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No ‘silver bullet’ for clean fuels future, Pembina says

Four kinds of clean fuels all have specific uses, think tank report finds

Fuelling the Transition by the Pembina Institute explores the optimal uses for four clean fuels in Canada as the transportation sector is put on a path to decarbonization. (Courtesy Pembina Institute)

In a compare and contrast study of four kinds of clean fuels for medium- and heavy-duty vehicles (MHDVs), the Pembina Institute finds each has its utility and drawbacks, ending in a likely “polyfuel future.”

The study, Fuelling the Transition, looked at biodiesel, renewable diesel, renewable natural gas (RNG) and hydrogen, analyzing for factors such as cost, availability, ease of use, scalability, and decarbonization potential for fleet operators.

The purpose was to reduce uncertainties about clean fuels, according to Hongyu Xiao, a senior analyst with the Calgary-based think tank’s transportation team, and author of the report.

The Pembina Institute’s choice of clean fuels in the analysis was driven by their current commercial availability and potential as viable fuels, Xiao said.

There is no clear answer for which fuel is best across all the categories or class of vehicles.

“Everybody was quite clear that there is no silver bullet. There is no fuel that is going to come up and we all go, ‘this is the future.’ All of them have advantages and disadvantages,” he said in an interview with Sustainable Biz Canada.

With a 100 per cent sales mandate for zero-emissions MHDVs in Canada by 2040, a transition period will require the use of clean fuels to replace petroleum and diesel, especially for vehicles that are not yet viable for electrification.

Looking at diesels

Biodiesel, produced largely from crops such as canola or soy, has 10 per cent of the life-cycle carbon intensity of diesel, can be used in internal combustion vehicles and is commonly mixed into diesel in Canada. Hundreds of millions of litres of biodiesel are produced in Canada (though under half of the total capacity in 2023) and mixed biodiesel adoption raises costs for a typical diesel consumer by 0.9 per cent.

A key detractor is the difficulty of sustainably scaling up biodiesel production because of the land necessary to grow crops.

The Pembina Institute sees “broad use of biodiesel at low-blend levels as long as road freight continues to run on diesel fuel,” but also sees its use decreasing due to electric and hydrogen-fuelled heavy-duty vehicles.

Renewable diesel does not require retrofitting vehicles or investing in fuelling infrastructure. Like biodiesel, it incurs small costs to adopt while being a ‘drop-in’ fuel, meaning it can easily substitute diesel. Production could be scaled up to as much as 4.07 billion litres per year by 2027 without much impact on food supplies, according to the report.

But renewable diesel results in only a 4.2 per cent decrease in life-cycle emissions relative to standard diesel and is only widely available in British Columbia. The institute concludes renewable diesel’s best uses are for vehicles that have not yet transitioned to zero-emissions, or in areas with harder-to-access alternatives, given the limited availability.

Comparing the gas fuels

As for RNG, production remains highly limited and would require a substantial build-up of new infrastructure connected to sources such as landfills or farms. RNG capacity is expected to modestly increase from seven petajoules in 2021 to 17.1 petajoules in 2025 (enough to power about 7,700 MHDVs).

Though RNG long-haul vehicles were deemed the most efficient compared to other decarbonization technology like battery-electric in a study by HEC Montreal, RNG costs could also fluctuate based on supply and demand.

A key risk with RNG is the upstream methane emissions, meaning an RNG-fuelled truck that reduces emissions between four per cent and 18 per cent compared to a diesel-powered truck may see those gains disappear due to leaking of methane during RNG production.

Uses for RNG, the Pembina Institute concludes, are garbage trucks, tractor-trailers, forestry vehicles in B.C. and long-distance trucks operating in provinces with strong RNG mandates.

Hydrogen has the obstacles of high cost for vehicles and infrastructure, limited production in Canada (only three million tonnes per year currently) and the technology to produce it at scale cleanly remain uncertain, the Pembina Institute states. Electrolysis is not a cost-effective solution to cleanly produce hydrogen because of its intense energy consumption, the report adds.

But hydrogen fuel cells are light, energy efficient and can be refuelled in relatively short time. If a hydrogen-powered vehicle can run on a green source, greenhouse gas emissions are reduced by 84 per cent in tractor-trailers and 89 per cent in urban buses.

The think tank envisions a use for hydrogen in long-haul transport and heavy-duty trucks if there is enough refuelling infrastructure, commercially viable hydrogen trucks, and a supportive transport ecosystem for maintenance and repair.

Electricity rises above the current for lighter vehicles

Electric vehicles are not ignored in the report. Electrification prevailed as the best option for buses, cargo vans and medium-duty vehicles based on economics and technology. “Electricity itself is not too expensive,” Xiao said.

Most of Canada’s grid is powered by clean energy, granting electricity an advantage when it comes to carbon compared to most of the clean fuels, he continued.

But electrification does have a limitation: the heavier the vehicle, the less viable it becomes.

Despite the promise of clean fuels, Xiao said there are many challenges remaining.

He found the top suggestions to make clean fuels viable for decarbonizing MHDVs are:

  • scaling sustainable supply;
  • using a ‘corridor’ approach to locate fuelling stations; and
  • fostering a transportation ecosystem that can support clean fuel use in commercial freight.

Strategy and deployment are key factors to overcoming the barriers, he stressed.

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