Zero-emissions will be driven by market needs, not legislation

Zero emissions trucks are being piloted at the Port of Los Angeles Zero emissions trucks are being piloted at the Port of Los Angeles
Industry Database

Peter Soderberg believes that politics and image-conscious corporates will push zero-emissions agenda

I am often asked to predict when Europe will enforce zero-emissions regulations for utility vehicles. This is a valid question, but there is a big misconception here – that the adoption of zero-emissions vehicles will require a major shift in pan-European regulation. Judging by what is happening around the world right now, this is not so. The change will happen, it will likely happen much faster than anticipated, and it won't be driven by legislation. It will be driven by the market.

Ports are normally located in populated areas, and their material handling is a major source of local air pollution. The heaviest machines – cranes and shuttle carriers – have been available as electric or hybrid solutions for many years. The electrification of these machines is mainly based on heavy-duty, relatively expensive industrial components.

At the moment, we are witnessing rapid technology development in a related industry with manufacturing volumes at least an order of magnitude or two bigger than ours. Once the new electric systems and components that are currently being developed for the mass-market auto industry reach a sufficient level of technical maturity and economies of scale, they will inevitably open up new opportunities to design cost-effective zero emission versions of heavy mobile equipment such as reachstackers and large forklift trucks, where the cost of battery technology is still the limiting factor.

Market variances

What about the market? Where does Europe stand, compared with the rest of the world? Perhaps surprisingly, Europe is not at the front of the pack.

In California, where the state is pushing hard with both regulation and incentives for zero-emission technologies, the ports of Los Angeles and Long Beach have announced aggressive plans that mandate only zero-emission horizontal transport equipment in new procurement from 2020, and for 100% of drayage fleets to be zero-emission by 2030.

Think about that. In a timeframe that would be normal for us to plan for adapting to the next upcoming level of diesel emissions standards, a major group of industry players has announced that they will not be buying any diesel-powered machines two years from now.

The interesting point about the zero-emissions drive in California is that it has nothing to do with federal legislation or energy policies. If emissions reduction is seen as a priority by voters and lawmakers in the state, it will be made to happen.

Likewise, shareholders and customers also have a vote, and the businesses are listening. Global companies with extensive logistics operations such as UPS, Amazon and IKEA are asking for zero-emissions equipment already today, and they are willing to pay a premium for it, based on corporate policies and image questions.

In China, rapidly deployed governmental initiatives are supporting the adoption of zero-emission vehicles at a remarkable pace. Likewise, India shares both China's ambitions and a capacity to execute dramatic regulatory changes in pursuit of lower environmental impact.

Here in Europe, most of the conditions are in place to enable the quick development of zero-emissions technology, but our regulatory processes are so slow that both national governments and the EU have great difficulty in impacting the market quickly. However, similarly to what we are witnessing in California, we are beginning to see local and regional zero-emissions initiatives coming from cities, regions and port authorities, proactively tackling the questions that pan-European legislation has not yet caught up with. The market will create its own demand and the change will happen – just not in the way that we are used to seeing it.

Peter Soderberg is vice president for Offering Development at Kalmar.

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