Transport’s dependence on fossil fuels is holding back energy transition and worsening climate change

REN21 calls for shift to renewables to decarbonise transport

As one of the most energy intensive sectors, transport is still heavily dependent on fossil fuels, holding back the energy transition while exacerbating climate change and slowing the achievement of the Sustainable Development Goals (SDGs).

Transport consumes 30% of the world’s total final energy. Most of this (96%) comes from fossil fuels to a large extent oil, and is responsible for 20% of global emissions, according to REN21’s Renewables in Demand Module of the 2024 Global Status Report (GSR) Collection.

Climate change has already unleashed devastating impacts this year from raging wildfires in Greece to heatwaves killing people in India, Saudi Arabia and the United States, says REN21, which is a global policy network made up of renewable energy actors from science, academia, governments, non-governmental organisations and industry across all renewable energy sectors.

Currently, renewables make up a very small part (4%) of the energy consumed in transport, and the sector is lagging far behind others – namely industry, buildings and agriculture. To achieve a successful energy transition and decarbonise transport, it is urgent to reduce the energy demand, move away from fossil fuels and shift to renewables.

However, as of 2023, only 49 countries had enacted renewable energy targets specific to the transport sector, says the Paris-based body.

Demand for transport is rising and the sub-sectors consuming the most energy – road, aviation and marine – have the least renewable shares, says REN21. Reducing demand means taking measures such as avoiding and decreasing travel and freight movement. Furthermore, lower demand in land transport can be achieved by resorting to sustainable modes like walking, cycling and shifting to public transport and electric vehicles.

One of the major barriers responsible for the low uptake of renewables in transport is the current state of disconnect between the transport and energy sectors. This is reflected in maintaining the way transport is built around a fossil fuel system, with subsidies, infrastructure and lack of integrated planning. The continued subsidisation of fossil fuels sends mixed signals and obstructs progress-oriented integrated planning with renewables.

“The energy transition and sustainable development are simply not possible without urgently decarbonising transport, especially in view of the sector’s chronic and structural dependence on fossil fuels and rising energy demand,” said REN21 executive director Rana Adib.

“As things currently stand, the transport and energy sectors are operating in silos. Transport needs urgent and collective attention of both transport and energy policymakers. There needs to be rapid integration between both sectors to break transport’s dependence on fossil fuels and shift it to renewables.”

Stronger integration is crucial as the choices of transport pathways and fuels solutions are interdependent and have direct implications on infrastructure development and vehicle options. Governments, which are adopting policies to bolster the integration of renewables in transport, such as targets, fiscal incentives (tax rebates, grants) and blending mandates, are creating benefits. For example, 74 countries set targets to promote electric vehicles by end of 2023. This resulted in the quadrupling of the global stock of electric cars between 2018 and 2023, reaching an overall share of 2% up from 0.45% in 2018. Also, electric car sales grew from 2.3% 2018 to 18% in 2023.

REN21 says this also testifies to the fact that electrification is playing a key role in decarbonising transport and enabling the shift from fossil fuels to renewable electricity. However, for electrification to succeed in shifting transport to renewables, governments must ensure that the primary source of electricity is coming from renewable energy. In most cases, this is not happening, impeding decarbonisation.

As of 2023 only nine countries have set 100% renewable power targets and 100% EV targets or complete internal combustion engine bans. These include, Chile, Costa Rica, Denmark, Iceland, New Zealand, Spain, Sweden, the United Kingdom and Antigua. To cite another example, as of early 2024, India had electrified around 40,000 kilometres of railway lines across 14 states and Union Territories. However, REN21 states that India’s rapid electrification of rail has not resulted in significant decarbonisation, as around 70% of the country’s electricity continues to come from coal rather than from renewable energy sources.

To attempt to bridge both sectors and encourage policy makers to explore practical ways to decarbonise transport, REN21 recently published the Global Futures Report (GFR): Renewables for Sustainable Transport. This report provides insights and guidance on possible pathways to increase the uptake of renewables in transport. The report raises essential questions about the transport sector’s transition. It delves into the infrastructure, fuels and allocation of roles and responsibilities needed to facilitate the process for any players with sufficient political will to make the shift.

“At the moment, the critical conversations between transport and energy players are not happening and each side is expecting solutions to come from the other,” said Adib. “Transport players often assume that fuels are fully renewable without specifying the types needed. Conversely, the energy community tends to overlook transport modes and vehicles, focusing instead on transforming feedstocks into usable fuels. This is the reason why collective strategies need to be developed and strengthened.”

The fact that policy makers are not enabling sectoral integration and energy players are not focusing on transport is leading to a sustained reliance on fossil fuels and low share of renewables, which is mainly coming from biofuels, in most regions. Latin America has the highest share of renewables reaching 14.5%, owing by and large to dedicated biofuel policies in Brazil. Europe and North America follow with a 5.5% and 5.4% share respectively, driven by the EU Renewable Energy Directive and the US Renewable Fuel Standard.

Biofuel mandates remain the most common regulatory policy for renewable transportation. In 2023, 64 countries had in place biofuel mandates including the United States, Brazil, South Africa, Indonesia, Malaysia and India. Meanwhile, global investments in biofuels dropped to its lowest level since 2016.

“Transitioning the transport sector to renewables is critical. However, it cannot be limited to setting targets for electric vehicles. We need holistic and collective strategic thinking and planning to wean transport off fossil fuels and shift it to renewables,” said Adib.

REN21’s Global Futures Reports provide a framework to debate and discuss the possible futures of renewable energy and to identify opportunities, barriers to progress and ways to overcome these barriers. Each report in the series seeks to capture the current thinking about one aspect of a sustainable energy future through wide-ranging consultations carried out across the extensive REN21 network. This consultation is used to identify “tension points” (where views of stakeholders diverge significantly), direct attention to critical areas, and shape conversations and strategic planning.

The 2024 edition addresses the question of how to rapidly scale up renewables in the transport sector. The report considers perspectives relating to different transport modes, geographic locations and interest groups and aims to pinpoint areas with significant disagreement about the “right” path forward.
 
Renewables 2024 Global Status Report (GSR) Collection
Since the GSR’s first release in 2005, REN21 has worked with thousands of contributors to spotlight the ongoing developments and emerging trends shaping the future of renewables. Producing this annual report is a collaborative effort of hundreds of experts and volunteers who contribute data, review chapters and co-author the report contents.

The GSR 2024 Demand Module explores renewable energy use in the key energy consuming sectors of buildings, industry, transport and agriculture.