Minister-led Roundtable: Greener Transportation - Summary of Discussion

June 21, 2016, 3:00PM to 5:00PM | Montréal, Québec

Summary of Discussion

The meeting was conducted under Chatham House Rule: “When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.”

Notes on Roundtable Discussion:

The Green Transportation Roundtable was intended to seek stakeholder perspectives on the environment and transportation, in particular with respect to systemic barriers to achieving environmental objectives and clean growth; environmental improvements, particularly reducing greenhouse gas (GHG) emissions; and climate change mitigation and adaptation in the transportation sector.

Highlights of participants’ comments follow below, grouped according to the four specific questions that were posed.

  1. 1. What intermodal and mode-specific strategies and investments are needed to ensure that the Canadian transportation sector accelerates greenhouse gas emission reductions and minimizes other environmental impacts?
  • Innovation and green transport do go hand in hand, and they are fueled by investment and commercial interest.
  • Public policy tools must be designed for a longer timeframe. Government is not expected to invest all the capital for green transportation, but it can play a fundamental role by setting up the frameworks needed to let those with capital get a return on their investment.
  • Investment decisions require a solid calculation of risk and return on investment. Federal governments can facilitate this through the articulation of national strategies, which provide the structure necessary for individual enterprises to size their investments.
  • Questions were raised as to whether the business community as a whole, is ready to stretch its return on investment period and, if not, what could government do to support business making these longer-term decisions?
  • Incentives can encourage reductions in GHG emissions by moving users to seek more efficient modes of transport, such as rail and marine, and by encouraging transportation operators to provide more efficient transportation through the adoption of technology, etc.
  • Incentives can also encourage each transportation mode to improve its environmental performance through the introduction of new technologies. Incentives can be paid for by directing some of the revenues collected through carbon pricing to support the infrastructure required to allow the shift from one mode to another.
  • In addition to incentivizing, public policy must also harmonize the approach across the country.
  • Regulatory pressure must be maintained to ensure shifts in consumer behavior. For example, regulation does promote low emissions vehicles and as a result, investments in emission-lowering research and development is on the rise, even as fuel prices have dipped.
  • With respect to innovation, Canada should build on its strengths. There are existing innovation clusters and nodes of expertise—sometimes focused in regions—as well as entrepreneurial strengths, that can be leveraged.
  • In greening transportation, we need to think more about corridors and intermodal nodes. Travellers want an intermodal transportation experience. Passenger rail, including high-speed, would contribute to an intermodal system and be key to greening transportation.
  • We must look at upstream and downstream consequences of shifts in energy use.
  • Internationally, there is work being done to develop universal standards for emissions calculations that can be used across modes. Users of multi-modal transport want to measure their carbon footprint.
  1. 2. How can governments best accelerate the transition to a transportation system that is low-carbon, non-polluting, and supports biodiversity (e.g. performance-based regulations, market-based measures, programs)?

Surface Freight Sectors

  • Even with today’s lower prices, fuel remains one of the largest inputs to most transportation businesses, including trucking. Thus, there are incentives to shifting to alternative sources of energy. The shift to electrification can be accelerated for small vehicles; however, for large, heavy vehicles, that technology may be further off. The alternative in such sectors is to shift to another fossil fuel, such as natural gas.
  • While natural gas technology exists for large vehicles, there are some barriers to its adoption, such as higher capital cost of the vehicles. Some provinces have implemented incentives to ease such barriers.
  • Currently, infrastructure limits the use of fuel alternatives to return-to-base type operations and does not support long haul operations.
  • For railways, barriers include the lack of conversion kits for locomotives.
  • There are potential gains lost through uneven regulatory frameworks across the country. Regulatory harmonization is a key factor in deploying green technology.
  • The next generation of freight customers want to know that there is a sustainable supply chain; they want to improve their carbon footprints.
  • Infrastructure should be built where it has the largest impact, such as in key transport corridors.
  • In the long term, hydrogen may prove to be the technology of the future and compressed natural gas stations could be scaled up for hydrogen use.

Passenger Vehicle Sector

  • In deep de-carbonization schemes, virtually all light duty transport would be electrified by 2050.
  • With lower gas prices, purchasing trends favoring more efficient passenger vehicles have leveled off. In the absence of these market-based incentives, governments can apply levers, such as vehicle- and infrastructure-based incentives. The question of whether governments should apply tax levers to incentivize fuels based on their carbon intensity was raised.
  • It was noted that in the U.S., 95% of electric vehicles are owned by multi-vehicle households. Incentives are needed to get single vehicle households to consider electric vehicles, but it was noted that there are proportionately fewer multiple vehicle households in Canada than in the U.S.
  • There are opportunities in the automotive sector to innovate and concurrently create jobs here in Canada and Canadian auto manufacturers should be encouraged in this direction.
  • Canadian bus manufacturers could develop demonstration projects, which might encourage more Canadian transit agencies to adopt greener technologies.

Aviation Sector

  • In the aviation sector, there are various opportunities for airports to green their operations. In Europe, airports want to electrify everything on the ground. Some Canadian airports are moving in this direction, electrifying ground handling, putting in charging stations for private vehicles and shifting aircraft at the gate to ground power instead of running engines.

Marine Sector

  • Liquefied national gas (LNG) is poised to resolve emissions challenges in the marine sector; however the current lack of infrastructure, particularly bunkering facilities on international routes, is a challenge.
  • In discussions with ports, there is a sense that they are open to LNG, but need assurances and incentives to make the shift.
  • There is work to be done to counter the misperception of LNG vessels being particularly dangerous or risky.
  • The industry is trying hard to decouple growth and emissions through improved energy efficiency; however, there are costs involved. Investing in new technology and ships is not cheap and the return on investment (7-8 years) is longer than standard investments.
  • It was noted that there are regulatory gaps in the North, which, for example, is not included in the North American emissions control area. Encouraging the use of lower sulphur fuels in the North would have dual benefits of lowering the effects of black carbon and also lessening the impacts of oil spills from ships, should they happen.

Alternative Fuels

  • Recognizing the growing demand for and scope of natural gas use, the energy sector is prepared to increase its production. In Quebec, the government is working to overcome the infrastructure barriers needed to kick start the movement.
  • The source of natural gas is an important consideration. The U.S. EPA accepts renewable natural gas as a renewable fuel. Such policies could help incentivize the switch.
  • With respect to biofuels, Canada is positioned to be a world leader. There are many sources for advanced biofuels, such as cellulosic, crop and forestry residues, municipal solid waste, and purpose grown materials. Biofuels have the advantage of not requiring changes in infrastructure or vehicles and are competitive when oil prices are around $60-$70/barrel.

Vehicle Electrification

  • While electrification is not the only answer to greening transportation, it is a key part of the answer.
  • Some current barriers to the adoption of new technology include lack of awareness, the need for infrastructure (e.g. charging), the need for longer term incentives, and concerns around battery disposal.
  • In moving towards vehicle electrification, a commensurate growth in the supply of clean energy will be needed, but there are systemic barriers that stand in the way. Utility mandates are old and are about least cost. However, Canada’s electricity grid produces more than 80% of its electricity from non-fossil fuel sources, and the utilities have indicated that growth in electricity needs for vehicle electrification is manageable. There are storage opportunities associated with electric vehicles which can help to manage the load on the grid. The federal government could bring this sector to the table to address these issues.
  • Electrification consists of a spectrum. There could be opportunities for Canada around mild electrification, for example in combination with natural gas powertrains. It was noted, however, that there is no federal programming dedicated to such projects.
  • Workplace charging stations, car sharing, and electrification of public transit, school/shuttle buses, and light duty trucks are upcoming challenges.
  1. 3. Where are the opportunities for greater collaboration between governments, communities (including indigenous), businesses, academia, and non-governmental organizations to enhance the environmental performance and resiliency of Canada’s transportation system?
  • There was support for different levels of government working together, developing targeted agreements with the private sector that clearly identify roles and responsibilities.
  • There would be opportunities for greater collaboration and bringing key partners to the table in developing a national strategy. One example cited was a Canadian energy strategy, which should align with the federal climate policy.
  • Another suggestion was to focus, in the short term, on sectors where there are greater challenges, such as freight and heavy duty vehicles.
  • The idea of an advisory committee to regularly advise the Minister on environmental questions was raised. It would send a strong signal that this is an on-going priority for the Government.
  • There is a continuing need for Transport Canada to collaborate at the international level, such as at the International Civil Aviation Organization and the International Maritime Organization.
  • There are strong university networks already looking at resilience to climate change that can be leveraged in the context of transportation infrastructure.
  • It was suggested that there are opportunities to build upon existing clusters of industry capacities and capabilities and invest in the full spectrum of pre-commercialization transportation technology innovation. To that end, an advanced transportation technologies manufacturing hub could be created in Canada through nimble funding that resides outside of government.
  • It was recommended that success metrics for greener transportation initiatives (e.g. the carbon impact) be tracked and reported in order to determine the success and value of taxpayer investments.
  • There is a need to ensure alignment of objectives with Infrastructure Canada. Infrastructure projects should be forward thinking. Electrification should be built into new transit projects, to ‘future-proof’ them. As well, new infrastructure should be built to be resilient to the effects of climate change.
  • The role of improving public awareness and education as a necessary and important tool to generate momentum in greening transportation was raised throughout the Roundtable. The federal government and other stakeholders have important roles to play.
  • The Green Transportation Roundtable itself was considered a useful collaboration tool.
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