The Clock is Indeed Ticking: Getting to Zero Emissions by 2050

Norfolk Southern

Railway Track & Structures, August 2024 Issue: One of the most thorough and worthwhile analyses on the outlook for railroads to achieve zero emissions within the next 25 years was published on the Railway Age website news feed on July 16. The title is “The Clock is Ticking: Railroads and the Net-Zero 2050 Goal,” and was prepared by Jason Kuehn, a Vice President at Oliver Wyman, one of the world’s leading management consulting firms. I’m not generally given to praise consulting firms, but Oliver Wyman is a good one. In Jason Kuehn’s case, he is a former railroader, has deep industry knowledge, and is an excellent analyst of the current rail environment. 

One of Jason’s key messages is the opening sentence of his piece: “The Class I railroads set ambitious goals to reduce greenhouse gas (GHG) emissions in the past 5-10 years, but a review of recent data shows mixed progress at best.” Kuehn says that railroads’ goals were set, most likely, on a continuing trend of fuel efficiency to improve by 1% per year, along with more rapid development of bio-based diesel fuels, neither of which have occurred.

            Kuehn points out that this lack of progress puts a black cloud over expectations of net zero emissions by 2050, giving advantage to the to the trucking industry, which has a much shorter replacement cycle for trucks (3-5 years) compared to 20-25 years for railroads. For various reasons, railroads have been rebuilding locomotives instead of buying new ones, and Kuehn shares the startling fact that only 137 new locomotives have been built during the past five years. He adds that things which drove increasing fuel efficiency and reduced emissions in the last decade have essentially maxed out.

            The Association of American Railroads (AAR), Kuehn says, favors hydrogen as the fuel of the future to meet net-zero standards by 2050. One thing that you don’t often see in discussions about zero-emissions is emphasis on what it will require to build a network of storage, distribution, and point of delivery for an alternative fuel like hydrogen. Kuehn aptly compares the work required to do this with the effort required to transition from steam locomotives to diesels in the late 1940s-50s. When folks address new network needs, they lament the cost and time required to do this yet may forget that the same effort was required when railroads moved away from steam. 

            Kuehn continues the piece by discussing methods for transitioning to an alternative fuel and likens the process to the moon shot, in the sense that each step from sending satellites in space to orbit the Earth to a crewed landing on the moon in 1969 was required to achieve the goal.

            Using the implementation of PTC as an example, Kuehn says “Initially, in the early 2000s, federally mandated PTC implementation was going nowhere fast until railroad CEO leadership got involved and built consensus; then, things started to happen . . .” He adds that “we believe something similar must happen with hydrogen, or any other alternative fuel choice, for the industry to meet a net-zero 2050 goal.”

From my point of view, while the railroads have set goals for net-zero emissions, it’s best not to approach fuel conversion the same way PTC implementation went after the 2008 mandate in the Rail Safety Improvement Act. Please know that I’m not being critical here. Railroads were handed an unfunded mandate to develop hardware and software technology that didn’t exist, which was extremely expensive and complex. The original mandate deadline was December 31, 2015. Now, I don’t know whether the railroads required more time than this to develop and implement the technology or if the pace of work during the first five years was not as fast as it could have been. Kuehn seems to think the latter. Even if it wasn’t, one can’t blame the railroads for taking some time to ponder a project that seemed as lofty as figuring out a way to change the direction of Earth’s orbit around the sun. 

            As the 2015 deadline approached, the U.S. Government and the railroad industry geared up for a big game of chicken. The Federal Railroad Administration held firm in its position that the industry must meet the 12/31/15 deadline or they would levy heavy daily fines on the railroads for every day they operated without PTC starting in 2016. The railroads came back with the response of “OK, PTC is not ready, so if you’re going to fine us, we simply won’t run trains over the lines and segments of the railroad that require PTC.” The government finally blinked and extended the deadline to December 31, 2018 with the stipulation that if a railroad could demonstrate that it had made good, measurable progress toward implementation, it could have until December 31, 2020 to complete implementation. In effect, this gave the railroads an additional five years to install PTC. I expect the pace of work during the last five years was much faster than during the first five years, although, the railroads had built enough knowledge in the intervening years to complete the work more quickly. Most railroads implemented PTC on December 31, 2020.

            I bring this up because we shouldn’t have a “last few years” rush to meet emissions goals. One reason is that regulations are likely to tighten as time goes by and tension between railroads and regulators will grow. Another is that most everyone agrees that climate change is real and we’re already seeing some spooky issues occurring, like polar ice melt, which reduces wildlife habitat and causes sea levels to rise. The prevalence and ferocity of storms throughout the year seems to be increasing, which is not good for anyone. Time to get going. As Kuehn says, the clock is ticking.