Decarbonisation of the rail industry: challenges, next steps and opportunities

The Department for Transport has challenged the rail industry to have removed all diesel-only trains from the network by 2040 in England and Wales. In this article we look at the scale of the challenge, the possible alternative modes of traction and the next steps and opportunities for the UK rail industry.

Net zero targets

Climate change is one of the greatest challenges faced by the world today, alongside the current global pandemic. Introduced in 2015, the Paris Agreement aims to bring together all participating nations to undertake ambitious efforts to combat climate change. In ratifying the Paris Agreement, the UK agrees to the aim of limiting global temperature rise this century to less than 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the increase to no more than 1.5 degrees Celsius.

In June 2019, the UK Government became the first major economy in the world to legislate to end its contribution to climate change by 2050.¹ The target requires the UK to reduce its greenhouse gas emissions to net zero by 2050, compared with the previous target of an 80% reduction from 1990 levels. In Scotland the legally binding commitment is to achieve net zero emissions by 2045.²

The Department for Transport ("DfT") responded to the UK's net zero target in March of this year through its "Decarbonising Transport: Setting the Challenge" paper, which indicates how the department intends to develop a plan (to be published later in 2020) to achieve net zero transport emissions by 2050. Transport Secretary, Rt Hon Grant Shapps MP also comments that there is a need to act "quickly and decisively" to reduce emissions and separately has challenged the rail industry to have removed all diesel-only trains from the network by 2040 in England and Wales. Similarly, Transport Scotland has set a target to decarbonise domestic Scottish passenger rail services by 2035.³

The scale of the challenge

Rail contributes to less than 1% of the total UK annual greenhouse gas emissions and is the only mode of transport that is capable of moving both people and heavy goods using a zero-carbon solution.⁴  A great deal of research into alternative traction technologies has already been done and in some cases the development of new technology has proved successful. However, the scale of the challenge faced by the rail industry should not be underestimated. Led by the RSSB, the Rail Industry Decarbonisation Taskforce ("RIDT") estimated in June 2019 that approximately 3,000–3,3000 diesel passenger vehicles will need to be replaced, re-engineered or converted, to decarbonise the railway.⁵  The take up of new traction technology required to convert diesel trains will be key in decarbonising the railway and the DfT has committed to invest by "improving infrastructure and rolling stock, and supporting the deployment of lower carbon technologies".⁶

1. Justifying the economics of electrification

To date, electric powered trains are considered the only alternative to diesel that can run freight or high-speed passenger services with zero carbon emissions (provided that they are fuelled by renewable energy). However, in Network Rail's Traction Decarbonisation Network Strategy ("TDNS") published in July 2020 the infrastructure manager reports that only 38% of all railway in the UK is currently electrified.7

Rail infrastructure electrification is complex and extremely costly, requiring extensive upgrades on a network which in some cases was never designed for any such electrification infrastructure. However, it is considered the only option for some lines. The TDNS estimates rail electrification will cost between £1 million and £2.5 million per km (in 2020 prices), making the total bill to electrify all remaining non electrified lines in Great Britain approximately £30 billion. For context, the total committed funding for Network Rail to operate, maintain and renew the entire railway for Control Period Six is £35 billion and so there is a question over how electrification will be funded.8 The further advantages and disadvantages of electric trains powered by overhead lines is considered at Table 1 below.

On less intensively used lines the long term benefits of electrification may simply not justify the investment cost and disruption caused by the expensive engineering works. There is therefore a challenge in balancing this cost with customer benefit and the goal of achieving zero carbon emissions - this is where additional green traction technologies as an alternative to diesel come in.

2. Overcoming uncertainties around alternative green traction technologies

Where electrifying the network proves too expensive the current alternatives are to power the train with an electric battery or hydrogen stored on board the train that generates electricity.

Table 1 below considers the key advantages and disadvantages of the alternative traction technologies that the industry is challenged with balancing in its attempt to decarbonise the railways. While it is unlikely that there is a single solution for all routes and rolling stock, there is opinion that the net zero targets are achievable with a combination of these technologies. In the TDNS, Network rail proposed that of the 15,400 km of unelectrified railway: 1,300 km should be operated by hydrogen technology; 800 km should be operated by battery technology; and 13,000 km should be electrified, in order to achieve decarbonisation (leaving approximately 300 km of track where a decision has yet to be made).

Table 1: advantages and disadvantages of the different forms of traction

Battery and hydrogen powered trains – the pioneers

• Alstom is the pioneer of hydrogen fuel cell trains with the Coradia iLint multiple unit being the first of its kind launched in Germany in 2016. The trains have now also been tested in the Netherlands and can run for 600 miles on a single tank of fuel (which is on par with the distances that diesel trains achieve).
  
• Eversholt Rail and Alstom announced a plan in July 2020 to fast-track the UK hydrogen train industry by investing £1 million in British hydrogen trains, creating an entirely new class of train, the first-ever 600 series (Breeze trains).
  
• Porterbrook have developed a “FLEX Family” to operate on electrified and non-electrified routes. The HydroFlex, in partnership with the University of Birmingham, was launched in 2019 and put into trial operations in the UK in September 2020. It involved retrofitting an electric train with a hydrogen powered fuel cell. The BatteryFlex, introduced in 2018, involves converting one of the Electrical Multiple Units (EMU) into a battery/electric bi-mode.
  
• Bombardier introduced an emission-free and energy-efficient battery operated train into public service in 2018. The Bombardier Talent 3 does not generate any exhaust and is 50% quieter than conventional modern diesel powered trains.
  

• Hitachi Rail and battery company Hyperdrive Innovation have partnered to develop a battery pack suitable for powering trains, and a roadmap towards a manufacturing agreement which would cover any future orders.

3. Climate change in the face of a global pandemic

Covid-19 has had a huge impact on the transport industry and the way in which the public use the railways. Any policy that is now being driven by the DfT is up against the backdrop of the emergency measures in place and the huge losses that the DfT and other devolved authorities are suffering due to drastic decreases in ticket revenue, which could lead to reduced funds for operation and investment (although the government could use infrastructure investment funds to invest). However, the procurement of new rolling stock programmes is continuing and the focus on climate change continues to be a key driver for the rail industry. Rail is already a relatively low carbon form of transport and with certain airlines looking to reduce national short-haul flights and improve their links with rail transport, further decarbonisation and investment in rail may well be encouraged.¹⁰

Next steps and opportunities for the UK rail industry

In July 2019 the RIDT report made a number of strategic recommendations for the industry geared towards achieving the objective of net zero carbon by 2050. As a starting point, one of the objectives was for the rail industry to commit to supporting the target of net zero carbon by 2050, which the DfT has now committed to support through its "Decarbonising Transport: Setting the Challenge" paper. The RIDT report also recommends that:

• the industry needs clear and targeted policies from Government to enable rail industry players to understand where investment is needed and should allow the industry to maximise its ability to innovate and deliver against the agreed target in the most cost-effective manner;
• the structure of the industry (including the long awaited Williams Review) could have a role to play in incentivising the delivery of net zero carbon. The report comments on how it is fundamental to align incentives, risk and reward to maximise opportunities for successful, cost-effective decarbonisation;
• each industry body should be encouraged to have a long-term plan aimed at achieving decarbonisation. A detailed review of ways to incentivise a transition to lower carbon forms of traction is recommended and ideas such as variable track access charges, some form of carbon tax, incentives to generate additional renewable energy, and increased research and development aimed towards adapting low carbon forms of tractive power should all be considered as part of such a review; and
• further research is needed to reduce technical and implementation uncertainties. 

Following the RIDT report and now the Network Rail TDNS, there is a consensus that with a combination of electrification and the deployment of battery and hydrogen powered rolling stock the net zero carbon targets are achievable. While the reports provide a high-level steer for the industry in terms of the overall goal, we await the targeted policies from the DfT (recommended by the RIDT report) to assist the industry in directing further research and investment for the rail industry to achieve net zero by 2050.

Such guidance from the DfT is likely to drive challenge but also opportunity. Rolling stock lessors are already developing sustainable investment policies and ESG reports that show a commitment to care for the environment. To the extent Rolling Stock lessors are owned by funds that are subject to the EU Sustainable Finance Disclosure Regulations (SFDR), due to come into effect in March 2021, lessors might start to further restructure capital flows towards sustainable finance. As we have explored in this article, lessors and manufacturers have already started investing in cleaner new trains and are channelling time and resources into developing clean technologies for both new trains and the conversion of existing diesel trains. New partnerships have been formed to drive innovation and attempts are being made to offset carbon footprints by green financing or social responsibility activities that focus on climate change.

These opportunities are likely to develop at pace over the coming months and years. With climate change and the net zero by 2050 target at the forefront of national policy, this is a challenging yet interesting time for the UK rail industry where the sector and its contribution to net zero could see a significant transformation in the not so distant future.

1. The Climate Change Act 2008 (2050 Target Amendment) Order 2019
2. Climate Change (Emissions Reduction Targets) (Scotland) Act 2019, which amends the Climate Change (Scotland) Act 2009
3. Transport Scotland, Rail Services Decarbonisation Action Plan (July 2020)
4. Network Rail, Traction Decarbonisation Network Strategy (July 2020)
5. Rail Industry Decarbonisation Taskforce, Final Report to the Minister for Rail (June 2019)
6. DfT, Decarbonising Transport: Setting the Challenge
7. Network Rail's, "Traction Decarbonisation Network Strategy" (31 July 2020)
8. Network Rail, "Traction Decarbonisation Network Strategy" (31 July 2020)
9. Engineering and Technology, "Rail solar projects pave the way for renewables" (July 2020)
10. CNN, Struggling Austrian Airlines swaps planes for trains (6 July 2020)