New greener fuels could punch low-carbon ticket for rail operators

The green transition in Canada’s railway sector is set to make a leap forward in the coming decade as lower-carbon and alternative fuels enter mainstream use to help cut locomotive emissions, says a senior industry official.

Railways' “emissions intensity” – measured by greenhouse gases (GHGs) released per tonne per kilometre – has fallen by nearly 27 per cent since 2005 for freight, and by 28.1 per cent for intercity passenger trains, the Railway Association of Canada (RAC) said in its latest Locomotive Emissions Monitoring (LEM) report.

But a further drop, which has come mainly from replacing older locomotives and rolling stock with multi-billion-dollar investments in new, higher-efficiency equipment, will rely on lower-carbon and alternative fuels, said RAC economics, data, and research manager Jonathan Thibault, lead author of the LEM report.

“Rail has been getting more efficient, greener every year, as has been evidenced in the data,” he said, referring to efforts to reduce emissions and air pollution under a monitoring agreement agreed with Transport Canada in 2018.

Canada has one of the world’s largest rail networks, transporting a wide range of commodities and industrial goods coast-to-coast and south of the border. Via Rail, the country’s passenger rail provider, carried some 4 million travelers last year.

Decarbonizing the railway system – which accounts for 1.0 per cent of Canada’s GHG emissions and 3.6 per cent of the transportation sector’s carbon footprint - has so far relied heavily on retiring older locomotives and improving overall fleet fuel efficiency.

In 2022, nearly a quarter of the $2.4 billion invested in rail networks went to new locomotives and rolling stock. That year, nearly 85 per cent of the active fleet met emissions standards, up from about 68 per cent five years earlier.

The rail industry and Transport Canada recently agreed a new five-year memorandum of understanding that will shift focus to new technologies rather than on the annual efficiency improvements that slashed emissions intensity in the past decade.

“The consensus through the negotiations is that we need to work together to advance the adoption of a low-carbon fuels ecosystem,” Thibault told Canada’s National Observer.

“Renewable fuel blends are a critical component to further emission reductions,” he said, noting that a 100 per cent biodiesel was undergoing operational tests in British Columbia.

Riding the hydrogen-powered rails

Beyond alternative fuels, the rail industry has launched several potentially market-changing pilot projects focused on zero-carbon technology.

Canadian Pacific Kansas City (CPKC) last month completed the first phase of testing of a high-horsepower hydrogen locomotive that pulled 152 loaded gondola cars from Sparwood to Golden in British Columbia.

The trial run was an important milestone in “advancing our hydrogen locomotive program and steering the industry towards a low-carbon future,” said CPKC’s Kyle Mulligan, assistant vice-president of operations technology.

CN Rail in 2021 announced plans to buy its first battery-electric locomotive from U.S.-based Wabtec as part of a pilot project to reduce fuel consumption and emissions. 

“Even once these technologies are proven,” Thibault cautioned, “there is an industrial ecosystem that has to be built to support them -- from the locomotive manufacturers to a network of supporting infrastructure.”

Canada’s railway sector has not set a shared net-zero target like some other industries. Instead, CPKC, CN Rail and Via Rail – which run the class 1 network responsible for the bulk of railway-related emissions – have turned to science-based targets to guide their ongoing decarbonization.

CPKC and CN Rail are members of the Science Based Targets initiative (SBTi), an international body advocating global emissions reduction targets aligned with climate science, and along with Via Rail, the three companies have set separate 2030 emissions reduction targets of between 30-45 per cent, depending on the base year.

“These targets will ensure adoption of lower-carbon fuel blends across the sector,” Thibault said. “This is where we are going to be seeing a lot of the improvements” in railway-based emissions.

CN Rail was among 41 publicly-listed companies assessed on their net-zero pledges in February by Climate Engagement Canada, a finance sector-led group that engages with companies to accelerate the transition to a low-carbon economy.

While the operator received passing grades for setting a net-zero target with medium- and long-term commitments, it came up short for its overarching decarbonization strategy, environmental governance and climate-related disclosures, and received a failing mark on aligning its capital spending to net-zero targets.

Beyond its GHG emissions, the industry has also faced scrutiny over air contaminants released during rail operations and expansion projects.

Since 2005, the LEM report said the rail industry’s air contaminant emissions had decreased for nitrogen oxides (48 per cent), particulate matter (61 per cent) and sulphur dioxide (99 per cent).  

Nevertheless, public concerns persist. Construction of CN Rail’s $250 million logistics hub in Milton, Ont. was temporarily halted by a federal court in March amid community concerns over the impact on air quality from additional rail lines and trucks serving a container terminal. 

Trains vs trucks

Over the next decade, rail operators are likely to make decarbonization a key argument in their efforts to grab market share away from the trucking industry.   

Moving just 10 per cent of trucked freight onto trains would save 4MT of carbon emissions a year, against a backdrop of a total of just over 700MT of CO2 released nationally, according to RAC calculations.

“Getting freight off the road onto the rails would create a massive reduction in GHG emissions,” he said, noting that 99 per cent of truck traffic involves trips of more than 25 kms.

“Not all of it is ready to shift to rail, but there is a big share that is,” he said.