Modernization: Engine for Decarbonizing Heavy-Duty Transport

When people talk about reducing pollution rates, images of cars and trucks spewing smoke into the environment often come to mind. Although it is not the only factor or the main contributor, finding a way to reduce pollution in transportation is a key to achieving decarbonization goals, which is why vehicle renewal is positioned as an urgent, viable, and high-impact strategy.

As I have mentioned in the past, Mexico's heavy-duty transport vehicle fleet is facing a structural problem due to the high age of many units.  Recall that the average age of the fleet of heavy vehicles registered with the Ministry of Infrastructure, Communications and Transport (SICT) is just over 19 years old – this only for units registered with federal plates, but it is estimated that units registered at the state level are even older given the greater regulatory flexibility existing at this level. This implies not only higher fuel consumption and emissions, but also a risk in terms of road safety, operational efficiency, and maintenance costs.

This reality contrasts with the technological advances available in the market. Today in Mexico, there are units that comply with international standards, such as EPA'10 or EuroVI, which can reduce at least 90% of particulate matter and nitrogen oxide (NOx) emissions compared to the average technology currently in circulation, which are EPA'98 and EuroIII diesel engines. However, the lack of access to competitive financing and effective public policies has limited the massive adoption of these technologies.

And here I am only talking about replacing an old diesel unit for a new diesel vehicle, but we also have natural gas, hybrid, battery electric, and fuel cell (hydrogen) technologies in the market. In these cases, the availability of fuel/energy for these units is very important to make them a real option.

Renew = Decarbonize, and More

Vehicle renewal should not only be understood as a vehicle fleet modernization exercise, but also as a strategic public policy tool for climate and economic policy – and an investment. Replacing obsolete heavy vehicles with new, cleaner, and safer units would significantly reduce emissions in the sector, while also improving air quality, which would result in better health for the inhabitants of this country by reducing the number of patients with chronic respiratory diseases.

The environmental impact is direct. We have already mentioned that renewing a single EuroIII unit (average technology) for a EuroVI represents a reduction of at least 90% of emissions in particulate matter and NOx. Adding the reduction in hydrocarbons, carbon monoxide, and carbon dioxide, multiplied by thousands of units, would represent a significant contribution to the goals established in the Paris Agreement and the General Law on Climate Change.

In addition, vehicle renewal generates important collateral benefits:

• Reduces road accidents by providing heavy vehicles with more modern safety devices 

• Increases energy efficiency, which translates into fuel savings

• Improves air quality, especially in logistics corridors and urban areas

• Promotes domestic industry, since many of the units produced in Mexico meet high environmental and safety standards

What Should an Effective Renewal Program Include?

For a vehicle renewal program to be successful, it must include several of the following key components:

Clear rules: Knowing what and who can participate in the program, how much they can get for the unit, units they can purchase, and from whom.

Economic and financial incentives: It is essential to establish accessible credit schemes, preferential rates, bonuses, and direct subsidies for the destruction of old heavy units. The cost of a new unit may be unaffordable for thousands of small haulers and truck drivers, who make up the bulk of the sector.

Validation: Verification and approval by the authority so that the carrier can start its process, and the assembly plant and/or distributor can deliver the most modern unit with the confidence that it will receive the bonus since it is being delivered to an already approved carrier.

Effective destruction: The renewal must be accompanied by the verifiable destruction of the replaced unit, to avoid its informal resale and guarantee a real environmental impact.

Administrative simplification: Procedures should be streamlined, digital and provide technical support for beneficiaries. Previous experiences show that bureaucracy can slow down even the best programs.

Public-private collaboration: OEM’s, financial institutions, state governments, and the federal government should work in a coordinated manner to scale the benefits of the program.

Lessons Learned and Opportunities

Mexico has implemented vehicle renewal programs in the past, but with limited results due to lack of budget, institutional design, clarity, or continuity. Today, with the nearshoring drive and the need to strengthen national logistics, it is the ideal time to relaunch an ambitious program, with a comprehensive vision and clear goals.

Both local and foreign experiences can be considered, but it is very important to tropicalize them and adapt them to our reality. Whether the vehicle is for passenger or cargo, for city or highway makes a difference.

The Future of Heavy Mobility Is Clean

The heavy transport industry is and will continue to be fundamental to the country's economic development. The sector transports more than 80% of goods and connects millions of people. However, it cannot continue to operate with vehicles from the last century in the context of the challenges of the 21st century.

Decarbonization is not utopian, it is necessary. And vehicle renewal is not an expense, but an investment with environmental, social, and economic returns. With political will, institutional coordination, and long-term vision, Mexico can lead a fair and efficient transition to cleaner and more modern heavy transport.