Decarbonization of transport in the EU

Road transport is the largest source of CO₂ emissions in the transport sector in the European Union, accounting for nearly three quarters of the total carbon footprint of this sector. At the same time, it is the most frequently chosen means of transport for people and goods, which makes it a priority in the EU's climate strategies. Decarbonising roads is not only a technological challenge, but also a social and infrastructural revolution that requires the involvement of consumers, businesses and policymakers.

^{Source: European Environment Agency (EEA), PwC's Analysis}

Electric propulsion is the most promising path, combining high energy efficiency with rapid tech progress, expanding infrastructure, and better user economics. However, still relatively few drivers opt for electric vehicles. Conventional internal-combustion powertrains, supported by biofuels and hybrid technologies, will remain in use well beyond 2035, when the ban on selling CO2emitting vehicles is set to take effect.

Air transport accounts for around 13% of CO₂ emissions in the transport sector in the EU, and its emissions are growing the fastest, having increased by 150% since 1990. At the same time, almost 99% of the energy used in aviation comes from fossil fuels, mainly kerosene. The decarbonisation of this sector is one of the biggest technological and financial challenges in the entire transport transformation.

In the short term, the greatest potential for reducing emissions lies in operational optimization - modernization of the fleet, improvement of aerodynamics and efficiency of engines. These are actions with a low cost of implementation, but a limited impact on the implementation of the EU's climate goals.

There is still a lack of cost-effective solutions to reduce emissions in aviation. Given that alternative aviation fuels are expected to be multiples more expensive than kerosene, it is necessary to consider whether the European economy can afford to decarbonise the aviation industry.

Evolution of final energy consumption in air transport in the EU, 1990-2023 (PJ)

^{Source: European Environment Agency (EEA), PwC's Analysis}

Waterborne transport is responsible for more than 13% of CO₂ emissions in the transport sector in the EU, and its fuel mix is still almost exclusively oil-based. In 2023, emissions from shipping reached 140 million tonnes of CO₂, with only 0.8% of energy coming from biofuels. This is a sector that requires urgent transformation - technological, regulatory and infrastructural.

Decarbonization of shipping requires the expansion of port infrastructure – both for distribution, storage and bunkering of new fuels. LNG will soon become the preferred fuel for water transport, which will be gradually supplemented with a growing share of bio-LNG, which is confirmed by analyses of the propulsion systems of vessels already produced in global shipyards.  

Share of final energy consumption in waterborne transport in the EU, 2023

^{Source: Eurostat, PwC's Analysis}

Rail transport generates only 0.3% of CO₂ emissions in the transport sector, making it the greenest form of mass mobility in the European Union. Thanks to the high level of electrification - 73% of the energy consumed by the railway comes from electricity - the railway already meets many climate goals that remain a challenge for other modes of transport.

At the end of 2023, 57% of railway lines in the EU were electrified, an increase of more than 40% compared to 1990 levels. The European Commission plans to double freight transport by rail by 2030 and triple the length of high-speed rail (HSR) lines by 2050. These are strategic investments that are to make rail the backbone of an integrated, low-emission transport system in Europe. 

Rail emits 75% less CO₂ than road transport and significantly less than aviation. However, full decarbonization of railways requires not only electrification, but also power from zero-emission energy sources.

Evolution of final energy consumption in EU rail transport, 1990-2023 (PJ)

^{Source: Eurostat, PwC's Analysis}

The European Union has set an ambitious goal of reducing CO₂ emissions by 90% by 2050. Each branch of transport – road, air, water, and rail – faces unique technological, regulatory and investment challenges.

• Road transport accounts for 73% of the sector's emissions and requires widespread implementation of electromobility and the expansion of charging infrastructure with a short-term supported of biofuels.

• There is still a lack of cost-effective solutions to reduce emissions in air transport.

• Waterborne transport needs urgent investment in port infrastructure and alternative fuels, led by LNG and its bio equivalent.

• Rail transport already meets many climate goals, shifting the burden of decarbonization to the energy sector that powers it. 

The PwC report shows that there is no single path – effective decarbonization requires an individual approach, cross-sectoral cooperation and strategic investment decisions.