Making Zero Emissions Trucking Possible

MAKING ZERO-EMISSIONS
TRUCKING POSSIBLE
An industry-backed, 1.5°C-aligned
transition strategy
TRUCKING TRANSITION STRATEGY / JULY 2022
Sponsored by
Supported
by knowledge
partner
McKinsey
& Company
Making Zero-Emissions Trucking Possible PAGE 1

PREFACE
The Mission Possible Partnership

At current emissions levels, staying within a global carbon budget aligned to 1.5°C might slip out of reach
in this decade. Yet efforts to slow climate change by reducing greenhouse gas (GHG) emissions run into
a central challenge: the biggest emitters of carbon dioxide equivalent (CO2e) into the atmosphere —
transportation sectors including aviation; shipping; and trucking; and heavy industries including steel,
aluminium, cement, and chemicals manufacturing — are the hardest areas in which to lower emissions.
Moreover, transitioning these industries to carbon-neutral energy sources is complex, requiring a
comprehensive approach across entire value chains, with collaboration among companies, suppliers,
customers, banks, institutional investors, and governments.
Catalysing these changes is the goal of the Mission Possible

Partnership (MPP), an alliance of climate leaders focused on
supercharging efforts to decarbonise these industries. Led
by the Energy Transitions Commission, RMI, the We Mean
A Sector Transition Strategy
Business Coalition, and the World Economic Forum, MPP has
as its objective to propel a committed community of CEOs from
informs decision makers from
carbon-intensive industries — together with their financiers,
customers, and suppliers — to agree on the essential decisions
the public and private sectors
required for decarbonising industry and transport. More
importantly, the coalition must act on those decisions. MPP will
about the nature, timing, cost,
orchestrate high-ambition disruption through net-zero industry
platforms for seven of the world’s most carbon-intensive and scale of actions necessary
sectors: aviation, shipping, trucking, concrete, steel,
aluminium, and chemicals. to achieve net zero within
Transitioning these seven hard-to-abate sectors to net-zero the sector by 2050.
emissions by 2050 will require significant changes in how they
operate. MPP facilitates this process by developing sector
transition strategies for all seven hard-to-abate sectors.1
1 Zero-emissions truck technology is or will be viable for almost all use cases. The sector remains a challenge to decarbonise because of the scale of change, the costs
for some users, and new infrastructure required.

All sector transition strategies are based on similar Industry support for MPP’s
assumptions about the costs and availability of technologies Trucking Transition Strategy
and resources such as renewable electricity, green hydrogen
(H2), and sustainable biomass. By providing a harmonised, This effort benefitted from the input of the MPP RFZ
cross-sectoral perspective, we hope to inform decision makers community, consisting of over 50 companies and 20
with a fair assessment of transition strategies for all seven organisations representing the entire trucking value chain.
sectors and to expedite innovation, investments, and policies Members of the initiative have validated the model and
to support the transition. architecture and endorse the general thrust of the arguments
made in this report, but should not be assumed to agree with
Within MPP, the Road Freight Zero (RFZ) initiative is working every finding, input, or recommendation. These companies
towards the goal of zero-emissions truck (ZET) deployment. agree on the importance of reaching zero emissions from the
A broad set of global stakeholders are engaged in this HDT sector by mid-century and share a broad vision of how to
initiative, including major buyers of transportation, leading achieve the transition.
transporters and logistics companies, significant players in
energy and infrastructure, financial institutions, and public- This agreement among industry leaders should give decision
sector organisations. They all have the same ambition: to makers around the world confidence that it is possible to meet
accelerate decarbonisation of heavy-duty urban, regional, global HDT demand and simultaneously reduce emissions from
and long-haul trucking. the sector to net zero by 2050. It should also inspire belief that
the critical actions required in the 2020s to set the sector on
This report sets out a zero-emissions transition strategy for the the right path not only are clear but can be pursued without
heavy-duty trucking (HDT) sectors in the United States, Europe, delay and that the industry is ready to collaborate with its value
China, and India. It identifies what needs to happen to enable chain to achieve those goals.
this future between now and 2050. The Trucking Transition
Strategy model (“the model”) underpins this transition strategy, A.P. Moller-Maersk
which has three main aims: ABB
CALSTART/Drive to Zero
• Provide a detailed reference point for the changes Credit Suisse Group
needed over the next 30 years to underpin corporate Deutsche Post DHL Group
target setting, science-based targets, and financial IKEA Supply
sector alignment methodologies. Kuehne+Nagel
Professor Alan McKinnon, Kuehne Logistics University Port
• Inform the 2020s’ priority actions, trade-offs, and decisions of Antwerp-Bruges
of stakeholders that will shape the road freight markets, National Grid
including transport buyers, logistics players, fleet owners, Smart Freight Centre
truck manufacturers, energy and infrastructure providers, Terawatt Infrastructure
policymakers, and financial institutions. Volta Trucks
Xos Trucks
• Catalyse actions from stakeholders across the value chain that
together will unlock investments in zero-carbon solutions.
The model used and the analytics behind it will be made open
access to promote transparency and collaboration, such that
the inputs and assumptions are available for inquiry, and future
iterations may build on this effort. This open-access approach
lends itself to regular refinement as data and insights evolve.
Critically, it also ensures that the industry can align behind a
strategy it considers technically and economically feasible,
subject to appropriate value-chain collaboration, finance, and
policy support.
Through this work, we hope to inspire and inform an

accelerated transition to net zero for the HDT sector, including
actions — innovations, investments, policies, and procurement
decisions — taken by the broader industry value chain essential
to support the transition.

AUTHORS & Acknowledgements
This report was prepared by the Mission Possible Partnership

trucking team, led by a steering committee of:
Angie Farrag-Thibault
(World Economic Forum and MPP Trucking Sector lead)
Dave Mullaney (RMI)
Manosij Ganguli (Energy Transitions Commission [ETC])
Patrick Hertzke (McKinsey & Company)
We wish to thank the key authors from the team:
Ari Kahn (RMI)

Emily Yang (McKinsey)
Wouter Vink (ETC)
The model and analytics effort was led by

Gerard Westhoff (RMI) and Wouter Vink (ETC),
supported by:
Henrik Becker (McKinsey)

Jake Straus (RMI)
Pranav Lakhina (RMI)
Rafal Malinowski (ETC)
Selena Wang-Thomas (McKinsey)
Steering and guidance were provided by MPP leadership

who oversee the development of all the MPP Sector
Transition Strategies:
Eveline Speelman (ETC)

Faustine Delasalle (MPP Executive Director)
The report was supported by a McKinsey team led by

Erik Östgren and Patrick Hertzke.
Additional input was provided by Andrea Bath (ETC),

Ben Shapiro (RMI), Claudia Alvarez (McKinsey),
Jessie Lund (RMI), Laëtitia de Villepin (ETC), and
Shannon Engstrom (World Economic Forum). The
report was edited and designed by M. Harris & Company.
This effort was prepared in collaboration with

Mission Possible Partnership partners World Economic Forum,
Energy Transitions Commission, RMI, and McKinsey.
We would like to thank the RFZ initiative as well as other

industry participants and experts for their input and review
over the past months.

PREPARED BY
Mission Possible Partnership (MPP) Energy Transitions Commission (ETC)

Led by the ETC, RMI, the We Mean Business Coalition, and the ETC is a global coalition of leaders from across the energy
World Economic Forum, the Mission Possible Partnership (MPP) landscape committed to achieving net-zero emissions by
is an alliance of climate leaders focused on supercharging the mid-century, in line with the Paris climate objective of limiting
decarbonisation of seven global industries representing 30% global warming to well below 2°C and ideally to 1.5°C. Our
of emissions: aviation, shipping, trucking, steel, aluminium, commissioners come from a range of organizations — energy
cement/concrete, and chemicals. Without immediate action, producers, energy-intensive industries, technology providers,
these sectors alone are projected to exceed the world’s finance players, and environmental NGOs — which operate
remaining 1.5°C carbon budget by 2030 in a Business-As-Usual across developed and developing countries and play different
scenario. MPP brings together the world’s most influential roles in the energy transition. This diversity of viewpoints
leaders across finance, policy, industry, and business. MPP is informs our work: our analyses are developed with a systems
focused on activating the entire ecosystem of stakeholders perspective through extensive exchanges with experts and
across the entire value chain required to move global industries practitioners. www.energy-transitions.org
to net-zero. www.missionpossiblepartnership.org
RMI World Economic Forum

RMI is an independent nonprofit founded in 1982 that transforms The World Economic Forum is an International Organization for
global energy systems through market-driven solutions to align Public-Private Cooperation. The Forum engages the foremost
with a 1.5°C future and secure a clean, prosperous, zero-carbon political, business, cultural, and other leaders of society to
future for all. We work in the world’s most critical geographies shape global, regional, and industry agendas. The Forum brings
and engage businesses, policymakers, communities, and NGOs together stakeholders to help address the greatest ecological
to identify and scale energy system interventions that will cut crises of our time, focusing on topics like climate, mobility,
greenhouse gas emissions at least 50 percent by 2030. RMI has energy, and the circular economy. The World Economic Forum’s
offices in Basalt and Boulder, Colorado; New York City; Oakland, platforms aim to facilitate action-oriented communities of
California; Washington, D.C.; and Beijing. rmi.org stakeholders from all parts of the international system, and the
organisation is one of the core partners for the Mission Possible
Partnership. https://www.weforum.org
McKinsey & Company

McKinsey & Company is a global management consulting firm
committed to helping organizations create change that matters.
In more than 130 cities and 65 countries, their teams help
clients across the private, public, and social sectors shape bold
strategies and transform the way we work, embed technology
where it unlocks value, and build capabilities to sustain the
change. Not just any change, but change that matters — for their
organizations, their people, and in turn society at large. McKinsey
& Company is a knowledge partner for the Mission Possible
Partnership and provided fact-based analysis for this report.
Learn more at www.mckinsey.com.

supported by
Road Freight Zero North American Council

Road Freight Zero is a multi-stakeholder, cross-value chain on Freight Efficiency (NACFE)
coalition of first-mover champions, working together to NACFE works to drive the development and adoption of
fast-track zero-emission, heavy-duty trucking toward a 1.5° efficiency-enhancing, environmentally beneficial, and cost-
trajectory by 2030. It focuses on accelerating the viability effective technologies, services, and operational practices in
and deployment of HD ZE fleets and infrastructure by aligning the movement of goods across North America. NACFE provides
stakeholders on a common vision and roadmap; performing independent, unbiased research, including confidence reports
scalable corridor pilots that create learnings and replicable on available technologies and guidance reports on emerging
blueprints for ZET fleet and infrastructure; scaling up innovative ones, which highlight the benefits and consequences of each,
financing to overcome first-mover disadvantages; and and deliver decision-making tools for fleets, manufacturers,
connecting companies with leading-edge solutions to start and others. NACFE partners with RMI on a variety of projects,
reducing emissions today. Road Freight Zero is led by the including the Run on Less demonstration series, electric trucks,
World Economic Forum, with support from knowledge partners emissions reductions, and low-carbon supply chains. Visit
including McKinsey, ETC, and RMI on specific projects such as NACFE.org or follow NACFE on Twitter @NACFE_Freight.
this Transition Strategy. https://www.weforum.org/projects/
decarbonizing-road-freight-initiative

CONTENTS
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Main report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1. Decarbonising trucking: Importance, challenges, and solutions . . . . . . 22

1.1 Decarbonisation is critical for achieving climate goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.2 The transition to zero-carbon trucking is complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
1.3 The transition has already started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2. A model to understand the transition to zero emissions . . . . . . . . . . 29

2.1 MPP models a cost-effective transition to zero-emissions trucks . . . . . . . . . . . . . . . . . . . . . . 30
3. Achieving zero emissions by 2050: Possible trajectories . . . . . . . . . . 33

3.1 Cost declines will bring substantial progress, but diesel vehicle sales will persist . . . . . . . . . . . . 33
3.2 Rapid decarbonisation will be needed, with help from public and private sectors . . . . . . . . . . . 38
3.3 Different regions will follow different paths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4. Infrastructure, grid upgrades, and finance enable the transition . . . . . 48

4.1. Infrastructure fuels tomorrow’s zero-emissions fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2 Finance must mobilise the capital needed to deploy solutions . . . . . . . . . . . . . . . . . . . . . . . . 52
5. Recommendations to enable a ZET transition . . . . . . . . . . . . . . . . 54

5.1 Commit to key milestones in vehicle production and infrastructure deployment . . . . . . . . . . . . . 55
5.2 Create and deploy policy frameworks and address bottlenecks . . . . . . . . . . . . . . . . . . . . . . . 56
5.3 Stimulate innovative business models, financing models, and partnerships . . . . . . . . . . . . . . . 58
5.4 Coordinate with other sectors to achieve economies of scale . . . . . . . . . . . . . . . . . . . . . . . . 59
The way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

EXECUTIVE SUMMARY
Ten critical insights on the

path to a zero-emissions
heavy-duty trucking sectOR

1. Trucking demand is surging globally, making it an
important sector to decarbonise. A swift, decisive
move to zero-emissions trucks and a rapid rollout of
infrastructure are needed to achieve net zero by 2050.
Heavy-duty trucking in China, Europe, India, and the United will be the fastest, and China will continue to have the highest
States emits approximately 1.5 gigatonnes (Gt) of CO2 demand (Exhibit A).2 Today, 95% of heavy-duty trucks use
equivalent (CO2e) today. Trucking demand is projected to more diesel. If most trucks continue to use diesel, by 2050 heavy-
than double and increase from 12 trillion tonne-kilometres duty trucking in the modelled regions will emit nearly 3 Gt of
(tkm) to 26 trillion tkm. India’s approximate 5% demand growth CO2e, double current levels.
EXHIBIT A
Heavy-duty trucking demand expected to grow through 2050
Annual trillion tonne-kilometres
China India United States Europe
12
11
10
6 6
6
5
4
3 3
2 2
2
0
2020 2050 2020 2050 2020 2050 2020 2050
Source: MPP analysis
Surging trucking demand and expected technology Zero-emissions trucks (ZETs) are in early-stage production
availability have largely dictated this report’s recommended by manufacturers, are just starting to have an equivalent total
decarbonisation strategies.3 Renewable diesel, renewable cost of ownership (TCO) with diesel vehicles for many uses,
natural gas (RNG), and other transitionary fuels can play a and are already experiencing an encouraging level of adoption.
role in the near term with legacy vehicles but have drawbacks, Further actions can help ensure that trucking achieves two goals:
and other new fuels are likely to be prioritised for use in other reaching zero emissions by 2050 and reducing the cumulative
sectors such as aviation and marine. amount of GHG emissions between now and then. Those actions
include stakeholders putting in place the market incentives,
The main pathway to decarbonising trucking will be developing policy frameworks, continued vehicle development, and timely
and using new vehicles and drivetrains: battery electric trucks charging infrastructure necessary for this major transition. It also
(BETs) and hydrogen electric trucks (HETs), powered with fuel depends on the rapid deployment of renewable generation for
cells. This analysis concludes that achieving net zero by 2050 both electric vehicle charging and hydrogen production.4
requires all trucks sold by 2040 to be either BETs or HETs.
2 Autonomous vehicles, though not modelled in this report, would likely further increase total freight miles travelled and increase each vehicle’s miles per year.
3 Efficiency improvements, such as shortening supply chains, ensuring that truck trailers are carrying fuller loads, and shifting to trains and ships, do play a role and
can reduce trucking’s emissions intensity by 20%.
4 In the MPP model, 100% of the H2 is assumed to come from renewable sources. Electricity for BETs in the four regions is expected to be sourced from a grid that is
90% renewables and storage, with the remainder using carbon capture and sequestration. Reports from the International Energy Association and the Energy Transi-
tions Commission consider a 90% renewable grid feasible. See the Appendix for more information on grid assumptions.

2. Most ZETs are expected to reach TCO superiority
with diesel trucks between 2025 and 2034.
A zero-emissions industry is fundamentally possible because

battery and hydrogen trucks are increasingly cost competitive.
ZETs typically have higher upfront costs but lower operating
costs than internal combustion engine (ICE) trucks. As
technological development and economies of scale in
production lower the upfront costs of ZETs, the ability of those
lower operating costs to recoup increased upfront investment is
growing. Zero-emissions vehicles may achieve TCO superiority
in most use cases between 2025 and 2034, depending on
usage and region.5
This report divides the trucking market into three usage

categories: urban, regional, and long haul. For urban deliveries,
BETs reach TCO superiority most quickly. They will have capital
expenditure costs competitive with those of diesel, and greater
operating cost advantages because of efficiencies during idling
and stop-and-go traffic. Long-haul trucking requires larger
batteries and more costly high-powered charging or extensive
hydrogen infrastructure; these trucks should achieve TCO parity
between 2032 and 2037 in every region except India, which will
take longer.
A few key trends in ZET adoption will determine the pathway to

zero emissions:
• Sales uptake for BETs will accelerate fastest in urban and

regional segments compared with long-haul segments, due
not just to TCO but also to operational feasibility such as
shorter trips and greater charging availability. BETs, rather
than HETs, will dominate this market.
• Long-haul HDT should see a higher uptake of HETs than

urban and regional duty cycles, mainly due to hydrogen’s • ZET policy works with existing fleet costs and behaviour to
higher energy density and shorter refuelling times. Up to influence market outcomes. Because existing diesel vehicles
50% of long-haul truck sales will be HETs; BETs will likely be are more expensive in the United States and Europe,
adopted for predictable routes that have on-the-go charging. ZETs have a greater cost advantage than ICE vehicles
— positioning them for faster adoption. In Europe, this
• Of the regions we studied, Europe will adopt zero- advantage is compounded by high diesel fuel prices. India
emissions vehicles fastest due to ambitious net-zero and China have cheaper ICE trucks and relatively low fuel
policies.6 Europe will be followed by the United States, prices, leading to a later transition.
which has ambitious state policy frameworks and some
supportive federal policies. China, which lacks significant • Transitionary fuels and drivetrains are expected to coexist
policy for ZETs but has ambitious policies for other during the next 5–10 years before BETs and HETs reach
transportation segments, will follow later. Because of TCO parity at scale. These technologies will likely include
vehicle costs and lower policy support, India will be last liquefied/compressed renewable natural gas (renewable
among our studied regions to adopt ZETs. LNG/CNG) and biodiesel trucks (Exhibit B).
5 Total cost of ownership is the cost of the truck, the fuelling infrastructure (diesel, electric, or hydrogen), and the ongoing fuel and maintenance operating costs over
the vehicle’s lifetime. The Appendix further describes the analysis.
6 The EU has introduced targets for heavy-duty vehicles to reduce emissions by 15% as of 2025 and by 30% as of 2030.

3. Adoption of ZETs based on cost optimisation
can substantially advance progress towards net zero.
This report models four scenarios for increasing ZET adoption,
EXHIBIT B
ZET TCO parity varies and the “Do Nothing” Baseline of fossil fuel usage at current levels.
depending on usage, technology First is the Expected Adoption scenario as the TCO of BETs and
HETs improves. This is a market-based scenario. Many fleets
development, and policy choices will buy ZETs because they make financial and operational
sense, and by 2050, 80% of trucks on the road will produce
2025 2030 2035 2040 2045 2050
zero emissions. Yet without additional action to support ZETs,
trucking will not achieve zero emissions by 2050. Trucking
will also create 41 Gt CO2e between now and then, consuming
nearly 6% of the world’s remaining “carbon budget”. TCO
BET
improvements, infrastructure development, and new policy are
needed to enable a zero-emissions industry by 2050.
Long haul
The second scenario, the Rapid Technology Improvement
H2 scenario, is also solely market based. However, the
HET significant economic superiority of ZETs leads to a nearly
zero-emissions trucking sector by 2050, even without policy
intervention.7 This scenario is modelled in two different ways:
accelerated BET deployment and accelerated HET deployment.
They include achievable improvements in vehicle supply, fuel
BET costs, and fuelling station usage. In these scenario models, we
also relax non-cost constraints on BET adoption (e.g., battery
Regional weight makes hauling heavy loads impossible), reflecting
non-cost technology gains, such as greatly increased battery
H2
energy density.
HET
It is possible that technological improvements will happen
more quickly than is currently anticipated. (Consider that
zero-emissions vehicle prices have decreased far more
than was projected a decade ago.) This scenario assumes
BET
rapid development of renewable electricity generation
Urban and transmission, as well as hydrogen production and
transportation.8 Complementary clean energy investments in
H2 adjacent sectors can also help, including:
HET
• Charging infrastructure for medium-duty vehicles
Note: Flags reflect TCO dates of Expected Adoption scenario. Bars reflect range
of TCO breakeven dates for the other modelled scenarios. HDT is legally • Hydrogen production infrastructure for heavy industry
restricted from urban deliveries in India; the country is therefore excluded from
the segment analysis.
• Lessons and economies of scale from light-duty electric
powertrains and battery production that reduce BET costs
• Guaranteed demand through investor and institutional

climate commitments
There are many plausible developments that can further reduce

the projected costs of zero-emissions technologies.
7 Modelling assumptions leave a minimal amount of continued ICE usage.

8 The EU has introduced targets for heavy-duty vehicles to reduce emissions by 15% as of 2025 and by 30% as of 2030.

4. Policy is another means of helping trucking achieve
zero emissions by mid-century. Strategies that
prioritise ZET uptake before 2050 prevent
6–13 Gt of cumulative CO2e emissions.
Unlike the Expected Adoption scenario and the Rapid measures in which the cost of carbon affects the TCO of
Technology Improvement scenario described earlier, the trucks powered by fossil fuel and other CO2e-emitting
remaining two scenarios below rely on both vehicle policy technologies.9 This scenario achieves net zero by 2050
and market forces for completely decarbonising HDT by 2050. and avoids 13 Gt CO2e compared with the Expected
The Zero-Emissions — ZET Mandate scenario (“Zero-Emissions Adoption scenario.
scenario”) represents the implementation of a diesel ban by
2040, the latest date to ensure that trucks on the road in MPP's Rapid Technology Improvement scenario nearly
2050 will produce zero emissions. Between now and 2050, achieves zero emissions, while the Zero-Emissions scenario
it would avoid 6 Gt CO2e compared with the Expected Adoption and Accelerated Zero-Emissions scenario reach the no-GHG
scenario (Exhibit C). goal. Each MPP scenario assumes different, discrete policies
and technology developments to reach zero emissions.
The Accelerated Zero-Emissions – Carbon Cost scenario However, a real-life path to net zero is likely to include
(“Accelerated Zero-Emissions scenario”) represents policy elements of all three.10
EXHIBIT C
Fully decarbonising trucking requires market forces
and other action
Annual GHG emissions by scenario, Gt CO₂e
Do Nothing Expected Adoption scenario Zero-Emissions scenario Accelerated Zero-Emissions scenario
Additional emissions savings Additional emissions savings from Additional emissions savings from
from “Do Nothing” Baseline to Expected Adoption scenario to Zero-Emissions scenario to Accelerated
Expected Adoption scenario Zero-Emissions scenario Zero-Emissions scenario
3.0
2.5
2.0
Cumulative
emissions savings:
24 Gt CO₂
1.5
7 Gt CO₂
1.0
6 Gt CO₂
0.5
0
2020 2025 2030 2035 2040 2045 2050
9 Well-to-wheel emissions, including tailpipe emissions, are included in this report’s greenhouse gas analysis.
10 See Appendix for a detailed review of TCO and main TCO assumptions.

5. Achieving zero-emissions trucking is cheaper than
continuing to burn fossil fuels. Higher vehicle costs will
be more than recouped through lower operating costs.
A trucking sector that is zero emissions is not only more

sustainable than the status quo but also more economical.
When compared with the cumulative investment that would
have been required in a “Do Nothing” diesel-dominated future,
investments in ZETs are cheaper in all markets. Though BETs
and HETs will usually have higher upfront costs, they more
than recover the difference from reduced fuel and operating
expenses (Exhibit D).
As the market continues to scale, ZETs will represent a growing

share of vehicle sales. A zero-emissions industry by 2050
is cheaper than a diesel-dominated one and is only slightly
more expensive than a cost-only optimised mix of ICE trucks
and ZETs. However, there are important regional differences:
Europe and the United States have lower transition costs than
do China and India.
EXHIBIT D
ZETs are expected to reduce overall trucking costs

Cumulative capital investments and operating expenditures by scenario, Trillion US$, 2020–50
35 33 33 1.8: Carbon cost

Operating and on vehicle
maintenance
expenditure -6% emissions
Capital
expenditure
17
18
27
15 16
–1.8: Carbon cost

redistribution to
Do Nothing Zero-Emissions Accelerated the trucking
Zero-Emissions sector

6. Financing the transition in developing economies
will require more capital, creating an opportunity
for global climate finance to enable a worldwide
transition to zero emissions.
In the United States and Europe, where ICE trucks are transition is better than continuing on the current pathway.
substantially more expensive than in India and China, the The value of operational savings from ZETs justifies the
upfront net capital investment required to achieve net zero transition (Exhibit F).
is 25% to 30% more than continuing to use mostly diesel.
However, in India and China, where ICE trucks are cheaper, Mobilising the financing to secure this transition in
the incremental costs of ZETs and their infrastructure are developing countries will be an important enabler for a zero-
more significant (Exhibit E). emissions trucking industry. Global multilateral financing
bodies should align their financing portfolios with the needs
However, even in India and China, where the overall of the trucking industry.
capital burden from the transition is highest, making the
EXHIBIT
EXHIBIT EE EXHIBIT
EXHIBIT FF
Diesel truck costs vary by ZET operating savings

region, impacting ZET’s upfront are projected to create positive
cost competitiveness TCO in all regions
Net
Net present
present value
value of
of 2020–50
2020–50 capital
capital costs
costs by
by scenario,
scenario, Net
Net present
present value
value of
of all
all 2020–50
2020–50 costs
costs by
by scenario,
scenario,
Trillion $$
Trillion Trillion
Trillion $$
Charging
Charging and
and refuelling
refuelling BETs
BETs and
and HETs
HETs ICE
ICE trucks
trucks Capital
Capital expenditure
expenditure Operating
Operating and
and maintenance
maintenance expenditure
expenditure
infrastructure
infrastructure
United
United States
States Europe
Europe United
United States
States Europe
Europe
6.2
6.2 6.3
6.3
5.5
5.5 5.2
5.2
3.0
3.0 2.9
2.9 3.8
3.8 2.5
2.5 4.0
4.0 2.9
2.9
2.4
2.4 2.3
2.3
2.4
2.4 3.0
3.0 2.3
2.3 2.3
2.3
Do
Do Nothing
Nothing Zero-Emissions
Zero-Emissions Do
Do Nothing
Zero-Emissions Do
Do Nothing
Zero-Emissions Do
Do Nothing
Zero-Emissions
Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario
India
India China
China India
India China
China
13.9
13.9 13.5
13.5
8.5
8.5 7.9
7.9
8.2
8.2
11.7
11.7
5.6
5.6
4.6
4.6
3.5
3.5 7.3
7.3
2.2
2.2 5.6
5.6
1.3
1.3
3.5
3.5 2.2
2.2
1.3
1.3
Do
Do Nothing
Zero-Emissions Do
Do Nothing
Zero-Emissions Do
Do Nothing
Zero-Emissions Do
Do Nothing
Zero-Emissions
Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario Baseline
Baseline scenario
scenario
Source:
Source: MPP
MPP analysis
analysis Source:
Source: MPP
MPP analysis
analysis

7. Innovative business models and financing instruments
can leverage ZETs’ lower operating costs in order
to mobilise capital to pay for their purchase.
A fleet’s access to financing depends on national financial these new and expensive technologies. The transition should
infrastructure and the fleet’s size. Typically, larger fleets have include innovative financing and business models that can
better access to capital than small ones, meaning they will be minimise economic harm to individual firms.
in a better position to finance the purchase of expensive ZETs
and ultimately recoup those extra costs through operational Furthermore, many truck operators understand the promise of
savings. However, globally, most fleets are owned by small ZETs but see substantial near-term risk in the transition. ZETs
businesses, which sometimes have just a single vehicle. are a new technology with a relatively short track record. If they
fail prematurely, they will be very expensive to replace or repair.
These small businesses typically have much less access to Offering extended warranties for critical components such
capital than their larger competitors and often have less as batteries and including original equipment manufacturer
ability to maintain and repair new technologies such as ZETs. (OEM) service agreements can bolster fleets’ confidence in
The market needs models that reduce this burden on small ZET ownership and accelerate the transition. Another way to
businesses and enable them to gain access to ZETs without increase fleets' confidence is to strengthen the residual value of
having to make large upfront payments or develop specialised their end of life trucks. Though this analysis does not measure
maintenance capabilities. Business models such as truck-as-a- second hand market value for either diesel trucks or ZETs,
service (TaaS) and battery-as-a-service (BaaS) are short-term cultivating the downstream battery recycling industry helps the
leasing arrangements that can help small fleets gain access to environment and improves the ZET business case.

8. Enabling policy and coordination in the timing
of supply and demand for both vehicles and
refuelling infrastructure can reduce fleets’
risk during this transition.
Although trucking decarbonisation is ultimately enabled and created increased costs to fleets. Especially in the early
accomplished by ZETs that are technically and economically stages of market development, increased demand alone is
superior to ICE vehicles, local policy designed to promote ZETs not sufficient to draw supply into the market in a way that is
can help secure the transition — especially in the early stages. compatible with ambitions for zero emissions. Policies designed
Those enacting policy should focus on simultaneously bringing specifically to induce supply must also exist. Such policies could
to market the supply of ZETs, creating demand for them, and include tax incentives or other subsidies to produce ZETs, such
ensuring the upstream infrastructure that enables them. If any as in the Netherlands, as well as specific regulatory regimes
of those three elements is lacking, the transition will be slowed that require the ZETs to make up an increasing share of vehicles
and net zero may not be achieved by 2050. sold, as in California.
Of the three, demand has historically been where most policy Finally, both supply and demand for ZETs are contingent on
action has been focused. A very common policy approach upstream value chains that enable the production and use of
increases demand for ZET technologies with vehicle purchase those vehicles. Policymakers should look upstream at issues
incentives that support early market development. A similar such as the ability of OEMs to ethically source raw materials for
approach is to alter the economics of operating trucks in critical ZET components and should invest in the infrastructure
favour of ZETs by increasing the prices of fossil fuels and to distribute electricity and hydrogen to places where trucks
subsidising the purchase of green electricity and hydrogen. will need it.
Finally, more forceful demand-side tools such as diesel bans
and diesel truck purchase requirements have been announced As they formulate these portfolios, policymakers should ensure
in several jurisdictions. both that they are catalysing the action needed from all parties
(supply, demand, and infrastructure) and that any costs created
Although demand is crucial, if policymakers stimulate demand by their policy portfolios to a particular party do not exceed the
for ZETs that is then unmet by supply, they will only have ability of that party to pay.
9. Operators need more public charging and hydrogen

stations, a more mature ZET production value chain,
and enough grid power for both charging and
hydrogen production.
Depending on the scenario, there will be between 6 million

and 9 million ZETs by 2030. These trucks will require dense
charging and refuelling networks (Exhibit G).

EXHIBIT G
ZET adoption requires a major infrastructure ramp-up

BET overnight chargers BET fast chargers Hydrogen refuelling stations
Zero-Emissions Accelerated Zero-Emissions

scenario scenario
Number of chargers, millions 15 15
10 10
5 5
0 0
2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050
Number of hydrogen 200 200

refuelling stations, thousands
150 150
100 100
50 50
0 0
2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050
Note: Overnight chargers are assumed to have a capacity of 100 kW and fast chargers are assumed to have one of 500 kW.
By 2030 about 1.4 million to 1.8 million overnight depot chargers models 500 kW public fast charging, charging of a MW or more
and 400,000 to 700,000 public high-speed chargers will be can improve BET economics. With higher powered chargers, each
needed for BETs, and 1,000 to 19,000 hydrogen refuelling station can serve more vehicles and potentially access lower
stations across key markets will be needed for HETs. Putting such cost electricity generation. Improved economies of scale and
an infrastructure in place requires cooperation with governments lower energy costs would improve TCO, particularly for long-
and utilities, which must enable and support it. haul trucking. Parties have to coordinate charging and vehicle
investments to be successful.
A gradual build-out of public charging is already happening in
urban areas. Continued infrastructure development of major Needs go beyond charging infrastructure availability. Increased
transportation routes and the electrification of HDT hubs (e.g., electricity generation, grid upgrades, and the development of
large harbours, large industrial areas) would trigger the transition green H2 production and distribution are also required to meet
to ZETs for longer and more heavy-duty cycles. For infrastructure significant demand increases over the next decades. Electricity
build-out, it will be necessary to balance the needs of various demand for HDT will likely increase more than 100-fold between
stakeholders. For example, fleet operators need enough 2020 and 2030, and in our Zero-Emissions scenario, green
conveniently located charging stations to serve their routes, hydrogen demand takes off from zero in 2020 to as much as
whereas charging station developers need to have sufficient 1,000 terawatt-hours (TWh) in 2040 (Exhibit H).
station utilisation to justify their investments. While this report

EXHIBIT H
Energy consumption by scenario, 2020–50
Diesel Biodiesel Electricity Hydrogen
Total energy demand by fuel, TWh Total energy demand by fuel, %

ZERO-EMISSIONS SCENARIO
5,000 100
4,000 80
64%
3,000 60
2,000 40
1,000 20 36%
2020 2025 2030 2035 2040 2045 2050 2020 2025 2030 2035 2040 2045 2050
ACCELERATED ZERO-EMISSIONS SCENARIO
5,000 100
4,000 80
53%
3,000 60
2,000 40
47%
1,000 20
2020 2025 2030 2035 2040 2045 2050 2020 2025 2030 2035 2040 2045 2050

10. Fleets today are already successful with ZETs.
Their experiences help identify the bottlenecks
that must be addressed in the larger market
in order to kick-start the transition to ZETs.
Some of the world’s largest fleet owners have committed to

taking action to reduce their carbon emissions in this decade.
These forward-looking fleet owners are transitioning to ZETs.
Fleets that are successful with ZETs share some characteristics:
they match vehicles to predictable routes, have enough
electrical and physical space for depot charging, receive
incentives based on purchase price or distance travelled to
improve vehicle TCO, have OEM support, and utilise “green
corridors” that provide charging for many vehicles.
These fleet owners’ success helps identify the steps necessary

to enable wider adoption of BETs. They include:
• Removing electric distribution cost and technical

constraints. Depots often have limited capacity for charging,
and electrifying the full fleet can require upgrading the
power grid connections at depots. EV charging loads are
a new challenge for grid operators, requiring more power
for more customers in less time than traditional building
or industrial loads. These electric service updates require
alignment between utilities, regulators, and the industry,
which can, in a worst-case scenario, take years.
• Creating truck-centric infrastructure. Public charging is

also currently focused on passenger vehicles, with pricing,
locations, and layouts that may not suit trucks. For example,
some trucks will require ultra-fast charging at power levels of
up to 1 MW, nearly three times the level of the fastest public
charging stations.
• Achieving expected TCO. Although BETs are at or near

cost parity in the urban segment, the current TCO of a BET
is higher in regional and long-haul use than a comparable
diesel truck (including infrastructure). ZETs achieve TCO
superiority as vehicle, electricity, and hydrogen price
declines add to existing maintenance savings. HETs require
greater price declines than BETs to reach TCO parity. In
addition, hydrogen vehicle and fuelling technology is less
available and less market proven.
• Increasing product variety and availability. Limitations in

the quantity and variety of vehicles available inhibit fleet
adoption. Vehicle manufacturers currently offer only a
limited number of models to accommodate the variety of
use cases among fleet operator services. Also, fleet owners
experience uncertainty about product availability when
placing orders.

Conclusion
Trucking is correlated with a country’s economic health, and networks, it is still a massive and challenging endeavour. We
thankfully ZETs enable the trucking industry to grow and can learn from fleets that are already successful and follow in
result in zero emissions. Trucking demand is growing just as their footsteps.
ZETs are becoming increasingly viable. This makes reaching
zero emissions very possible under several scenarios that To summarise, there is no single policy or measure that alone
involve government policy, technological improvements, or can decarbonise the trucking industry. Decarbonising trucking
likely a mix of the two. is a shared responsibility that will require action from all
market participants — including manufacturers, vehicle owners,
The economics vary, both by region and usage (urban, regional, government, utilities, and energy suppliers. Collaboration
and long haul). For those reasons, private financing, transport between industry players across the value chain is needed, as is
buyers, and government policy must be attuned to fleets that a portfolio of policies that address the cost of ZETs, the ability
are less able to make the technology shift. New needs include of small fleets to procure ZETs, supply bottlenecks involving
building fuelling infrastructure and managing high initial costs. ZETs, and the availability of ZET refuelling infrastructure.
In general, sooner action is better action. An early signal Resolving the sector’s barriers is a shared responsibility that
allows stakeholders to plan, and encouraging fleets that have can be overcome with ambitious and smart policy, financing,
positive TCO today to adopt ZETs creates a virtuous circle of and corporate leadership. The rest of this report seeks to
increased product development, experience, and core fuelling elaborate on actions to take and opens the door to increased
infrastructure. Though building the needed infrastructure dialogue and deeper alignment on the path forward to zero-
is comparable to past efforts to electrify or create fuelling emissions trucking.

MAIN REPORT
ZERO-EMISSIONS TRUCKING:
A HEAVY-DUTY
TRANSITION STRATEGY

PART 1
Decarbonising TRUCKING:
IMPORTANCE, Challenges,
and Solutions
1.1 Decarbonising trucking is critical for achieving

climate goals and creating other vital benefits
Heavy-duty trucks are vital for global supply chains. They In this report, we focus on four regions (China, Europe, India,
move the goods an economy creates and enable economic and the United States) that represent 50% of global HDT
growth. Today, the heavy-duty trucking (HDT) sector produces emissions. In these regions, 95% of the trucks now travel on
significant carbon dioxide equivalent (CO2e) emissions because diesel, creating 1.5 gigatonnes (Gt) CO2e of annual emissions.
of ongoing reliance on diesel-fuelled trucks. Transportation Moreover, HDT demand in these regions is expected to more
accounts for about 16% of total global greenhouse gas (GHG) than double by 2050. If trucks continue to use diesel without
emissions. About a third of that total comes from road freight — any additional ZET adoption, annual emissions will grow to 3
more than aviation and shipping combined. HDT is the source of Gt CO2e by 2050. Moving to zero-emissions trucks (ZETs) in
more than 40% of freight emissions and around 2.1% of global these key regions now would avoid putting an additional 31 Gt
CO2e emissions. cumulative CO2e into the atmosphere by 2050.

ZETs also create societal benefits, by eliminating the refining,
fuel transportation, and tailpipe pollution caused by diesel
trucking. Refining diesel releases toxic metals, gasses, and
other materials into the air. Transporting diesel creates the
risks of pipeline leaks or spills during shipping. When diesel is
combusted in an engine, it creates airborne pollutants such as
carbon monoxide (CO), sulphur and nitrogen oxides (SOx, NOx),
and fine particulate matter (PM2.5). These harm human health
by contributing to heart disease, asthma, and other illnesses.11
What is more, internal combustion is noisy and jarring for
pedestrians and drivers.
Moving to ZETs now would provide societal benefits, reduce

climate impacts, and reduce the number of diesel trucks that
risk becoming stranded assets. Early action creates a positive
feedback loop between ZET demand, efficiency gains, and
infrastructure development, driving overall costs lower by 2050.
1.2 The transition to zero-carbon

trucking is complex
energy lost in braking, making them perform very well in start-
1.2.1 Decarbonisation will require and-stop urban and metropolitan driving conditions.
an array of technologies
However, batteries have less energy density than diesel
Trucking decarbonisation is a difficult proposition. The fuel. That means that heavy battery packs must be carried
technologies to tackle it are currently expensive and limited in on all BETs, limiting both the range of the vehicle and the
capabilities, yet they must be deployed in complex real-world weight of the cargo it can carry. Furthermore, charging those
situations. Broadly, there are three options for decarbonising batteries requires both time and infrastructure. Charging at
trucking: (1) battery electric trucks (BETs), (2) hydrogen electric higher powers can reduce the time needed to refuel, but also
trucks (HETs), and (3) internal combustion engine (ICE) trucks requires more expensive infrastructure — especially on the
powered by zero-carbon fuels such as biofuels or synfuels. part of electric utilities that often lack the capability to supply
electricity to the locations where trucks need to charge at the
Currently, only one fuel — diesel — satisfies the needs of almost power levels that trucks need for very fast charging.
every trucking use case. Diesel has high energy density, is
cost-effective and reliable, and is easy to transport along In general, this makes BETs most suitable for use in urban
well-established infrastructure. But although diesel has many and metropolitan areas, in return-to-base applications where
positives, it also has serious drawbacks. Its combustion releases overnight charging is available and limited range is required.
harmful air pollutants that are difficult and expensive to remove This implies that urban and regional segments will adopt BETs
from exhaust streams. It exhibits substantial price volatility most rapidly and thoroughly, but not to the exclusion of the
in response to economic or geopolitical events. Critically, its long-haul segment. As we will explore later, the model shows
continued use past mid-century is not compatible with a stable that BET growth will occur in the long-haul segment. Under
climate. most scenarios, BETs will make up the majority of long-haul
segment vehicles. This growth will be faster and greater if
Diesel is akin to a Swiss army knife — capable of performing in the technology experiences major improvements, which are
a wide variety of applications — whereas the zero-emissions uncertain but possible. If they come to pass, these vehicle or
technologies that will replace it are more specialised tools, with fuel cost savings will improve BET adoption in all the segments,
more pronounced costs and benefits. most notably in long-haul trucking.
BETs have some very attractive operational features. They are HETs operate differently. Hydrogen can be quickly added to
quiet and have no tailpipe emissions, enhancing driver comfort tanks in time frames that are competitive with those of diesel.
and reducing their negative effects on nearby people and However, although hydrogen is very light, it uses a lot of space.
businesses. They also have very high torque and can recover To be moved, it must be transported either as a liquid or as a
11 https://www.epa.gov/dera/learn-about-impacts-diesel-exhaust-and-diesel-emissions-reduction-act-dera.

gas at very high pressures. Both pose difficulties: liquefying
hydrogen requires both low temperatures and high pressures,
meaning a lot of equipment and energy is needed if it is in liquid Will low-emissions HDT powertrain
form; transporting it as a gas requires equipment and energy to technologies coexist with ZETs?
compress it and a lot of space for high-pressure tanks.
Before ZET HDT technologies such as BETs and HETs
Currently, all HETs in production use gaseous hydrogen, and become economically and operationally viable, alternative
most hydrogen transportation is done via high-pressure tanks lower-emissions powertrain technologies such as renew-
on trucks. As a result, HETs must be longer to accommodate able LNG/CNG and biofuels may play roles as transitional
on-board hydrogen storage — or cargo storage volume must technologies to ensure emissions reduction in the next
be reduced to make room for the hydrogen tanks. Additionally, 5–10 years. These technologies use ICE technologies for
hydrogen requires at-scale distribution for HETs to reach costs propulsion, which lowers the entry barrier. However, all
competitive with BETs. these alternative fuels still generate tailpipe emissions
(GHG, particulates, and others), making them less attrac-
Carbon-free and low-emissions combustible fuels (e.g., tive as options for achieving net zero emissions in 2050,
biodiesel, RNG, synfuels) are more or less chemically especially in cities. Moreover, bio- and synthetic fuels face
identical to their fossil-based cousins and offer very similar limited supplies and carry price premiums compared with
performance. This would seem to make them an ideal fuel for diesel. This report covers only ZET technologies.
trucks. However, each of those fuels is made by converting
feedstocks into fuels via industrial processes. Those feedstocks
are limited, and those processes can be expensive. For both
sustainable biofuels and RNG, the highest-value use cases shorter daily travel distances and have a base at which they
for the biomass feedstocks is in other industries, especially can charge overnight, in favour of BETs. However, they also
aviation and petrochemicals. Power-to-Liquids (PtL), in which sometimes carry heavy loads, operate multiple shifts per day
CO2 is converted into combustible fuels by a chemical reaction without the opportunity to charge in between, or are based
known as the Fischer–Tropsch process, relies on high-purity out of depots without access to the high-power electricity
CO2 and H2 as feedstock and renewable electricity to produce infrastructure needed to charge a fleet of BETs. Those use
the intermediate synfuels. Although these gasses are abundant, cases may be more suitable for HETs.
obtaining them in high-purity form is difficult and expensive.
Similarly, converting them into usable fuels takes a lot of energy Finally, there is short-haul or urban trucking. In this application,
and requires substantial investment. For those reasons (i.e., cost trucks operate in dense urban areas, typically at low speeds and
and feedstock availability), combustible fuels are expected to with many stops. An example of this market segment would be
play a very limited role in truck decarbonisation. delivery of fresh foods or beverages to stores and restaurants.
We expect BETs to dominate in this space. The relatively low
1.2.2 Technologies must be matched daily range requirements of these vehicles allow for smaller,
to the operational needs of trucks lighter battery packs and, considering their tendency to return
to base at night, allow for overnight charging with lower-
The truck market is not monolithic. Although most trucks look powered chargers. Furthermore, the handling characteristics
similar, they are used in very different ways. of a BET with high torque and regenerative braking are ideal for
stop-and-go urban driving. However, some cities, especially in
Some trucks travel across countries (or even continents), drive India and China, ban heavy trucks in city centres. In India, this
up to 1,000 km per day, and will go weeks or months without duty cycle is nearly nonexistent, so we do not analyse it there.
returning to a large depot, picking up and dropping off freight
as the market demands. This flexible-route, long-haul market, 1.2.3 The economics of trucking are more
which necessitates long ranges and has no “home base” to complex in a zero-emissions world
return to with guaranteed charging available, is most capably
served by HETs. BETs may become more competitive in this Historically, trucking drivetrains were “one size fits all”. Trucks
market with ubiquitous fast charging or battery advances that mostly used diesel fuel, and range had little impact on vehicle
enable greater range or lower vehicle weight. costs. Diesel prices are volatile, but unlike with electricity, diesel’s
costs do not vary on an hourly basis or by the speed at which the
Other trucks drive long distances daily, but in more fuel is dispensed. The world of zero emissions trucking requires
metropolitan areas, and return to base at night. This type new purchasing and fuelling planning and practices.
of activity, known as regional-haul trucking, often occurs
in and around major industrial clusters. This intermediate BETs’ large battery packs make their upfront cost significantly
market may see both HETs and BETs competing depending higher, but ongoing operational costs such as maintenance
on the specific needs of a truck. These trucks typically have and fuelling (i.e., charging) are substantially lower. Electricity

prices not only contribute to a lower cost per mile, but also are
historically more stable. However, electricity does not have a
single price. The price of electricity varies widely according What role will alternative charging
to the time at which it is used, the place it is used, and the technologies play?
power at which it is drawn from the grid. Furthermore, the
cost of an electric vehicle such as a BET is largely dependent Innovative charging technologies (e.g., catenaries,
on the battery size of the vehicle, making truck range a induction chargers, battery swaps) are likely to have a
newly important element of the vehicle purchase decision. place in the future HDT landscape. Their rapid deployment
Collectively, BETs promise to be cheaper to own and operate could accelerate BET uptake, but their development and
than diesel trucks. Realising those cost advantages, however, implementation still have many uncertainties. However,
will require operators to optimise their purchases of both trucks we believe that although these solutions are likely to
and fuel in a whole new way. be used in discrete contexts, they will not represent the
backbone of the system by 2050.
HETs have less complex economics. Hydrogen pricing will
likely remain relatively stable, and the range of an HET does
not substantially affect its purchase cost. However, HETs
are expensive. Both the vehicles and their fuel are currently
substantially more expensive than diesel. However, we expect smaller role because ZET fleet economics are simpler, and the
those cost disadvantages to abate. Green hydrogen production original equipment manufacturer (OEM) scaling that leads to
benefits from economies of scale, and large electrolysers are further ZET cost declines would be more certain.
expected to reduce hydrogen costs by 50%–70% in the next
several years. Similar cost reduction potential exists in the This model does not assume that today’s historic diesel prices
production of the vehicles themselves — with fuel cells expected become permanent. It models that technology maturation
to fall considerably in cost as the technology gains traction. and economies of scale will make ZETs cost competitive
Cost reductions in both fuel and the vehicle can make HETs with ICE trucks in the same way that past zero-emissions
commercially viable. 12 technologies supplanted incumbent ones. Accelerating those
ZET cost declines will be a critical enabler of zero-emissions
Finally, the evolution of costs of both high-carbon and zero- trucking by 2050.
carbon technologies in the future is uncertain. BETs and HETs
are both significantly more expensive than diesel trucks. 1.2.4 Infrastructure availability will be a key
However, they are also relatively new technologies, whereas enabler of the transition
diesel trucks have been around for a century. Furthermore,
diesel trucks are produced in much larger volumes than either The supply chain for diesel — the infrastructure to produce
HETs or BETs, giving them economies of scale in production and transport it — is very mature. There is a global system
that the other technologies do not yet enjoy. As tech develops of oil wells, refineries, pipelines, ships, and filling stations
and economies of scale in production are achieved, ZET costs for delivering diesel. In comparison, the infrastructure for
will likely fall, as they have for other low- and zero-emissions competing zero-carbon technologies is not well developed.
technologies such as solar photovoltaic panels, wind turbines,
battery energy storage, heat pumps, and LED lighting. Although the countries we are focusing on in this report all have
functional electricity systems, those electricity systems were
Diesel trucks, on the other hand, will likely get more expensive. not built with trucks in mind. BET charging is likely to happen
As regulators increasingly focus on the public health impacts at high power and in concentrated locations. Upgrading the
of air pollution, they are limiting diesel tailpipe emissions. To electricity grid to provide that electricity is a major investment
meet these standards, trucks are required to be equipped with in grid infrastructure and will require significant capital. Some
ever more expensive exhaust aftertreatment systems, greatly grids are also more developed than others. Managing truck
increasing the cost of the vehicles. BETs and HETs, which have charging electricity loads can reduce, but not eliminate, the
no pollutant emissions, are not subject to these costs. substantial investments in grid capacity that will be required.
The 2022 diesel prices are some of the highest ever.13 If diesel Furthermore, BETs qualify as zero emissions only if the electricity
remained persistently expensive, ZETs would enjoy an earlier used to charge them also qualifies as zero emissions. Many
and larger cost advantage, and market-based ZET adoption countries have plans to decarbonise their power sectors with
would be faster. In a high-cost diesel world, policy would play a renewables. Doing so is likely to require substantial investments
12 Combustion engines for hydrogen have lower manufacturing costs than fuel cells in the short term but have fundamental efficiency and pollution disadvantages.
13 United States Energy Information Administration, No. 2 Retail Diesel Prices, June 24, 2022, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=-
PET&s=EMD_EPD2D_PTE_NUS_DPG&f=M.

not only in renewable generation and transmission, but also in 1.2.5 Matching demand and supply cycles
various types of storage to balance supply with demand. is challenging for buyers and truck
manufacturers
Finally, hydrogen infrastructure is the least mature of the
technologies in both its production and its transportation. Fleet owners typically order new trucks yearly to both minimise
Like electricity, hydrogen is not necessarily zero carbon. costs of operation and ensure that fleets can meet customer
Today, most hydrogen is produced from fossil fuels (e.g., steam and regulatory requirements. As the costs of ZETs fall rapidly
methane reformation and coal gasification). Zero-carbon and both shippers and regulators increasingly require the fleets
green hydrogen can be produced through electrolysis, which to decarbonise operations, the market demand for ZETs has the
uses renewable electricity to split water into its constituent potential to expand rapidly.
hydrogen and oxygen molecules. Today this process is
expensive, resulting in fuel costs for HETs that are well above The supply of ZETs, however, is less flexible in the near
those of diesel. For HETs to be viable, the supply of green term. Building out the productive capacity for ZETs requires
hydrogen will need to grow exponentially, and its cost will substantial investment not only in the production of ZETs
need to fall substantially. themselves but also in the supply chains for ZET components.
Furthermore, demand for ZETs is highly dependent on ZET
Similar benefits of scale exist in conditioning, transport, pricing. Production at small scale leads to high prices, which
and dispensing of hydrogen. Broadly, three options exist for leads to lowered demand for ZETs, slowing purchases and
hydrogen distribution: inhibiting the development of economies of scale. Similar
chicken-and-egg dynamics exist with the deployment of grid
• Transporting it as a compressed gas in trucks, which is infrastructure to enable ZET charging.
expensive and not easily scaled
Collectively, these two factors slow the adoption of ZETs and
• Transporting it as a liquid, which requires specialised make achieving net zero by 2050 difficult. As countries chart
equipment and supply chains their course to zero-emissions trucking, keeping in mind the
importance of supply of both vehicles and infrastructure can
• Transporting it in new or upgraded pipelines (the most likely help to ensure that the transition stays on track. Regulatory
long-term solution) tools that incentivise ZET supply can avoid a situation in which
the supply of ZETs chronically lags behind demand.
Today, none of those transportation systems exist at scale.
Whatever hydrogen transportation solution is adopted, For example, in California and China, zero-emissions vehicle
significant infrastructure investment will be required to provide (ZEV) credit trading schemes require that electric vehicles (EVs)
it as a fuel reliably. account for a certain percentage of sales of light-duty vehicles

for all companies producing vehicles. Companies that produce and its policy portfolio has largely been focused on very light
more EVs than they are required to can sell the resulting vehicles (scooters and rickshaws) and buses. As a result, it is
credits to underproducing companies. This both incentivises most likely to be a late mover in aggressively pursuing truck
expansion in vehicle supply in the market and enables EVs to decarbonisation policies.
be sold at lower prices, as the sale of credits by EV producers
can lower the cost at which those EVs can be offered to the Additionally, economics, operational patterns, and infrastructure
market. Europe has a similar system for light-duty vehicles, may influence the timing, cost, and shape of the transition in
with suppliers required to meet ever-increasing standards of different countries. In China and India, a new diesel truck is much
average CO2/km emissions limits on the cars they sell — with cheaper to purchase than it is in the United States or Europe,
EVs receiving special treatment to increase their impact on largely because of differing regulatory regimes. That hurts the
calculated average CO2/km. Again, those that exceed the limits economics of ZET adoption in those geographies, leading to a
must buy credits from those that have outperformed them. later transition (especially in the expensive long-haul segment).
These types of credit trading schemes, which both incentivise Operational patterns also differ by country. For example, the
the entry of EV suppliers to markets and enable EVs to be sold United States — a large land mass with low population density,
at a price the market will bear, can be applied to trucks as well. and economic centres on its East and West coasts — generates
For example, California has applied ZEV credit principles to very long trips for trucks. This length of haul makes truck
its Advanced Clean Trucks (ACT) rule, and the EU is planning decarbonisation more challenging. Europe, on the other hand,
to expand the light-duty average CO2 requirements to heavy- tends to have shorter lengths of haul due to greater population
duty markets. densities and more even distribution of economic activity. China
is similar to Europe in this regard. Although it is a very large
It is likely that regulators and ZET manufacturers in different land mass, both its population and its economic activity are
geographies will craft unique paths to spur the ZET transition. highly concentrated on its east coast and in certain economic
But in all markets, ensuring vehicle supply that meets demand mega regions such as the Pearl River Delta or the greater
at a price that markets can bear will be a key enabler of net Beijing area (known as Jing-Jin-Ji).
zero by 2050.
1.2.6 Truck decarbonisation will not be

uniform across geographies Given the still immature economics
A final element of the complexity of truck decarbonisation is the of trucking decarbonisation,
differing geographies in which it will have to be implemented.
Some geographies are well positioned to move quickly; others policy has been its main driver.
are more likely to move later. The main drivers will be local
policies, differing economics, infrastructure availability, and
truck travel patterns that will influence drivetrain selection.
Given the still immature economics of trucking decarbonisation, In India, trucks travel shorter daily distances at slower speeds.
policy has been its main driver. Currently, Europe is doing Furthermore, much of the truck traffic in India is concentrated
the most to incentivise truck decarbonisation; it has an array in several corridors that are collectively known as the golden
of policies already in place, creating an early lead for truck quadrilateral. However, the easiest-to-electrify use case,
decarbonisation in that region. These measures include planned urban transportation, is nonexistent in India. This argues for a
phasing out of diesel and petrol, and incentives to buy ZETs. In relatively late starting transition in the country, but one that is
the United States, there is little policy support for ZETs at the potentially fast moving once it gains momentum.
national level, but strong policy from California and some other
states. This is likely to lead to a rapid but uneven transition, Finally, infrastructure availability may affect technology
some states leading and others lagging. selection. For example, India has a relatively underdeveloped
power grid compared with those of the United States, Europe,
China, on the other hand, has strong national policy for and China. Delivering the power to provide high-powered
electrification of lighter vehicles, but little policy focus to date charging for millions of trucks may conflict with other goals
on heavy-duty trucks. As a result, China is trailing in heavy truck such as increasing power reliability to existing users. This,
decarbonisation. However, China has shown itself to be capable combined with suitable geography for hydrogen production,
of rapidly driving transitions to electric vehicles through policy may lead to an increased use of HETs. Similar situations may
and infrastructure packages. If China does make a policy move play out in other countries where power delivery to certain
to decarbonise trucking, it is likely to be effective. sites is prohibitively expensive, leading to hydrogen use in
Finally, India is a relative newcomer to the electric vehicle world, applications where BETs would otherwise make sense.

1.3 The transition has already started
Many leading stakeholders
Many leading stakeholders (e.g., transport buyers, logistics
players and fleets, OEMs, energy and infrastructure (e.g., transport buyers, logistics
providers, policymakers, and financial institutions) are
pursuing decarbonisation. Governments around the globe players and fleets, OEMs, energy
are inducing demand for and supply of ZETs by implementing
stricter emissions targets, fuel standards, or both. Major
and infrastructure providers,
logistics companies and large truck buyers are committing to policymakers, and financial institutions)
decarbonisation and emissions reductions, thereby
creating increased ZET demand along the way. Incumbent are pursuing decarbonisation.
OEMs and new entrants are investing heavily in the
development of ZET models, while fleet owners are investing
in vehicles and on-site infrastructure. Some examples of
innovative ZET deployments:
1.3.1 China 1.3.3 India
• In Shihezi industrial park, a fleet of 100 battery electric • Tata Steel contracted for 27 electric trucks in 2021 to
trucks serve business based in the park. The trucks, with a transport finished steel. The trucks have a 35-tonne
gross weight rating of 38 tonnes, are manufactured by Sany carrying capacity and are equipped with a 2.2-tonne,
and SAIC Hongyan and feature swappable batteries ranging 230.4 kWh lithium-ion battery pack.
from 275 kWh to 425 kWh. The trucks typically make trips
of about 100 km and swap batteries at a facility in the • Dalmia Cement Bharat is set to purchase 22 electric trucks
industrial park. as part of its e-truck initiative. Dalmia will deploy the RHINO
5536 manufactured by IPL TECH trucks, which has a gross
• In July 2021, HeSteel Group deployed 30 fuel cell trucks vehicle weight of 55 tonnes and a 258 kWh battery pack.
transporting iron ore on a 150 km round-trip route. The company also commissioned two charging stations at
its Rajgangpur unit in the Sundergargh district of Odisha.
• In 2021, the Baoding government deployed 100 fuel cell
trucks for short-distance transportation of construction 1.3.4 United States
materials to building sites in Xiong’an. By 2024 it plans to
deploy a total of 1,000 such trucks along with 6–10 hydrogen • NFI. The North American supply chain solutions provider is
fill stations en route. testing a pre-production Volvo VNR electric with over 280
km of range and a class 8 terminal tractor out of its Los
1.3.2 Europe Angeles–area depots. It has plans to operate over 100
battery electric tractor-trailers by early 2023.
• DHL has announced plans to accelerate the transition by
deploying 44 new Volvo trucks (Volvo FE and Volvo FL) for • Frito-Lay North America. In Modesto, California, the
routes in Europe. These trucks will be used for package packaged-foods giant is using electric vehicles in its
delivery in urban areas. warehouse and delivery operations. That includes electric
forklifts, yard trucks, and six 220EV Peterbilt electric box
• Amazon has launched five electric 37-tonne trucks in the trucks for local distribution. The company has also placed an
UK. They are operating from the fulfilment centres in Milton order for 15 Tesla semi-trucks.
Keynes and Tilbury. Four more electric trucks are expected
by the end of 2022. • Anheuser-Busch. The world’s largest beer producer is
adding 20 electric trucks to its California fleet, including a
• Dachser, a family-owned logistics company from Germany, Class 8 BYD electric tractor-trailer.14
will introduce at least 50 additional battery electric trucks
on European routes by the end of 2023. • A.P. Moller-Maersk. A global leader in shipping services that
employs approximately 95,000 people, it recently ordered
110 Volvo VNR and 300 Einride electric trucks. It expects to
deploy 450 electric trucks in North America from various
manufacturers in 2022–23.
14 More information on fleet and vehicle performance can be found at NACFE’s Run on Less website: https://runonless.com/participant-profiles/.

PART 2
A Model to Understand
the Transition to
Zero-Emissions Trucking
BOX 1
An array of approaches are complementary to zero-emissions truck adoption
In this report, we model how the transition to ZETs could play

out. ZETs are not the only solution relevant to freight transport
decarbonisation, but they are the most impactful. However,
other strategies that reduce the total amount of truck driving
required are also valuable; these include demand reduction,
increased logistical efficiency, use of sustainable fuels, and
application of hybrid powertrain technology.15
Three main strategies could be applied to reduce freight

kilometres travelled:
1. Encourage a mode shift from long-haul trucking to rail.

A diesel freight train in the United States is three to four
times as fuel efficient as a truck, reducing emissions by up
to 75%. Outside the United States, existing and planned
electrification of rail allows for transport with little to no
emissions.16 Furthermore, rail typically is the most effective 3. Improve logistical efficiency. Improvements in net load
method for very-long-haul shipments, the segment of factor (e.g., due to reducing return trips with empty or below-
the market most difficult to decarbonise, making trains a capacity trucks) and higher fleet utilisation from operator
valuable complement to ZETs. consolidation can move more goods using less space.
2. Increase supply chain efficiency. Shorter, less transport- Collectively, these strategies could reduce HDT sector demand,
intensive supply chains could potentially reduce the total thus reducing emissions by roughly 20%.18
travelled distances by about 3.5%.17
15 High-cost CO2 removal solutions are expected to play a limited role in heavy-duty trucking, because technologies are already available for the industry to
transition to ZETs.
16 Association of American Railroads, “Sustainability Fact Sheet”, 2020, AAR.org; and Rapid Transition Alliance staff, “On Track to Full Electrification: Low Carbon
Railways”, Resilience, July 21, 2021.
17 MPP Road Freight Zero initiative research.

18 Expert estimate and team analysis.

BOX 1
Change
Change in HDT
in HDT Demand
demand Due to improvements
due to efficiency Efficiency Improvements
Millions of trucks
In millions of trucks
United States Europe China India
40
36.6
35
–30%
30
–6.1
+106% –1.5 25.6
25
–3.4
20
17.7
15
10
2020 demand 2050 reference case Mode shift Supply chain efficiency Logistical efficiency Low-demand case
Note: Baseline case is used for subsequent modelling in this report.

Although mode shift, efficiency, and reduced fuel usage cannot number of zero-emissions trucks required, and efficiency
create a zero-emissions industry, they reduce the remaining reduces the industry’s electricity, batteries, and hydrogen
need for full decarbonisation. Demand reduction lessens the requirements.
2.1 MPP models a cost-effective The model approaches the decision to deploy ZETs much as a
transition to zero-emissions trucks truck purchaser would, by seeking to minimise the cost of the
truck over its lifetime — known as its total cost of ownership
Although MPP recognises the importance of demand (TCO) — while complying with applicable regulations. TCO
reduction as a decarbonisation tool, actually meeting covers the full cost associated with putting a truck on the road
demand with ZETs will deliver the bulk of the sector’s (purchase cost, registration fee, charger/filling station cost, and
decarbonisation. To understand how this transition is likely other costs) and the net present value of operating expenses
to play out, we have developed a model that estimates how (i.e., fuel, maintenance, CO2e costs, insurance, charger/filling
quickly ZETs can be deployed and what the rough costs of station costs) discounted over the truck’s lifetime using a 5%
doing so will be. real discount rate.19
19 The model includes some ZET adoption ahead of TCO-positivity and some ICE use afterwards for users that choose ICE vehicles even after ZETs make greater
economic sense.

Furthermore, as discussed above, the trucking market is not
monolithic. The most cost-effective technology is dependent on
the use case of the vehicle. To capture this dynamic, the model
employs three distinct duty cycles for HDT that are modelled
separately: long-haul, regional, and urban.
TCO is usually important for vehicle purchasers, but it isn’t

always the determining factor. Many fleets today would like
to purchase BETs and HETs, but there is not enough supply of
those vehicles, and it takes time to build out the capacity to
supply them. To capture this reality, we model constraints on
vehicle supply in the near future, which can slow down adoption
even when greater adoption would be cost-effective.20
Detailed definitions of duty cycles, constraints, and costs, as

well as a detailed walkthrough on the modelling methodology,
can be found in the Appendix.
2.1.1 We model four scenarios to explore

pathways to zero-emissions trucking
Expected Adoption scenario
We recognise that although the market is nascent, some Zero-Emissions — ZET Mandate scenario
degree of ZET adoption is likely through 2050 and beyond.
To understand how far the transition to ZETs is likely to go Sales mandates or sales bans are a common tool used by
without aggressive policy action and more rapid technological policymakers around the world to achieve ZET adoption targets.
development, we model an Expected Adoption scenario. In this The Zero-Emissions — ZET Mandate Scenario models a policy
scenario, there is no additional policy action by government, of phasing out new fossil fuel truck sales by 2040 to ensure a
and we use consensus estimates of the evolution of fuel and zero-emissions fleet by 2050. This captures the logic at play in
truck prices through 2050. policies such as California’s ACT and Advanced Clean Fleet rules
and the diesel bans enacted by several European countries.
Rapid Technology Improvement scenario
Accelerated Zero-Emissions — Carbon Cost scenario
Over the past decade, many analysts have drastically
underestimated the rate at which zero-emissions technologies In the Zero-Emissions — ZET Mandate scenario, operators still
(e.g., wind, solar, batteries) would decline in cost and gain minimise TCO, but the cost of carbon increases the TCO of
market share. Similarly, the adoption rate of passenger electric non-zero-emissions technologies. This second policy-focused
vehicles has frequently outpaced market forecasts, requiring scenario captures the dynamics at play in policies such as the
analysts to revise new forecasts upwards. To capture a similar EU Emissions Trading System (EU ETS) or California’s Low
potential for ZETs, we model a separate policy-agnostic Carbon Fuel Standard (LCFS).
scenario, the Rapid Technology Improvement scenario, which
sees faster development of low-cost BETs and HETs. The purpose of the scenarios described above is not to
advocate for any path that they describe, but rather to have
Both the Expected Adoption scenario and the Rapid Technology a framework to evaluate the costs and benefits of different
Improvement scenario see significant levels of ZET adoption, approaches (Exhibit 2.1). We anticipate that individual countries
and they are both market based. However, it is also likely that will ultimately formulate their own policy packages that
some policy action will be required to achieve zero-emissions implement features from each scenario and also add other
trucking by 2050. For that reason, we model two policy-focused elements that we have not modelled (e.g., subsidies, particular
scenarios, below. tax treatments).
20 In the short term, battery supplies are constrained because of growing demand for long-range passenger electric vehicles. Battery production capacity is growing
rapidly. Trucking is highly cost-sensitive, and if battery supply remained constrained, the passenger car market and others might be willing to pay more per kWh for
batteries than truck purchasers are.

EXHIBIT 2.1
An overview of the scenarios modelled
BASELINE MARKET SCENARIOS POLICY SCENARIOS
Do Nothing Rapid Technology Improvement scenario

Zero-Emissions scenario
TCO
■ ZET mandate is
minimisation with
announced in 2030 and
diesel phase-out
TCO Accelerated Accelerated implemented in 2035
and operational
minimisation BET HET for shorter routes, and
constraint
with no ZETs announced in 2035 and
implemented in 2040
for long-haul as a last
measure to reach net
■ Only ICE ■ ~30% lower power price ■ ~30% lower zero by 2050 — ICE sales
powertrains at the chargers hydrogen prices at are distributed to HET
the pump and BET
■ Possible ■ 10% higher max
emissions charging infrastructure ■ 10% higher max
trajectory in utilisation (20%–45% HET infrastructure
absence of versus 10%–35%) utilisation Accelerated
coordinated (20%–45% versus Zero-Emissions scenario
■ Assumes no operational
policy, finance, 10%–35%)
constraints for BETs TCO
and value-chain minimisation with ■ Carbon cost of
support carbon cost and $0–$250/t CO2
operational (increasing linearly from
Expected Adoption scenario constraint 2023 to 2050) applied on
GHG well-to-wheel
■ No policy changes emissions for diesel and
TCO biodiesel ICE trucks
■ Vehicle mix based on
minimisation
individual fleet economics ■ Carbon cost as a proxy
and adoption behaviour for coordinated policy
actions
Note: Carbon cost is based on BP Energy Outlook 2050, and diesel phase-out timeline is based on maximum vehicle lifetimes.

PART 3
Achieving Zero Emissions by 2050:

Possible Trajectories
3.1 Expected declines in cost of zero-emissions technologies will deliver substantial

decarbonisation, but sales of diesel vehicles will persist to 2050 and beyond
The cost of ZETs is falling quickly, and those vehicles are However, in developing markets, such as India and China,
rapidly gaining market acceptance. We anticipate that early- competing diesel vehicles are substantially cheaper than in
mover market segments — urban and regional — will reach the United States or Europe. In those markets zero-emissions
cost parity in this decade and see substantial growth in sales technologies will have a less pronounced cost advantage
share. In developed markets, that early cost parity will drive (Exhibits 3.1 and 3.2). As a result, achieving net zero in those
these lower-mileage segments close to net zero by 2050. geographies will require more effort.

EXHIBIT 3.1
TCO and sales shares for the Expected Adoption scenario,
urban segment
TCO per km, $ Sales share, %
BET HET ICE Diesel Biodiesel BET HET
Europe
5 100
96% 97%
4 80
BET parity year
72%
2025
3 60
2 40
1 20
HET parity year 2044
2020 2030 2040 2050 2020 2030 2040 2050
United States
5 100
95% 96%
4 80
64%
3 60
2 2026 40
1 20
2046
2020 2030 2040 2050 2020 2030 2040 2050
China
5 100
80 72%
4
67%
3 60
52%
2 40
2028
2049
1 20
2%
2020 2030 2040 2050 2020 2030 2040 2050
Note: HDT is legally restricted from urban deliveries in India; the country is therefore excluded from the segment analysis.

EXHIBIT 3.2
regional segment
TCO per km, $ Sales share %
Europe
2.5 100
97% 97%
2.0 80
BET parity year
72%
1.5 2026 60
1.0 40
0.5 20
HET parity year 2040 1%
2020 2030 2040 2050 2020 2030 2040 2050
United States
2.5 100
2.0 95% 96%

80
1.5 60 63%
2028
1.0 2046 40
0.5 20
2020 2030 2040 2050 2020 2030 2040 2050
China
2.5 100
75%
2.0 80
71%
1.5 60
48%
1.0 40
2032
0.5 2049 20
5%
2020 2030 2040 2050 2020 2030 2040 2050
India
2.5 100
88%
2.0 80 67%
1.5 60
2034
1.0 2049 40 37%
0.5 20 11%
2020 2030 2040 2050 2020 2030 2040 2050
Soruce: MPP analysis

The projection of India and China as relatively late movers Long-haul duty cycles will be more difficult to decarbonise
in urban and regional market segments is based on today’s (Exhibit 3.3). To decarbonise long-haul, two pathways
vehicle regulations. Currently, regulatory regimes in developed exist: (1) BETs with very large battery packs and ubiquitous
markets are substantially stricter than those in developing high-powered public charging and (2) HETs with a national
markets, imposing higher costs on truck manufacturers. hydrogen distribution network. Either solution will create
Over the past decade, however, India and China have more substantial extra upfront vehicle costs and require substantial
stringently regulated trucks. If that trend continues, China infrastructure development. We project that these segments
and India’s urban and regional ZET trajectories would become will not see cost parity until the next decade and see
more like those of the United States and Europe. significant sales share only by the second half of the 2030s,
too late for a 2050 zero-emissions transition without faster
technology improvement or policy intervention.

EXHIBIT 3.3
long-haul segment
TCO per km, $ Sales share %
Europe
2.0 100
71% 62%
80
1.5
BET parity year 60
1.0 2033
40
0.5
20 11% 35%
HET parity year 2040
2020 2030 2040 2050 2020 2030 2040 2050
United States
2.0 100
80
1.5
57%
2036
60 66%
1.0
40
0.5
20 7%
2049 32%
2020 2030 2040 2050 2020 2030 2040 2050
China
2.0 100
80
1.5 48%
2038 60
1.0 45%
40
2040 28%
0.5 20 36%
2020 2030 2040 2050 2020 2030 2040 2050
India
100
80
2041 60 41%
40
43%
20 7% 36%
2048
2020 2030 2040 2050 2020 2030 2040 2050
Soruce: MPP analysis

3.2 Getting to zero emissions will
require rapid decarbonisation,
particularly of long-haul trucking,
with contributions from both the
public and private sectors
Broadly speaking, there are two ways to achieve a full zero-
emissions transition in trucking. One is by altering the cost-
optimal decisions that truck purchasers make, such as through
accelerated tech development, subsidisation, or some form of
carbon pricing. The second is by allocating those costs back to
truck manufacturers via a sales requirement or to truck fleets
via a purchase requirement. We have modelled these scenarios
separately, but all approaches are likely to be used — indeed,
that is already how things are playing out.
For example, in California, a sales requirement (the ACT rule)

mandates an ever-growing share of vehicles sold to be ZETs and
a purchase requirement (the Advanced Clean Fleet rule) requires
fleet owners to purchase those newly made vehicles. At the
same time, truck purchases are subsidised via California’s HVIP
programme, and low-carbon fuels are subsidised via California’s
LCFS programme. This combination of stick and carrot, which MPP models two potential pathways for accelerated
simultaneously requires the use of ZETs and substantially technological development — one in the BET ecosystem and one
improves the economics of their use, has made California the in the hydrogen ecosystem. The BET breakthrough represents
centre of ZET adoption in the United States. Meanwhile, the some combination of battery improvements and industry
Global Drive to Zero MOU, the First Movers Coalition, and the advances including prevalent megawatt fast charging. Solutions
Climate Champions Breakthrough Agenda are tremendous such as these can eliminate the problem of reduced cargo
examples of how public- and private-sector voluntary action can carrying capacity and truck downtime. These improvements
accelerate the normalisation of the transition. can come from new technology or an industry that achieves
efficiencies faster than assumed in the model's Expected
As mentioned above, projected cost declines are expected Adoption scenario. This breakthrough enables near full
to be enough to motivate ZET adoption in urban and regional electrification of trucks by 2040 even in the long-haul segment
trucking, both of which are already largely on a zero-emissions — an outcome that is near compliant with net zero by 2050. In
pathway. For that reason, in the following sections, we focus on this world, hydrogen sees almost no role because BETs both are
the impact of these policies and tech development in long-haul cost superior and provide the operational capabilities needed in
markets, which are not expected to naturally achieve net zero. long-haul operations.
Further discussion of how those easier-to-electrify markets
react to the zero-emissions policy and market developments A breakthrough in the hydrogen ecosystem would see the costs
can be found in the Appendix. of both the vehicle and the hydrogen fuel go down. Absent a
parallel breakthrough in BETs, it does not alone deliver a zero
3.2.1 Getting close to net zero via emissions by 2050 trajectory (Exhibit 3.4). This is because as
accelerated cost declines hydrogen gets cheaper, it increasingly captures market share
from BETs, but it does not gain cost superiority and sales
In recent years, clean technologies such as wind, solar, and share over diesel trucks before 2040 sufficient to enable a full
batteries have fallen in cost far faster than even the most retirement of diesel vehicles by 2050. However, if a hydrogen
optimistic projections. In the light-duty market, declining breakthrough occurs in the 2020s and the capability to make
battery prices have led to rapid consumer acceptance and hydrogen ubiquitously available to trucks emerges soon after,
widespread adoption of EVs. We attempt to capture those this scenario could prove to be conservative.
dynamics in our Rapid Technology Improvement scenario,
in which the costs of ZETs and their fuel fall more rapidly, For the sake of brevity, we do not show the individual
vehicle production is not limited by production constraints, and breakdowns of sales by country for these scenarios. Here
charging infrastructure is used by more vehicles. we show only the globally aggregated view of the transition.
Country-specific details are available in the Appendix.

EXHIBIT 3.4
Sales share, total trucking fleet population by year in the
Rapid Technology Improvement scenario, long-haul segment
Diesel Biodiesel BET HET
Accelerated BET scenario Accelerated HET scenario
Sales share %
100 93% 96% 100 36%
75 75 39%
50 55% 50
59%
30%
25 25 16%
3%
2020 2030 2040 2050 2020 2030 2040 2050
Population, millions of trucks

15 15
14
5
12 12
11
9 9
8
6 6 4
3 3 3
1 2
2020 2030 2040 2050 2020 2030 2040 2050
To create cost breakthroughs that enable a more market- Many European nations have effectively committed themselves
driven trajectory to zero emissions, both governments and to this path through announcements or bans on internal
private financial institutions must direct capital to high- combustion engines at specific dates in the future. Furthermore,
priority research and development, such as breakthrough the EU has mandated two binding reduction targets for each
battery chemistries or low-cost hydrogen electrolysis. manufacturer’s sales, setting a target of 15% in 2025 and
Countries must also continue unbottling renewables through 30% in 2030 from the 2019 baseline. Some countries in the
new electricity generation and transmission, and hydrogen European region have gone further. The UK government has
distribution capabilities. announced its intention to phase out the sale of new diesel
and petrol heavy-duty trucks by 2040. The Netherlands has
3.2.2 Altering costs through policy levers announced that cities will allow only ZET deliveries after 2025.
to achieve zero emissions In the United States, California is already following this path
through its ACT and Advanced Clean Fleet rules. The Global
Even with strong investment and innovation, technology MOU is further encouraging ambition around the globe.21
development is an inherently uncertain process. If technology
development is unable to maintain the strong pace of the Under this scenario, sales until 2035 follow the same trajectory
previous decade, governments can intervene to ensure truck as they would under the Expected Adoption scenario.
decarbonisation. However, beginning in 2035, sales of ZETs ramp up rapidly
as the requirement begins to be enforced. For geographies
3.2.3 ZET sales and purchase requirements that already have seen extensive market development led by
favourable TCOs, such as Europe, this ramp-up in sales is not
One policy is a sales mandate requiring that supply to enter particularly steep. However, for markets with less favourable
the market. In this Zero-Emissions — ZET Mandate scenario, we TCOs in the early years, the ramp-up in sales after 2035 is more
model a required sales trajectory starting in 2035, which leads to abrupt (Exhibit 3.5).
a full exit of fossil fuel–powered trucks from the fleet by 2050.
21 Sixteen leading nations signed a Global Memorandum of Understanding (MOU) for ZE-MHDVs. The MOU establishes the goal of at least 30% vehicle sales being zero
emissions by 2030 and 100% by 2040 at the latest. Supported by over 50 subnational government and industry endorsements, the MOU aligns with Paris Agree-
ment goals and establishes a pathway for the commercial on-road transportation sector to reach net zero carbon by 2050.

EXHIBIT 3.5
Sales share by region in the Accelerated Zero-Emissions
scenario, long-haul segment
Sales share % Diesel Biodiesel BET HET
Europe United States
100 68% 59% 100 70% 56%
80 80
60 43% 60
47%
40 41% 40 44%
32% 30%
20 20
15%
3%
2020 2030 2040 2050 2020 2030 2040 2050
China India
100 45% 51% 100 47% 51%
80 54% 80
60 60
55% 48% 53%
49% 49%
40 40
27%
20 20
7%
2020 2030 2040 2050 2020 2030 2040 2050
Under this policy scenario, global action in the mid- to late

2030s becomes critical. Sales of ZETs increase from less Sales share and total EXHIBIT 3.6
than 40% in 2035 to 100% by 2040, leading to a fully zero-

emissions fleet by 2050 (Exhibit 3.6). trucking fleet population by year in
the Accelerated Zero-Emissions
Although we have modelled this scenario as having the most
deferred ZET adoption, that need not be the case. Depending scenario, long-haul segment
on the timing of sales requirements, the ramp-up in production Diesel Biodiesel BET HET
and sale of ZETs can be achieved earlier. As discussed later,
Sales share %
in California, an effective carbon price via the LCFS and a 100 54% 53%
supply mandate via ACT have been implemented in tandem —
80
simultaneously addressing both supply and demand constraints
60 49%
for ZETs. Programs that incentivise fleets to retire old trucks
46% 47%
also accelerate GHG reductions. Rather than viewing policy 40
tools as mutually exclusive or viewing a sales requirement as 20
17%
a last resort, policymakers should explore these coordinated
policy approaches and provide a predictable target that 2020 2030 2040 2050
stakeholders can use to plan. The more gradual a transition Population, millions of trucks
to ZETs is and the more widely the costs of that transition are 15 7.7
distributed, the more smoothly it is likely to play out. 12 6.4
9
7.1
6
5.1
3 2.4
0.5
2020 2030 2040 2050

3.2.4 Fuel carbon pricing instruments such as carbon taxes. For that reason, it is best
that policy approaches that materially affect demand, such
Carbon pricing is an approach that is already used globally, both as carbon pricing, be implemented in tandem with policies
through carbon credit trading systems, which exist in Europe ensuring that supply is available in the market to meet that
and China, and through policies such as California’s LCFS, which increased demand.
effectively increases the price of fuels depending on their
carbon intensity. Finally, it should be noted that the carbon prices needed to
achieve the transition shown below are substantial. Details of
This approach represents a more active role from government the costs used in this Accelerated Zero Emissions — Carbon
but continues to rely on cost optimisation as the mechanism Cost scenario can be found in the Appendix, but they start out
for the transition. This approach is promising but also has some relatively low and grow steadily, leading to a rapid transition in
difficulties. Because carbon pricing is essentially a tax on fuels, the late 2020s and early 2030s, and continue growing to 2050.
the burden of the transition will sit with fleets — which are often
the worst-equipped to deal with rising costs due to highly In this scenario, TCO parity is accelerated in all countries,
competitive markets and slim margins. However, to the extent leading to rapid acceleration in ZET deployment in the late
that carbon costs are captured in the cost of fuel at the pump, 2020s. As carbon prices increase into the mid-2030s, the TCO
fleets can rely on existing practices such as fuel surcharges to superiority of ZETs grows, leading to full adoption in all markets
pass costs up to shippers in a transparent way. This can help in the late 2030s (Exhibit 3.7). The expansion of demand is
minimise market dislocations from policy intervention. quite rapid, especially in countries such as India and China,
which arrive to TCO parity somewhat later, leading to very rapid
Furthermore, as discussed above, the supply of electric trucks growth in ZET sales that may challenge the ability of suppliers
is unlikely to be able to adjust as quickly as demand to policy to meet market demand.
Sales share by region in the Zero-Emissions — ZET Mandate

EXHIBIT 3.7
scenario, long-haul segment

Sales share % Diesel Biodiesel BET HET
Europe United States
100 76% 64% 100 85% 52%
80 80
60 60
40 40 48%
36%
20
11% 24% 20
7% 15%
3%
2020 2030 2040 2050 2020 2030 2040 2050
China India
100 67% 53% 100 52%
80%
80 80
60 60
47% 48%
40 40
25% 33%
20 20
2% 7% 11%
2020 2030 2040 2050 2020 2030 2040 2050

Globally, this policy scenario leads to very strong sales growth
Sales share and population
EXHIBIT 3.8
of both BETs and HETs in the late 2020s and early 2030s. With
the majority of sales ZETs by 2030 and nearly 100% of sales
ZETs by 2035, 95% of all trucks on the road by 2040 would be in the Zero-Emissions —
zero emissions (Exhibit 3.8). ZET Mandate scenario for
As policymakers implement policies such as carbon pricing, they the long-haul segment
should consider the market’s ability to provide supply in response Diesel Biodiesel BET HET
to these very rapid expansions in demand. If carbon pricing is not Sales share %
paired with vehicle availability, it will not effectively accelerate 100 75% 56%
the transition to ZETs; it will just impose costs on the industry 80
that will ultimately be passed on to consumers.
60 44%
40
24%
3.2.5 Different approaches to net zero have 20 15%
differing cumulative carbon emissions 2020
1%
2030 2040 2050
Together, the modelled policy and market scenarios form an Population, millions of trucks
emissions envelope and provide insights into how the HDT 15 8.9
industry can transition to net zero (Exhibit 3.9). 12
9
6.1
6 5.9
3
0.7 1.4
2020 2030 2040 2050
EXHIBIT 3.9
Annual GHG emissions by scenario, Gt CO2e
Do Nothing Expected Rapid Technology Zero-Emissions Accelerated
Adoption scenario Improvement scenario, BET scenario Zero-Emissions scenario
3.0 Cumulative
emissions
(Gt CO2e)
2.5
66
2.0
42
1.5
33
1.0
36
0.5
29
2020 2025 2030 2035 2040 2045 2050

Under the Expected Adoption scenario, ZETs gain market cumulative emissions — the main drivers of climate change —
share as fleet owners optimise costs, reducing emissions by to decrease.
24 Gt CO2 compared with continuing diesel usage at current
levels. The scenarios that go beyond the Expected Adoption 3.3 Different regions will follow
scenario reduce as much as an additional 13 Gt CO2. The different paths to zero emissions
emissions-reduction potential is the highest in the Accelerated
Zero-Emissions — Carbon Cost scenario, given its earlier Broadly speaking, we project a similar transition in Europe,
transition to ZETs. The earlier implementation of a carbon the United States, China, and India. Each region has a viable
cost drives the earlier adoption of ZETs, resulting in fewer path to zero-emissions trucking by 2050, but some regions
cumulative emissions. In the Zero-Emissions — ZET Mandate are positioned to move more quickly and at lower incremental
scenario, the acceleration in emissions reductions starts after cost, whereas others may see a later, but more jarring,
the announcement of the diesel phase-out in 2035 (five years transition. In the following sections, we explore these regional
before the enactment of the ban). Before then, the sector differences. Although we focus on aggregated outcomes
follows roughly the same emissions-reduction pathway as the within regions, details of the transition for each market
Expected Adoption scenario. This highlights the positive effect segment, in each scenario, for each region can be found in the
on emissions reduction of early coordinated action. It allows accompanying Appendix.

3.3.1 Europe This dynamic is apparent in our modelling outcomes, with
Europe coming close to reaching zero emissions by 2050 even
Europe is likely to be the fastest to transition to ZETs because in the Expected Adoption scenario. This does not suggest that
of a mix of market and policy drivers. the EU should ease its existing policy and technological efforts
to decarbonise trucking, but rather that the probability of
One factor propelling momentum is that new diesel trucks in those efforts succeeding is high. Broadly, the goal for Europe
Europe are relatively expensive to buy as well as operate. High can be ensuring that demand for ZETs, brought on by cost
diesel prices combined with high upfront costs for a diesel truck competitiveness, is met by both vehicle supply and infrastructure.
improve the relative TCO of ZETs. Furthermore, lengths of haul in Europe has the opportunity to ensure that forthcoming
Europe are shorter on average than in the United States, so BETs regulation ensures this is the case with its ambitious Alternative
can generally use smaller, cheaper battery packs. As a result, Fuels Infrastructure Regulation (AFIR) framework and revision of
Europe is already on a strong glide path to zero emissions by the CO2 standards. Furthermore, if ZETs do not exhibit the cost
2050 (Exhibit 3.10), and the burden on industry of extra policy declines — especially of batteries — projected in our modelling,
action to achieve zero emissions will be limited. industry and policymakers may need to take more active steps to
stimulate demand.
EXHIBIT 3.10
Trucking fleet population Expected Adoption scenario
by scenario 10
8.4
8
Europe
6 6.1
Number of trucks, millions
4
Diesel Biodiesel
2
1.4
BET HET 0.3 0.5
2020 2030 2040 2050
Rapid Technology Improvement scenario, BET Rapid Technology Improvement scenario, HET
10 10
8.9 8.2
8 8
6.6 5.9
6 6
4 4
2 1.8 2
1.4
0.4 0.8
2020 2030 2040 2050 2020 2030 2040 2050
Zero-Emissions scenario Accelerated Zero-Emissions scenario

10 10
9.1 8.5
8 8
6.5 6.3
6 6
4 4
2 2
1.6 1.6
0.4 0.7
2020 2030 2040 2050 2020 2030 2040 2050

3.3.2 United States policy framework and accelerate the transition in early years.
The rest of the country (with a few exceptions) will follow
Quickly following Europe, the United States is likely to be a less stringent federal policy framework. Still, even these
a second mover to decarbonisation of trucking. Fuel prices slow-moving states will benefit from the economies of scale
in the United States are not as high as in Europe, but diesel achieved by faster-moving states, ultimately helping facilitate a
truck prices are moderately higher. However, haul lengths are nationwide transition over time.
relatively long, necessitating larger, more expensive battery
packs. Together, the higher incremental capital costs of a Like Europe, the United States will need to only modestly
transition along with the lower operational savings lead to a increase its deployment of ZETs from the Expected Adoption
slightly slower transition in the United States than Europe as scenario if it is to achieve zero emissions by 2050 (Exhibit 3.11).
cost parity arrives a few years later. However, although the United States is strongly positioned for
a market transition, it is less strongly positioned than Europe
On the policy side, the United States has a fragmented policy in the policy work because its regulatory framework is much
framework that will create a varied pace of transition in more patchwork. If the cost-competitiveness of ZETs evolves
different areas of the country. Some locations, predominantly more slowly than we have projected, the transition in the United
the Northeast and the West Coast, will adopt California’s ACT States is more at risk than in Europe.
EXHIBIT 3.11
by scenario 8
6.5
United States 6
4.3
Number of trucks, millions 4
Diesel Biodiesel 2
BET HET 0.9 0.5

2020 2030 2040 2050
8 8
7.4 6.2
6 6
5.0
4 4
4.3
2 2
1.1 0.9 0.9
0.2
2020 2030 2040 2050 2020 2030 2040 2050

8 8
6.8
7.0
6 6
5.0
4.6
4 4
2 2
0.9 1.2
0.1 0.7 0.3 0.9
2020 2030 2040 2050 2020 2030 2040 2050

3.3.3 China (Exhibit 3.12). Furthermore, in its quest for LDV electrification,
China has built mature battery supply chains and gained
Though China has the most ZETs on the road of any market expertise in developing large fast-charging infrastructure
over the medium term, it is likely to be the third mover of the projects. These major assets (not captured in our modelling)
regions we studied purely thanks to economics. The primary could substantially accelerate the transition should China make
reason for China having a slower transition is that it has a significant push into the ZET market.
substantially cheaper diesel trucks than either the United
States or Europe. These low-priced diesel trucks create an Primarily because of relatively cheap models of diesel trucks
increased price premium for ZETs, which is not easily recovered in China and the large cost gap between those low-cost
by reduced operating expenses. Over the years, declines in trucks and expensive ZETs, we project that cost optimisation
battery and hydrogen prices will create the economic incentives will leave China relatively far away from zero emissions by
for a transition, but this process will play out more slowly in 2050. However, China may well surprise the world with an
China than other geographies. unexpectedly rapid transition, because its capability and
demonstrated willingness to deploy policy and rapidly develop
However, China has shown itself to be highly capable of technologies to support decarbonisation are very strong. By
catalysing a rapid transition to EVs in the light-duty vehicle either bringing the policy tools it used to develop the electric
(LDV) segment. Although we predict a relatively slow transition LDV or increasing the costs of diesel trucks via stronger
in China based on economics, that process could speed up regulatory regimes, especially with respect to air pollution
rapidly if China decides to deploy a policy and infrastructure emissions, China could rapidly shift towards faster adoption.
investment approach to trucks similar to what it has for cars
EXHIBIT 3.12
by scenario 20
China 15
11.2
Number of trucks, millions 10
8.4
Diesel Biodiesel 5
BET HET 2.7 2.1

0.7
2020 2030 2040 2050
20 20
15 15.8 15
8.1
12.8
10 10
7.5
6.1
5 5
4.3
2.7
1.5
2020 2030 2040 2050 2020 2030 2040 2050

20 20
14.9 13.1
15 15
10.8
10.7
10 10
5 5
4.0 5.0
2.6 3.2 3.6
0.9 0.4
2020 2030 2040 2050 2020 2030 2040 2050

3.3.4 India more rapidly than we project, and could more fully realise its
potential as a policy leader in transportation decarbonisation
We project India to be the last mover of the four regions for developing economies. Additionally, of all the countries we
studied. This is largely because India has very cheap diesel analysed, India has the least developed electricity grid. The
trucks, lower in cost even than those used in China. These low- complexity of integrating very high-powered charging into
cost vehicles coupled with moderately priced fuel — comparable a still developing grid could delay the transition to BETs and
to the United States and China — will lead India to have the create interest in increased use of HETs.
latest transition (Exhibit 3.13).
Finally, mostly due to low costs for diesel trucks (even lower
Furthermore, on the policy side, India has yet to take a than in China), India is the last region studied to achieve
position on truck electrification and decarbonisation. India zero emissions. Cost optimisation alone is insufficient,
does, however, have a robust and rapidly growing market for and India currently has no policy framework to support
electric light-duty vehicles and buses, which was catalysed by zero-emissions trucks. For the transition to occur in India,
supportive national policies such as FAME and FAME II,22 as well substantial additional effort will be required not only from
as myriad state and city policies. By bringing similar types of Indian policymakers and industry, but also from global climate
policies to the trucking market, India could make the transition finance and development organisations.
EXHIBIT 3.13
by scenario 15
12
India
9 7.7
Number of trucks, millions
6
Diesel Biodiesel 4.0
3
BET HET 0.6 1.4
2020 2030 2040 2050
15 15
12 12
11.4
4.9
9 9
6.9
6 6 5.8
3.7
3 3
1.3 0.6 0.3
2020 2030 2040 2050 2020 2030 2040 2050

15 15
12 10.4 12 8.6
9 9
5.7
6 6
5.5
4.0
3 3
2.2 2.0
0.6 0.1 1.3
2020 2030 2040 2050 2020 2030 2040 2050
22 Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles.

PART 4
Infrastructure, Grid Upgrades,

and Finance Enable the
Transition to Net Zero
Our models focused primarily on sales trajectories required to
ensure that a 2050 fleet is 100% ZETs — and the policies and
cost declines needed to make those trajectories a reality. But
vehicles alone cannot deliver zero emissions. Other adjacent
sectors, especially finance and infrastructure, must play a role
if the transition is to be successful.
4.1 Infrastructure fuels tomorrow’s

zero-emissions fleet
4.1.1 Electric truck charging
Partly because the technology is more mature, BETs reach TCO

parity earlier than HETs, fostering higher adoption rates earlier
across regions and duty cycles. Though they have a head start,
heavy-duty BETs are still new and are sensitive to power prices
and electricity availability. Delivering electricity to trucks will
require substantial investments in new charging infrastructure
of various types. Trucks in urban and regional applications will
likely be able to use depot charging with powers ranging from Charger costs are not the only roadblock in infrastructure
approximately 20 kW level 2 chargers up to 50 kW DC fast development. Delivering the power to those chargers is also
chargers — depending on the energy needs of the truck. Trucks a major task. Current electricity grids are not built for truck
operating in long-haul segments will require much more powerful charging. Large collections of high-powered truck chargers, as
charging equipment, relying on a network of ubiquitous, high- are likely to be found on major trucking corridors, will require
powered DC fast chargers ranging from 350 to 1,000 kW. very high levels of power, which in turn will require direct
connections to high-voltage transmission lines. In many cases,
Building the number of chargers needed will be a substantial this infrastructure is not where it needs to be, and bringing it to
challenge. However, ZET market development in urban, those locations is both costly and time consuming.
then regional, and finally long-haul segments lends itself to
a staggered, more economically efficient rollout of public Depot charging for urban and regional trucking will face related
infrastructure. Urban trucking will rely almost exclusively problems. Lower-powered chargers aggregated at a single
on depot charging, with fast charging added as a failsafe for depot can still require more power than a location has, and
completing atypically energy-intensive routes.23 Regional electricity distribution grids typically do not have the capacity
trucking will benefit from the market scaling created by urban to serve a large collection of new industrial loads coming online
demand, and although it will require more en route charging, in urban areas at the same time — as must happen for trucking
some of that infrastructure will have been built to serve urban decarbonisation to be viable by 2050. For urban locations,
trucking. Long-haul trucking follows the same pattern, with increasing local grid capacity often requires laborious and slow
vehicles and infrastructure development cost savings enabled construction. These infrastructure build-out requirements will
by prior demand. strain electric utilities.
23 The model also reflects the benefits of urban density for fast-charging infrastructure. Europe’s urban fast chargers achieve higher utilisation because they have
more potential users nearby.

Furthermore, extensive utility-side infrastructure investment Depending on the scenario, we believe that 130,000–190,000 H2
could cause utility costs to rise and trigger an increase in the filling points will be needed by 2050 in the regions under study
costs of electricity. If that happens, assumptions about BETs’ in this report. However, the similarities to diesel end there.
TCO would no longer hold. Creating this grid-side infrastructure
without increasing costs to truck operators will be a key Compared with hydrogen, diesel is much easier to transport
challenge in the transition. and has an existing mature distribution network. To be practical,
hydrogen will also need a widespread network, entailing
4.1.2 Hydrogen truck refuelling substantial investment in the distribution system to make that
hydrogen available. It may be possible to repurpose natural gas
HETs must also have substantial infrastructure needs fulfilled if pipelines as natural gas loses market share in a net-zero world.
they are to be viable. Hydrogen is more like diesel in that trucks However, repurposing existing pipelines requires significant
will be able to quickly fill up at public stations, such that far modifications to ensure that hydrogen does not escape from
fewer hydrogen filling points will be needed than charger plugs. pipelines and does not corrode them.
EXHIBIT 4.1
ZET adoption requires a major infrastructure ramp-up

BET overnight chargers BET fast chargers Hydrogen refuelling stations
Zero-Emissions Accelerated Zero-Emissions

scenario scenario
Number of chargers, millions 15 15
10 10
5 5
0 0
2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050
Number of hydrogen 200 200

refuelling stations, thousands
150 150
100 100
50 50
0 0
2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050
Note: Overnight chargers are assumed to have a capacity of 100 kW and fast chargers are assumed to have one of 500 kW.

4.1.3 Energy and fuel production require more investment to enable the supply and distribution
of zero-emissions electricity and hydrogen. Electricity demand
In all scenarios, the HDT sector would see a shift in consumption will continue to increase through 2050.
away from diesel in favour of electricity and H2 consumption.
The consumption of electricity will increase before the Green hydrogen demand should accelerate after 2035 as
consumption of green H2, given the earlier sales uptake of BETs. HET uptake increases. Demand for hydrogen will multiply by
These earlier BET sales in the Accelerated Zero-Emissions 10 to 20 times from 2030 to 2040, when it will reach 250–
scenario also translate to increased electricity consumption in 1,100 TWh of H2 final energy use, or 6%–32% of energy use,
the first decade (Exhibit 4.2). depending on the scenario.
Between 2025 and 2035, the demand for electricity for HDT Increased green hydrogen supply will translate into higher
will multiply by almost 10 in both the Zero-Emissions scenario electricity demand, as renewable energy is required to power
and the Accelerated Zero-Emissions scenario. By 2035, total the production process. However, this electricity for hydrogen
electricity consumption of 900–1,300 TWh is expected to power production is not included in the electricity demand in Exhibit
BETs, equivalent to 20%–35% of total final energy used in the 4.2, which refers to end-use electricity only. For reference, the
HDT sector. China is likely to see the most dramatic change in H2 multiplier (defined as the kWh of energy required to provide
consumption due to the size of its BEV fleet, followed by the 1 kWh of energy to the HET wheels) is estimated to be between
United States and Europe, whereas India’s electricity grid will 4 and 10 in 2030 and between 3 and 8 in 2050.

EXHIBIT 4.2
Energy consumption by scenario, 2020–50
Diesel Biodiesel Electricity Hydrogen
Total energy demand by fuel, TWh Total energy demand by fuel, %

ZERO-EMISSIONS SCENARIO
5,000 100
4,000 80
64%
3,000 60
2,000 40
1,000 20 36%
2020 2025 2030 2035 2040 2045 2050 2020 2025 2030 2035 2040 2045 2050
ACCELERATED ZERO-EMISSIONS SCENARIO
5,000 100
4,000 80
53%
3,000 60
2,000 40
47%
1,000 20
2020 2025 2030 2035 2040 2045 2050 2020 2025 2030 2035 2040 2045 2050

4.2 TCO alone cannot catalyse EXHIBIT 4.3
a transition; finance must Diesel truck costs vary by
mobilise the capital needed region, impacting ZET’s upfront
to deploy solutions
cost competitiveness
4.2.1 Financing needs by region Net present value of 2020–50 capital costs by scenario,
Trillion $
Reaching zero emissions in 2050 will require additional
investments in zero-emissions trucks and charging Charging and refuelling BETs and HETs ICE trucks
infrastructure. Although these investments will be substantial, infrastructure
they both avoid the need for substantial investments in diesel
United States Europe
trucks that would otherwise occur and enable substantial
savings in operating expenditures.
When one looks at these dynamics between now and 2050,

a few key points emerge. The first is that increased capital
expenditures in developed markets between the “Do Nothing”
Baseline and the Zero-Emissions scenario is manageable for 3.0 2.9
2.4 2.3
developed countries (Exhibit 4.3). In Europe, the incremental
capital expenditure, in net present value terms, is about Do Nothing Zero-Emissions Do Nothing Zero-Emissions
$565 billion, and in the United States it is about $680 billion Baseline scenario Baseline scenario
(a 25%–30% increase over continued use of diesel). This is
largely because in Europe and the United States, diesel trucks
are already expensive, and as battery prices fall and economies India China
of scale accrue to ZET manufacturing, the cost gap between
diesel vehicles and ZET alternatives rapidly shrinks. Because
most adoption in a Zero-Emissions scenario occurs in the
late 2020s through the 2030s, when ZETs are purchased, the
incremental investment is rapidly recouped with fuel savings. 5.6
3.5
2.2
However, because developing markets have much lower prices 1.3
for diesel trucks, the dynamic there is very different. In India
Do Nothing Zero-Emissions Do Nothing Zero-Emissions
and China, the incremental capital expenditure between the Baseline scenario Baseline scenario
Zero-Emissions scenario and full continued use of diesel has
a net present value of $2.3 trillion in India and $3.4 trillion Source: MPP analysis
in China (a 160%–180% increase over the continued use of
diesel). Financing these substantial incremental capital costs
in developing economies will be a key enabler of the global zero is cheaper in all regions. In the United States and Europe,
transition to zero-emissions trucking. following a zero-emissions path reduces total cost by a net
present value of $0.64 trillion and $1.1 trillion (10% and 17%,
However, incremental capital expenditure alone does not respectively). In India and China, where capital expenditure
capture the investment dynamics of the transition. ZETs are dynamics are less favourable, cost reductions have a net
substantially cheaper to operate than diesel vehicles. When present value of $.35 trillion and $.36 trillion (4% and 3%,
one considers both operating costs and capital costs, going net respectively) (Exhibit 4.4).

This is a critical point for developing markets. The transition to EXHIBIT 4.4
net zero is cheaper than the continued use of diesel vehicles ZET operating savings
but imposes significant upfront costs. Mobilising the financing
that enables operating expenditure savings to pay for those are projected to create positive
increased capital costs must become a major focus of the global TCO in all regions
climate finance industry if the transition is to be successful in
developing economies. Net present value of all 2020–50 costs by scenario,
Trillion $
4.2.2 Innovative financing approaches Capital expenditure Operating and maintenance expenditure
and business models
The ability to convert operational savings into the upfront United States Europe
capital to purchase expensive ZETs does not only inhibit
the ability of less wealthy countries to decarbonise their
economies. It also inhibits the ability of smaller, less
sophisticated, and less well capitalised trucking fleet owners,
or fleets, to transition their own operations to a zero- 6.2 6.3
5.5 5.2
emissions approach that is ultimately more cost-effective than 3.8 2.5 4.0 2.9
the continued use of diesel. 3.0
2.4 2.3 2.3
Do Nothing Zero-Emissions Do Nothing Zero-Emissions
Large, sophisticated fleets have several advantages in adoption
Baseline scenario Baseline scenario
of ZETs. First, large fleets serve a variety of use cases and can
best deploy ZETs in their fleets to meet specific needs. For a
small fleet that may consist of only one vehicle, that vehicle
India China
must be able to do any job required of it on any given day. This
makes diesel’s flexibility a very valuable asset to small fleets. 13.9 13.5
Second, ZETs promise lower maintenance costs, but when 8.5

8.2 7.9
maintenance is required, new and specialised expertise is 11.7
needed. Large fleets can develop this expertise in-house and 4.6
7.3
use it to serve their own vehicles. Small fleets cannot; they 5.6
must outsource that maintenance to a market that does not yet 3.5 2.2
1.3
exist for ZETs. Do Nothing Zero-Emissions Do Nothing Zero-Emissions
Baseline scenario Baseline scenario
Third, for many small fleets, the investment in charging
equipment and expertise to cost-optimally charge EVs is both Source: MPP analysis
considerable and overly complex. Large fleets can optimise EV

charging to minimise costs, a proposition that is much more These leasing models come in many flavours; another is
difficult for small fleets. “battery-as-a-service”. Under this model, the fleet takes direct
ownership of the truck itself and takes on risk associated with
Finally, large fleets typically have much better access to credit maintenance and charging of the vehicles. However, it does not
than do small fleets — which are often just family businesses. actually own the battery or any associated maintenance. This
This enables large fleets to gain access to credit at rates that can substantially reduce the upfront costs of those vehicles and
preserve the TCO advantages of ZETs. Small fleets would bring their purchase price below that of ICE trucks.
make higher monthly payments on a loan for the same truck —
eroding the ZET’s TCO advantage. However, battery-as-a-service models are most often used
when the battery is easily separable from the vehicle, as with
New business models have emerged to fill this gap. Companies vehicles capable of battery swapping. When the battery is not
now offer electric trucks for rent or via leasing packages that separable, OEMs can offer extended battery warranties. Those
include maintenance and access to shared charging for a warranties do not reduce the cost of buying a vehicle, but they
fixed monthly payment. This “truck-as-a-service” approach do reduce the risk of owning it. Reduced risk to the owner can
allows small fleets to have access to ZETs when they need in turn reduce the risk to the financier, which would become
them, without needing internal maintenance or infrastructure the vehicle owner in the event of default. This lowered risk can
expertise, and without having to make a large upfront payment. enable the owner to access capital at lower rates.

PART 5
Recommendations for Policies

and Coordinated Action
to Enable a ZET Transition
In the Glasgow Climate Pact, agreed upon in 2021, the parties ZETs or an inability to purchase ZETs or their fuels does not
to the United Nations Framework Convention on Climate derail positive developments in TCO.
Change (UNFCCC) recognise “that limiting global warming to
1.5°C requires rapid, deep and sustained reductions in global HDT stakeholders should target key areas for interventions
greenhouse gas emissions, including reducing global carbon in the 2020s in order to unlock decarbonisation’s potential.
dioxide emissions by 45 percent by 2030 relative to the 2010 Identified actions include:
level”. They add that this will require accelerated action this
decade, on the basis of the best available scientific knowledge. 1. Use milestones that collectively indicate whether the
transition is on course.
Although the HDT sector may not reach this 2030 goal, rapid
decarbonisation is technically and financially possible. Industry, 2. Create and deploy policy frameworks.
policymakers, and other stakeholders need to ensure market
adoption in two critical ways. First, stakeholders must continue 3. Stimulate innovative business models, financing models,
reducing costs in batteries, electricity, and public charging that and industry partnerships.
drive zero-emissions TCO. Cost decline trends must maintain or
exceed their current trajectories. Second, fleet operators need 4. Coordinate with other sectors to achieve economies of scale.
support so that soft costs related to considering or deploying

5.1 Develop and adhere to key Charging and refuelling infrastructure
milestones in vehicle production
The lack of charging infrastructure will constrain the ZET
and technology as well as transition. Gaining scale in infrastructure development will
infrastructure deployment result in cost optimisation and lead to a positive impact on
TCO. Investments designed to improve the availability of
5.1.1 Vehicle TCO, performance, and supply charging and refuelling stations are also critical to eliminating
operational concerns.
TCO, operational performance, and product availability will
affect a fleet owner’s decision when investing in a new truck. A ZET scale-up will require two dimensions of infrastructure
All stakeholders must have a shared view of how the transition development: first, improved charging and refuelling station
to ZETs will play out and collectively agree on real economy coverage (including at depots for charging), and second, an
“milestones” to calibrate whether that transition is on track. enhanced overall supply of green electricity and hydrogen.
Such milestones include: Green hydrogen can unlock decarbonisation potential for
multiple hard-to-abate sectors and will face steep increases
Product availability in demand. Improving charging and refuelling availability will
require significant capital investments ($700 billion to $800
• Expand ZET sales to reach HDT populations of at least 2.6 billion) and will require utilities to provide the hydrogen and
million units in China, 1.5 million units in Europe, 0.9 million electricity to users in a timely and affordable way.
units in the United States, and 0.6 million units in India by
2030. Example targets in line with the results obtained in the Zero-
Emissions scenario:
• Have 400 GWh capacity of annual battery manufacturing for
heavy-duty trucks in the modelled regions by 2030, rising • Boosting the installed capacity of BET chargers to reach
to over 1,200 GWh by 2050. Current total electric vehicle about 160 GW in China, 55 GW in Europe, 45 GW in the
battery production is approximately 631 GWh per year.24 United States, and 40 GW in India by 2030. At 300 GW
total, this is five times the electric demand of the Tokyo
• Have production capacity for over 15,000 fuel cells globally metropolitan area.25
per year by 2030, rising to 1 million by 2050.
• Grid electricity production for BETs to reach 184 TWh in
Cost China, 42 TWh in India, 40 TWh in Europe, and 26 TWh in the
United States by 2030.
• Reduce HET costs by 60% to 75% through reduced fuel cell
stack costs of up to 85%. • Dedicated zero-carbon electricity production to produce
green hydrogen for HETs to reach 265 TWh in China, 50 TWh
• Achieve hydrogen costs of near $3/kg by 2050. in Europe, 40 TWh in India, and 35 TWh in the United States
by 2040.26 Currently just 0.3% of hydrogen is produced
• Reduce BET costs by approximately 50%, enabled by using renewable electricity.27
battery price declines of up to 55%.
• Increasing the number of H2 refuelling stations to
Operational performance reach 36,100 in China, 6,600 in Europe, 5,600 in the
United States, and 2,200 in India by 2040.28 These are
• Reduce weight penalty of long-haul BETs compared with diesel significant investments and also just a fraction of existing
trucks by increasing battery energy density by up to 50%. infrastructure. For example, there are approximately 116,000
gasoline fuelling stations in the United States.29
24 Jakob Fleischmann et al., “Unlocking growth in battery cell manufacturing for electric vehicles”, McKinsey Insights, October 2021, https://www.mckinsey.com/
business-functions/operations/our-insights/unlocking-growth-in-battery-cell-manufacturing-for-electric-vehicles.
25 Presentation, Tokyo Electric Power Company, March 19, 2015, http://az545403.vo.msecnd.net/uploads/2015/03/5-tepco.pdf.

26 Figures refer to actual energy utilised by vehicles. To supply that amount of power, a greater amount needs to be produced to account for losses during, e.g., hydro-
gen production and grid transmission.
27 IEA, “Hydrogen Tracking Report”, November 2021, https://www.iea.org/reports/hydrogen.

28 Figures refer to actual energy utilised by vehicles. To supply that amount of power, a greater amount needs to be produced to account for losses during, e.g., hydro-
gen production and grid transmission.
29 Statista, June 27, 2022, https://www.statista.com/statistics/525107/number-of-gasoline-stations-in-the-united-states/.

Large amounts of hydrogen and electricity are needed to that subsidise the development of ZET production facilities.
achieve an accelerated ZET transition. Stakeholders must Furthermore, to ensure that such factories can be completed in
manage the soft costs and split incentives to enable the a time frame that is compatible with a zero-emissions trucking
building of this infrastructure. future, they can minimise regulatory red tape.
5.2 Create and deploy policy Building ZET factories alone is not enough; a whole supply
frameworks that enable the chain of ZET components must exist if that factory is to
produce vehicles. These upstream activities also have their
transition and address key own financing and permitting needs. Policymakers should
bottlenecks in vehicle supply, coordinate closely with ZET manufacturers to understand
demand, and fuelling and address operational constraints on ZET production due to
upstream issues.
In the near term, the transition to ZETs will be difficult
because of high costs resulting from poor economies of scale Although incentives and soft cost reductions for both vehicle
and technological immaturity. Policy action can help to both production and upstream supply chains may help spur
catalyse the industry to take on those costs and enable the supply, the effects of financial support on production levels
costs to be allocated to different segments of society so that are unpredictable. To achieve certainty of supply at a price
they remain bearable. which the market will bear, policymakers can introduce sales
requirements, as currently exist in California and the EU. These
5.2.1 Supply can take the form of ZEV credits, as is common in California
and China, or the form of CO2 credits, as is common in Europe.
Investing in the new supply chains needed for a ZET transition In either case, these credit-based systems both guarantee
will challenge manufacturers. New factories or factory retoolings sufficient supply and create a market framework in which
are very expensive and require years of planning and permitting the incremental cost of bringing ZET supply to the market is
to be built. Policymakers can extend financial incentives ultimately borne by the producers of ICE vehicles — not the
through tax credits, preferential land use, or other policy levers purchaser of the ZET.

5.2.2 Demand
As with vehicle supply, levels of demand for ZETs are highly

dependent on their cost feasibility. In the early stages of market
adoption, when costs are high and TCO is poor, governments
can work to spur demand by offering incentives for vehicle
purchase in the form of upfront subsidies, tax incentives, or
financing instruments such as loan guarantees. They can also
offer incentives for vehicle use such as forms of carbon tax like
LCFS credits that transfer cost from renewable fuels used by
ZETs to fossil fuels used by ICE vehicles.
However, similar to the supply situation, the effects of

subsidisation on adoption are unpredictable, and the cost
of ongoing subsidisation of more mature markets can be
prohibitively high. At later stages of market development,
policymakers can use levers that more forcefully affect demand
in non-financial ways. For example, they can put direct purchase
requirements on fleets, as California did with the Advanced
Clean Fleet rule, or they can create zero-emissions zones in
cities, which essentially ban the use of an emitting vehicle in
areas where the impacts of air pollution are high. As they use
these more forceful tools, policymakers must keep in mind the
feasibility of compliance by operators. Just as a factory cannot
produce ZETs without upstream supply chains, fleets cannot
use ZETs if they cannot buy or charge them. As a result, it is
critical that policymaking be holistic and simultaneously take
on issues in supply, demand, and infrastructure.
5.2.3 Fuelling infrastructure
The supply chain by which a stream of raw materials

eventually turns into ZETs on the road is not the only one that
policymakers must concern themselves with. How renewable
electricity eventually becomes energy in a truck’s battery or
hydrogen in a truck’s fuel tank is equally important.
Similar dynamics exist in hydrogen markets. In the long
Policymakers must be aware of how these fuel supply chains term, the only way in which hydrogen can be delivered to
work and what matters require policy resolution to be functional refuelling points at a reasonable cost is via pipeline — perhaps
at scale. Although many issues exist, two have outsized supplemented by delivery trucks in the final mile. This will require
importance. First is ensuring that fuels can be transported from considerable investment in new hydrogen pipelines. In several
the point of production to the point of use while maintaining of the regions under study, these types of public works projects
strong cost superiority over diesel. That requires separate are often slow and costly. Policymakers must proactively identify
action from policymakers for hydrogen and electricity. legal barriers to hydrogen pipeline investment and ensure that
they do not derail the ZET transition.
In many jurisdictions, electrical transmission and distribution is a
regulated monopoly. That means that private utilities must apply The second issue of outsized importance is ensuring that
to government-appointed regulators for permission to build sufficient points of sale can exist. Many times, the deployment
the capacity to serve ZET charging needs. This process is often of charging infrastructure, especially public infrastructure,
inefficient and slow, and its outcomes are uncertain. Furthermore, can come into conflict with local land use regulations and
the operators of ZETs are frequently required to bear the cost permitting processes — slowing down infrastructure deployment
of building this infrastructure even though utilities will make and creating extra soft costs that are ultimately passed on
money by selling more electricity through that infrastructure. to infrastructure users as real financial costs. Policymakers,
Policymakers must design regulatory regimes that both facilitate particularly those at sub-national levels, must proactively
rapid investment decisions and ensure that costs are not allocated address issues that slow or prevent the emergence of a robust
in such a way that the growth of the ZET industry is stifled. ZET refuelling network.

5.3 Stimulate innovative business
models, financing models, and
industry partnerships Zero-emissions trucks come with a
new set of challenges for operators.
5.3.1 Establish innovative partnerships up They often create risks that fleets are
and down the truck value chain to share
risk and enable scale unable to shoulder, and opportunities
Zero-emissions trucks come with a new and different set of that demand new types of expertise to
challenges for operators. They often create risks that fleets are capture. Innovative partnerships can
unable to shoulder, and opportunities that demand new types of
expertise to capture. Innovative partnerships can help to diffuse help to diffuse these risks and take
these risks and take advantage of those opportunities.
advantage of those opportunities.
Financing and risk management
ZETs are expensive up front, but cheap to operate. Although

these vehicles may ultimately be profitable to operators, many
fleets, especially smaller ones, do not have the access to
capital to buy ZETs. Fleets may also lack the ability to readily • Long-term supply contracts: The facilities needed to
provide ZETs with the required charging infrastructure or produce green hydrogen or green electricity also become
maintenance. To address these barriers, partnerships could more easily financed with committed purchasers. Similar
include the following: to how power purchase agreements enable renewables
deployment, or certificates enable the financing of plants
• Leasing models: Providing ZETs for relatively short periods that produce Sustainable Aviation Fuels (SAF), long-term
without the need for a large upfront payment can make supply contracts can enable production of expensive assets
them more accessible for smaller fleets. These leases can be such as the electrolysis plants that produce green hydrogen.
structured for smaller windows of time to reduce the need
for long-term commitments that small fleets may be unable • Utility collaboration: Electric vehicle charging can be good
to make. for the grid. Charging increases the use of the grid, often
during off-peak hours. This increased utilisation can put
• Truck-as-a-service: These models provide the entire suite downwards pressure on all customers’ electric rates. Many
of services needed to operate a ZET on a short-term basis. utilities promote electric vehicle adoption by reducing the
The service provider owns, maintains, and charges the costs of utility and customer-sided infrastructure. These
vehicle — the operator needs only to drive it. “make-ready programmes” make BETs more attractive
through reduced total TCO.
• Battery warranties: The battery is the most expensive
component of the ZET, but vehicle batteries have been Demand certainty
known to fail early, making fleets wary of purchasing
expensive assets with unknown lifetimes. Robust battery Vehicle producers often cite lack of firm demand for ZETs as
warranties would reduce risk and provide peace of mind. a barrier to investing in the plants needed to produce them.
However, collaboration can demonstrate strong demand for
Infrastructure ZETs that potential manufacturers need to see. By pooling
demand, for example, would-be ZET buyers can work together
Like ZETs themselves, the infrastructure to power ZETs to quantify total market demand for vehicles and stimulate
typically has a long lifetime and is expensive up front. investment in production capacity by OEMs.
Partnerships formed to mobilise capital can accelerate their
deployment. Similarly, purchasers of transportation services — oftentimes
large manufacturing or industrial companies — can provide
• Committed offtake: ZET refuelling stations (chargers or demand certainty to ZET operators and pay a “green premium”
hydrogen) rely on revenue streams from truck operators for zero-emissions transportation services. In this way,
to be financeable. By agreeing to long-term offtake of especially in the short term, shippers of goods can support the
either hydrogen or electricity from a specific station, truck development of the ZET industry by enabling operators to pass
operators can create revenue certainty for station operators on their higher TCO to the final consumer of the goods that are
and enable the financing of those stations. being shipped.

Scaller LLC photo
5.4 Coordinate with other sectors 5.4.2 Coordinating with industry and
to achieve economies of scale shipping on creating scaled
on the shared path to net zero production of green hydrogen
Trucking decarbonisation will require a wholesale shift to new Like electricity, green hydrogen will be a key enabler in
fuel sources to become a reality. However, ZET actors are not decarbonising hard-to-abate sectors. Ocean shipping will need
on this path alone. Other industries will be undertaking similar hydrogen to make ammonia, for example, and many industrial
changes on a similar timeline — creating opportunities for processes that currently use natural gas for heat, such as steel
shared costs and economies of scale in both the production and production, will switch to hydrogen as a heat source. Like
distribution of those fuels. Those opportunities include the below. many other fuel production processes, hydrogen electrolysis
shows strong economies of scale. A hydrogen electrolysis plant
5.4.1 Sharing the cost of electricity grid that is directly connected to utility-scale wind and solar can
upgrades with buildings, industry, produce green hydrogen at far lower costs than can a smaller
installation or one that is grid-connected. By co-developing
and light-duty vehicles regional hydrogen production hubs that supply multiple users
The “electrification of everything” is a key pillar of the of green H2 in each area, the trucking industry can both benefit
decarbonisation of the global economy. To achieve this from economies of scale in production and help reduce the
outcome, sectors as varied as heating and cooking in buildings, need for hydrogen transportation.
passenger transportation, and many industrial heat processes
are also moving towards electrification. These actions will also 5.4.3 Coordinating with aviation
require new capacity to generate and move electricity. Sizing on biodiesel production
the required upgrades to the needs of all electrifying sectors
from the start will reduce the total cost of infrastructure borne Although we see a minimal role for biodiesel in a fully
by any single sector. Furthermore, by avoiding individual decarbonised world due to limited cost-effective sustainable
upgrades for individual sectors, electric utilities can save time feedstock, the trucking industry should use what zero-carbon
and soft costs related to permitting and regulatory approvals liquid fuels are available to it. The primary user of biofuels is
for investment. expected to be the aviation industry. In many SAF production
pathways, both SAF and biodiesel are co-produced. This can be
valuable in the trucking market. By coordinating with SAF plants
to use those by-products, trucking can have a supply of liquid
fuels to enable the decarbonisation of use cases that are not
appropriate for either hydrogen or battery electric trucks.

The way forward
The HDT industry finds itself at a significant intersection.
The trucking sector can and must rapidly decarbonise. The
foundations of such efforts are emerging and growing steadily,
with intensive product development projects, risk-sharing
partnerships, and infrastructure projects already under way.
These concerted efforts are receiving support from new
trucking regulations and numerous collaborative initiatives
aimed at creating the conditions for investment in zero-
emissions solutions.
At the core of heavy-duty trucking decarbonisation,

stakeholders need to solve the “first-mover disadvantage”.
Finding multilateral solutions to existing and emerging
regulatory challenges will be critical to unlocking the first wave
of near-zero-emissions trucking. Government must clearly
signal its zero-emissions intent and commitment to create
an early mandate, and OEMs, fleet owners, and infrastructure
players must align their strategies.
The MPP Trucking Initiative and its members will contribute

actively to mobilising the industry’s value chain to enhance
the environment for investment. It will also support financial
institutions in designing interventions that will help put the
global trucking sector and its stakeholders on the path to
reaching zero emissions. This is the best way to help this
committed community of stakeholders act on the essential
decisions required to deliver a sustainable future for this
industry and the planet.

The Mission Possible Partnership is an alliance of climate leaders focused on supercharging efforts
to decarbonise some of the world’s highest-emitting industries in the next 10 years.
© COPYRIGHT 2022 MISSION POSSIBLE PARTNERSHIP

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MAKING ZERO-EMISSIONS

TRUCKING TRANSITION STRATEGY / JULY 2022

Making Zero-Emissions Trucking Possible PAGE 1

The Mission Possible Partnership

Catalysing these changes is the goal of the Mission Possible

Making Zero-Emissions Trucking Possible PAGE 2

Through this work, we hope to inspire and inform an

Making Zero-Emissions Trucking Possible PAGE 3

This report was prepared by the Mission Possible Partnership

We wish to thank the key authors from the team:

Ari Kahn (RMI)

The model and analytics effort was led by

Henrik Becker (McKinsey)

Steering and guidance were provided by MPP leadership

Eveline Speelman (ETC)

The report was supported by a McKinsey team led by

Additional input was provided by Andrea Bath (ETC),

This effort was prepared in collaboration with

We would like to thank the RFZ initiative as well as other

Making Zero-Emissions Trucking Possible PAGE 4

Mission Possible Partnership (MPP) Energy Transitions Commission (ETC)

RMI World Economic Forum

McKinsey & Company

Making Zero-Emissions Trucking Possible PAGE 5

Road Freight Zero North American Council

Making Zero-Emissions Trucking Possible PAGE 6

1. Decarbonising trucking: Importance, challenges, and solutions . . . . . . 22

2. A model to understand the transition to zero emissions . . . . . . . . . . 29

3. Achieving zero emissions by 2050: Possible trajectories . . . . . . . . . . 33

4. Infrastructure, grid upgrades, and finance enable the transition . . . . . 48

5. Recommendations to enable a ZET transition . . . . . . . . . . . . . . . . 54

Making Zero-Emissions Trucking Possible PAGE 7

Ten critical insights on the

Making Zero-Emissions Trucking Possible PAGE 8

Source: MPP analysis

Making Zero-Emissions Trucking Possible PAGE 9

A zero-emissions industry is fundamentally possible because

This report divides the trucking market into three usage

A few key trends in ZET adoption will determine the pathway to

• Sales uptake for BETs will accelerate fastest in urban and

• Long-haul HDT should see a higher uptake of HETs than

Making Zero-Emissions Trucking Possible PAGE 10

• Guaranteed demand through investor and institutional

There are many plausible developments that can further reduce

7 Modelling assumptions leave a minimal amount of continued ICE usage.

Making Zero-Emissions Trucking Possible PAGE 11

Making Zero-Emissions Trucking Possible PAGE 12

A trucking sector that is zero emissions is not only more

As the market continues to scale, ZETs will represent a growing

ZETs are expected to reduce overall trucking costs

35 33 33 1.8: Carbon cost

–1.8: Carbon cost

Making Zero-Emissions Trucking Possible PAGE 13

Diesel truck costs vary by ZET operating savings

Making Zero-Emissions Trucking Possible PAGE 14

Making Zero-Emissions Trucking Possible PAGE 15

9. Operators need more public charging and hydrogen

Depending on the scenario, there will be between 6 million