The transition to lower-carbon freight transportation will require a combination of fuels and technologies to meet the varying needs of maritime, road, rail and air transport, according to a report by Reuters Events in association with commercial insurer Axa XL.

The research – Freight in a low-carbon economy: managing the risks – highlights the safety, infrastructure and investment risk profiles of maritime, road, rail and air freight as the industries move away from fossil fuels. It found that while readily available alternative energy sources may offer limited reductions in greenhouse gas emissions in the transport sector, technologies with greater decarbonisation potential can introduce significant safety, infrastructure, cost and regulatory challenges.

The challenge is particularly acute in the maritime sector, which carries an estimated 90% of the world’s freight. The report compares nine alternative fuels and propulsion systems for commercial shipping across criteria including cost, emissions reduction, infrastructure, scalability, safety and regulatory readiness.

Vicky Roberts-Mills, global head of energy transition at Axa XL, said: “As we move to a low-carbon economy, the future energy mix is going to become a lot more complex. There will be more local production, more flexibility, and more diversification. Transportation is at the heart of that transformation.

“Freight operators are assessing technologies that are advancing at varying speeds, creating distinct risk profiles. Insurers can help create confidence to invest by improving understanding of those risks and helping businesses deploy new technologies safely and at scale.”

Image courtesy BSI

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