“The course for sustainable logistics has been set”

Andre Kranke has been Department Head Trends and Technology Research, Corporate Research & Development and Climate Protection Project Lead at DACHSER since 2019. In the first part of our interview, he explains why there is no alternative to zero-emission truck transport and describes the experiences DACHSER is already gaining from the use of new drive technologies in practice.

You can find the second part of the interview with Mr Kranke here ›

 

Mr Kranke, sometimes football commentators come up with phrases that hit the nail on the head when a team scores the decisive goal. Would “Nailed it!” be the right phrase for the logistics industry with respect to the “when” and “how” of its evolution into a zero-emissions sector after previously being dominated by fossil fuels?

Andre Kranke: “The core issue – tackling climate change – is one that concerns us all greatly. Each and every one of us has to clearly understand that the road to climate-neutrality will be paved with drastic global changes that encompass all economic sectors and also extend into our private lives. And yes, it’s true that the course for sustainable logistics has now been set and the fundamental technological decisions have been made – although there are still details to be clarified. The timeframe has also been drawn up.”

This is reflected in many laws and regulations throughout Europe which are either already in effect or in the planning stage…

Andre Kranke: “...There are many laws we have to obey as players in the logistics industry, but three key legal framework conditions require our particular attention. One of them is the amended EU Renewable Energy Directive 2018/2001, also known as RED 2. It contains targets for every EU Member State on the percentage of renewable energies – wind power, solar or biomass – which they need to achieve.”

How does this affect on the transport industry?

Andre Kranke: “Well, fossil fuels are becoming more expensive, as we can all see every day when we fill up our cars. The German Fuel Emissions Trading Act (BEHG), which took effect on 1 January 2021, has caused a gross price rise for diesel of around 8 cents per litre. And that’s only the beginning. This national emissions trading, which imposes the price of EUR 25 on each tonne of CO₂e emissions, will remain in force in its present form until 2026, costs are rising year on year and will reach a minimum of EUR 55 per tonne of CO₂e emissions; that involves bigger costs than 8 cents on a litre of diesel. Incidentally, other fossil transport and heating fuels like heating oil, natural gas, LNG and CNG will also be affected.”

These provisions apply to Germany only. Is a similar concept being planned for Europe?

Andre Kranke: “The European Union is planning to extend CO₂ emissions trading to the transport sector as part of its Green Deal, and is currently using the German Fuel Emissions Trading Act (BEHG) as a blueprint. While details of the plans have not yet been precisely defined, I personally anticipate that the transport industry will be hit by costs of EUR 70 to EUR 100 per tonne of CO₂e emissions from 2025 onwards. However, as I said, this is only my personal view.”

What other aspects do logistics players have to expect?

Andre Kranke: “One important European directive, Regulation 2019/1242 [of the European Parliament and European Council], has already been in effect since mid-2019. It sets out extremely clear fleet targets for commercial vehicle manufacturers: significant CO₂ reductions must be introduced for new vehicle registrations by 2025, and particularly from 2030. But optimising diesel technology alone is simply not enough to achieve a 30% reduction in CO₂ emissions compared to a modern Euro 6 truck from 2019. Truck manufacturers are therefore focusing on zero-emission vehicles, which are clearly defined in the EU directive as meaning absolutely no emissions of CO₂ or air pollutants from the vehicle exhaust pipe.“

So how can this target be achieved?

Andre Kranke: “To ensure compliance with the definition of zero-emission vehicles set out in law, the way forward will be battery-powered electric trucks and hydrogen fuel-cell trucks– and possibly trucks with overhead catenary systems on selected routes. Given this, it is no wonder that as early as 2019, market-leading automotive companies like Daimler Trucks announced that from 2039 they would only be selling zero-emissions vehicles in Europe, but also the USA and Asia. The commercial-vehicle industry is in the midst of far-reaching change, not least because it has been forced into that position by the imposition of legal framework conditions.”

Which of the technologies you listed will win the race?

Andre Kranke: “Battery-powered electric vehicles and hydrogen fuel-cell trucks. Opinions currently vary as to which of the two technologies is the right one for which purpose, and are sharply divided over the scenarios in which the two forms of electric drive perform the most efficiently. Some vehicle manufacturers favour battery-powered electric trucks for city distribution and for local and regional transport with ranges of up to 500 kilometres; they see the use of hydrogen fuel-cell trucks for greater distances. However, other original equipment manufacturers (OEMs) believe that in future, battery-powered electric trucks will also be able to manage transport efficiently even over distances greater than 500 kilometres. At DACHSER, we are intensively engaged with both technologies. For example, we have used battery-powered electric trucks for city deliveries since 2018. I’m convinced we need both forms of technology. Ultimately it will be the individual scenario, depending on factors including payload and operating times, that sways the decision about which solution is better and when.”

 What roles will LNG, biofuels and e-fuels play in the future?

 Andre Kranke: “From a climate perspective, these fuels and drive technologies will only have a minor role to play. Fossil CNG and LNG have only a marginal impact in reducing greenhouse gas emissions. Depending on how long Germany keeps their current exemption from truck tolls in place, this may take on a different slant in terms of pure business management. The situation is different for bio-CNG and bio-LNG. These biofuels and bioblends make a significantly greater contribution to protecting the climate and should always be used wherever it is economically possible. For example, at DACHSER in Finland we achieve greenhouse gas savings of around 70 per cent by using biogas trucks. But given their low availability in Europe, bio-CNG and bio-LNG are only limited solution remedies In addition, the EU does not categorise them as zero-emission vehicles, so at DACHSER we rank them as an interim technology. Also, e-fuels fall outside the category of zero-emission vehicles. Given the high production costs, it is also questionable whether e-fuels will play a role in truck transport, even as an interim solution. However, they are essential in air and sea freight.”

It’s a fascinating topic. But before we go into more detail, could you explain the third directive of major relevance to the logistics industry?

Andre Kranke: “Sure. The EU Parliament, Council of Ministers and the EU Commission recently reached agreement over the future procedure for the Euro Vignette Directive – an issue that is particularly relevant for the logistics industry as a cost factor. The directive will basically establish the framework for all truck toll systems throughout the EU and define how truck tolls can be imposed and how high they will be. The system is likely to be applied in Germany from 2023, introducing a new truck toll system which will probably have five new CO2 categories in addition to the previous emissions categories of Euro 0 to Euro 6. Those new categories will play a crucial role in the future. By my reckoning, the difference in toll payments between a Euro 6 truck and a comparable zero-emission truck could be between 8 and 15 cents per kilometre for a 40-tonne vehicle, on top of the normal toll charges. As a result, the increasing cost benefits for zero-emission trucks will give further impetus to the development and sales of those vehicles from the middle of this decade at the latest.”

At present, the purchase price of a battery-powered electric truck is around two to three times higher than that of a Euro 6 truck. However, despite these higher costs, DACHSER is already using various zero-emission trucks on its regular schedules. You’re also driving your Emission-Free Delivery concept for zero-emission deliveries in city centres, and biting the bullet of the higher costs involved…

Andre Kranke: “...Yes, driven by our convictions. We need to expand our experiences with these vehicles and we aim to lead the way as pioneers, so it’s only logical that we invest in the technology and processes involved even without getting financial support from our customers. After all, at DACHSER we’re firmly convinced that we are playing our part in helping to achieve the Paris Agreement targets of keeping global warming below 2° C. We see this challenge as part of our integrated responsibility, pursuing the clear-cut mission of our family-run company. In line with this, we have operated an Emission-Free Delivery Zone in Stuttgart since 2018. As a basic principle, all our deliveries to the city centre and pedestrian zones are provided as zero-emission services as standard, using battery-powered electric trucks combined with electric cargo bikes. In fact, we even won the German Environment Ministry’s National Competition for Sustainable Urban Logistics.”

 

A successful project that opens up huge perspectives. After the launch of your original flagship project in Stuttgart, your Emission-Free Delivery concept has now been rolled out in Oslo and Freiburg. When does DACHSER plan to implement the concept in further cities?

Andre Kranke: “Standardised processes are essential to implement the idea in more cities. The experience we gained from our flagship project in Stuttgart enabled us to set out basic principles for standards. More than that, it’s enormously important for us to continue expanding our expertise – for instance, to deepen our knowledge of dealing with loading technology and to acquire valid findings about the effect of variations in vehicle dispatching. All these are important steps towards the goal of zero emissions. By the end of 2022, we thus plan to extend emission-free deliveries to at least eleven European metropolitan regions in Germany, France and other countries.”

A major investment in a sustainable future. But, then you will need to significantly expand the number of electric trucks in your fleet…

Andre Kranke: “Yes, of course. But we not only plan to buy more battery-powered electric trucks for city deliveries; we are also currently looking at using some battery-powered electric trucks for shuttle services between customers’ sites and our warehouses and transit terminals. However, series-produced vehicles with sufficient range and performance specifications are still few and far between, and we don’t expect to see more choice until 2025 and beyond. “Series-produced” as we understand it means that the vehicles are approved for use throughout Europe and that there is an extensive network of service stations and charging points. But despite the open issues remaining, we will continue to look ahead in this area, to enable us to extend our emission-free services for longer routes, too.”

What role do hydrogen fuel-cell trucks powered by liquid hydrogen play in your ideas for emission-free long-haul transport?

Andre Kranke: “It’s definitely a technological development that we aim to support and encourage. However, at the moment the market is only offering prototypes or small-series production runs. Despite that, our partner network for food logistics – the European Food Network – is using fuel-cell trucks. An extremely interesting project in Switzerland, driven by Peter Galliker – CEO of Galliker Transport AG, with whom we are in regular in-depth contact. Because there is so much that still needs to be clarified, at DACHSER we have set ourselves the goal of supporting the research and providing impetus for innovation. As part of this, we have participated in various studies since 2020, including a collaboration with Kempten University of Applied Sciences, a research project by RWTH Aachen University, and a European study project examining the cost structures of individual vehicle types. In addition, this January we joined the German Hydrogen and Fuel Cell Association. This brings us into contact with specialist technological sources and enables us to access expertise in pan-European networks that address topics of sustainable energy supply in depth.“

Energy supply is enormously important, particularly where hydrogen is concerned. In future, the plan is to produce hydrogen from all renewable energy sources. Furthermore, the infrastructure that will be necessary to operate liquid hydrogen-powered fuel-cell trucks on linehauls across Europe is lacking.

Andre Kranke: “... It’s an absolutely mammoth task, and it’s one of the biggest issues that still await clarification. Another very interesting question is the one of what form of fuelling technology will prevail. Vehicle range is crucial to the use of fuel-cell trucks. Because hydrogen has a low volumetric energy density, high-volume tanks are inevitable to reach adequate range levels (around 1000 kilometres). But, if the hydrogen tank is too big, it will reduce the load volume of the truck, which will further drive up the costs of transport. At the moment there are three different fuelling systems for hydrogen-powered trucks. One is 350-bar compressed hydrogen storage technology; however, a truck using this technology can currently travel only 400 to 500 kilometres on one tankful.

The 700-bar compressed hydrogen storage tanks are standard for passenger cars, but our research showed that only a few manufacturers are pursuing them because they offer only limited advantages in truck transport. The most advanced technology, which has primarily been taken up by Daimler, involves hydrogen that is liquefied at temperatures of -233 °C; in this respect it is comparable to LNG technology. Cryogenic hydrogen technology offers storage capacity that is around 2.5 times greater than the 350-bar system, theoretically enabling trucks to travel more than 1000 kilometres on a single tankful. This technology is highly promising – provided that it is technologically feasible. The coming years will show whether it can prevail over 350-bar compressed hydrogen storage technology. To gain more clarity in this area, we will support development and vehicle testing in the coming years and engage in pilot testing of vehicles powered by hydrogen fuel cells as soon as possible.“

Will diesel trucks still have a role to play in these new developments?

 Andre Kranke: “Although they are certain to be phased out over the long term, they will still have a crucial role to play in logistics up to at least the end of this decade. Today’s diesel trucks in emissions category Euro 6 are the only form of road transport that can be used across Europe for all transport purposes. Our enthusiasm for zero-emissions vehicles notwithstanding, we will only be able to banish this efficient, and thus eco-friendly, technology from our roads when we have found practical answers to the technological, legal and economic issues that remain to be solved.”

So many questions, and so many answers needed so quickly… 

Andre Kranke: “… and those answers will certainly be found. Although many decisions still have to be made, you can only score a goal if you kick in the right direction.”

And on that note, thank you for a very interesting interview!

In the second part of our interview, Andre Kranke talks about sustainable warehousing strategies, efficiency and innovation in logistics, and the solar power systems which DACHSER plans to use extensively to generate its own power.

You can read more about DACHSER's long-term climate protection strategy here in the second part of the interview with Mr Kranke.