Will cargo transportation be carbon neutral by 2060?

In the digital age, e-commerce is at a constant growth. Globalization, too, is calling for wider networks. Thanks to this development, the logistics sector is experiencing a boom. Experts estimate that by 2040, freight transportation will increase by 25 percent. In China and India, researchers even anticipate a 600% increase. What does this mean for our environment? How can we reduce CO2 emissions by 2060, instead of letting it increase with economic growth?

The following statements were made in the context of the current #Window2TheFuture campaign. They are intended to encourage sustainable thinking, and are not tied to any investment recommendation. 

Today, «Next day» and «Express delivery» are a fix component of e-commerce. In order to meet the clients’ growing demands, logistics companies are making numerous efforts. The constantly growing number of goods is delivered at an ever-faster rate. But the increasing number of shipments is ultimately taking a toll on the environment. Today, 5% of the greenhouse gas emissions are caused by logistics vehicles. Solutions, where the growth in e-commerce does not implicate an increase in CO2 emissions are sorely needed.  

E-mobility in freight transportation: A question of the right solution
Already today, many are annoyed by the sight of fossil-fueled trucks on the highway. The pressure on shipping companies is mounting. In many countries, businesses have to pay a CO2 tax. A long-term solution against pollution is needed – and there are many approaches. 
One answer might be patently obvious: What is already popular in motor racing and private vehicles, is also an interesting approach for freight transportation. E-mobility in the logistics sector is currently on everyone’s lips. 

Decarbonization is currently feasible – but it entails costs
Gil Georges is Senior Scientist at the Institute of Energy and Technology at ETH Zurich. In an interview with the «Globe», the magazine of ETH Zurich, he states: “Whatever solution you chose – the decarbonization of freight transportation is feasible, but it comes with high infrastructure costs.” Regarding energy use, e-trucks would be the obvious choice. However, e-trucks are currently far from being the ideal solution; long charging times, a lack of charging stations, and high weight due to the up to three-ton heavy batteries. These factors make it less attractive, especially for long-haul e-trucks. Furthermore, from an environmental viewpoint, batteries still cause quite some problems, say researchers.

Another solution would be to have hydrogen-powered trucks. Soon a fleet of 1,000 such trucks will be delivered from South Korea to Switzerland. A big Swiss retailer, too, tried hydrogen-powered trucks and even opened a hydrogen refueling station. But Gil Georges doesn’t want to get too excited too soon: “It’s a big challenge to ensure long-term CO2-neutral hydrogen production and distribution.”
From George’s point of view, there are more interesting alternatives. Overhead power lines, for example – the ones we see with city busses and trolleys. Inductive charging systems in the ground would also be interesting, so the researcher – but, as said before, they would entail costs.

Steering into future with the right investment
Finding a solution for environmental-friendly and Innovative freight transportation is very important for our future. There are good approaches – now, we have to make the right decisions. Thanks to digitalization, there are more opportunities, like how to better plan transportation processes. There are numerous start-ups in this field that deal with exactly this issue. A combination of e-mobility and innovative route optimization could bring the hoped-for solution for future freight transportation.

Talking about future: How do we want to live in 2060? Only if we act today, tomorrow can be determined. We at Julius Baer are convinced that we can shape our future and our children’s and grand-children’s – with the right investments, innovation and courage. In this regard, Formula E is our source of inspiration.  

Formel E serves as test bed for e-mobility 
Early on, we at Julius Baer recognized the potential of Formula E. The racing series represents so much more than just motor sports. It serves as a test bed for innovations. As the founding Global Partner of Formula E, we contribute to the development and testing of future technologies. Formula E is a source of inspiration for electric mobility. At Julius Baer, we believe that e-mobility will provide a significant contribution to stopping climate change – from electric racing cars through to energy-producing algae. 

We are in control of how we want to live in the future. Within the context of our #Window2TheFuture campaign, we ask ourselves questions such as: Will we fly to work in 2060? Will we produce electricity from algae in 2060? Will drones have replaced trucks in 2060?  

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