Information from the National Business Initiative
Globally, the transport sector is one of the significant contributors to greenhouse gas emissions, with most transport today running off internal combustion engines powered by fossil fuels. Global CO2 emissions from the transport sector grew by 8% year-on-year and rebounded to a 37% share of emissions in 2021 post-pandemic.
Ten key findings on the transport sector analysis
Transport in South Africa is the third largest CO2 emitting sector, with >90% of transport sector emissions arising from road transport. It faces the dual challenge of decarbonising while improving transport as a service for consumers and enabling other sectors to decarbonise. n South Africa, transport contributed more than 10% (55 Mt CO2) to the country’s national gross emissions.
Global trends in technology and policy can drive a 50% reduction in emissions by 2050, with limited local support – primarily due to electric vehicle (EV) adoption in road transport.
Without a deliberate and coordinated local effort, South Africa’s transport sector will be on a trajectory that is inconsistent with the South Africa’s climate commitments or Nationally Determined Contribution (NDC) under the Paris Agreement by 2030 and inconsistent with net-zero by 2050.
With the right support, the transport sector can be fully decarbonised by 2050 via four key levers:
- Improved spatial planning
- Mode-shift to rail and public transport
- Accelerated zero-emission technology adoption, coupled with the decarbonisation of the national grid
- Use of green fuels for hard-to-abate aviation and shipping
A net-zero pathway requires shifting 15 to 20% of road traffic to rail, banning new internal combustion engine (ICE) vehicle sales by 2035 and enabling zero emission vehicle (ZEV) uptake for remaining road transport, as well as blending to 100% sustainable aviation fuels by 2050.
Of all levers that must be pulled to get the transport sector to net-zero, the one that is likely to have the largest financial impact on the end-user of transport as a service is the greening of fuels. The use of green fuels is highly OPEX-intensive with a fuel premium of up to 2,1 times for e-ammonia, 2,5 times for e-methanol and between 1,7 and 2,1 times for e-kerosene, even in 2050.
South Africa should strategically prioritise high value, or value-added exports by developing local beneficiation and industrialisation capacity to mitigate the impact of costly green synfuels (e-ammonia and e-methanol) on shipping costs considering the high trade-weighted distance to key trade partners (such as China, EU and US).
Key uncertainties and signposts lie in the choice of battery electric vehicles (BEVs) vs. fuel cell electric vehicles (FCEVs) in heavy duty transport, autonomous vehicle adoption, the impact of spatial planning, and the interaction between formal and informal public transport.
To achieve this ambitious pathway, South Africa must build and operate an efficient public transport system, invest in rail, and port infrastructure as well as improve their reliability and efficiency, and incentivise EV adoption and public transport use.
Immediate next steps and no-regret actions include incorporating EVs in the EU trade agreement to reduce import tariffs, investing in revitalising the rail infrastructure, and improving governance within rail and port management.
Decarbonising South Africa’s Transport Sector is the latest report to be released as part of the series of publications from the Climate Pathways and Just Transition Project run by the National Business Initiative (NBI), in partnership with Business Unity South Africa (BUSA) and Boston Consulting Group (BCG).
