Policies to encourage the use of renewable energy in the transport sector include targets, incentives and mandates aimed at increasing the use of biofuels and at boosting vehicle electrification through the integration of renewables. The global momentum towards net zero emission pathways also has driven policy change in the transport sector, although with a stronger focus on decarbonisation than on the penetration of renewables. ²³

During 2022, no new national targets for renewable energy shares were adopted in the transport sector, however, a few countries revised their targets. Two countries raised their targets for the share of renewables in transport by 2030: Portugal from 20% to 29%, and the Netherlands from 14% to 28%. ²⁴ In contrast, Italy revised its 2030 target downward from 22% to 16%. ²⁵ At the city level, Curitiba (Brazil) set a target to power 100% of passenger transport with renewables by 2050. ²⁶
In the United States, King County (Washington state) committed to achieving a zero-emission public transport fleet by 2040. ²⁷

Road Transport

The global energy crisis resulting from the war in Ukraine, as well as high fuel prices at the pump, have motivated policy makers to enact more low-carbon policies for road transport. ²⁸ Although biofuels have been a key focus for decades, the number of new biofuel policies has flattened in recent years. Meanwhile, policies targeting the electrification of road transport have received growing interest. However, incentives for electric vehicles do not necessarily lead to greater renewable energy uptake unless they are aligned specifically with efforts to increase renewables in the electricity mix.

Biofuel blending mandates remain the most common policy for advancing renewable fuels in transport. As of the end of 2022, a total of 56 countries and 30 sub-national jurisdictions had in place biofuel blending mandates (p See Figure 10); this was down from 65 countries in 2021, due to temporary suspensions of mandates in some countries. ²⁹

Some countries updated their policies. Four countries – Argentina, India, Indonesia and the Republic of Korea – increased their biofuel mandates or targets in 2022. To reduce reliance on oil imports, India amended its national biofuel policy by increasing the ethanol blend in petrol to 20% by 2025-2026 (five years ahead of schedule) and allowing for additional feedstocks in biofuel production. ³⁰ The Republic of Korea raised its biofuel blend mandate for road transport from 3% to 3.5%, and in the United States the Environmental Protection Agency proposed updating the national renewable fuel policy to mandate higher volumes. ³¹

During 2022, 10 national and sub-national jurisdictions either temporarily reduced their biofuel blending mandates (Brazil, Colombia, Finland, Mexico and Thailand) or suspended them (Czech Republic, Latvia, Peru, Zimbabwe and the US state of New Mexico). ³² In some cases, countries scaledback their mandates because of rising prices for vegetable oil. Brazil's National Energy Policy Council opted to extend the existing mandate of 10% for a longer time period, rather than increasing it. ³³

FIGURE 10.

National and Sub-National Renewable Biofuel Mandates and Targets, as of End-2022

Momentum for the electrification of vehicles is growing, with support policies ranging from tax incentives and stimulus packages to specific targets for electric vehicles. By the end of 2022, a total of 23 national and 17 sub-national jurisdictions had 100% internal combustion engine vehicles. ³⁴ (See Figure 11)

Early in the year, Thailand rolled out a set of exemptions or reductions of import duty and excise tax, as well as conditional subsidies, for imported electric vehicles; these measures build on the target set in 2021 to produce domestically 250,000 electric vehicles, 3,000 electric public buses, and 53,000 electric motorcycles by 2025, and 1.2 million electric vehicles by 2036. ³⁵ In the Philippines, the Electric Vehicle Industry Development Act entered into law, offering fiscal incentives for the manufacture of electric vehicles. ³⁶ The US Environmental Protection Agency amended its renewable fuel policy to include, for the first time, a pathway for electric vehicle manufacturers. ^{3 7}

As support for COVID-19 stimulus packages continued in 2022, some countries provided ongoing incentives for electric vehicle purchases. France and Germany, among others, now offer consumers an environmental bonus for buying an electric vehicle, often financed through a tax collected on the sale of internal combustion engine vehicles. ³⁸ A few countries revised down their vehicle electrification targets. For example, Germany adjusted its initial target of having 15 million exclusively battery electric vehicles on the road by 2030, so that it also includes plug-in hybrids. ³⁹

FIGURE 11.

Targets for Renewable Power and Electric Vehicles, as of End-2022

Policies for charging infrastructure also gained attention during the year. The US Department of Transportation proposed standards for a National Electric Vehicle Charging Network that includes using renewable electricity for charging. ⁴⁰ In France, new legislation makes it mandatory for parking lots that have 80 spots or more to install solar photovoltaic (PV) systems for electric vehicle charging within three to five years. ⁴¹

Hydrogen production for road transport is seen as suitable for use in heavy-duty vehicles that drive long distances. India launched a Green Hydrogen and Green Ammonia Policy in February 2022 and also announced a National Hydrogen Mission, with specific mention of the transport sector. ⁴²

Bans on internal combustion engine vehicles provide indirect policy support for renewables. In 2022, 17 new and revised electric vehicle targets and policies were announced, covering 16 countries and 1 sub-national jurisdiction (the US state of Minnesota), with 6 of the countries (Canada, Chile, Chinese Taipei, Mexico, New Zealand and the Philippines) announcing 100% bans on internal combustion engine vehicles by a specified year. ⁴³ Chile and New Zealand also have targets for 100% renewable power (across all sectors). ⁴⁴ The European Union (EU) approved a ban on the sale of all new petrol and diesel cars from 2035. ⁴⁵

Aviation, Rail and Shipping

Despite growing efforts to incorporate renewables into aviation, rail and shipping – such as by using biofuels in aviation and developing electric and hydrogen-powered trains – policies supporting these initiatives remain nascent and face significant challenges. The use of renewables also has been limited by the heavy reliance on fossil fuels in these sectors. In some cases, policies have impeded the development of low-carbon alternatives: for example, the EU continues to provide tax exemptions for kerosene fuel used in aviation. ⁴⁶

In 2022, there was growing emphasis on policies supporting sustainable aviation fuel, or SAF, defined as fuels produced from sustainable feedstocks that have similar properties to conventional aviation fuel. With more countries and airlines committing to net zero emissions, SAF is increasingly seen as the way forward for decarbonising aviation. ⁴⁷

The EU and the United States have led the way in SAF policies. In December 2022, the EU's the ReFuelEU Aviation package of legislative proposals includes a blending mandate for aviation fuel suppliers starting in 2025. ⁴⁸ The United States adopted legislation in August that includes a two-year blender tax credit and a two-year production tax credit for SAF, along with a grant programme of USD 290 million. ⁴⁹ Subsequently, the US Department of Energy issued the SAF grand challenge roadmap, which details the country's strategy to reach its SAF targets. ⁵⁰

Denmark announced plans to make all domestic flights fossil fuel-free by 2030 and is considering a range of technological options to achieve this, including synthetic paraffin, battery-electric and fuel cell-electric aircraft. ⁵¹ In a similar push to reduce emissions, France banned all short-haul flights if there is an existing rail alternative of less than 2.5 hours' duration. ⁵² Concurrently, the French national railway company signed a 25-year power purchase agreement (PPA) to secure enough solar PV power to cover 3.6% of its annual energy use; this brings to seven the total number of solar PPAs the company has signed in recent years. ⁵³ The rail company is aiming for a 40-50% of its electricity demand covered by renewable energy. ⁵⁴

In the shipping sector, several green shipping corridors – where zero-emission solutions are in place along key maritime trade routes – were announced in 2022. These include the Los Angeles-Long Beach-Singapore Green and Digital Shipping Corridor, the Republic of Korea-US Green Corridor, the Rotterdam-Singapore Green Corridor and, notably, the Shanghai-Los Angeles corridor. ⁵⁵ (See Snapshot: US-China) These are among several worldwide initiatives and commitments made in the shipping industry following the signing of the Clydebank Declaration (on the establishment of green shipping corridors) at the United Nations climate conference in Glasgow, Scotland in 2021. ⁵⁶

Snapshot.US-CHINA

World's First Trans-Pacific Green Shipping Corridor Between Los Angeles and Shanghai

In 2022, the Port of Los Angeles in the United States and the Port of Shanghai in China announced a strategic partnership to create a green transport corridor to reduce emissions from one of the world's busiest container shipping routes. The alliance aims to phase in low-carbon fuels in order to achieve zero-carbon container ships by 2030. It was facilitated by the C40 Cities Climate Leadership Group and involves authorities from both cities as well as industry partners, including shipping companies and a network of cargo owners.

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World's First Trans-Pacific Green Shipping Corridor Between Los Angeles and Shanghai

In 2022, the Port of Los Angeles in the United States and the Port of Shanghai in China announced a strategic partnership to create a green transport corridor to reduce emissions from one of the world's busiest container shipping routes. The alliance aims to phase in low-carbon fuels in order to achieve zero-carbon container ships by 2030. It was facilitated by the C40 Cities Climate Leadership Group and involves authorities from both cities as well as industry partners, including shipping companies and a network of cargo owners.

This alliance represents a step forward in promoting long-term decarbonisation solutions for shipping. The shipping sector is responsible for up to 3% of global greenhouse gas emissions, and emissions from the sector are expected to double by 2050. In 2020, an estimated 21% of the total of 31.2 million containers moved by ship across the Pacific Ocean travelled along the Trans-Pacific corridor. Introducing low- and zero-carbon fuel ships on this busy transport route can potentially reduce a large share of the sector's emissions.

In addition to phasing in low- and ultra-low-carbon fuel ships in the 2020s and operating the first zero-carbon container ships by 2030, the Los Angeles and Shanghai Green Shipping Corridor Association aims to develop best management practices to improve the efficiency of all ships that use the corridor and to reduce emissions from the port operations supply chain to improve air quality.

Source: See endnote 55 for this module.