Reducing Freight Energy Costs in Europe

by Rafel Mayol

The European Union (EU)Comparable size in Economy and Population

Europe Energy Consumption61.3% of Oil used in Transportation96% of Transportation relies on Oil

Transport32%

In-dus-try

27%

Households

25%

Ser-vices13%

Agricul-ture2%

EU27 Final Energy Consumption by Sector (%)

The ProblemDependency on oil: volatile and non reliable

source

Price will increase over time

Challenges:Freight movement doubled by 2050Already heavy road congestion

The Situation: EU vs US

Rail Road PipelineWater Air

27.4

18.5

26.9 27.1

0.1

39.5

28.6

19.6

12

0.3

US Modal Freight Transport Share (%)

1980 2007

Sea shipping between European ports can improve

Rail mode has fallen by 6.3% since 1995Road is saturated

The Rail ProblemPotential to save oilRail system is a glue of 27 different rail

networksDifferent standards, train sizes and rail widthUnreliable time schedules

Rail SolutionStandardization of platforms, trains and

systems.European wide approach vs “glue” approach:

European “Corridors”Separate infrastructure ownership from

service providerTrue market liberation

Short Sea Shipping ProblemMost efficient mode but no free movement of

goods intra EU ports

Extensive normative on borders, transportation and health enforcement

Different procedures in each country

Different organs to deliver documentation

Short Sea Shipping SolutionHighway of the Sea:

Free movement for “normal” goods for ships moving between European ports

Connect ports to Transportation Hubs

Simplify procedures and deliver to an unique government agency

Utilization ProblemFreight Vehicles in Europe

24% run emptyNon empty vehicles run at 56% capacity

43% Global Efficiency

Solution:Mandatory 60% average efficiency within first

yearUp to 70% load efficiency within 5 years

Alternative fuel enginesEuropean initiative potential:

Bring technology cost down

Offer network of refuel points across Europe for freight

Alternative fuel engines solutionLiquid Natural Gas:

Mature proven technologyEquivalent cost to gas is $1.50 per gallonPrice down due new drilling technologies

Alternative fuel engines solutionEuropean approach

Tax refunds to LNG buyers (earned thorough taxes on oil) to increase offer and demand

Deploy a European wide network of refuel points on highways to assure system viability Mandatory by law Government owned but installed in current stations

ConclusionsIncrease transportation efficiency per energy

unitMoving freight from road to water and railIncrease road efficiency

Reduce dependency on oil:Natural Gas engines

Reply Short Sea Shipping to the United States