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Financing the Decarbonisation of MHDVs: A Subnational Perspective

by Madaline Dunn

Climate Group and the Under2 Coalition’s ZEV Community have published a new report outlining what subnational governments need to do to boost the transition to zero-emission trucks.

The research findings are based on 14 survey responses and eight structured interviews with representatives of states and regions in Europe, Africa, Latin and North America.

The report outlines that medium and heavy-duty vehicles (MHDVs) represent less than one-tenth of all vehicles, but roughly 40 of road transport emissions and make up a third of total transport fuel use.

Further, it details that tailpipe CO2 emissions from all MHDVs have been increasing rapidly since 2000, with trucks accounting for more than 80 per cent of this growth.

It notes that electrification of MHDVs requires urgent attention, the right policy frameworks, investment, and commercial deployment.

However, fewer than half of the governments surveyed have a target year to ensure public/government-owned MHDV fleets are net zero emission, according to the report.

Some governments do have partial or incremental targets or overarching net zero targets in place.

The top challenges cited by governments were found to be:

• Lack of charging infrastructure;

• Lack of access to public finance;

• The need for underlying grid development; and

• Investment

It outlines that one important step for progress is setting a clear target date for phasing out internal combustion engines, trucks, and buses.

It reveals that a target date of 2030 for a zero-emission bus fleet and 2040 for trucks is the most widely recognised benchmark.

Further, it writes that innovative financing solutions should also play a role, and there should be more collaboration and communication with energy utilities to:

  • Accelerate the deployment of infrastructure
  • Streamline the planning and permitting by leveraging joint expertise, and
  • Enhance the sharing of data and financial resources.

Likewise, it encourages governments to engage and work with businesses to unlock private finance and investment and send a message to the manufacturers that there’s a market for zero-emission trucks.

Read the full report here.

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