvo Cars markets,there is indeed energy recovery from incineration of waste.This somewhat conservative assumption has been made since there are many markets with no energy recovery,and data on how common the case with energy recovery is for the combustible streams is unknown.Assessment of material losses after shredding and in refining are outside the system boundaries set by the cut-off approach.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE23Functional unit:The use of a specific Volvo vehicle driving 200 000 km4.1 XC40 Recharge compared to XC40 ICE(petrol)In Figure 5 and Table 5 the results of the XC40 Recharge and XC40 ICE LCAs are presented in graphical and numerical terms.The choice of electricity mix in the use phase has a large impact on the total Carbon Footprint.With a global electricity mix,the XC40 Recharge gets a slightly smaller Carbon Footprint than the XC40 ICE,and with the wind power mix the reduction is more than 50%compared to the XC40 ICE.Another interesting point to note regarding the Materials production and refining phase is that the XC40 Recharge has approximately 20%higher Carbon Footprint than the XC40 ICE,mainly due to the higher weight of the XC40 Recharge and larger share of aluminium and weight of electronics.The most significant addition,however,is the Li-ion battery.All in all,the carbon footprint of the materials production and refining category including the Li-ion battery increases by 70%.This increase is smaller than the decrease found in the use phase for all three electricity-mixes.The results of the LCAs gives an interesting insight into a potential future shift of which life cycle phase is the most dominant.When comparing the XC40 Recharge driven with wind electricity to the XC40 ICE,dominance is shifted from the use phase to the production phase.Volvo Cars manufacturing and end of life treatment only gives a small contribution to the life cycle.4.Results for XC40 ICE,XC40 RechargeVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE24XC40 ICE petrolEnd of LifeUse phaseVolvo Cars manufacturingLi-ion battery modulesMaterials production and refiningXC40 RechargeGlobalXC40 RechargeEU28XC40 RechargeWind604020054452758Figure 5.Carbon Footprint for XC40 ICE and XC40 Recharge,with different electricity-mixes used for the XC40 Recharge.Results are shown in tonne CO2-equivalents per functional unitXC40 ICE PetrolXC40 Recharge GlobalXC40 Recharge EU28 XC40 Recharge WindMaterials production and refiningLi-ion battery modules14171717-7772,11,41,41,44128180,40,60,50,50,558544527Volvo Cars manufacturingUse phase emissionsEnd of LifeTotalVehicle type Table 5.Carbon Footprint for XC40 ICE and XC40 Recharge,with different electricity-mixes used for the XC40 Recharge.Results are shown in tonne CO-equivalents per functional unit (rounded values).Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE25Figure 6 and Table 6 highlight the break-even point that occurs when comparing the XC40 Recharge with the XC40 ICE.Because the XC40 ICE has a lower Carbon Footprint in the Materials production and refining phase it starts out having a lower Carbon Footprint than the XC40 Recharge,but as the vehicles are driven the cumulated Carbon Footprint increases more rapidly.At a certain driving distance,the vehicles break even and after this point the XC40 Recharge has a lower total life cycle Carbon Footprint.Where this break-even occurs depends on the difference in Carbon Footprint of the Materials production and refining phase,and how carbon-intense the electricity-mix is.For the three electricity mixes in the LCA the break-even occurs at 47 000,84 000 and 146 000 km respectively.All within the assumed life cycle of the vehicle(200 000 km).50100150GlobalWindEU28ICEUse phase(1000 km)Figure 6.Total cumulated amount of GHG emissions,depending on total kilometres driven,from XC40 ICE(ICE in the diagram)and XC40 Recharge(with different electricity mixes in the use phase).Where the lines cross,break-even between the two vehicles occurs.The functional unit for the LCA is“The use of a specific Volvo vehicle driving 200 000 km”.All life cycle phases except use phase are summarized and set as the starting point for each line at zero distance.2509060300200XC40 Recharge,Global Electricity Mix/XC40 ICEXC40 Recharge,EU28 Electricity Mix/XC40 ICEXC40 Recharge,Wind Electricity/XC40 ICEBreak-even(km)146 00084 00047 000Table 6.Number of kilometres driven at break-even between XC40 ICE(petrol)and XC40 Recharge with different electricity mixesVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE26Figure 7 and Figure 8 give an insight into how different material groups contribute to the total Carbon Footprint of the Materials production and refining phase.Steel and aluminium give a significant contribution,especially for the XC40 ICE,but also for the XC40 Recharge.Electronics and polymers are also interesting to note as they contribute around 10ch for both vehicles(although out of different totals).Figure 7.Contribution from different material groups to the Carbon Footprint from“Materials production and refining”for XC40 ICE Figure 8.Contribution from different material groups to the Carbon Footprint from“Materials production and refining,and the Li-ion battery modules”for XC40 Recharge Aluminium34%Steel and Iron34%Electronics13%Fluids and Undefined 4%Polymers11%Tyres 1%Natural Materials 1%Copper 1%Other Metals 2%Aluminium30%Steel and Iron18%Li-ion battery modules28%Electronics9%Fluids and Undefined 3%Polymers 7%Other Metals 2%Natural Materials 1%Copper 1%Tyres 1%Figure 7.Contribution from different material groups to the Carbon Footprint from“Materials production and refining”for XC40 ICE Figure 8.Contribution from different material groups to the Carbon Footprint from“Materials production and refining”for XC40 Recharge Aluminium34%Steel and Iron34%Electronics13%Fluids and Undefined 4%Polymers11%Tyres 1%Natural Materials 1%Copper 1%Other Metals 2%Aluminium30%Steel and Iron18%Li-ion battery modules28%Electronics9%Fluids and Undefined 3%Polymers 7%Other Metals 2%Natural Materials 1%Copper 1%Tyres 1%Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE27Testing alternative electricity mixes for the XC40 Recharge in the use phase shows that the choice of electricity source in the use phase is a crucial factor in determining the total life cycle Carbon Footprint.As stated in Chapter 4,an XC40 Recharge run on wind power has only half the carbon footprint of an XC40 ICE.Forecasts for the global electricity market indicate the carbon intensity of electricity production will further decrease in all markets.This would mean there will be a continuous reduction of the BEVs Carbon Footprints even if no active choice of using renewable energy in the use phase is made.The choice of electricity source in the use phase will also determine which life cycle phase dominates the result.When considering a global average electricity mix,the life cycle impact is split roughly 50/50 between the Materials production and refining stages and the use phase(Table 5).In contrast,a choice of wind-based electricity gives a life cycle carbon footprint that is significantly lower compared to driving with EU-28 or global mixes,and consequently the Materials production and refining phase dominates.This will shift the focus more to the Materials production and refining phase and further emphasize the importance of efforts to reduce the Carbon Footprint in this phase.Volvo Cars strategy of aiming to reduce the Carbon Footprint from the Materials production and refining phase by 25%per average vehicle from 2018 to 2025 is an ambitious start towards achieving net zero Carbon Footprint emissions by 2040.The choice of electricity source in the Materials production and refining phase also has an impact on the total Carbon Footprint,e.g.some metal production processes like electrical furnace are very energy intensive.However,changing electricity has not yet been tested due to the fact that many of the background data-sets are aggregated into black box 5.Discussion This LCA of the Carbon Footprint of an XC40 ICE and an XC40 Recharge gives insight into both the relative contribution to the Carbon Footprint from different life cycle phases(see Figure 5)as well as the underlying causes for the emissions.In turn,these insights can be used to guide efforts into understanding and reducing the emissions.The comparison between the XC40 Recharge and the XC40 ICE shows the differences and similarities between the ICE and the BEV technology,and the potential benefits of electrification.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE2821 E.g.GREET calculation modell,https:/greet.es.anl.gov/datasets,where modifying the electricity production is not possible.When considering the Materials production and refining phase and comparing the result of the XC40 Recharge to the results of the XC40 ICE,the XC40 Recharge has a higher Carbon Footprint.This is mainly due to the addition of the Li-Ion battery.This increase in emissions is compensated for by a lower Carbon Footprint in the use phase,resulting in a total lower Carbon Footprint.Further improvements in the Materials production and refining phase will result in an even further reduced total Carbon Footprint.The BEV driveline technology is still young compared to the ICE driveline implying a relatively higher potential of improvements.Recent studies have shown a general decrease in Carbon footprint of battery production over recent years,and it is a probable expectation that it will continue decreasing in the future.Other material-related improvements are also probable and beneficial,and since the ICEs and BEVs share many bulk materials(aluminum,steel,plastics)and electronic components the effects of these improvements will result more in a lower total Carbon Footprint of both vehicles,and less in an increase of the difference between them.Production of steel and aluminum has a relatively large contribution to the total Carbon Footprint,accounting for roughly 20%of the total Carbon Footprint when a global energy mix is used in the use phase.The Li-ion battery modules account for almost 15%and electronics and plastics for almost 5ch.Thus,efforts to reduce the impact from these materials,for example with increased use of recycled content and more renewable energy in the production,is also an important part of reducing the Carbon Footprint.As long as the XC40 Recharge has a higher Carbon Footprint from the Materials production and refining phase than the XC40 ICE,the question of break-even will remain.At what distance will GHG emissions from Materials production and refining be outweighed by lower emissions in the use phase?This study shows a break-even point of almost 50 000 km for the wind powered XC40 Recharge,significantly below the driving distance of 200 000 km used as the functional unit.When considering a global average electricity mix the break-even point is at about 146 000 km for XC40 Recharge,also below the 200 000 km.After the break-even points the global warming related benefits of the XC40 Recharge compared to the XC40 ICE continue to increase over the rest of the life cycle.This means that the longer the lifetime,the lower the Carbon Footprint of the XC40 Recharge compared to the XC40 ICE.The choice of allocation method results in all GHG emissions from producing scrap being allocated to the vehicles.It also results in all GHG emissions from waste in the end of life treatment being allocated to the vehicles,even if the material is being recycled.This in turn results in a relatively high Carbon Footprint of the Volvo Cars vehicles compared to some other studies where production of material ending up as scrap in the manufacturing is excluded21.Furthermore,the metal production datasets that have been used are average data,and further investigation is needed to assess to what extent this data differs from Volvo Cars actual supply network.There are indications that Volvo Cars suppliers perform significantly better than the average global production in some cases,which is another indication that the results may be overestimated.This is in line with the conservative approach,i.e.to rather over-estimate rather than under-estimate the Carbon Footprints.Volvo Cars strategy of aiming to reduce the Carbon Footprint from the Materials production and refining phase by 25%per average vehicle from 2018 to 2025 is an ambitious start towards achieving net zero Carbon Footprint emissions by 2040.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE29Life Cycle Analysis(LCA),has been used,which has been identified by the EU Commission as the best framework for assessing the environmental performance of products has been used.LCA is well suited for assessing improvements in the whole life cycle and avoiding sub-optimization,i.e.decreasing the environmental impact in one step while increasing it in another step.According to the methodology described in this report the Carbon Footprint of an XC40 ICE and XC40 Recharge is 58 tonnes CO2e and 2754 tonnes CO2e respectively.The reason for the variation in the result of the XC40 Recharge is because different electricity mixes with varying carbon intensity in the use phase have been analysed.The size of the variation clearly shows the impact the choice of electricity mix has on the end result.The XC40 Recharge,and BEVs in general,can have even lower Carbon Footprints in the near future because of potential improvements in e.g.battery technology,vehicle energy efficiency and in the energy systems.The break-even analysis in the study,investigates at what driving distance the Carbon Footprints of the XC40 Recharge become less than the XC40 ICE based on alternate electricity mixes.It shows that all break-even points for the tested electricity mixes occur within the used driving distance of 200 000 km.After the break-even point the Carbon Footprint of the XC40 Recharge improves linearly compared to the XC40 ICE.The longer the lifetime the better the relative Carbon Footprint of the XC40 Recharge.It should be noted that a BEV sold on a market with carbon intensive electricity production indeed can be charged with electricity from renewable energy,which would decrease the Carbon Footprint substantially.Furthermore,the results assume a constant carbon intensity within the alternate electricity mixes throughout the vehicle lifetime which is likely to overestimate the total Carbon Footprint.LCA and the underlying methodology will be used as the metrics for assessing the Carbon Footprint of Volvo vehicles.LCAs will be performed regularly and serve as the framework for guiding the GHG reduction related activities,applying a product perspective.The methodology,practice,data collection procedures etc.will be continuously developed.In this study Carbon Footprints of XC40 ICE and XC40 Recharge have been calculated,including all life cycle phases,i.e.Materials production and refining,Manufacturing,Use phase and End of life(see Figure 5).6.Conclusions Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE30Appendix 1 Chosen datasetsMaterialLocationNameTypeSourceDate usedABS ABSGLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20ABS(filled)ABS(filled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20ABS(filled)EU-28Talcum powder(filler)aggts2020-04-20ABS(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20ABS(unfilled)ABS(unfilled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20AdBlue AdBlueEU-28Urea(46%N)aggFertilizers Europe2020-04-20AdBlueEU-28Tap water from surface wateraggts2020-04-20Aluminium,cast(matcat)Aluminium,cast(matcat)GLOAluminium ingot mix IAI 2015aggIAI/ts2020-04-20Aluminium,wrought(matcat)Aluminium,wrought(matcat)GLOAluminium ingot mix IAI 2015aggIAI/ts2020-04-20ASA ASAGLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20ASA(filled)ASA(filled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20ASA(filled)EU-28Talcum powder(filler)aggts2020-04-20ASA(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20ASA(unfilled)ASA(unfilled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20Brake fluid Brake fluidGLOMarket for diethylene glycolaggecoinvent 3.62020-05-19Cast iron(matcat)Cast iron(matcat)DECast iron part(automotive)open energy inputsp-aggts2020-04-20Catalytic coating Catalytic coatingZAMarket for platinum group metal concentrateaggecoinvent 3.62020-06-01Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE31Copper CopperEU-28Copper Wire Mix (Europe 2015)aggDKI/ECI2020-04-20Copper alloys Copper alloysGLOCopper mix (99,999%from electrolysis)aggts2020-04-20Copper alloysGLOMarket for zincaggecoinvent 3.62020-04-20Cotton CottonGLOMarket for textile,woven cottonaggecoinvent 3.62020-04-20Damper DamperRERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope2020-04-20DamperRoWMarket for limeaggecoinvent 3.62020-04-20Diesel DieselEU-28Diesel mix at filling stationaggts2020-04-20E/P E/PRoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20E/P(filled)E/P(filled)RoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20E/P(filled)EU-28Talcum powder(filler)aggts2020-04-20E/P(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20E/P(unfilled)E/P(unfilled)RoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20Electronics ElectronicsGLOMarket for printed wiring board,surface mounted,unspecified,Pb containingaggecoinvent 3.62020-05-26EPDM EPDMDEEthylene Propylene Diene Elastomer(EPDM)aggts2020-04-20Epoxy EpoxyRoWMarket for epoxy resin,liquidaggecoinvent 3.62020-04-20EVAC EVACRoWMarket for ethylene vinyl acetate copolymeraggecoinvent 3.62020-04-20EVAC(filled)MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE32EVAC(filled)RoWMarket for ethylene vinyl acetate copolymeraggecoinvent 3.62020-04-20EVAC(filled)EU-28Talcum powder(filler)aggts2020-04-20EVAC(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20EVAC(unfilled)EVAC(unfilled)RoWMarket for ethylene vinyl acetate copolymeraggecoinvent 3.62020-04-20Ferrite magnet Ferrite magnetGLOMarket for ferriteaggecoinvent 3.62020-04-24Filled Thermoplastics(matcat)Filled Thermoplastics(matcat)RoWMarket for nylon 6aggecoinvent 3.643941Filled Thermoplastics(matcat)EU-28Talcum powder(filler)aggts43941Filled Thermoplastics(matcat)GLOMarket for glass fibreaggecoinvent 3.643941Float glass Float glassEU-28Float flat glassaggts2020-04-20Glycol GlycolEU-28Ethylene glycolaggPlasticsEurope2020-01-01Lead,battery Lead,batteryDELead(99,995%)aggts2020-04-20Leather LeatherDECattle hide,fresh,from slaughterhouse(economic allocation)aggts2020-04-20LeatherDELeather(varnished;1 sqm/0.95 kg)open input cattle hidep-aggts2020-04-20Lubricants(matcat)Lubricants(matcat)EU-28Lubricants at refineryaggts2020-04-20Magnesium MagnesiumCNMagnesiumaggts2020-04-20NdFeB NdFeBGLOMarket for permanent magnet,electric passenger car motoraggecoinvent 3.62020-04-24NR NRDENatural rubber(NR)aggts2020-04-20PA MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE33PARoWMarket for nylon 6aggecoinvent 3.62020-04-20PA(filled)PA(filled)RoWMarket for nylon 6aggecoinvent 3.62020-04-20PA(filled)EU-28Talcum powder(filler)aggts2020-04-20PA(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PA(unfilled)PA(unfilled)RoWMarket for nylon 6aggecoinvent 3.62020-04-20PBT PBTDEPolybutylene Terephthalate Granulate(PBT)Mixaggts2020-04-20PBT(filled)PBT(filled)DEPolybutylene Terephthalate Granulate(PBT)Mixaggts2020-04-20PBT(filled)EU-28Talcum powder(filler)aggts2020-04-20PBT(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PBT(unfilled)PBT(unfilled)DEPolybutylene Terephthalate Granulate(PBT)Mixaggts2020-04-20PC PCGLOMarket for polycarbonateaggecoinvent 3.62020-04-20PC(filled)PC(filled)GLOMarket for polycarbonateaggecoinvent 3.62020-04-20PC(filled)EU-28Talcum powder(filler)aggts2020-04-20PC(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PC(unfilled)PC(unfilled)GLOMarket for polycarbonateaggecoinvent 3.62020-04-20PC ABS PC ABSGLOMarket for polycarbonateaggecoinvent 3.62020-04-20PC ABSGLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20PC ABS(filled)PC ABS(filled)GLOMarket for polycarbonateaggecoinvent 3.62020-04-20PC ABS(filled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20PC ABS(filled)EU-28Talcum powder(filler)aggts2020-04-20PC ABS(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PC ABS(unfilled)PC ABS(unfilled)GLOMarket for polycarbonateaggecoinvent 3.62020-04-20MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE34PC ABS(unfilled)GLOMarket for acrylonitrile-butadiene-styrene copolymeraggecoinvent 3.62020-04-20PE PERoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20PE(filled)PE(filled)RoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20PE(filled)EU-28Talcum powder(filler)aggts2020-04-20PE(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PE(unfilled)PE(unfilled)RoWPolyethylene production,low density,granulateaggecoinvent 3.62020-04-20PET PETGLOMarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.62020-04-20PET(filled)PET(filled)GLOMarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.62020-04-20PET(filled)EU-28Talcum powder(filler)aggts2020-04-20PET(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PET(unfilled)PET(unfilled)GLOMarket for polyethylene terephthalate,granulate,amorphousaggecoinvent 3.62020-04-20Petrol PetrolEU-28Gasoline mix(regular)at refineryaggts2020-04-20PMMA PMMARERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope2020-04-20PMMA(filled)PMMA(filled)RERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope2020-04-20PMMA(filled)EU-28Talcum powder(filler)aggts2020-04-20PMMA(filled)GLOmarket for glass fibreaggecoinvent 3.62020-04-20PMMA(unfilled)PMMA(unfilled)RERPolymethylmethacrylate sheet(PMMA)aggPlasticsEurope2020-04-20Polyurethane(matcat)MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE35Polyurethane(matcat)RoWMarket for polyurethane,rigid foamaggecoinvent 3.62020-04-20POM POMEU-28Polyoxymethylene(POM)aggPlasticsEurope2020-01-01POM(filled)POM(filled)EU-28Polyoxymethylene(POM)aggPlasticsEurope2020-01-01POM(filled)EU-28Talcum powder(filler)aggts2020-04-20POM(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20POM(unfilled)POM(unfilled)EU-28Polyoxymethylene(POM)aggPlasticsEurope2020-01-01PP PPGLOMarket for polypropylene,granulateaggecoinvent 3.62020-04-20PP(filled)PP(filled)GLOMarket for polypropylene,granulateaggecoinvent 3.62020-04-20PP(filled)EU-28Talcum powder(filler)aggts2020-04-20PP(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PP(unfilled)PP(unfilled)GLOMarket for polypropylene,granulateaggecoinvent 3.62020-04-20PS PSGLOMarket for polystyrene,general purposeaggecoinvent 3.62020-04-20PS(filled)PS(filled)GLOMarket for polystyrene,general purposeaggecoinvent 3.62020-04-20PS(filled)EU-28Talcum powder(filler)aggts2020-04-20PS(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PS(unfilled)PS(unfilled)GLOMarket for polystyrene,general purposeaggecoinvent 3.62020-04-20PVB PVBDEPolyvinyl butyral granulate(PVB)by-product ethyl acetateaggts2020-04-20PVB(filled)PVB(filled)DEPolyvinyl butyral granulate(PVB)by-product ethyl acetateaggts2020-04-20PVB(filled)EU-28Talcum powder(filler)aggts2020-04-20MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE36PVB(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PVB(unfilled)PVB(unfilled)DEPolyvinyl butyral granulate(PVB)by-product ethyl acetateaggts2020-04-20PVC PVCRoWPolyvinylchloride production,suspension polymerisationaggecoinvent 3.62020-04-20PVC(filled)PVC(filled)RoWPolyvinylchloride production,suspension polymerisationaggecoinvent 3.62020-04-20PVC(filled)EU-28Talcum powder(filler)aggts2020-04-20PVC(filled)GLOMarket for glass fibreaggecoinvent 3.62020-04-20PVC(unfilled)PVC(unfilled)RoWPolyvinylchloride production,suspension polymerisationaggecoinvent 3.62020-04-20R-1234yf R-1234yf R-123yfu-so 43943R-134a R-134aGLOMarket for refrigerant R134aaggecoinvent 3.62020-04-20SBR SBRDEStyrene-butadiene rubber(S-SBR)mixaggts2020-04-20Silicone rubber Silicone rubberDESilicone rubber(RTV-2,condensation)aggts2020-04-20Steel,Sintered Steel,SinteredGLOSteel hot dip galvanisedaggWorldsteel2020-04-20Steel,Stainless,Austenitic Steel,Stainless,AusteniticEU-28Stainless steel cold rolled coil(304)p-aggEurofer2020-04-20Steel,Stainless,Ferritic Steel,Stainless,FerriticEU-28Stainless steel cold rolled coil(430)p-aggEurofer2020-04-20Steel,Unalloyed Steel,UnalloyedGLOSteel hot dip galvanisedaggWorldsteel2020-04-20Sulphuric acid Sulphuric acidEU-28Sulphuric acid(96%)aggts2020-04-20Thermoplastic elastomers(matcat)MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE37Thermoplastic elastomers(matcat)DEPolypropylene/Ethylene Propylene Diene Elastomer Granulate(PP/EPDM,TPE-O)Mixaggts43941Thermoplastics(matcat)Thermoplastics(matcat)RoWMarket for nylon 6aggecoinvent 3.62020-04-20Tyre TyreDEStyrene-butadiene rubber(S-SBR)mixaggts43941TyreEU-28Water(deionised)aggts43941TyreGLOVulcanisation of synthetic rubber(without additives)u-sots43831Undefined UndefinedRoWMarket for nylon 6aggecoinvent 3.643941Unfilled Thermoplastics(matcat)Unfilled Thermoplastics(matcat)DEPolypropylene/Ethylene Propylene Diene Elastomer Granulate(PP/EPDM,TPE-O)Mixaggts43941Washer fluid Washer fluidDEEthanolaggts2020-04-20Wood(paper,cellulose.)Wood(paper,cellulose.)EU-28Laminated veneer lumber(EN15804 A1-A3)aggts2020-04-20Zinc ZincGLOSpecial high grade zincp-aggIZA2020-04-20Aluminium,manufacturing(DE,EU-28)DEAluminium die-cast partu-sots2020-01-01 EU-28Aluminium sheet-open input aluminium rolling ingotp-aggts2020-04-20 DEAluminium sheet deep drawingu-sots2020-01-01Manufacturing (general assumption)Manufacturing (general assumption)u-so2020-05-15Manufacturing,Leather(general assumption)Manufacturing,leatheru-so2020-06-01Polymers(all categories)manufacturing(GLO)MaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE38DEPlastic injection moulding part(unspecific)u-sots2019-02-01Stainless steel manufacturing(DE)DESteel sheet deep drawing(multi-level)u-sots2020-01-01Steel unalloyed,manufacturing (DE,VCC data)DESteel sheet deep drawing(multi-level)u-sots2020-01-01Steel manufacturing (VCC data)u-so2020-05-11Appendix 2 complete list of Volvo Cars Material Library material categoriesMaterial nameMaterial groupSteel,SinteredSteel and IronSteel,UnalloyedSteel and IronSteel,Stainless,AusteniticSteel and IronSteel,Stainless,FerriticSteel and IronCast iron(matcat)Steel and IronAluminium,cast(matcat)AluminiumAluminium,wrought(matcat)AluminiumMagnesiumOther MetalsCopperCopperCopper alloysCopperZincOther MetalsLead,batteryOther MetalsNdFeBOther MetalsABS(filled)PolymersASA(filled)PolymersE/P(filled)PolymersEVAC(filled)PolymersPA(filled)PolymersPBT(filled)PolymersPC(filled)PolymersPC ABS(filled)PolymersPE(filled)PolymersPET(filled)PolymersPMMA(filled)PolymersPOM(filled)PolymersPP(filled)PolymersPVB(filled)PolymersPVC(filled)PolymersABS(unfilled)PolymersASA(unfilled)PolymersE/P(unfilled)PolymersEVAC(unfilled)PolymersPA(unfilled)PolymersPBT(unfilled)PolymersPC(unfilled)PolymersPC ABS(unfilled)PolymersPE(unfilled)PolymersPET(unfilled)PolymersMaterial nameMaterial groupMaterialLocationNameTypeSourceDate usedVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE39PMMA(unfilled)PolymersPOM(unfilled)PolymersPP(unfilled)PolymersPVB(unfilled)PolymersPVC(unfilled)PolymersThermoplastic elastomers(matcat)PolymersEPDMPolymersNRPolymersSBRPolymersSilicone rubberPolymersTyreTyresEpoxyPolymersPolyurethane(matcat)PolymersDamperPolymersCottonNatural MaterialsLeatherNatural MaterialsWood(paper,cellulose.)Natural MaterialsCatalytic coatingGlassFerrite magnetOther MetalsFloat glassGlassAnode*Cathode*ElectronicsElectronicsDieselFluids and UndefinedPetrolFluids and UndefinedLubricants(matcat)Fluids and UndefinedBrake fluidFluids and UndefinedGlycolFluids and UndefinedR-1234yfFluids and UndefinedR-134aFluids and UndefinedSulphuric acidFluids and UndefinedWasher fluidFluids and UndefinedAdBlueFluids and UndefinedSeparator,Li battery*UndefinedFluids and UndefinedMaterial nameMaterial groupMaterial nameMaterial group*Not used in any Carbon Footprint presented in this report,since the Li-ion battery is modelled separately.Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE40Appendix 3 Summary of data-choices and assumptions for component manufacturingMaterialAssumption on component manufacturingCommentMaterial utilization rate in additional component manufacturingCast ironNo extra manufacturing processesThe chosen dataset already includes the production of a finished part to be used in automotive applicationsFluidsNo extra manufacturing processesAssumed that fluids do not need further refining after production of the raw material(the fluid itself)TiresNo extra manufacturing processesAssumed that the processes after vulcanisation only has minor GHG-emissionsCopper(wire)No extra manufacturing processesAssumed that processing after manufacturing into copper wire has negligible emissions and wasteNdFeB magnetsNo extra manufacturing processesThe chosen dataset already includes the production of a finished magnet to be used in electric motors for automotive applicationsElectronics(PCBs)No extra manufacturing processesThe chosen dataset already includes the production of a finished printed circuit boardCast AluminiumDie-casting process 96%Wrought AluminiumRolling Aluminium sheet deep drawingAssumed to represent different types of wrought processes62%Steel(in parts,processed at suppliers)Steel sheet deep drawingSheet is assumed in line with the conservative approach 63%Steel(stamped in a Volvo factory)Steel scrap generated at Volvo Cars factoriesThe steel scrap generated at stamping in the Volvo factories,that is the steel in workstream“vehicle structures”ConfidentialStainless steelSteel sheet deep drawingSheet is assumed in line with the conservative approach63%PolymersInjection moulding processAssumed to represent different types of processes98%Other materialsRaw material weight x2Emissions from raw material production has been multiplied by two,to compensate for further refining and processing50%Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE41Appendix 4 End-of-life assumptions and methodA4.1 TransportTransportation of materials sent to material recycling is included and is assumed to be transported 1500 km by truck.A4.2 DisassemblyThe disassembly stage is globally still a mostly manual process.The energy consumption of this stage was therefore disregarded.As the weight of the disassembled parts are low,potential additional transport of these component was disregarded.A4.3 Pre-treatmentPre-treatment was included for the following disassembled components:Lead acid battery Catalytic converter(only ICE vehicles)Tyres Lithium ion batteries(only electric vehicles)For the lead acid batteries,catalytic converter and tyres,ecoinvent datasets were used for the pre-treatment stage.The lithium-ion battery is assumed to be transported 1500 km by truck to the recycling facility.For the remaining disassembled parts,no inventory was made since their disassembly mainly is done as a safety precaution and they will after this be handled similarly to the rest of the vehicle.The fluids and oils that are incinerated likewise do not go through any pre-treatment.A4.4 ShreddingIn the shredding process the vehicles are milled to smaller fractions.This process uses electricity.In order to estimate the amount of energy needed the energy consumption per kg in the dataset“treatment of used glider”,passenger car,shredding from ecoinvent 3.6 was used.The electricity used for this process was modelled as Volvo Cars specific electricity grid mix as described in 3.1.6.Emissions of metals to water and air where omitted based on the scope focusing on climate change.The entire vehicle except the parts sent for specific pre-treatment is sent through the shredding process.No additional transport is included as shredding is modelled as occurring at the same site as dismantling.A4.5 Material recyclingThis is the fate of the flows of metals from the shredding,as well as for the materials in the pre-treated components.Based on the choice of cut-off approach for end of life modelling,this stage is outside the boundaries of the life cycle and is not included in the inventory,except for the transportation to the material recycling,as mentioned above.A4.6 Final disposal incineration and landfillThe disassembled fluids and oils,as well as the combustible part of the shredder light fraction are modelled to be incinerated without energy recovery.The choice to not include energy recovery relates to the global scope of the LCA.To model the incineration of the waste oils an ecoinvent dataset for treatment of waste oil was used.To model the emissions from the combustion of material from the shredder a dataset for incineration of mixed plastics where used,based on the main content of the flow going to this stage.The main part of the weight will be from the plastics in the vehicle.The dataset chosen was a Thinkstep dataset of EU-28 incineration of mixed plastic.Non-combustible materials,like ceramics and glass are a small part of the vehicle but make up the part of the shredder light fraction that cannot be combusted.This flow is either landfilled or recycled as filler material,both cases modelled with a dataset for landfilling of glass/inert matter,from Thinkstep.Transportation of materials which are separated in the shredding processes and which are assumed to be recycled is estimated to 1500 km by truck.A4.7 Data collectionThis section provides an overview of the data collection Volvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE42activities relating to each life cycle stage.For a full list of datasets see Appendix 2 Chosen datasets.According to the cut-off methodology,the processes presented in Table 8 are included in the data collection effort.BatteriesFuelTyresLiquids(coolants,brake fluid etc)Oils(engine,gearbox etc)Oil filtersCatalytic converterAirbags and seat belt pretensionersRest of vehiclePre-processing stageDisassembly stage*Metals to material recycling,combustible material to incineration(mainly plastics)and residue to landfillFinal disposalSeparate handling.Lead recovery from lead acid and designated Li-ion battery dismantlingPre-treatment for tyre recyclingPre-treatment to allow extraction of precious metalsDisarming of explosives.ShreddingShreddingAccording to material category*IncinerationNone(sent to material recycling)IncinerationIncinerationIncinerationNone(sent to material recycling)None(sent to material recycling)According to material category*Table 8.Processes included in the data collection effort for End of LifeVolvo Cars Carbon footprint report Battery electric XC40 Recharge and the XC40 ICE43
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Air Transport Competitivity Index in Latin America and the CaribbeanSTART HERECONTENTS Introduction.3Historical traffic growth and future perspectives.4Objective,scope,and methodology.6Pillars of the index.7Main results.8Pillar 1:Operating costs.91.1 Fuel costs.111.2 Overflight costs.121.3 Turnaround costs.13Pillar 2:Infrastructure quality .142.1 Airport congestion.192.2 Non-Remote Parking Positions.202.3 Punctuality.212.4 Airport quality.22Pillar 3:Taxes and fees for passengers.243.1 International TUA .273.2 Other fares and international taxes.293.3 Arrival taxes and fees.303.4 Sales and other taxes.31Pillar 4:Sustainability.334.1 SAF Policies .374.2 SAF Refineries .384.3 Average age of fleets.394.4 Eligible offset projects for CORSIA.40Pillar 5:Willingness to travel.415.1 GDP per capita,PPP(constant 2017 International USD).435.2 Age dependency ratio.445.3 Urbanization rate.45Pillar 6:International openness and liberalization.466.1 Visa openness.486.2 Henley Passport Index.496.3 Air Service Agreements.50Pillar 7:International connectivity.527.1 Connectivity index.54Annex 1:Country profiles 63Annex 2:Availability of Non-Remote Parking Positionsand Fleet Mix(Selected Airports).84Annex 3:International connectivity.91Annex 3.1:Interregional connectivity.100INTRODUCTIONWe are convinced that travel is a powerful tool for development.Air travel brings families together,enables companies to reach new markets,contributes to personal growth,and accelerates trade.It provides direct,indirect,and induced employment to millions of people and,by connecting remote and urban areas,travel fosters social mobility,inclusion and accessibility to essential services and cultural exchange.In a region as rich and diverse as Latin America and the Caribbean,travel is not just an option,it is an essential service,and millions of people from all walks of life will benefit if travel continues to grow.It is no wonder that Latin America and the Caribbean are among the fastest growing regions in the world for air travel.More than 70%of tourists arriving in the region arrive by air,and in the decade before the pandemic,increased tourism activity,infrastructure investments and new air routes contributed to passenger numbers growing at a rate of 5.6%per year.The pandemic caused a drastic stop,but the aviation industry in Latin America and the Caribbean has recovered to 2019 levels and has even resumed a growth path despite adversity:an estimated 306 million passengers flew with Latin American airlines in 2023,according to ALTA estimates based on data from Amadeus Travel Intelligence Market Insight.In fact,Latin America and the Caribbean have outperformed all other regions with the highest passenger recovery worldwide,an impressive achievement considering it received no financial assistance during the pandemic.So,what are the conditions that can foster further growth in air travel?How can Latin American and Caribbean countries make the most of these opportunities?And how can the travel industry find a path to growth that is truly sustainable,cooperative,and fair,so that all Latin American and Caribbean citizens,and their local,national,and regional economies can benefit from it?Since 2019,ALTA(Latin American and Caribbean Air Transport Association)and Amadeus have partnered to answer these questions with the Latin American and Caribbean Air Transport Competitiveness Index.To make the best decisions,industry stakeholders,policy makers and industry leaders need access to the best and latest industry data and analysis.Our Competitiveness Index was designed with this in mind.By providing a detailed view of the strengths,challenges and opportunities of the Latin American and Caribbean air transport industry,Amadeus and ALTA aim to provide the information regional leaders need to design strategies that orchestrate a successful and sustainable path for growth,increased collaboration,and improved competitiveness.Ultimately,we believe that if more people can make use of air travel,the countries and citizens of the region will benefit from the income and jobs generated directly and indirectly by the tourism industry.To that end,this report outlines steps that can be taken to generate more attractive conditions to attract investment and facilitate tourism.While this report delves into a lot of data on the influence of all sorts of factors,from infrastructure to fuel prices,airport quality,passenger taxes,ground transportation,etc.,there are some overarching themes that we know have a major influence on the success of the tourism industry,not only in Latin America and the Caribbean,but around the world:Collaboration:The potential of aviation and the travel and tourism industry should be recognized by local and regional governments.It is essential that it be considered as part of State Agendas to foster appropriate contexts for development.Collaboration will help to enhance these efforts more quickly and efficiently.Technology as an enabler:The transformative power of technology will continue to have a dramatic impact on the success and growth of aviation in the region.Technology and innovation can enhance safety,improve sustainability,increase efficiency,and improve the overall passenger experience.With travel-centric retail,technology cannot be overlooked as an essential tool for the growth and prosperity of the travel industry in Latin America and beyond.Amadeus and ALTA firmly believe that the travel industry is a positive force.By working together and sharing this data and our findings with all our industry partners,we hope to contribute to a future in which the travel industry brings development and prosperity to all,while fostering social inclusion,diversity,and sustainability.We look forward to hearing your views,Jos Ricardo BotelhoExecutive Director and CEO of ALTA Victoria GorzioVice President Airlines Latin America,AmadeusHistoric traffic growth and prospects Economic growth:Air transport enables companies to reach new markets,enhances the tourism industry and accelerates trade.Employment and skills development:Provides direct and indirect employment,fostering skills and expertise in diverse fields such as engineering,logistics and customer service.Social cohesion and accessibility:By connecting remote and urban areas,air transport fosters social inclusion,accessibility to essential services and cultural exchange.The air transport industry in Latin America and the Caribbean(LAC)is a fundamental pillar of the regions economic vitality and social progress,not only facilitating the movement of goods and people,but also serving as a catalyst for investment and international cooperation.The contribution of air transport to Latin America goes beyond connectivity.It is a tool for economic growth and social development,and the sectors importance can be understood through several key dimensions:Innovation and investment:The continuing need for technological advances drives innovation and attracts investment in research,development,and infrastructure.Environmental leadership:The industrys focus on sustainability offers a model for balancing growth with environmental responsibility.050100150200250300350197019711972197319741975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023Passengers(millions)Passengers carried in LAC(LAC-based airlines)CAGR by decade:1970-1980:11.380-1989:1.390-1999:3.7 00-2009:3.8 10-2019:5.6 23-2024 Estimated:4.5%-5.5%Source:ALTA AnalysisThe growth of the air transport sector in Latin America and the Caribbean(LAC)over the last fifty years has reflected the regions changing circumstances.In the 1970s,passenger numbers increased at a compound annual growth rate(CAGR)of 11.3%due to political transitions to democracies,which boosted trade and investment.The 1980s,often referred to as the Lost Decade,witnessed stagnation,with modest passenger growth of 1.3%annually due to economic problems,high inflation,and debt.The 1990s revitalized the sector and passenger numbers rose from 65.2 million to 93.6 million.Economic reforms,the emergence of new airlines,the tourism boom and investments in aviation infrastructure were the main drivers.Technological advances in this decade played a transformative role.The introduction of computerized reservation systems streamlined ticketing processes,allowing airlines to reach a wider audience and simplify bookings.In addition,the emergence of digital communication tools and the Internet began to reshape the way airlines interacted with their passengers and managed their operations.There were challenges,such as the financial crisis of 2007-2008,but they were effectively overcome.Between 2010 and 2019,the number of passengers grew from 178.4 million to 305.1 million,an annual growth of 5.6%.Increased tourism activity,infrastructure investments and new air routes drove this growth.However,2020 was a difficult year due to COVID-19,which caused a decline to 121 million passengers.However,thanks to the resilience of airlines and government collaboration on security measures,the industry demonstrated resilience,paving the way for a rapid recovery.Today,the aviation sector in Latin America has fully recovered to pre-pandemic levels,with an estimated 306 million passengers carried by LAC airlines by the end of 2023,according to ALTA estimates.An analysis of the data reveals significant room for growth;current per capita travel stands at 0.6,representing a significant growth opportunity in the region.For sustainable expansion,it is imperative that countries streamline policies and frameworks,fostering a more competitive landscape for industry.Upon conclusion of this historical review,the importance of this Competitiveness Report is evident.Through a detailed assessment of the seven identified pillars,this study provides a holistic perspective of the strengths and vulnerabilities of the Latin American and Caribbean aviation sectors.It is vital to identify areas of excellence and potential improvement.Armed with this analysis,countries can formulate specific strategies,capitalize on their strong points,and strengthen areas of concern.This in-depth knowledge will contribute to a stronger and more resilient air transport landscape in the region.Scoring system:Countries receive scores between 0 and 1 for each pillar.A score of 1 indicates the best performance,while 0 is the lowest.The final country score is the weighted average of all pillars.Normalization:Scores are adjusted to the range 0-1.For most metrics,higher values get scores close to 1.But for factors where less is better,such as fuel price,lower values get higher scores.Thus,the scores for the different pillars are consistent and directly comparable.When there are multiple data points for the same pillar(such as fuel price,which differs between airports in the same country),a country-specific value was calculated using a weighted average based on the number of passengers each airport handles relative to the total number of passengers.Objective,scope,and methodologyData collection:Data is sourced from reliable industry reports,official databases and specific ALTA and Amadeus calculations.The Amadeus Travel Intelligence Market Insight platform,in particular the Schedule Analytics and Traffic Analytics modules,were the main sources of traffic and capacity related data.Weighting of the pillars:Each pillar and sub-pillar is weighted according to its importance for the competitiveness of the air transport sector.In assessing the competitiveness of aviation in Latin America and the Caribbean,greater relevance has been given to the first three pillars:air infrastructure,operating costs,and fees and taxes.The emphasis on these pillars is justified by the ability of a robust air infrastructure to meet growing demand in a region with significant growth potential,where air transport is often the only viable option due to its challenging geography and long distances between destinations.Competitive operating costs are essential,as efficiencies achieved by airlines have a proven track record of being passed on to passengers in the form of lower fares.Finally,the structure of fees and taxes is critical,as they should not represent a barrier that makes the cost of air travel more expensive for passengers,especially in a highly price-sensitive market.Therefore,these three pillars together make up 75%of the final score of this study,underlining their importance in the formation of a competitive and accessible aviation environment in the region.Xnorm=X-XminXmax-XminInverse Xnorm=1 _X-XminXmax-XminThrough this study,we aim to provide a detailed and comprehensive view of the strengths,challenges,and opportunities of the air transport sector in Latin America and the Caribbean.Our goal is to provide information for stakeholders,policy makers and industry leaders to design strategies for sustainable growth,increased collaboration,and improved competitiveness.This report analyzes the competitiveness of the air transport industry in 20 Latin American countries,focusing on 7 key pillars.Index PillarsThe following 7 pillars have been examined,which provide an overall view of the sector:ALTA-AMADEUS Competiveness IndexAirport qualityTaxes on salesCORSIA elegiblesoffset projectsOverflight costsAge dependency ratioHenley indexTurnaround costsOn time performanceArrival taxesFleet ageUrbanization rateASA Agreements Operating costsQuality of infrastructurePassenger taxes and feesSustainabilityPropensity to travelInternational openess&liberalizationInternationalconnectivityFuel costsAirport saturationNon-Remote Parking PositionsInternational TUAGDP per capitaVisa openessSAF policiesSAF refineriesConnectivity indexOther taxes&fees on international routesMain ResultsCountry/PilarOperational costsQuality of infrastructureTaxes and feesSustainabilityWillingness to travelInternational openness and liberalizationInternational connectivityTotal1Panama0.750.900.770.480.740.610.247.342Chile0.550.900.930.200.680.690.126.893Brazil0.540.441.000.980.610.720.346.774Trinidad Tobago0.660.820.820.350.560.530.046.635Guatemala0.660.860.85-0.560.460.086.496Costa Rica0.650.730.770.340.640.590.166.407El Salvador0.610.820.820.090.520.440.096.268Venezuela0.770.820.690.010.530.430.046.229Aruba0.710.750.750.070.640.370.216.2110Colombia0.580.610.550.590.610.560.395.7311Bahamas0.540.770.620.030.820.620.315.7212Mexico0.610.610.550.190.650.580.945.6813Dominican Republic0.400.730.550.290.680.670.425.3814Ecuador0.340.860.670.060.520.570.105.3115Bolivia0.440.770.640.040.610.560.035.2616Belize0.540.610.730.030.540.390.055.2117Peru0.550.440.770.070.570.530.155.0818Argentina0.460.800.430.070.660.660.175.0319Jamaica0.370.820.460.120.520.560.214.8920Cuba0.230.370.670.030.470.160.163.60After reviewing data from the air transport sector in Latin America and the Caribbean,countries in the region have different strengths and challenges.Some are leaders in certain areas,while others need more attention and support.The detailed rankings provide a better understanding of where each country stands and what can be done to improve.Overall ranking:Panama leads the Air Transport Competitiveness Index for Latin America and the Caribbean 2023,with a score of 7.34,ahead of second-ranked Chile,which scored 6.89.Brazil rounds out the top 3 most competitive markets with a score of 6.77.Cuba is the market with the most room for improvement,with a score of 3.60.Operating costs:Venezuela leads the way with a score of 0.77,while Cuba has the most room for improvement with 0.23.Infrastructure quality:Panama and Chile are the countries with the best air infrastructures in the region,both with a score of 0.90.Cuba,Peru,and Brazil have ample room for improvement in their air transport infrastructure.Taxes and fees:Brazil leads this category,with a score of 1,and Argentina has the lowest score of 0.43.Sustainability:Brazil leads in this category with a score of 0.98.Venezuela is the country with the most room for improvement,with a score of 0.01.Willingness to travel:The Bahamas has the highest score in this pillar with 0.82.Cuba,on the other hand,has the lowest score of 0.47.International openness:Brazil leads with a score of 0.72,while Cuba has the greatest opportunities for improvement with 0.16.Connectivity:Mexico is the best-connected country in the region with a score of 0.94,outperforming other countries.Venezuela,Trinidad and Tobago and Bolivia are the least connected countries in the region with a score of 0.04.In conclusion,the Latin American and Caribbean air transport sector shows a diverse picture of strengths and areas requiring attention.Panama emerges as a leader in overall competitiveness,infrastructure quality and operational efficiency,while Brazil leads in sustainability and taxes/fees.However,it is essential to recognize that each country has its unique potential and challenges.Addressing the areas of improvement highlighted,especially in countries such as Argentina and Venezuela,can pave the way for a more cohesive and robust regional air transport network.As stakeholders in this vital sector,continued collaboration,knowledge sharing,and strategic investments are imperative to elevate the regions global position and ensure sustainable growth for the future.Pillar 1.Operating CostsThe air transport industry is dependent on airport and air navigation services,which include aviation fuel supply,maintenance,landing fees,en route overflight fees,ground handling fees,etc.There is a positive correlation between operating costs and the price of airline tickets,which undoubtedly has an impact on airline profitability.Throughout history,the industry has been complemented by new technologies,more modern fleets and more efficient operations that have managed to reduce operating costs and,in turn,the price of airline tickets,which has allowed it to attract more passengers.However,operating costs are constantly in flux,linked to external situations such as currency depreciation,inflation,or political crises.Pillar 1.Operating Costs$6$8$10$12$14$162011201220132014201520162017201820192020202120222023Cents(USD$)Evolution of CASK(cost per available seat-km)and Yield(revenue per passenger-km)of LAC airlines.(Inflation-adjusted values)CASKYieldSource:ALTA analysis based on airlines financial statements.The global aviation industry is a capital-intensive sector,requiring significant investments in both fixed and variable costs.Airlines face a very competitive environment,with demand highly sensitive to price variations,and often operate with narrow profit margins.Given these challenges,there is a common assumption that the costs associated with air travel are high;however,a closer look at the data presents a different perspective.Considering these low margins and strong competition,the aviation industry in Latin America and the Caribbean has struggled to pass savings and improvements directly to passengers.Since 2011,LAC airlines have reduced their Cost per Available Seat Kilometer(CASK)by 42.6%.At the same time,the Yield,which represents revenue per passenger-kilometer,has decreased by 42.7%in real terms.This progress is due to the ongoing efforts of the regions airlines,which have increased their efficiency,adopted best practices,and managed to reduce costs and improve operations.As a result,flights have become more affordable for passengers in the region.It is for these reasons that in Pillar 1 we analyze and compare across countries the top 3 operating expenses that account for more than 60%of total airline operating costs in the region,including:1.1 Fuel Prices Fuel is the largest component of airline operating costs,representing between 34%and 40%in 2023,with an average of 37.4%for airlines based in Latin America and the Caribbean.Even though the vast majority of Latin American and Caribbean countries are producers of oil and petroleum products,the region faces higher fuel prices compared to the United States,where this cost constitutes 24.4%of airline operating expenses.Even though Latin American and Caribbean airlines are more fuel efficient per 1,000 Revenue Passenger Kilometers(RPKs)than their U.S.counterparts,they face higher costs,as illustrated in the graph below.Fuel costsTurnaround costs(including landing fees)Overflight costs88.599.51010.5USALACFuel consumption for each 1,000 RPK0%5 %05%USALACFuel as%of operating costsSource:ALTA AnalysisOperating costs(final score)-0.100.200.300.400.500.600.700.800.90Operating costsBrazilD.RepublicPillar 1.Operating CostsCountry Cost/100 KmIndexAruba18.121.00Peru28.320.94Panama30.000.93Bahamas32.330.92Costa Rica37.250.89Belize37.250.89El Salvador37.250.89Colombia37.250.87Trinidad Tobago39.850.86Guatemala42.000.86Mexico44.670.85Ecuador49.340.82Bolivia50.070.82Venezuela55.000.79Brazil83.70 0.62Chile91.40Argentina119.000.42D.Republic165.000.15Jamaica182.000.05Cuba191.21-1.2 Overflight CostsAirlines pay overflight charges to the governments of each country when they fly over its airspace,even if they do not land in its territory.These costs are intended to cover the use of air traffic control and other air navigation services,such as weather forecasting and communications.The amount of the fee is usually based on the weight of the aircraft and the distance flown in the countrys airspace.Overflight charges can be a significant cost to airlines,especially those flying long-haul routes.Source:ALTA Analysis based on airline dataCountryFuel price/Gallon(average Dec 23-Feb 24)IndexVenezuela1.821.00Panama2.720.55Colombia2.870.47Argentina2.900.46Mexico2.900.46Aruba3.000.41Brazil3.020.40Peru3.050.38Chile3.070.37Jamaica3.070.37Trinidad Tobago3.080.37Guatemala3.140.34Ecuador3.150.33El Salvador3.290.26Costa Rica3.430.19D.Republic3.550.13Bahamas3.550.13Belize3.740.04Bolivia3.750.03Cuba3.81-0.58-0.200.400.600.801.001.20VenezuelaPanamaColombiaArgentinaMexicoArubaBrazilPeruChileJamaicaTrinidad TobagoGuatemalaEcuadorEl SalvadorCosta RicaD.RepublicBahamasBelizeBoliviaCubaFuel price/Gallon Fuel prices(score)Overflight Costs(score)-0.100.200.300.400.500.600.700.800.901.00ArubaPeruPanamaBahamasCosta RicaBelizeEl SalvadorGuatemalaColombiaTrinidad TobagoMexicoEcuadorBoliviaVenezuelaBrazilChileArgentinaD.RepublicJamaicaCubaOverflight costs$Pillar 1.Operating CostsTurnaround costs Aircraft turnaround costs are the expenses incurred between arrival and departure.Airlines try to minimize them to reduce costs and improve efficiency.Factors influencing costs include aircraft size,airport fare structure and airline procedures.This section analyzes the three main costs incurred by airlines when arriving and departing from an airport,which are landing fees,parking fees,and jet bridge fees.The calculations are based on the following assumptions:Aircraft type:A320 with MTOW of 78 tonsType of flight:InternationalHours of operation:Daytime(non-peak hours)Turnaround time:2 hoursCountryCost for 2 hour turnaroundIndexCosta Rica$1551D.Republic$2230.95Aruba$2740.91Belize$2800.91Guatemala$2950.9Trinidad Tobago$3000.89Panama$3220.88El Salvador$4400.79Bahamas$4430.79Chile$4500.78Brazil$5790.69Cuba$5850.68Bolivia$6000.67Mexico$6350.65Colombia$7740.55Venezuela$7850.54Jamaica$8020.53Argentina$8250.51Peru$8660.48Ecuador$1,519-00.20.40.60.81Turnaround costSource:ALTA Analysis based on public informationTurnaround Cost(score)Pillar 1.Operating CostsPeruCosta RicaD.RepublicArubaBelizeGuatemalaTrinidadPanamaEl SalvadorBahamasChileBrazilCubaBoliviaMexicoColombiaVenezuelaJamaicaArgentinaEcuadorPillar 2.Infrastructure Quality2.Infrastructure QualityThe quality of aviation infrastructure is a determining factor for the competitiveness of air transport.An efficient and modern infrastructure not only ensures operational efficiency,but also improves the overall passenger experience.In addition,anticipating and accommodating future growth is very important;as air transport continues to expand,it is essential to have infrastructures that can seamlessly accommodate the growing demand for passengers and cargo.The condition and efficiency of an airports infrastructure directly influences a countrys ability to attract both business and leisure travelers.To assess infrastructure quality,we have broken down this pillar into four specific factors.Each of these factors contributes uniquely to the overall assessment of infrastructure quality:Airport congestion:Using data from the World Airport Coordinators Group(WWACG),we measure airport congestion levels.An airports congestion level gives an idea of its capacity,efficiency in managing peak hours and ability to accommodate growth without causing significant congestion or delays.A high level of congestion can discourage airlines from adding new routes and lengthen the operation times between entering and leaving the airport.This factor has a 40%weight in the infrastructure pillar.Non-Remote Parking Positions:We looked at the number of boarding bridges available per flight during peak hours.The availability of boarding bridges can reduce turnaround times and increase airline efficiency,while offering passengers a more comfortable boarding experience compared to remote stands.This factor has a 20%weight in the infrastructure pillar.Punctuality:Data from OAGs OTP database provides insight into the timeliness of flight departures and arrivals.It is a reliable measure of the airports ability to maintain on-time operations.This factor has a weight of 20%in the infrastructure pillar.Airport quality:This aims to measure the level of service(LoS)of airports using a qualitative approach.The data comes from the Skytrax 2023 ranking and reflects passenger satisfaction at various touch points of their airport experience.This factor is weighted at 20%in the infrastructure pillar.To ensure an accurate and representative assessment of airport infrastructure quality at the country level,the methodology for calculating each countrys final score is based on a detailed and nuanced analysis.This approach recognizes the variability in importance and traffic volume between airports in each country,implementing a weighted average system that adequately reflects the impact of each airport on the national airport infrastructure.The calculation of the final score for each factor is done through a weighted average,considering the percentage of passengers and the number of flights handled by the airports.This system ensures that those airports with a higher volume of traffic,which are more relevant to the countrys airport infrastructure,have a proportionally greater influence on the final evaluation.For countries where most of the traffic is concentrated at a single airport,as is the case in Panama,only the main airport is considered for the evaluation.For the selection of airports that form part of the evaluation,we have established clear and objective criteria focused on the top 5 airports in each country,based on the number of passengers and flights.This approach allows us to identify those airports that:Handle the highest volume of passenger andflight traffic,reflecting their strategic importancewithin the country.Are crucial for international and domesticconnectivity and play a significant role in the nationaleconomy and logistics.These aspects ensure that our assessment focuses on the airports that truly drive and reflect the capacity and quality of airport infrastructure in each country.By applying this method,our assessment provides a fair comparison between countries,adjusted for variability in the size and importance of their most critical airports.Through this weighted average approach,we ensure that our assessment of airport infrastructure quality accurately represents user experience and operational efficiency at the national level.Pillar 2.Infrastructure QualityA sound aviation infrastructure goes beyond merely facilitating the movement of passengers and cargo.It demonstrates a countrys commitment to strengthening its air transport sector,and adequate investment can significantly elevate the countrys position in the global air transport landscape.Below is a summary of private and public investment in airport infrastructure in Latin America and the Caribbean over the past 15 years,according to an analysis done by ALTA based on data from INFRALATAM and the World Banks PPI(Private Participation in Infrastructure)database.On average,only 0.07%of the regions GDP was invested in airport infrastructure during the period 2008-2022.Current traffic growth forecasts up to 2040 are between 3.5%and 5.5%,so there is an urgent need to continue investing in airport infrastructure in the region to meet growing demand.According to an analysis by CAF,approximately US$40 billion of additional investment is needed in the region to meet future demand,given current growth projections.0.00%0.10%0.20%0.30%0.40%$-$5,000$10,000$15,000$20,000200820092010201120122013201420152016201720182019202020212022%Investments vs.GDPInvestments(millions USD)Airport Infrastructure Investments in LACPublic Private%GDP(right axis)Private investments correspond to 63%of total of total investments(2008-2022)97.9%1.7%0.4%Private investments by typeBrownfield projectGreenfield projectManagement and lease agreementsSource:Development Bank CAFSource:World Bank,INFRALATAMFuture airport investment needs69%8%6%By CategoryTerminalRunwayPlatformCargo32!%6%By CountryMexicoBrazilColombiaPeruChileOthersPillar 2.Infrastructure QualitySource:Development Bank CAFPercentage of total airport revenues going to the government in selected airport concessionsCTG22%BOG46%MDE19%GYE50v%LIM47%SCLRecent airport privatizations in Latin America have improved terminals and capacity.However,high concession fees set by governments put a strain on airport operators,passing the costs on to passengers and airlines.Privatization should prioritize service efficiency and infrastructure needs,and not simply increase fees without improving services.Such practices could increase ticket prices and slow the growth of aviation in the region.In accordance with ICAO policies,charges should reflect the cost of services provided,ensuring that airlines and passengers are not harmed by unfair costs,such as rents and concession fees for which they receive no service in return.Pillar 2.Infrastructure QualityPanama leads the infrastructure pillar with a score of 0.904,reflecting its strong aviation infrastructure.It is closely followed by Chile with a score of 0.898,demonstrating a comparable commitment and development in its airport sector.Ecuador,with a score of 0.862,also stands out for its airport infrastructure.Countries such as Jamaica and Argentina,with scores of 0.823 and 0.803 respectively,as well as El Salvador with 0.825,show positive progress towards strengthening their airport capacities.On the other hand,larger economies such as Mexico and Colombia,with scores of 0.609 and 0.611,and Brazil with 0.441,are ranked lower,suggesting that a larger market size does not necessarily guarantee a high-quality airport infrastructure.These results indicate a variety of approaches and levels of investment in aviation infrastructure in Latin America,highlighting opportunities for growth in various economies in the region.-0.100.200.300.400.500.600.700.800.901.00Air Transport Quality RankingIndex Pillar 2.Infrastructure QualityPanamaChileGuatemalaEcuadorVenezuelaElSalvadorJamaicaTrinidad TobagoArgentinaBahamasBoliviaArubaCosta RicaD.RepublicColombiaBelizeMexicoPeruBrazilCuba2.1 Airport Congestion The level of congestion at an airport provides an indicator of its capacity and operational efficiency.As the volume of air travel increases,it is essential to know the level of congestion.A high level of congestion can lead to overcrowding,delays and discourage airlines from introducing new routes.Assessing this factor provides information about an airports ability to handle peak hours and accommodate future growth without significant disruption.Although certain coordinated airports show acceptable levels of punctuality,the focus of our assessment leans toward their ability to expand operations,vital given the 0.6 per capita travel index in Latin America and the Caribbean,which underlines significant growth potential when compared to per capita travel in markets such as the USA or Europe(2).This prioritization reflects the importance of preparing for an increase in air demand,beyond current performance metrics.The airport congestion factor has a significant impact,representing 40%within the infrastructure pillar,due to its critical influence on airport capacity and operational efficiency.Congestion levels directly affect the airports ability to handle peak hours and accommodate growth,thus being a key factor in determining the quality and efficiency of the aviation infrastructure.Considering that 50%of flights in the region take off or land at congested airports,it is essential to promote investments in the expansion of existing airports or the development of new ones to alleviate this problem.Source:ALTA Analysis based on the WWACG listThe Worldwide Slot Guidelines(WASG)establish comprehensive policies and principles for slot allocation at congested airports.These guidelines are managed by the World Airport Slot Board(WASB),a conglomerate of airport,airline,and slot coordinator experts charged with promoting best practices globally.The WASG ensures the impartial updating of these guidelines,allowing any interested party to propose modifications.In addition,airports are classified into three levels,depending on their degree of congestion,to facilitate more effective slot management:Level 1(adequate capacity)Level 2(potential congestion solved with schedule adjustments)Level 3(inadequate infrastructure or imposed restrictions requiring slot coordination).Airports that do not appear on the WASG list receive the WASG value 1.00.10.20.30.40.50.60.70.80.91 Argentina Chile PanamaD.RepublicEcuador Bolivia Costa Rica Bahamas Jamaica Venezuela Belize El Salvador Trinidad Tobago Guatemala Aruba Mexico Colombia Peru Brazil CubaAirport Congestion RankingCountry Weighted Average WASG LevelIndexArgentina1.001.00Chile1.001.00Panama1.001.00D.Republic1.001.00Ecuador1.001.00Bolivia1.001.00Costa Rica1.001.00Bahamas1.001.00Jamaica1.001.00Venezuela1.001.00Belize1.001.00El Salvador1.001.00Trinidad Tobago1.001.00Guatemala1.001.00Aruba1.001.00Mexico1.810.53Colombia2.160.32Peru2.510.12Brazil2.610.06Cuba2.70-Many Latin American countries consistently show a Level 1 status for airport congestion,indicating balanced airport capacity.However,the most important markets(in terms of passenger demand)such as Mexico,Colombia,Peru,and Brazil show signs of increasing congestion.This highlights the need for airport infrastructure development and investment.Airport Congestion(score)Pillar 2.Infrastructure Quality2.2 Non-Remote Parking PositionsNon-remote parking positions play a critical role in determining the operational efficiency of an airport during boarding and deplaning procedures.By analyzing the number of non-remote parking positions per flight during peak hours,we gain insight into the potential for quick and smooth passenger transitions between the aircraft and the terminal.While boarding bridges are critical to operational efficiency in many contexts,they are not universally necessary or desirable at all airports.For airports with low traffic levels or a fleet mix that does not benefit from their use,implementing boarding bridges at all gates could unnecessarily raise costs,counteracting the competitiveness objective.However,the evaluation methodology and criteria focus on the top 5 airports in each country,characterized by high levels of traffic and flights,where the presence of boarding bridges is indicative of advanced aviation infrastructure and contributes significantly to operational efficiency.For major airports with high traffic levels,but which due to their original design do not have boarding bridges,as is the case of Cartagena airport or Bogots T2,the proximity of the parking positions to the terminal building is considered.In these cases,the number of parking positions in front of the terminal building is evaluated and given a value equivalent to that of the boarding bridges,recognizing their contribution to operational efficiency.What is crucial is to minimize the use of remote positions that require passengers to be bussed to and from the aircraft,as this can introduce delays and detract from the passenger experience.In this regard,the focus of our assessment goes Source:ALTA Analysis based in public informationbeyond the mere number of boarding bridges,seeking to underscore the importance of maintaining optimal operational efficiency,facilitating fast and smooth transitions for passengers without compromising the overall experience,especially at those airports that handle a significant volume of air traffic.A more detailed analysis of hourly operations and fleet mix at the regions major airports is provided in Annex 2.-0.200.400.600.801.001.20 Chile Panama Guatemala Jamaica El Salvador Venezuela Colombia Brazil Trinidad Tobago Mexico Cuba Ecuador Argentina Bahamas Aruba PeruD.Republic Bolivia Costa Rica BelizeNon-remote parking positions at the front terminal during pike hoursCountry Non-remote parking posi-per flight peak hours(weighted average)IndexChile1.671.00Panama1.661.00Guatemala1.140.69Jamaica1.130.68El Salvador1.120.67Venezuela1.060.63Colombia1.020.61Brazil0.900.54Trinidad Tobago0.810.49Mexico0.790.47Cuba0.700.42Ecuador0.630.38Argentina0.610.37Bahamas0.550.33Aruba0.550.33Peru0.510.31D.Republic0.480.29Bolivia0.460.28Costa Rica0.380.23Non-Remote Parking Positions(score)Pillar 2.Infrastructure QualitySource:ALTA Analysis based in the OAG OTP Ranking*Note:OTP is the average of Jan-Dec 2023 period2.3 PunctualityPunctuality is a reliable measure to assess the efficiency and reliability of an airport.By measuing the punctuality of flight departures and arrivals,this metric provides information on the coordination,efficiency,and robustness of air-port operations.For this analysis we have used the on-time performance published by OAG,and the calculation is based on the average OTP(On Time Performance)during the year 2023.This indicator has a weight of 20%in the infrastructure pillar.Country Pondered Average of OTP(5 TOP Airports)IndexPanama91%1.00ElSalvador88%0.98Peru88%0.97Bolivia86%0.95Guatemala85%0.94Ecuador85%0.93Colombia84%0.92Brazil82%0.90Trinidad Tobago81%0.90Chile81%0.89Argentina79%0.87Venezuela77%0.85Mexico77%0.85Aruba75%0.83Cuba75%0.83D.Republic72%0.80Bahamas71%0.78Costa Rica69%0.76Jamaica68%0.75Belize64%0.7000.10.20.30.40.50.60.70.80.91Punctuality RankingOn time Performance(score)PanamaEl SalvadorPeruBoliviaGuatemalaEcuadorColombiaBrazilTrinidad TobagoChileArgentinaVenezuelaMexicoArubaCubaD.RepublicBahamasCosta RicaJamaicaBelizePillar 2.Infrastructure Quality 2.4 Airport Quality To holistically assess the efficiency of the airport infrastructure,it is crucial to evaluate the Level of Service(LoS)of the various airport subsystems.The ideal methodology would consist of a quantitative analysis of waiting times during peak hours in all crucial subsystems:check-in,security,passport control and baggage claim.However,despite efforts at several airports to obtain this quantitative data,the response rate was insufficient.This posed a challenge in using a purely quantitative approach to assess responsiveness.To fill this gap and ensure that this vital element was not overlooked,an alternative approach was adopted.Recognizing the importance of user experience in airport operations,qualitative data from the reputable Skytrax rating was integrated.Specific sections of the Skytrax results were selected to qualitatively recreate the quality and efficiency of each airport subsystem.This qualitative approach,although not the original intent,brings its own merit.Qualitative insights,often based on the opinions and experiences of travelers,offer valuable insight into operational efficiency,and can reflect reality to some extent,offering a genuine sense of what passengers experience.While recognizing that this qualitative method may not provide the granular accuracy of quantitative wait times,it presents a viable and informative alternative.This approach ensures that the assessment remains comprehensive and insightful,capturing the essence of the airport systems service levels from the passengers point of view.Pillar 2.Infrastructure QualitySource:ALTA Analysis based on Skytrax Ranking*Note:This does not include countries with-out classified airports00.10.20.30.40.50.60.70.80.91Airport Quality RankingCountryAverage of Skytrax RankingIndexEcuador4.201.00Bahamas4.000.95Colombia3.650.87Guatemala3.500.83Argentina3.270.78Brazil3.190.76Jamaica3.000.71Peru2.910.69Mexico2.780.66Costa Rica2.750.66Venezuela2.630.63Cuba2.560.61Chile2.500.60Panama2.190.52ElSalvador2.000.48Methodology:Billing subsystem evaluation:To evaluate the check-in subsystem,we use the scores from the following Skytrax categories:Congestion around check-in Quality of queuing systems Assessment of the security subsystem:For the security subsystem,we relied on scores from these Skytrax categories:Waiting timesService efficiencyPassport control/immigration service assessment:To gauge the effectiveness of passport control or immigration service,we considered these Skytrax metrics:Waiting time-arrivalsWaiting time-departuresEvaluation of the baggage claim subsystem:To evaluate the baggage claim subsystem,we incorporated the scores from these Skytrax categories:Baggage hall facilitiesBaggage turnaround timesThis methodology,based on qualitative data from Skytrax,ensures that our assessment of the baggage claim subsystem is based on the followingSkytrax qualitative data,ensures that our assessment covers a broad spectrum of passenger spectrum of the passenger experience,from check-in through to baggage check-in to baggage claim,effectively capturing their journey through the effectively capturing their journey through the airport.Skytrax ranking(score)Pillar 2.Infrastructure QualityPillar 3.Taxes and Fees for Passengers International TUA:The Airport User Charge(TUA)for international flights is assessed byconsidering the passenger charges at the fiveairports with the highest international passengertraffic in each country.The international SUT score iscalculated as a weighted average of these airports,reflecting the proportionality of their passengertraffic.Other International Fees and Taxes:Thissection examines the additional fees,includingsecurity,infrastructure development and ticketingtaxes,among others,paid by passengers at the topfive international airports in each country.Todetermine the value of these fees and taxes bycountry,a weighted average is used,based on therelevance of each airport,taking into account itsvolume of international passengers.Arrival fees and taxes:Focuses on the specificcharges that non-resident passengers must payupon arrival in a country,such as tourism taxes.3.Passenger taxes and feesThe structure of taxes and fees has a significant impact on the final ticket price for passengers,sometimes double the initial fare.These charges,usually collected by the airlines,go to different entities such as airports,specific government agencies,and general government funds.The diversity in international air transport regulations and charges,derived from the sovereignty of each country,adds to the complexity of airline operations.Clearly,lower taxes can increase accessibility to air services and stimulate travel demand.To capture the complexity and variety of these charges more accurately and representatively,we have decided to divide this pillar into four distinct sections:Sales and other taxes:This section addressesthe analysis of Value Added Tax(VAT)and othersimilar taxes that are levied directly on the base fareof airline tickets in those countries that impose them.These taxes,calculated as a percentage of the basefare,directly affect the final cost of the ticket topassengers.The assessment covers both VAT andany other national taxes levied on the selling price ofairline tickets,providing insight into the fiscal impacton the cost of air travel and its effect on thecompetitiveness of air transport.For each section,after calculating the taxes and fees paid on the selected routes,a normalization from 0 to 1 is performed,where the country with the lowest fees and taxes receives the highest score.This normalization allows a fair comparison of the different tax regimes and their impact on the cost of air travel,highlighting those countries that offer more competitive conditions for travelers and airlines.This approach helps to identify areas where countries are more or less competitive,highlighting specific aspects that contribute to air accessibility and travel demand,and provides a sound basis for policies aimed at improving air transport competitiveness.The final tax and fee score for each country will be determined by the average of the scores obtained in each of the four categories analyzed,ensuring a balanced and comprehensive assessment of the fiscal and tax impact on air transport.Pillar 3:Taxes and Fees for Passengers CountryIntl.TUAOtherintl.feesArrival taxesIntl.les taxesTotalSales TaxesIntl1Brazil1.001.001.001.001.002Chile0.711.001.001.000.933Guatemala0.610.961.000.830.854El Salvador0.770.711.000.820.825Trinidad Tobago0.610.831.000.830.826Panama0.400.781.000.900.777Costa Rica0.670.740.730.930.778Peru0.591.000.730.750.779Aruba0.730.460.821.000.7510Belize0.92-1.001.000.7311Venezuela-0.861.000.890.6912Cuba0.691.00-1.000.6713Ecuador0.170.840.900.760.6714Bolivia0.710.071.000.790.6415Bahamas0.490.160.980.830.6216D.Republic0.810.400.250.750.5517Colombia0.250.470.730.740.5518Mexico0.190.810.240.940.5519Jamaica0.650.000.201.000.4620Argentina0.050.671.00-0.43.Passenger taxes and fees(final score)-0.100.200.300.400.500.600.700.800.901.00Ranking of fees,taxes and contributionsPillar 3:Taxes and Fees for Passengers BrazilChileGuatemalaEl SalvadorTrinidad TobagoPeruPanamaCosta RicaArubaBelizeVenezuelaEcuadorCubaBoliviaBahamasD.RepublicColombiaMexicoJamaicaArgentina3.1 International Airport Use Charge(TUA):The Airport Use Charge(TUA)is a charge that passengers must pay for the use of airport facilities and services.It is charged at the time an airline ticket is purchased and varies by airport.The following are the TUA rates by country using the weighted average methodology described above.$-$10$20$30$40$50$60$70International TUA by country(weighted average)CountryInternational InternacionalIndexBrazil$11.001.00Belize$15.000.92D.Republic$20.000.81El Salvador$22.130.77Aruba$24.000.73Chile$25.000.71Bolivia$25.000.71Cuba$26.000.69Costa Rica$27.000.67Jamaica$28.090.65Trinidad Tobago$30.000.61Guatemala$30.000.61Peru$30.780.59Bahamas$35.640.49Panama$39.720.40Colombia$47.190.25Mexico$50.160.19Ecuador$51.230.17Argentina$57.000.05Venezuela$59.27-Pillar 3:Taxes and Fees for Passengers VenezuelaArgentinaEcuadorMexicoColombiaPanamaBahamasPeruTrinidad TobagoGuatemalaJamaicaCosta RicaCubaChileBoliviaArubaElSalvadorD.RepublicBelizeBrazilCase Study:Potential Benefits of Reducing Passenger Facility Charges(PFCs):Chile and Cartagena.$0$10$20$30$40$50$60$70$80$90$100MIAIADLPBCUNPOSSALGYEHAVASUNASSCLGUALIMCLOCURSDQEZESJOMEXMDEADZPTYMVDUIOCCSCTGIn 2014,CTG had one of the highest airport charges in the Region.Selected airports TUA:USD per passenger(2014)-200,000400,000600,000800,0001,000,0001,200,000International passengersSince the reduction of the airport tax at CTG,international traffic has tripled.CAGR2014-2019:24.8%Source:ALTA calculations with data from MINCITUR,Aero civil Colombia and JAC Chile.-200,000400,000600,0002014 2015 2016 2017 2018 2019 20202021 2022International Tourist ArrivalsAnd international tourist arrivals to Cartagena had doubled before the pandemic.-500,0001,000,0001,500,0002,000,000SeptOctNovDecJanFebMarAprMayJunSince the reduction of the airport tax at CTG,international traffic has tripled.CAGR 2008-2014:6.2%.2017-20182018-20192019-2020*2022-2023Total Passengers(accumulated sep-jun)Pillar 3:Taxes and Fees for Passengers$-$10$20$30$40$50$60$70BelizeJamaicaBoliviaBahamasD.RepublicArubaColombiaArgentinaElSalvadorCosta RicaPanamaMexicoTrinidad TobagoEcuadorVenezuelaGuatemalaBrazilPeruChileCubaOther Fees/Taxes on International Tickets(weighted average)CountryOther fees and taxesIndexBrazil$-1.00Peru$-1.00Chile$-1.00Cuba$-1.00Guatemala$2.600.96Venezuela$8.050.86Ecuador$9.550.84TrinidadTobago$10.000.83Mexico$10.890.81Panama$12.910.78Costa Rica$15.100.74El Salvador$17.000.71Argentina$19.400.67Colombia$31.000.47Aruba$31.600.46D.Republic$35.000.40Bahamas$49.040.16Bolivia$54.200.07Jamaica$58.340.00Belize$58.50-3.2 Other international taxes and fees This section focuses on the analysis of additional charges imposed on passengers on international flights,which go beyond airport usage fees.These include,but are not limited to,security fees,migration fees,infrastructure development,ticketing taxes,as well as country-specific taxes such as the stamp tax in Colombia.These charges,whether applied directly to the base fare or included in the final ticket price,have an impact on the total cost of travel for passengers.Each of these taxes and fees reflects a fiscal policy of the country of origin,intended to finance airport security,infrastructure improvements or other initiatives.In this section,a weighted average of these additional costs at the top five international airports in each country is calculated,based on their relevance and volume of international passengers,to estimate how they contribute to the total cost of airline tickets and to assess their effect on the competitiveness of international air travel.Pillar 3:Taxes and Fees for Passengers 3.3 Arrival taxes and fees This section focuses on the arrival taxes and fees that foreigners or foreign residents pay when entering a country,included in the airline ticket.These charges may include tourist taxes or other categories.For example,Ecuador applies the Impuesto Potencia Turstica,a 5%tax on the net fare with a maximum of 10 USD.To calculate the value of this tax for Ecuador,a weighted average of the base fare of the top ten international routes was used,with fares based on a 30-day advance purchase and a 7-day stay.This approach allows estimating the additional cost for international travelers.$-$10$20$30$40$50$60Arrival Taxes/FeesCountryArrival TaxesIndexBrazil$-1.00Argentina$-1.00Chile$-1.00Panama$-1.00Bolivia$-1.00Venezuela$-1.00Belize$-1.00ElSalvador$-1.00Trinidad Tobago$-1.00Guatemala$-1.00Bahamas$1.000.98Ecuador$5.700.90Aruba$10.000.82Colombia$15.000.73Peru$15.000.73Costa Rica$15.000.73D.Republic$41.300.25Mexico$42.000.24Jamaica$44.000.20Cuba$55.00-Pillar 3:Taxes and Fees for Passengers Trinidad TobagoGuatemalaCubaJamaicaMexicoD.RepublicColombiaPeruCosta RicaArubaEcuadorBahamasBrazilArgentinaChilePanamaBoliviaVenezuelaBelizeElSalvadorThe variability in the taxation of airline tickets demonstrates the different fiscal policies of each country and their impact on the airline industry.While some states choose to significantly tax ticket sales,others recognize the importance of keeping costs low to promote tou-rism and international connectivity.CountryTaxes over base fareIndexBrazil0%1.00Chile0%1.00Cuba0%1.00Jamaica0%1.00Belize0%1.00Aruba0%1.00Mexico4%0.94 Costa Rica5%0.93 Panama7%0.90 Venezuela8%0.89 Bahamas12%0.83 Guatemala12%0.83 Trinidad Tobago13%0.83 El Salvador13%0.82 Bolivia15%0.79 Ecuador17%0.76 Peru18%0.75 D.Republic18%0.75 Colombia19%0.74 Argentina72%-ArgentinaTaxes from ticket sales(%over base fare)0 0Pp%3.4 Taxes levied on ticket salesThis section analyzes Value Added Tax(VAT)and other taxes levied as a percentage of the base fare on airline ticket sales.Special attention is paid to those countries that impose a significant tax burden on tickets,directly affec-ting cost competitiveness for travelers.Argentina stands out for having the highest tax burden in the region on ticket sales,totaling 72%of the final ticket price.This burden includes the tax(AFIP)of 30%,the inclusion and solidarity tax(PAIS)of 30%,the tourism tax of 7%,and the income withholding tax of 5%.It is important to note that the AFIP and PAIS taxes apply exclu-sively to tickets purchased in Argentina and paid in pesos.In contrast,countries such as Brazil and Chile do not apply VAT to tickets for international flights,which reflects a more favorable policy towards the promotion of international air transportation and a follow up of ICAO recommendations,which in its document 8632 recommends that international air transportation and related services should not be subject to VAT,highlighting the importance of maintaining the competitiveness and accessibility of air transportation at a global level.Pillar 3:Taxes and Fees for Passengers Aruba Colombia PeruD.RepublicEcuador Bolivia El Salvador Trinidad Tobago Bahamas Guatemala Venezuela Panama Costa Rica Mexico Brazil Chile Cuba Jamaica BelizeThe structure of fees and taxes in air trans-port is a fundamental component that has a direct impact on the competitiveness of aviation in Latin America and the Carib-bean.The sensitivity of the air market to prices is such that even small increases in fees can trigger a significant decrease in travel demand.This price-demand rela-tionship not only affects travelers deci-sions,but also has a direct impact on the economic and tourism development of countries,where an increase in costs can curb the flow of visitors and investment in the region.Taxes,fees,and charges,as they constitu-te a considerable part of the total cost of the ticket,should not be evaluated in isola-tion.Their cumulative impact is a decisive factor in airline strategy when selecting routes and markets to operate and can lead to a redistribution of air traffic flows to regions with lower tax burdens.Conse-quently,the decline in travel demand not only represents a problem for airlines,but also translates into lower-than-expected tax revenues for governments,which see travel and consumption diverted to other jurisdictions.The relevance of taxes and charges in the airline industry is clear in the analysis of the top 15 intra-regional routes in Latin Ameri-ca.The data shows that,on many of these routes,taxes and fees account for more than half of the final cost paid by passen-gers,with the base fare being less than half of the total price.The graph below shows the%of each item(transport fare,TUA,fees,taxes and contributions over the final fare on the top 15 intra-regional internatio-nal routes in Latin America and the Carib-bean.The analysis is based on the basic fare(without extras and baggage)for each route with a 30-day advance purchase and a 7-day stay for the months of March and April 2024.On average,the basic transpor-tation fare represents 49.3%of the final fare and fees,taxes and contributions re-present 51.7%of the final fare.The variability in the taxation of airline tic-kets demonstrates the different fiscal poli-cies of each country and their impact on the airline industry.While some states choose to significantly tax ticket sales,others recognize the importance of kee-ping costs down to promote tourism and international connectivity.This fiscal and tax landscape underscores the critical need for a comprehensive con-sideration of fees and taxes in aviation po-licymaking.It is imperative that govern-ments and aviation regulators carefully weigh the balance between revenue gene-ration and the promotion of a healthy and accessible aviation sector.49.3%.9.0%7.7%3.2%0 0Pp0%LIM-SCLAE P-SCLGRU-S CLE ZE-SCLBOG-ME XGIG-S CLAE P-GRUE ZE-GIGGUA-SJ OBOG-PT YBOG-CUNBOG-LIMAE P-GIGE ZE-GRUBOG-UIOAverage-FareTUASales taxOther feesTourist/Arrival tax%of base fare,fees,contributions and taxes on the final price(15 intra-regional international routes in Latin America and the Caribbean)Source:ALTA AnalysisThis fiscal and tax landscape underscores the critical need for comprehensive consideration of rates and taxes in the formulation of policies.It is imperative that governments and regulators carefully weigh the balance between generating income and promoting a healthy and affordable airline sector.Pillar 3:Taxes and Fees for Passengers Pillar 4.SustainabilityThe recent adoption by the ICAO Assembly of the zero net emissions target recognized the key role of cleaner aviation fuels,such as SAF,in reducing aviation CO2 emissions.According to a Committee on Aviation Environmental Protection(CAEP)study,the substitution of traditional fuels with SAF could drastically reduce the CO2 footprint,laying the groundwork for significant reductions by 2050.6.51Pillar 4.SustainabilityInternational Civil Aviation Organization(ICAO)set a clear goal for the aviation industry:to achieve net zero emissions by 2050.The interconnected aviation ecosystem,involving airlines,fuel suppliers,aircraft manufacturers,airports and ground handling companies,demands collective responsibility.While there is a shared desire to decarbonize aviation,there are many practical challenges.Aircraft typically have a service life of 20 to 30 years,and new designs can take many years to become operational.In addition,the industrys high energy requirements to transport passengers and cargo at high speeds and altitudes make decarbonization difficult.Achieving the emissions target depends on several CO2 reduction strategies.Governments,through ICAO,have committed to prioritizing innovations in aviation technology,streamlining flight operations to reduce fuel consumption and,in particular,increasing the production and use of sustainable aviation fuels(SAF).In addition,measures have been promoted outside the industry,such as offsetting through the Carbon Offsetting and Reduction Scheme for International Aviation(CORSIA)for carbon offsets.Across this pillar,we survey the status of SAF policies and the SAF refineries planned for construction as a measure and assessment of each countrys commitment to sustainable aviation.While there are aspirations around the world,the pace and scale of adoption of SAF differs from country to country.The objective of this pillar is to provide an overview of the SAF landscape by identifying the key players in SAF production,the policies in place to promote its use,and upcoming infrastructure projects that signal a nations commitment to greener aviation.By analyzing the strategies and commitments of different countries,we can compare progress and highlight best practices.In addition,we assess the average age of aircraft fleets by country,noting that newer aircraft tend to be more fuel efficient and produce fewer emissions.Finally,we include a factor that evaluates and identifies CORSIA-eligible offset projects in the region.This is another important element that complements the other key pillars,aiming to reduce CO2 emissions,which cannot be implemented directly through improved technologies and increased efficiency of operations,as through the use and production of sustainable aviation fuels.In summary,the pillar provides a comprehensive examination of aviations path to sustainability.Through operational improvements,fleet renewal,technological innovation and strong commitment,the aviation industry in Latin America has managed to mitigate its carbon footprint over the last decade.As seen in the graph below,from 2011 to 2022,fuel consumption per 100 RPK has decreased by 29%,with an average annual efficiency rate of over 2%.0.700.800.901.001.101.201.30201120122013201420152016201720182019202020212022Gallons of fuel per 100 RPKFuel consumption 100 RPK-29%Pillar 4.SustainabilityAlthough all these operational and technological improvements have enabled the sector to reduce its emissions,there is a limit to the reduction in total emissions.The aviation sector in the region already has one of the most modern fleets,using the latest and most efficient technologies.It is therefore crucial to develop a sustainable aviation fuel industry that will enable an energy transition in the sector.According to ICAOs Feasibility Report on a Long-Term Aspirational Goal for International Civil Aviation CO2 Emissions Reduction(LTAG),large-scale production of sustainable fuels has the greatest potential to reduce aviation emissions.-0.100.200.300.400.500.600.700.800.901.00Sustainability RankingSustainability(final score)D.RepublicPillar 4.SustainabilityThe goal of zero net emissions by 2050 requires a combination of several strategies to reduce and eliminate emissions at source,and according to several sources and different scenarios,SAF could contribute around 60%-70%of the total emissions reduction.However,reaching this target requires enormous support from governments and stakeholders,especially when,according to IATA,SAF production in 2022 represented only 0.1%to 0.15%of total jet fuel demand.The challenges are manifold:limited political support,varied SAF accounting methods,insufficient distribution infrastructure,confusion about its benefits,raw material shortages,limited investments,and competition from other sectors.Clear and consistent policies are essential for effective adoption of SAF.Such policies should be harmonized across countries,prioritize research,and comply with international standards.Pricing plays a key role.If SAF becomes more affordable,consumption is likely to increase.However,strict mandates that do not make SAF more accessible or affordable could deter new entrants to the market and stifle innovation in SAF production.Finally,the overall financial approach needs to be reevaluated.Currently,a larger share of financing is allocated to conventional fuels than to renewable sources such as SAF.This paradigm needs to shift.All stakeholders,from governments to airlines,must work together to promote the adoption of SAF and contribute to a more sustainable aviation future.In this section we analyze and rank Latin American countries according to government policies supporting the production of SAF.Scores are awarded based on the following criteria:If a country has a SAF legal framework ready and implemented,it receives 1 point.If a country has a SAF legal framework pending government approval,it receives 0.8 points.If a country has completed SAF feasibility studies,it receives 0.5 points.If a country has created working groups to study the feasibility of SAF,it receives 0.25 points.00.10.20.30.40.50.60.70.80.91SAF PoliciesSource:ALTA AnalysisCountrySAF policies rankingIndexBrazil0.801.00D.Republic0.500.63Costa Rica0.500.63Trinidad Tobago0.500.63Mexico0.250.31Colombia0.250.31Chile0.250.31Argentina-Peru-Panama-Cuba-Ecuador-Bolivia-Bahamas-Jamaica-Venezuela-Belize-El Salvador-Guatemala-Aruba-4.1 SAF policies SAF Policies(score)Pillar 4.SustainabilityBrazilD.RepublicCosta RicaTrinidadTobagoMexicoColombiaChileArgentinaPeruPanamaCubaEcuadorBoliviaBahamasJamaicaVenezuelaBelizeElSalvadorGuatemalaArubaThe sustainable aviation fuel(SAF)boom is transforming the aviation landscape.Leading countries in the production of SAF are positio-ning themselves to lead the global market.Cost-competitive domestic production of SAF is increasingly seen as a key element of a countrys aviation competitiveness.According to various sources,including ICAO,Argus,S&P Global and Boeing,several countries have announced SAF refinery projects,unders-coring their strategic commitment to the sustai-nable future of aviation.Those countries capable of producing SAF efficiently can attract more aviation operations,positioning their aviation hubs as potential SAF exporters.In this section,countries that have announced the construction of SAF refineries receive 1 point.In addition,according to Air Transport Action Groups(ATAG)Fueling Net Zero study,be-tween 620 and 850 SAF refineries will be needed in Latin America and the Caribbean by 2050 to reach the Net Zero target.Each of these refineries will need to produce an average of 22 million gallons of SAF per year.So far,only 5 refi-neries have been announced for the period up to 2030(2 in Brazil,1 in Paraguay,1 in Panama and 1 in Colombia).It is therefore important to con-centrate all efforts on achieving this goal.The projected cost for the construction and start-up of these refineries is between US$142 billion and US$183 billion,which underlines the need for government support in this transition.By 2050,Latin America and the Caribbean will have the potential to produce around 13%of the industrys FAE needs,given the feedstock available in the region.This supply will be more than sufficient for regio-nal fuel demands;however,the implementation of adequate public policies is crucial.Without such supportive policies,regional airlines may be forced to import SAF from other areas.00.10.20.30.40.50.60.70.80.91BrazilPanamaColombiaMexicoArgentinaPeruChileD.RepublicCubaEcuadorBoliviaCosta RicaBahamasJamaicaVenezuelaBelizeElSalvadorTrinidad TobagoGuatemalaArubaAnnounced SAF refineriesCountry Announced SAF refineries ranking IndexBrazil1.001.00Panama1.001.00Mexico-Colombia1.001.00Argentina-Peru-Chile-D.Republic-Cuba-Ecuador-Bolivia-Costa Rica-Bahamas-Jamaica-Venezuela-Belize-El Salvador-Trinidad Tobago-Guatemala-Aruba-4.2 SAF RefineriesSource:ALTA AnalysisPillar 4.Sustainability0246810121402004006008001,0001,2001,4001,6001,8002,000200520082010201120122013201420152016201720182019202020212022Total#of fleetAverage age(right axis)Modern aircraft consume less fuel than older models,which translates into lower emissions and lower operating costs.The latest generation of aircraft consumes 15-20%less fuel than the oldest fleet,which in turn emits less CO2.Advances in fleet modernization are likely to continue along this path,with more fuel-efficient engines,lighter materials,lower operating costs,and even advanced systems such as the introduction of all-electric aircraft.ALTA airlines have placed more than 1,269 new-generation aircraft into service since 2005,with an approximate market value of more than$90 billion.12.89.88.37.88.28.48.59.19.79.9510152005 2010 2015 2016 2017 2018 2019 2020 2021 2022 Average age in yearsAverage fleet age(ALTA Airlines)Average fleet age reduction:22%9.912.212.251015ALTAUSAEU Average age in yearsAverage fleet age comparison(2022)4.3 Average fleet age0204060801001201401602,3002,4002,5002,6002,7002,8002,9003,0003,100202420252026202720282029203020312032TotalFleetinServiceScheduledDeliveriesScheduled deliveries in LACTotal number of aircraft and average age of fleetSource:ALTA Analysis based on Cirium Fleet AnalyzerTotal number of aircraftAverage age(years)Index Pillar 4.Sustainabilitya harmonized way of reducing international aviation emissions,minimizing market distortion while respecting the special circumstances and respective capabilities of ICAO member states.“At the time of this analysis,no country in the region has eligible projects applicable for the first phase of CORSIA.4.4 Eligible offset projects for CORSIASource:ALTA Analysis Based on Cirium Fleet Analyzer0.00.10.20.30.40.50.60.70.80.91.0Fleet Average AgeCountry Average AgeIndexTrinidad Tobago5.11El Salvador8.30.88Costa Rica8.40.88Brazil11.00.79Chile11.30.78Panama11.60.77Aruba12.80.72Peru13.20.71Colombia13.50.70Argentina14.20.67Mexico14.30.67Ecuador16.80.58D.Republic22.40.38Bolivia22.70.37Cuba24.00.32Belize24.70.29Bahamas25.40.27Venezuela29.60.12Guatemala32.80.00Trinidad and Tobago stands out as the country with the most modern fleet,with an average age of 5.1 years.IndexAs already mentioned,aviation has committed to making advances in technology,operations,and infrastructure to further reduce its carbon emissions,and carbon offsetting aims to be an additional element in the efforts to achieve this commitment.Through CORSIA,the sector can be supported in reaching its short-and medium-term climate goals by complementing the initiatives mentioned above.According to the definition established by ICAO,CORSIA is the first global market-based measure for any sector and represents a cooperative approach that moves away from a patchwork of national or regional regulatory initiatives.It offers Pillar 4.Sustainability40Pillar 5.Willingness to travelThe disparity between Latin Americas 0.6 trips per capita and the 2 trips of mature markets such as the U.S.and Europe highlights a significant gap and shows that there is significant potential in the regions aviation sector.To harness this potential and drive competitiveness,it is important to understand the most important factors that can drive the propensity to travel.GDP per capita(PPP):Adjusted for purchasing power parity,this parameter reflects the economic well-being of the population.Higher GDP per capita usually indicates that citizens have more income available for discretionary spending,including travel.In the Latin American context,tracking this metric is crucial to observe the growth of the emerging middle class,which tends to travel more as their disposable income increases.Age Dependency Ratio:This demographic metric gives an idea of the size of the working-age population compared to the non-working age group.A lower ratio suggests a larger working-age population,which is often associated with greater economic activity,urban mobility and,consequently,air travel.Latin Americas large youth population could lead to increased demand for air travel as this group becomes economically active.Source:ALTA AnalysisUrbanization rate:As people move to cities in search of better opportunities,they often find themselves closer to transportation hubs,including airports.A rising urbanization rate indicates an increase in travel demand and underscores the importance of urban infrastructure and air connectivity.Taken together,these factors provide a global perspective on Latin Americas aviation prospects.Aruba has the highest GDP per capita on the list,suggesting that its residents are more financially able to travel.In contrast,Bolivia,although with a lower GDP,has the lowest Age Dependency Ratio,suggesting a younger population.Urbanization,which makes travel more accessible due to proximity to major airports,is higher in Argentina.The Bahamas,Panama and Chile consistently rank highest on all factors,indicating strong travel demand.For airlines and the travel industry,these indicators highlight potential areas of market growth in Latin America.-0.100.200.300.400.500.600.700.800.90Willingness to travelIndex Pillar 5.Willingness to travelSource:ALTA analysis based on World Bank data.GDP per capita,when adjusted for purchasing power parity(PPP),serves as a reliable indicator of the economic health of a countrys citizens.Higher GDP per capita implies that individuals have more discretionary income to spend,which often includes spending on travel.When people have more purchasing power,they are more likely to travel,whether for leisure or business.Country GDP per capita,PPP(constant international 2017 USD)IndexAruba$38,8661.00Bahamas$34,1970.88Panama$33,2660.86Chile$25,8860.67Trinidad Tobago$23,5260.61Argentina$22,4470.58Costa Rica$21,9870.57Mexico$19,5470.50D.Republic$19,3380.50Colombia$15,6520.40Brazil$15,0930.39Peru$12,7440.33Cuba$11,5100.30Ecuador$10,8590.28Jamaica$10,0120.26Belize$9,6980.25El Salvador$9,3970.24Guatemala$9,1620.24Bolivia$8,2010.21Venezuela$6,1060.1600.10.20.30.40.50.60.70.80.91ArubaBahamasPanamaChileTrinidad TobagoArgentinaCosta RicaMexicoD.RepublicColombiaBrazilPeruCubaEcuadorJamaicaBelizeEl SalvadorGuatemalaBoliviaVenezuelaGDP per capitaIndex Pillar 5.Willingness to travelSource:ALTA analysis based on World Bank data.00.10.20.30.40.50.60.70.80.91Age Dependency RatioCountryAge dependency ratioIndexBolivia7.681.00Guatemala7.880.97Belize8.000.96Jamaica9.990.77D.Republic10.950.70Ecuador11.530.67Bahamas11.930.64Mexico12.160.63El Salvador12.330.62Colombia12.510.61Peru12.730.60Venezuela13.000.59Panam a13.170.58Brazil13.710.56Costa Rica15.280.50Trinidad Tobago15.950.48Argentina18.240.42Chile18.420.42Aruba22.970.33Cuba23.000.33The Age Dependency Ratio measures the ratio of dependents(under 15 or over 64)to the working age population(typically between 15 and 64).A lower ratio indicates that a higher proportion of the population is of working age,potentially with more disposable income and a greater likelihood of travel.Conversely,a higher ratio indicates that a larger proportion of the population is dependent,which can put economic pressure on the productive segment,possibly reducing discretionary spending on items such as travel.For a country,understanding this ratio is key,as it can influence travel trends.A balanced age distribution with a sizeable working population can be a positive sign for increased travel activity.Index Bolivia Guatemala Belize JamaicaD.RepublicEcuadorBahamas Mexico El Salvador Colombia Peru Venezuela Panama Brazil Costa Rica Trinidad Tobago Argentina Chile Aruba CubaPillar 5.Willingness to travelSource:ALTA analysis based on World Bank data.Urbanization Rate refers to the percentage of the total population living in urban areas.As cities grow and develop,they tend to offer more employment opportunities,better infrastructure and better access to amenities and services.This urban concentration often translates into higher disposable income and greater exposure to diverse cultures and global trends,which fosters a greater desire to travel.For countries,an increasing rate of urbanization can mean greater potential for foreign travel,which impacts their global competitiveness.00.10.20.30.40.50.60.70.80.91BrazilVenezuelaChileBahamasD.RepublicColombiaCosta RicaMexicoPeruCubaElSalvadorBoliviaPanamaEcuadorJamaicaTrinidadTobagoGuatemalaBelizeArubaUrbanization RateCountryUrbanization rateIndexArgentina92.231.00Brazil88.000.95Venezuela88.000.95Chile87.820.95Bahamas83.370.90D.Republic83.210.90Colombia81.740.89Costa Rica81.430.88Mexico81.020.88Peru78.500.85Cuba77.000.83El Salvador74.120.80Bolivia70.480.76Panam a68.780.75Ecuador64.360.70Jamaica56.650.61Trinidad Tobago53.270.58Guatemala52.250.57Belize46.200.50Aruba43.870.48Index Pillar 5.Willingness to travelArgentinaPillar 6.International openness and liberalization6.51Open borders and strong international connectivity are key indicators of a countrys integration into the global economy.In Pillar 6,we delve into the metrics that determine such openness:the Henley Passport Index,the Henley Openness Index,and the number of Bilateral Air Services Agreements.The Henley Openness Index(HOI)provides information on the number of countries to which a particular country allows visa-free entry,reflecting its overall openness to travelers.Its counterpart,the Henley Passport Index(HPI),derived from Henley&Partners research,shows the number of destinations that passport holders can access without a visa,serving as an indicator of a passports overall strength.Air Service Agreements(ASAs)are critical to a countrys competitive positioning in the global travel market.They determine how many flights and which airlines can operate between two countries.More of these agreements,especially those that are fully liberalized,allow for greater air connectivity,encouraging more tourism,trade,and business exchanges.More ASAs usually result in lower airfares due to competition,increased flight frequencies offering better options for travelers and greater economic benefits for the countries involved.To quantify the liberalization of each countrys air market,we use the same methodology used in the World Economic Forums Travel&Tourism Competitiveness Index.This metric analyzes the number and nature of ASAs maintained by an economy,with weights assigned according to their level of liberalization:traditional agreements,0.5;transitional agreements,0.75;and fully liberalized markets,1.0.In Pillar 6,we use these weights to quantify the liberalization of each countrys air market.In Pillar 6,we use these specific metrics to get a clear picture of how well connected a country is to the international travel and tourism scene.Being open to more nations and having strong air connections can go a long way in helping a country compete on the global stage.When a countrys borders are open to many others and it has numerous air service agreements,it usually means more tourists,more trade,and more opportunities for growth.0.000.100.200.300.400.500.600.700.80International Openness and LiberalizationPillar 6.International openness and liberalizationSource:ALTA analysis based on Henley&Partners-0.200.400.600.801.001.20BoliviaEcuadorBahamasJamaicaPanamaD.RepublicBelizeTrinidad TobagoBrazilColombiaPeruCosta RicaChileArgentinaElSalvadorGuatemalaMexicoVenezuelaArubaCubaOpenness of visasCountry#of origin markets not requiring visasIndexBolivia1781.00Ecuador1720.97Bahamas1210.68Jamaica1210.68Panama1200.67D.Republic1070.60Belize1040.58TrinidadTobago1030.58Brazil1020.57Colombia1020.57Peru1000.56CostaRica960.54Chile920.52Argentina900.51ElSalvador870.49Guatemala870.49Mexico680.38Venezuela670.38Aruba580.33Cuba210.12Henley Openness Index(score)Pillar 6.International openness and liberalization-0.200.400.600.801.001.20ChileArgentinaBrazilMexicoBahamasCosta RicaTrinidad TobagoPanamaPeruGuatemalaElSalvadorColombiaVenezuelaArubaBelizeEcuadorJamaicaBoliviaD.RepublicCubaHenley Passport IndexCountry#of destinationnot requiring a visaIndexChile1771.00Argentina1740.98Brazil1730.98Mexico1620.92Bahamas1580.89CostaRica1520.86TrinidadTobago1510.85Panama1490.84Peru1420.80Guatemala1370.77ElSalvador1360.77Colombia1350.76Venezuela1260.71Aruba1170.66Belize1040.59Ecuador950.54Jamaica900.51Bolivia820.46D.Republic740.42Cuba640.36Source:ALTA analysis based on Henley&PartnersHenley Passport Index(score)Pillar 6.International openness and liberalizationSource:ALTA analysis based on DATATURSource:WEF T&T indices00.10.20.30.40.50.60.70.80.91Air Service AgreementsCountryNumber of bilateral air services agreements by liberalization levelIndexD.Republic48.81.00Brazil30.30.62Chile26.30.54Jamaica240.49Argentina23.50.48Mexico21.30.44Costa Rica17.80.36Colombia170.35Panam a15.50.32Bahamas140.29Peru11.30.23Bolivia10.50.22Ecuador9.50.19Venezuela9.30.19Trinidad Tobago7.50.15Guatemala60.12Aruba60.12El Salvador3.80.08Case study:Potential benefits of visa liberalization and market opening.Recent studies and experiences show that the removal of visa requirements and the opening of air markets can generate more tourists,better trade,and higher economic growth for countries.As of November 9,2012,the Mexican government eliminated the visa requirement for Peruvians and Colombians traveling to Mexico.This generated benefits for both tourism and air passenger volume between Mexico and both countries.In 2022,921,000 more Colombians and Peruvians visited Mexico compared to 2012,bringing an additional US$499 million to the Mexican economy,based on average spending per tourist of US$542 per visit.0200,000400,000600,000800,0001,000,0002010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20202021 2022Historical tourist arrivals from Colombia and Peru.ColombiaPeruIndex Pillar 6.International openness and liberalizationU.S.based airlinesMarket stimulation caused by visa exemption(O&DPax)RoutePAX 2012PAX 2022CAGRBOG-MEX 247,655608,0169.3%BOG-CUN 32,791472,91630.2%MDE-MEX18,765195,24224.6%MDE-CUN1,081214,62059.5%LIM-CUN90,259272,25511.5 122023RouteOperatingairlinesWeeklyflightsBOG-MEX3354244MDE-MEXMDE-CUN00OperatingairlinesWeeklyflights200256391410CUN-LIM29331BOG-CUN010,00020,00030,00040,00050,00060,00070,000MillionsHistorical annual commercial available seats per kilometer(ASKs)between MX and the U.S.Mexico-based airlines*There have been 20 new routes launched between the two countries since 2016.The U.S.-Mexico open skies agreement has greatly boosted international trafficAs of August 2016,the United States and Mexico signed the MX-US Open Skies agreements.UU.and opened their air markets to their airlines.And since then,U.S.and Mexican airlines can fly any route they want between the two countries,with no frequency limit(except from MEX which still limits the numbers of operations).The agreement has allowed both countries to further strengthen their dynamic commercial and economic relationship and offer better options to travelers.Since the agreement came into effect,more than 20 new routes have been launched and passenger traffic has experienced very positive growth.Pillar 6.International openness and liberalizationPillar 7:International Connectivity7.International connectivityAir connectivity reflects how well connected a country is with cities around the world.Increasing and accessing greater air connectivity is essential for a country to develop economic linkages.Air connectivity drives the development of value chains,global trade,and international mobility,enabling companies to compete to attract tourism and foreign investment.Therefore,the more air connections a country has,the greater its ability to deliver economic benefits to communities.Pillar 7:International Connectivity7.1.Connectivity index Given the importance of connectivity and its relationship to economic development,for this section we have calculated international and intra-regional connectivity to measure and quantify how well connected a country is to the global air transport network.The index,based on methodologies used by other renowned organizations such as IATA,is calculated by measuring the number of destinations served and seats available from each countrys main airports.In other words,the connectivity indicator considers the number of seats available for each of the destinations served during a specific year,in this case 2023.The number of total seats available for each destination is weighted according to the size of the destination airport,such weighting is given in terms of the total seat capacity for the year and the number of destinations served from that airport.The average of these two indicators is the metric by which each airport is weighted or assigned a weight.The weighting of each destination gives an indication of the economic importance of the destination airport and the number of indirect connections it can provide.For example,Dubai Airport(DXB),being the airport with the largest international capacity,has a weighting of 1,while London Heathrow(LHR),which provides 84.3%of the number of seats and 88%of the destinations offered by DXB,has a weighting of 0.86.Therefore,if an airport has 100 flights available to DXB,it is assigned a weighted total of 100.But if it also has 100 flights available to LHR,it will be assigned a weighted value of 86.The sum of all weighted totals for each destination served will determine the final absolute connectivity indicator.The index has been calculated as follows:Therefore,a given country with a higher number of destinations and total seats will have a higher connectivity index score.For more details on the global connectivity index score,please refer to Annex 3.The absolute connectivity index score does not necessarily guarantee the best measure of quality in connectivity,as countries are in different situations,contexts and locations that directly impact their air connectivity.Countries with larger economies and larger populations have more destinations and seats available,leading to greater connectivity.For this reason,two adjustments were made to the absolute connectivity score,obtaining a final score by means of a weighted average,assigning the greatest weight to the absolute international connectivity measure.Adjustment considering per capita travel.Adjustment for travel per capita andGDP per capita.-0.100.200.300.400.500.600.700.800.901.00International Connectivity Ranking(Frequencies Connectivty Index*connectivity coefficient of the destination airport)Pillar 7:International ConnectivityThe following section evaluates absolute international air connectivity by country and airport,as well as connectivity adjusted for the two parameters explained above.The analysis presented compares data and scores to 2019,as air traffic and connections decreased in 2020 and 2021 due to the pandemic.This provides a better understanding of the progress and recovery of air connectivity in the region and globally.A similar analysis is also presented for intra-regional connectivity.The Pandemics Impact on LAC Connectivity The impact of the pandemic and the restrictive measures imposed by governments on international travel to contain the spread of the virus led to a prolonged and near-total shutdown of international aviation,resulting in significant disruption of connectivity worldwide.The number of connected airport pairs was significantly reduced.With the slow lifting of restrictions on international passengers,connectivity in the region has been fully restored.Regionally,during 2019 there were 2,713 connected airport pairs,while in 2023 there were 2,743,or 1ove pre-pandemic levels.Connectivity Index 2023Index 2019Global 2023Global Ranking 2019Growth 2023vs2019Mxico35,98036,3142435-1%Colombia14,69013,046505713%RepblicaDom.14,04712,448546113%Brazil13,87017,2365550-20%Panam8,9259,4516868-6%Argentina6,8128,4377576-19%Costa Rica5,5185,14386947%Per5,8097,0388482-17%Jamaica5,2445,22187910hamas4,9265,6028890-12%Cuba6,2718,6988173-28%Chile4,3995,6669088-22uador3,8613,89293101-1%El Salvador3,4543,67297103-6%Guatemala3,1522,78610310913%Aruba2,0572,369111116-13%Venezuela1,6851,803120126-7%Trinidad.1,2801,990132122-36%Bolivia1,0071,267143140Absolute International Connectivity-5,00010,00015,00020,00025,00030,00035,00040,000MexicoColombiaD.RepublicBrazilPanamaArgentinaCubaPeruCosta RicaJamaicaBahamasChileEcuadorEl SalvadorGuatemalaArubaVenezuelaTrinidadBoliviaAbsolute connectivityAbsolute international connectivity by country(2023 vs.2019)20232019Source:ALTA analysis based on Amadeus Travel Intelligence Market Insight.Pillar 7:International Connectivity-21%CountryConnectivity Ranking In terms of absolute connectivity for the countries studied in this competitiveness index,Mexico scored the best in international connectivity in 2023,and remains only 1low 2019.It was followed by Colombia,the country that showed the highest growth in connectivity relative to pre-pandemic levels( 13%)and the Dominican Republic,which also performed well with 13%growth.It is important to note that in 2019,Brazil reached second place after Mexico,however,in 2023 it ranked fourth,being 20low pre-pandemic levels.These results are not surprising given that these three countries were the first to recover their international traffic volumes in April 2022.Adjustment relative to per capita travel In terms of relative connectivity adjusted to per capita travel per country,the Bahamas presents the highest levels of connectivity in contrast to Mexico,which while remaining within the top positions,drops to third place,despite having the highest absolute connectivity of the countries included in the study.The first two positions correspond to two small Caribbean islands that rely heavily on inbound tourism and which,in 2023,had the highest number of trips per capita in the region,Aruba with 26.4 and Bahamas with 12.6.Aruba experienced a decline in connectivity with respect to 2019 of 7%,while Bahamas only reaches 2%of pre-pandemic levels.Dominican Republic,meanwhile,stands out as the country with the highest growth in international connectivity( 49%vs 2019).Source:ALTA analysis based on Amadeus Travel Intelligence Market Insight and World Bank010,00020,00030,00040,00050,00060,00070,000Trips with absolute connectivity per capita2023201905.010.015.020.025.030.0Number of air trips per capita(2023 vs.2019).20232019Pillar 7:International ConnectivityBahamasArubaMexicoD.RepublicJamaicaPanamaColombiaCostaRicaBrazilChileArgentinaBelizeEl SalvadorCubaTrinidadEcuadorGuatemalaBoliviaVenezuelaPeruArubaBahamasBelizeJamaicaD.RepublicCosta RicaTrinidad.PanamaChileColombiaMexicoBoliviaPeruEl SalvadorArgentinaBrazilCubaEcuadorGuatemalaVenezuelaInternational connectivity adjusted by number of trips per capitaIntraregional connectivity An indicator derived from international connectivity is intraregional connectivity,which measures air connectivity within a region.The intraregional connectivity index measures and quantifies how well connected a country is to the air transport network of Latin America and the Caribbean.The index is calculated similarly to the global connectivity index,measuring the number of destinations in the region and seats available from a countrys main airports.The 2023 scores for the countries studied are shown below.For more details on the scores for each of the countries in Latin America and the Caribbean,see Annex 3.1.Source:ALTA analysis based on Amadeus Travel Intelligence Market Insight.CountryIntraregional Connectivity Index Intraregional Connectivity Index 2019RankingRanking2019Growth vs2019Colombia19,16219,43411-1%Mexico13,55214,56424-7%Brasil12,85017,73632-28%Panam a12,76213,38745-5%Argentina12,02114,93353-20%Peru9,41112,96066-27%Chile8,89912,24577-27%D.Republic7,9426,6638919uador7,1257,36598-3%CostaRica5,5966,3791010-12%Venezuela4,1313,717111311%Guatemala3,4493,6271214-5%El Salvador2,6914,2121412-36%Cuba2,6725,1391511-48%Bolivia2,3073,1661818-27%Aruba1,8551,454212628%Trinidad.8051,3982827-42%Jamaica7247693035-6lize4304433443-3hamas1963024644-35%-5,00010,00015,00020,00025,000ColombiaMexicoBrazilPanamaArgentinaPeruChileD.RepublicEcuadorCostaRicaVenezuelaGuatemalaEl SalvadorCubaBoliviaArubaTrinidadJamaicaBelizeBahamasAbsolute Intraregional Connectivity20232019Intraregional Connectivity by country(2023 vs.2019)Pillar 7:International ConnectivityColombia ranked first in the interregional ranking for 2023 and is only 1.4%away from reaching its 2019 levels.Second place went to Mexico,which made very positive progress as it ranked#4 in 2019.However,this represented a 7%drop compared to 2019.Brazil ranked#4 after being in second place in 2019.Venezuela stood out as one of the countries with the highest growth( 11%vs 2019)and moving up two places compared to 2019.Conversely,one of the countries with the lowest growth in connectivity was Cuba,which had a decrease of almost 50%compared to 2019.Intraregional connectivity for the top 25 LAC airportsIn the interregional connectivity index by airport,Panama(PTY)led the ranking as it did in 2019,albeit with a 5crease compared to the same year.It was followed by Bogota(BOG),which ranked 4th in 2019 and had a 6crease.In the city of Buenos Aires specifically,Aeroparque Airport(AEP)experienced an impressive 388%growth versus 2019.On the other hand,other airports highlighted for their significant growth were Santo Domingo in the Dominican Republic(SDQ)with 29%and Medellin(MDE)with 21%.Source:ALTA analysis based on Amadeus Travel Intelligence Market Insight.-5,00010,00015,00020,00025,00030,00035,00040,000Absolute ConnectivityInternational versus interregional connectivity by country InternationalWithin LAC-2.0004.0006.0008.00010.00012.00014.000Absolute connectivityThe 20 most connected airports in LAC in terms of interregional connectivity20232019Pillar 7:International ConnectivityCase study:The increase of connectivity in Colombia and its benefits in the international passenger market.International connectivity in Colombia has shown outs-tanding performance in the last 5 years,with a growth of 31%compared to 2017,moving from 60th place in the world ranking to 39th and from 4th place in the region in 2017,to 2nd in 2022.It is also worth noting that despite the impact of the CO-VID-19 pandemic,international connectivity in Colombia has been resilient and has managed to recover formida-bly,being one of only 2 countries in the region along with the Dominican Republic that surpassed its 2019 levels with a 7%increase.DownNeutralUpBrazil,14Dominican Republic,12Colombia,11Panama,9Peru,6Costa Rica,5Mexico,3520172022Mexico,34Colombia,15Dominican Republic,13Brazil,12Panama,9Costa Rica,6Peru,5Air connectivity Absolute Score(thousands)Selected Countries in LACPillar 7:International ConnectivitySource:ALTA analysis based on Amadeus Travel Intelligence Market Insight.BrazilDominican RepublicCosta Rica Trinidad.MexicoColombia Chile Argentina Peru Panama CubaEcuador Bolivia Bahamas Jamaica Venezuela Belize El Salvador GuatemalaAruba Absolute Connectivity Growth by Country(2022 vs.2017)-60%-40%-20%0 %MexicoColombia BrazilDominican RepublicCosta Rica Trinidad.Chile Argentina Peru Panama CubaEcuador Bolivia Bahamas Belize Jamaica Venezuela El Salvador GuatemalaAruba Absolute Air Connectivity by country(2022 vs.2017)40,00035,00030,00025,00020,00015,00010,0005,000-20172022Pillar 7:International ConnectivityThis growth in absolute connectivity has contributed to Colombias air transport market growing significantly over the last 5 years.From having a total of 35.6 million passengers(12.3 international)in 2017 to 47.9 million(15.2 international)in 2022,i.e.1.3 more passengers traveling to and from Colombia,with a CAGR of 6.1%(for more information on the performance of some key metrics and statistics of Colombias air transport,refer to Annex 1:Country Profiles,Colombia).On the other hand,Colombian cities have had an outstanding performance with a significant increase in their connectivity levels.Bogota went from being the fifth most connected city in LAC to the third in 2022,an increase of 20%,growing more than Cancun or Mexico City,two leading cities in connectivity in the region.Medellin was one of the cities that presented the greatest increase in international connectivity with a significant growth of 88%,followed by Pereira with 67%,Cali with 37%and Cartagena with 34%more.Of the 10 international routes with the highest growth in number of passengers and which at least doubled their annual traffic,have as origin or destination,some of the cities with the highest growth in connectivity,especially Bogota and Medellin.Source:ALTA analysis based on AerocivilDomestic and international passengers to/from Colombia(2012-2022)3530252015105-202220212020201920182017InternationalDomesticMillions PaxInternational CAGR:4.3%Domestic CAGR:7%Top 25 LAC cities with highest connectivity growth 2022 vs.2017100pP0 %0%MDEJBQCULPEIRTBCAYGEOACANATVCPRIHCLOCURFORCTGTRCGGTPUJBOGLIRSJDSTIBGAMLMMPNPillar 7:International ConnectivityThe increase in connectivity has brought important benefits,in addition to the growth of international traffic.The main indicators of the aviation market in Colombia have shown growth,for example,the number of airlines operating international flights has grown by 31%,or,on the other hand,the number of international trips per capita went from 0.25 to 0.28,representing an increase of 12%.Fuente:Anlisis ALTA basado en Amadeus Travel Intelligence y Aero civilGrowth20222017Main international indicators by market 24.212.3International passengers(millions)25!.317International seats(millions)142,077107,518International frequencies 31829International airlines operating 21696International city pairs 7%2,6922,518Average distance on internationalroutes(kms)12%0.280.25International travel per capita 18%4.63.9International tourists(millions)Route2017 passengers 2022 passengersGrowthCTG PTY132,717274,990107%BOG PUJ87,490213,117144%CTG MIA83,626177,801113%BOG YYZ75,727232,672207%JFK MDE63,478135,459113%MDE MEX59,526178,140199%LIM MDE54,089117,008116%BOG SDQ45,255157,269248%CUN MDE40,852180,493342%BOG CUR37,08175,825104%Pillar 7:International ConnectivityAnnex 1.Country Profiles65Passenger Traffic200420052006200720082009201020112012201320142015201620172018201920202021Millions0510152020232022TOP International Markets(O&D Traffic)Passengers(thousands)050100150200400BOG-PTY371MIA-PTY315PTY-SJO298CCS-PTY218MDE-PTY202CUN-PTY152GUA-PTY148HAV-PTY148MEX-PTY148LIM-PTY133250300TOP Domestic Markets(O&D Traffic)DAV-PTY115DAV-PAC47BOC-PAC25BLB-DAV13CHX-PAC11BOC-DAV9BOC-CHX7020406080140100120350PanamaMain indicators(2023)18.3 million21.4 million10192771041.5 million9.2%1.4Passenger TrafficTotal Seating CapacityInternational RoutesDomestic RoutesNo.of airlines operatingNo.of airports with commercial trafficTotal fleetInternational tourists(2022)Travel&tourism%of GDPTravel per capita OperatingCostsQuality ofInfrastructureTaxes andFeesSustainabilityWillingnessto TravelInternationalOpennessand LiberalizationInternational ConnectivityPanamaAveragePanama(1st/20)Total points:7.34Main airlines(2023)Passengers(millions)ASKs(millions)Seats(millions)Flights15.6941,60018.14 115,3920.474260.613,2630.361,2920.422,3210.282,5820.361,0620.232,2020.257080.161,5740.185480.163420.181,3880.151620.211,1990.151,2970.165240.141,4500.18616Source:Amadeus Travel Intelligence-Market InsightPassenger TrafficChileMain indicators(2023)Passenger TrafficTotal Seating CapacityInternational RoutesDomestic RoutesNo.of airlines operatingNo.of airports with commercial trafficTotal fleetInternational tourists(2022)Travel&tourism%of GDPTravel per capita 25.7 million30.3 million514225201452 million9.7%1.28Millions051015202530200020052006200720082009201020112012201320142015201620172018201920202021202320012002200320042022OperatingCostsQuality ofInfrastructureTaxes andFeesSustainabilityWillingness to TravelInternationalOpennessand LiberalizationInternational ConnectivityChileAverage Chile(2nd/20)Total points:6.89TOP International Markets(O&D Traffic)TOP Domestic Markets(O&D Traffic)0100200300400800LIM-SCL714AEP-SCL582GRU-SCL573EZE-SCL554GIG-SCL547MIA-SCL309BOG-SCL279CUN-SCL251MAD-SCL198PUJ-SCL17950060070006008001,0001,2002,000ANF-SCL1,756CJC-SCL1,730IQQ-SCL1,401PMC-SCL1,272CCP-SCL1,131SCL-ZCO945LSC-SCL732CPO-SCL636ARI-SCL554PUQ-SCL5501,4004002001,6001,800Passengers(thousands)Source:Amadeus Travel Intelligence-Market InsightMain airlines(2023)Passengers(millions)ASKs(millions)Seats(millions)Flights13.6632,39216.0579,0725.608,0906.6034,2143.495,6304.19 20,5800.552,8960.603,6780.351,7820.422,3340.344390.392,4140.323,9220.361,0690.252,1060.301,2140.222,7610.247300.191,7700.23730Main indicators(2023)Passenger TrafficTotal Seating CapacityInternational RoutesDomestic RoutesNo.of airlines operatingNo.of airports with commercial trafficTotal fleetInternational tourists(2022)Travel&tourism%of GDPTravel per capita 111.5 million143.8 million194487411675153.6 million7.6%0.44BrazilOperatingCostsQuality ofInfrastructureTaxes andFeesSustainabilityWillingnessto TravelInternationalOpennessand LiberalizationInternational ConnectivityBrazilAverage Brazil(3rd/20)Total points:6.77TOP International Markets(O&D Traffic)TOP Domestic Markets(O&D Traffic)0100200300700GRU-SCL573GIG-SCL547EZE-GIG477AEP-GRU459GRU-MIA369GRU-LIS335AEP-GIG315EZE-GRU310GRU-JFK264GRU-MCO22540050060005001,5002,0002,5003,500CGH-SDU3,166BSB-CGH1,864CGH-POA1,764CGH-CNF1,614GRU-REC1,268CGH-SSA1,195CGH-CWB1,187BSB-SDU1,012CGH-REC1,010GRU-POA1,0093,0001,000Passengers(thousands)Source:Amadeus Travel Intelligence-Market InsightPassenger Traffic200020052006200720082009201020112012201320142015201620172018201920202021020406080100120140202320012002200320042022MillionsMain airlines(2023)Passengers(millions)ASKs(millions)Seats(millions)Flights37.830.329.21.91.11.10.90.80.80.783,13342,31743,55116,2676,2012,3207,6696267,1197,27149.838.937.92.31.31.21.11.30.90.8267,964217,229304,9778,3327,6367,5783,86819,0693,4792,570CarrierMain indicators(2023)Passenger TrafficTotal Seating CapacityInternational RoutesDomestic RoutesNo.of airlines operatingNo.of airports with commercial trafficTotal fleetInternational tourists(2022)Travel&tourism%of GDPTravel per capita 2.4 million 2.9 million30111217 0.22 million7.6%1.4Trinidad and TobagoOperatingCostsQuality ofInfrastructureTaxes andFeesSustainabilityWillingness to TravelInternationalOpennessand LiberalizationInternational ConnectivityTrinidadTobagoAverageTrinidad an
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