Transportation costs

Of all the sectors of global energy use, renewable energy currently contributes least to the transport sector. Renewables accounted for only 4% of energy consumption in the transport sector in 2016.

Virtually the entire contribution of renewables to the transport sector currently comes from conventional biofuels derived from grains, oil crops or other feed crops. Advanced biofuels – which are not dependent on volatile food-related feedstock prices like conventional biofuels – are just starting to be produced at commercial scale and have tremendous potential. Plug-in hybrid and battery electric vehicles are also beginning to be deployed in commercial quantities with global stock surpassing 2 million vehicles in 2016.

As a result, despite the early stage of deployment for advanced biofuels and electric vehicles, IRENA’s study, Road Transport: The Cost of Renewable Solutions, presents an increasingly positive outlook for the use of renewable energy in road transport to 2020 and beyond. The analysis shows that plug-in hybrid and pure electric vehicles, advanced biofuels and biomethane for transport could be competitive against fossil fuel transport options by 2020 in an increasing number of market segments, provided supportive policies are enhanced and expanded.