Repowering Transport 2011
Global transportation and fossil fuels are inextricably linked. More than 60% of the 87 million barrels of oil consumed daily powers the world’s transportation system and liquid fossil fuels account for more than 96% of the sector’s energy supply.
The Repowering Transport project provides a high-level platform for executives from the World Economic Forum’s Industry Partners in the mobility (automotive, aviation, and logistics), energy (oil and gas, utilities, alternatives), chemicals, and investors industries, and select Global Growth Companies.The project explores technology-driven opportunities to drive short- to medium-term energy diversification and efficiency in the transportation sector. It provides a framework of key enablers – partnerships, policies, and financing mechanisms – that are critical to accelerate the development and deployment of these technologies.
Project Outcomes and Conclusions The project report concludes that widespread deployment of a full suite of technologies is required to limit energy use to 0.5% annually and achieve an 11% decrease in oil consumption to 2030.
The associated policy action, partnership arrangements, and financing mechanisms conclusions are:
A two-pronged approach will ensure an integrated policy approach and an efficient allocation of funds. First, implementation of technology-independent policies that set performance-based targets will allow freedom for market forces to select the best technologies to meet that goal. Second, implementation of technology-specific policies selected based on the strategic priorities and competitive advantages of a particular market or nation will drive rapid deployment.
The complexity of the challenge and the absence of effective policy measures drive the proliferation of non-traditional, multistakeholder partnerships. Smaller-scale partnerships, with limited players are effective at research, development and pilot-scale trials. Narrow-based, high investment partnerships are effective at developing infrastructure and bringing technologies to the market. Broad-based partnerships have a role throughout the technology lifecycle: conducting feasibility studies, policy lobbying, and standards development; and addressing market failures.
Total capital availability/requirement is not a constraint – the amount of capital needed is large, however not excessive when compared to industry turnover or comparable investments in other sectors. The main challenges lie in securing financing for high-risk projects with long payback periods: in these cases government intervention may be necessary.