Status quo of heavy-duty road transport
Road freight is responsible for approximately 40% of road transport’s total energy consumption. It is expected that energy use for heavy-duty trucks will rise to 25% by 2035, accounting for 80% of the growth in energy demand in the road freight sector.
Heavy-duty trucks and buses are key modes of transport that play a vital role in the global economy, especially for freight and passenger transport. A schematic overview of the different categories for heavy-duty trucks can be found in Figure 7.1. As can be seen, heavy-duty trucks come in different configurations and cater to different sectors, depending on design and efficiency profile. More than 80% of rigid heavy-duty vehicles have a daily mileage of less than 500 km, and approximately 80% of tractor trailers travel less than 600 km of daily – a distance that can already be covered by a single charge in new vehicles.
Note: GVW is the gross vehicle weight, LD is light-duty, MD is medium-duty, HD is heavy-duty.There are different categories of bus. City buses are passenger vehicles that have a gross vehicle weight (GVW) above 3.5 tonnes (t) and are used only in urban contexts. Inter-urban buses have a similar profile to city buses, but are also used in regional settings. Coaches are buses that are used primarily for regional transport.
Heavy-duty trucks and buses together account for 8–9% of global vehicle stock,
Despite the current predominance of fossil fuels, the decarbonization of the road transport sector is approaching a turning point. Driven by technological progress and growing regulatory and market pressures, it is set to accelerate in the coming years. The growth in zero-emission vehicles is due to the increasing penetration of clean energy sources in energy systems, along with technological cost competitiveness and efficiency. The other driver for the adoption of sustainable trucks and buses is their competitive total cost of ownership compared to fossil fuel variants.
While zero-emissions heavy-duty vehicles are progressively increasing in market share, there have also been efficiency improvements to those heavy-duty vehicles currently on the road. For instance, the emission intensity (gCO2/t km) of new trucks decreased by around 14% from 2019 to 2022, in part due to efficiency measures, operational improvements and an increase in biofuels in the fuel mix.
The increasing availability of electric truck models, as well as their improved range coverage and performance, is opening the door for long-distance transport, resulting in surging sales across markets. In 2024, global electric medium- and heavy-duty trucks sales surpassed 90,000 units (representing a year-on-year growth of 80%). China accounted for 80% of global sales, which has been ascribed to that country’s introduction of purchase incentives, a fall in battery prices, and an on-going vehicle scrappage scheme.
In 2024, approximately 70,000 electric buses were sold, representing a year-on-year growth of 30%. This was largely driven by growth in China (70%), Europe (15%) and Latin America (almost 40% of sales outside of China and Europe).
Decarbonization pathways for heavy-duty road transport
With rapid urbanization, especially in emerging and developing economies, it is projected that demand for freight and bus services is likely to increase. Therefore, the rapid deployment of zero-emission heavy-duty vehicles powered by clean energy sources is essential to reducing dependence on fossil fuels. Key drivers that can complement the deployment of sustainable variants include but are not limited to energy efficiency standards to reduce GHG emissions, incentives to improve air quality, and public procurement to generate demand for new, innovative products and services. These drivers can promote climate and societal benefits in parallel across economies, if implemented correctly.
In the short to medium term, the transport sector’s carbon footprint can be reduced by introducing and/or complying with stringent efficiency standards for trucks and buses. But, whereas such standards can be ratified in the short term, the effects will not become evident until the medium and long term. For example, the EU’s CO2 emission standard requires heavy-duty fleet manufacturers and operators to achieve a 15% and 45% emission reduction by 2025 and 2030, respectively (compared to 2019–2020 levels). The EU’s Vehicle Energy Consumption Calculation Tool (VECTO) is designed to simulate fuel consumption for heavy-duty vehicles.
To further reduce freight transport energy intensity, rail and shipping should be considered as options. According to IRENA’s central models, electrification is an important means of addressing energy demand in scenarios that comply with international efforts to limit global warming to 1.5°C. Electrification of end-use sectors (including transport) would need to have reached 30% and 52% by 2030 and 2050, respectively, under these scenarios.
Several of IRENA’s analyses have found electric trucks and buses to be the most attractive option for various reasons: their higher efficiency potential, greater market penetration, and the potential for harnessing broad synergies with battery-electric cars, which are at the forefront of the transport sector’s sustainability transformation. Such developments would also lead to a lower total cost of fleet ownership for electric variants.
For heavy-duty trucks, the deployment of electric variants is dependent on application, given that some duty cycles are more favorable to electrification. Duty cycles that have a combination of lower daily mileage, low speeds and defined routes are the easiest to electrify, because it is easier to plan charging, and the operator is able to install charging points at strategic locations (e.g., at the site returned to at the end of a delivery).
In regard to buses, electrification is the preferred decarbonization solution. This is because their operation is more predictable compared to heavy-duty trucks, given that schedules and routes are usually fixed, and therefore amenable to depot charging. Moreover, there are battery stocks available in the market that allow buses to complete a full day’s service (in an urban duty cycle) relying solely on an overnight charge, while providing a service comparable to their diesel counterparts.
Battery innovation and cost competitiveness are bolstering the case for the electrification of most forms of road transport. Between 2013 and 2025, the weighted average price of lithium-ion (Li-ion) battery packs declined 86% to USD 108 per kilowatt hour (kWh). The cost of Li-ion battery cells also fell below USD 74/kWh during the same period.
The energy density of some newly commercialized batteries has crossed the 500 watt-hours per kilogram (Wh/kg) mark and battery chemistry innovations, such as lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP), are increasing application options in the transport sector.
Continuous innovation in battery design is viewed by the truck and bus industries as the most attractive option to accelerate decarbonization and reduce energy intensity. Battery cost competitiveness will continue to facilitate the widespread adoption of electric variants across regional markets.
While electrification is most certainly the future, there is still a large presence of trucks and buses powered by the internal combustion engine (ICE) that will remain in operation over the next three decades and will need phasing out as quickly as possible. Heavy-duty vehicles have lifespans of between 10 and 15 years, with some extending beyond 20 years, thus emphasizing the need for quick win solutions. One avenue toward reducing emissions from current ICE heavy-duty vehicles is the greater use of biomass-based substitutes in the short to medium term. Biofuel blending is the dominant policy option besides electrification for decarbonizing road transport (currently about 50 countries have regulations regarding biofuel blending).
In the long run, sustainable biomass usage should be prioritized when the application of electrification and other low-carbon alternatives is limited.
Beyond biomass, the use of hydrogen to power heavy-duty vehicles is being explored. According to the Global Drive to Zero platform, there were 68 hydrogen-powered heavy-duty vehicle models in service in 2026 (heavy-duty trucks, coaches, school buses, shuttle buses, and transit buses), up from 27 models in 2021. While the patent trends described previously demonstrate that innovation is happening in this space, the economics and learning curves of vehicles such as these lag far behind those of electric trucks and buses – thereby impacting their technical development. Renewable-based hydrogen could be prioritized in those sectors where the impact for decarbonization is significant, however, this is not truly applicable to heavy-duty road transport. There are cases where hydrogen-powered trucks (fuel cell variants) could be considered advantageous when ranges extend over 800 kms.
The decarbonization pathways available for heavy-duty trucks and buses are as follows, and are also summarized in Figure 7.3:
CO2 emissions reduction can be facilitated by robust efficiency and emissions standards mandated by national laws. Where there is strong demand for freight services there could be benefits beyond increased efficiency, by ensuring adequate sustainable infrastructure is available and/or moving toward rail transport, which can reduce energy intensity.
Battery-electric trucks and buses are the key driving force for decarbonization of the heavy-duty road transport sector. The cost competitiveness of batteries, as well as higher system efficiency (well-to-wheel), is the main reason for this trend. Focus now needs to be on the rapid deployment of charging infrastructure.
In the short-to-medium term, sustainable biofuels can be used to power ICE fleets, which should eventually be phased out to ensure a complete decarbonization of the sector.
Hydrogen-powered trucks and buses are an option; however, the economics argue against their suitability compared to battery-electric options. For hydrogen variants to reach scale there is a need for immediate massive infrastructure investments. This does, however, represent a risk, as battery-electric variants are currently the most competitive models attracting the greatest interest from investors. This could make current H2 transport infrastructure investments debatable due to potential under utilization.
Key infrastructure needs for electric heavy-duty trucks and buses:
Development frameworks to facilitate to rapid permitting for infrastructure projects, as well as interoperable standards for OEM components;
Fast-charging infrastructure, with slow charging offered at depots;
Expansion of new distribution grids and reinforcement of existing infrastructure;
Digital solutions for smart charging;
Battery-swapping facilities;
Provision of storage options at charging stations to reduce peak loads.
Mapping the enablers and tracking progress toward the decarbonization of the heavy-duty road transport sector
If current plans and policies are to be realized, a fifth of global heavy-duty vehicles sold by 2030 will need to be electric-powered. In the ICCT’s Paris 1.5°C compliant scenario, this would need to double to more than 40% of the global total.
Tracking progress: policies and regulation
Efforts toward the decarbonization of road freight transport have already begun, with wide policy measures and targets in place. Countries are setting quantitative targets for the sales of sustainable and zero-emission vehicles. According to the global “Memorandum of Understanding (MoU) on Zero-Emission Medium- and Heavy-Duty Vehicles”, 25 countries have pledged to introduce zero-emission trucks and buses by 2040. The overall ambition for signatories of this MoU is to facilitate the identification of pathways toward accelerating the deployment of zero-emission heavy-duty vehicles and associated infrastructure. The target is to ensure that sales of zero-emission HDV’s reach 30% by 2030, so as to enable a full transition to zero-emission medium- and heavy-duty vehicles (ZE-MHDVs) in new fleets by 2040 to facilitate the achievement of net-zero carbon emissions by 2050.
Targets are being announced in developing markets as well. For instance, Rwanda has committed to electrify 10% of all public buses by 2030, and Uganda’s 2024 E-Mobility Strategy commits to 100% electrification of buses by 2030.
To promote the adoption of zero-emission heavy-duty vehicles, major markets such as Canada, China, the EU, Germany and India, along with several national and regional governments, have begun offering purchase incentives. Major developments are especially evident in India, where, under the EV Scheme FAME I and II, the country has provided subsidies for the purchase of 7,500 electric buses between 2015 and 2024. In 2024, the country announced it would provide an additional USD 396 million in incentives to procure 38,000 electric buses for public use between 2024 and 2029.
Green public procurement legislation should be explored and governments lead guidance to facilitate the implementation of procurement principles. For example, the EU’s Clean and Energy-Efficient Road Transport Vehicles Directive stipulates that, when making purchasing decisions, consumer and businesses must take into consideration such factors as energy consumption, CO2 emissions and hazardous pollutants, so as to contribute to the bloc’s overall efforts to decarbonize the transport sector. In the case of electric buses, in Singapore, the government has taken the responsibility of covering all the costs associated with electric bus procurement. In 2023, it provided USD 124.3 million for the procurement of 360 electric buses and USD 34.4 million for the purchase of charging infrastructure at three bus depots.
Different economies are exploring the development and implementation of green public procurement legislation and guidance to support the implementation of sustainable procurement principles. This requires businesses and consumers to take into consideration such variables as energy consumption and hazardous pollutants in purchasing decisions, with the intention of making the bloc’s transport sector more sustainable.
Regulatory instruments, particularly standards for emissions reduction, are widely used by governments across economies to limit vehicle emissions. Such standards apply to CO2 and other greenhouse gases. A prominent example is the EU, where new CO2 emission standards have been introduced that set a 45% emissions reduction target for heavy-duty vehicles by 2030 compared to 2019 levels, increasing to 90% by 2040.
In the gradual phase-out of direct economic support measures for heavy-duty vehicle segments, adequate carbon pricing is pivotal to ensuring a level playing field and accelerating the shift to zero-emission vehicles. Germany’s revamped tolling system (Eurovignette) started in 2023, whereby trucks pay a CO₂ surcharge (EUR 200/tCO₂). Zero-emission trucks fall into the lowest emission class and incur no surcharge. In the Netherlands, zero-emission zones have proved to be a very powerful tool in promoting the deployment of electric heavy-duty vehicle (e-HDV) sales. Electric truck sales in the country grew by 188% in the first half of 2025, far outpacing the European average of 46%.
Tracking progress: technology, infrastructure and system operation
Emerging charging options are being explored by the transport industry to catalyze the electrification of heavy-duty vehicles. While there is an intense focus on developing overnight charging capacities for such vehicles, there is also a great deal of innovation going into developing rapid charging options to empower fleet operators in increasing the share of e-HDVs in their fleets – especially for regional and long-haul operations.
Several regional charging standards for heavy-duty trucks are under development and likely to be adopted internationally. In 2022, CharIN introduced the Megawatt Charging Standard that had 3.75 MW as a maximum power rating. The Standard was scheduled for adoption in 2024 in several regions globally,
Across economies there are dedicated policies focused on the deployment of charging infrastructure for heavy-duty vehicles. Emerging initiatives being spotlighted include the development of charging corridors, as well as an increase in the provisions of grants and subsidies directed at charging points. Europe is a leader on the policy and charging infrastructure side, as evidenced by the establishment of the Alternative Fuels Infrastructure Regulation (AFIR), with the objective of installing electric recharging stations with a minimum output of 350 kW for heavy-duty vehicles along the Trans-European Transport Network by 2030.
Advanced power system planning and grid management measures are being used to better understand charging requirements, while also catalyzing heavy-duty vehicle electrification. The introduction of storage capacity and the development of renewable energy corridors are viewed as significant enablers that complement the development of charging infrastructure corridors. Smart charging options can contribute toward grid cost reductions for infrastructure and electricity procurement. Power system flexibility is being enhanced by increasing the integration of vehicle-to-grid (V2G) technology by enabling electric trucks and buses to not only to draw power from the grid, but also supply electricity back to it (as a distributed storage asset). This can enhance grid stability, as well as offer potential new revenue streams for electric fleet operators.
Tracking progress: market conditions, business models and finance
Many heavy-duty vehicle manufacturers are prioritizing the decarbonization of fleets by setting ambitious electrification targets. Daimler Truck expects up to 60% of its European sales to come from EVs by 2030, while Volvo wants 50% of all global sales to be electric within the same time frame.
Industry initiatives have a significant potential to accelerate efforts toward the decarbonization of trucks and buses. Notable examples are the Road Freight Zero and the Smart Freight Centre’s Fleet Electrification Coalition, which are focusing demand aggregation of electric trucks to bypass the challenges associated with charging infrastructure. These initiatives are also exploring the development of innovative financing solutions for zero-emission trucks.
New business models are being introduced to tackle the high upfront costs associated with e-HDVs.
“Mobility as a service” is a business model applicable to buses and heavy-duty trucks, whereby transport operators can lease a transport modal for a defined period of time. For example, in India, this model is being used by state public transport operators to procure electric buses from manufacturers under a 12-year fixed-contract agreement. This framework allows bus operators to bypass the associated financial and fiscal risks that they would otherwise have to bear if they were to approach a manufacturer independently.
(71)IRENA (2025). Policies for Advancing the Renewables-based Electrification of Road Transport. Abu Dhabi: International Renewable Energy Agency. Available at: https://www.irena.org/Publications/2025/Jun/Policies-for-advancing-the-renewables-based-electrification-of-road-transport. “Pay-as-you-drive” (buses) is another business model in which transport companies can purchase an electric vehicle at a comparable cost to its diesel variant and participate in a subscription scheme. The subscription cost covers leasing the electric vehicle battery, charging services and overall vehicle maintenance.
(72)IRENA (2025). Policies for Advancing the Renewables-based Electrification of Road Transport. Abu Dhabi: International Renewable Energy Agency. Available at: https://www.irena.org/Publications/2025/Jun/Policies-for-advancing-the-renewables-based-electrification-of-road-transport. Scania has its own pay-per-use model providing clients with easier access to electric truck solutions and incentivizing companies to make the switch by eliminating the high upfront costs for adoption.(73)Scania (2023). Scania and sennder establish JUNA, a joint venture to drive large-scale electric truck adoption and accelerate decarbonisation of European road logistics. Available at: https://www.scania.com/group/en/home/newsroom/press-releases/press-release-detail-page.html/4675185-scania-and-sennder-establish-juna--a-joint-venture-to-drive-large-scale-electric-truck-adoption-and-. Broad leasing of zero-emission trucks and buses is also an effective business model that encourages uptake. The advantage of this model is that operators pay according to usage, thereby bypassing any upfront capital expenditure. The maintenance and depreciation risks are borne by the leasing company, encouraging operators to accelerate the integration of zero-emission variants into their fleets. For example, companies like WattEV (US-based) act as demand aggregators, purchasing e-trucks from manufacturers such as Volvo, BYD, and Tesla, capitalizing on available incentives and offering leasing options to carriers and shippers.
(74)ITF et al. (2025). Financing the Electrification of Heavy-Duty Vehicles, Available at: https://www.itf-oecd.org/sites/default/files/docs/financing-electrification-heavy-duty-vehicles.pdf. Battery-swapping is a potential model for enabling the efficient and cost-effective operation of electric trucks, given the rapid swap time. This model has not, however, gained widespread adoption due to the limited market penetration of electric trucks. This business model would also require the greater standardization of battery technologies and charging processes. One advantage of this model is the ability it gives to charge batteries in optimal conditions at swapping stations. Allowing batteries to be charged at off-peak times can support the power system flexibility of electrical grids.
(75)IRENA (2025). Policies for Advancing the Renewables-based Electrification of Road Transport. Abu Dhabi: International Renewable Energy Agency. Available at: https://www.irena.org/Publications/2025/Jun/Policies-for-advancing-the-renewables-based-electrification-of-road-transport. China currently leads the world in the deployment of battery-swapping infrastructure for heavy-duty trucks. Although upfront infrastructure costs, appropriate skills development and technical standardization remain challenges, battery-swapping has become a commercially viable solution in high-utilization, fixed-route freight segments, positioning China at the forefront of heavy-duty road transport electrification.Fleet management is another conduit for supporting the deployment of electric alternatives to heavy-duty trucks and buses. Analyzing factors such as vehicle use, route length and charging infrastructure availability can serve to inform bus and truck operators when determining the best vehicle technology to deploy for different routes. By including fleet management in policies, there is an opportunity to facilitate the adoption of electric heavy-duty trucks and buses.
(76)IRENA (2025). Policies for Advancing the Renewables-based Electrification of Road Transport. Abu Dhabi: International Renewable Energy Agency. Available at: https://www.irena.org/Publications/2025/Jun/Policies-for-advancing-the-renewables-based-electrification-of-road-transport. Utility-led process improvements such as GridFAST, which decrease costs and speed up interconnection for fleets, and eRoadMAP, which confidentially shares a fleet’s electrification plans with utility regulators and grid planners to swiftly and cost-effectively upgrade the grid when and where needed, are two examples of tools connecting power system operators with fleet operators.
If financing and de-risking instruments are leveraged correctly, they can greatly catalyze the deployment of zero-emission heavy-duty vehicles. Several multilateral banks are supporting the introduction of sustainable trucks and buses. In 2024, the World Bank started financing loans to support the procurement of electric buses, as well as chargers and maintenance services, in Cairo.
Supply chain, skills and stakeholder engagement
Multilateral and international organizations play a critical role in helping industry and community stakeholders identify ways to make the transport sector sustainable. Electrification is gaining significant interest in the dialogue between industry and community stakeholders. IRENA’s Collaborative Frameworks (CF) offer a platform that allows Member States to interact with the public and private sectors and discuss how to accelerate the energy transition. The transport sector is prominently featured in the Collaborative Frameworks focusing on Just and Inclusive Transition, Critical Materials, Green Hydrogen, and Geopolitics.
To support the deployment of electric trucks and buses, governments and industry players are allocating resources and developing upskilling programs for the existing workforce, as well as developing initiatives to attract new talent across several regions. This is essential primarily for the installation and maintenance of charging infrastructure, fleet operations optimization, servicing and EV recycling. The US Environmental Protection Agency’s Clean Heavy-Duty Vehicles Program offers grants to organizations that want to train their workforce in the maintenance of new vehicle types, as well as undertake charging infrastructure installation certification under the Electric Vehicle Infrastructure Training Program.
Despite the progress across the various enabling dimensions discussed above, the current pace of adoption of electric trucks and buses is slower than what is needed to achieve Paris Agreement-aligned climate targets. Under IRENA’s 1.5°C scenario, EVs should comprise nearly two-thirds of the heavy-duty vehicle stock by 2050.
This section has considered the progress of the heavy duty transportation – trucks and buses – in terms of the enablers mapped by IRENA across each of the enabling dimensions, as well as highlighting the bottlenecks in this sector.
The following sections list the key actions that governments and industry stakeholders could implement to foster the deployment of zero emission trucks and buses, while also contributing to the achievement of broader national and global climate targets.
Reflections and recommendations to accelerate the transition
Reflections on the WIPO and IRENA analysis
WIPO and IRENA have leveraged patent data, and technological and market trends, to highlight net-zero trends in the heavy-duty truck and bus transport segments. Operators using trucks and buses to meet freight and passenger requirements face two major challenges: the implementation of decarbonization solutions and driver shortages. Digitalization offers an opportunity to address both challenges, though it also poses a threat, since the industry is heavily paperwork-reliant worldwide. These pressures are pushing the road transport industry to revolutionize its operation in a shift away from the thoughtful evolution of incremental optimizations that has defined current practices. Road transport is the backbone of modern economies, with any operational disruption representing a significant market risk.
The concepts that will define the adoption of sustainable trucks and buses to meet economic and client needs are the total cost of ownership and capacity. The major bottleneck is one related to the total cost of ownership (TCO) – namely, capacity pairing.
While the TCO of zero-emission vehicles is sometimes lower than for diesel vehicles during first ownership, their higher retail prices require companies to mobilize greater capital, thereby delaying the transition. This is particularly difficult when freight rates are expected to remain constant across powertrains, and interest and insurance rates remain high, and questions about zero-emission vehicle residual values create uncertainty for banks with regard to the financing of the transition.
Regarding capacity, zero-emission vehicles can only operate if they have access to energy. Public infrastructure remains too weak, is poorly adapted to heavy-goods vehicle dimensions and weights, and too expensive to create a favorable TCO. Private infrastructure is growing stronger, but carriers still experience significant delays in setting up depot chargers and accessing a grid that has adequate power. Moreover, private infrastructure is limited to operating the shorter range of zero-emission vehicles, making long-range and international operations difficult without partnerships.
The crucial question to be answered is “Will there be a vehicle available at the right place and time, and at the right price?” The analysis conducted in this report demonstrates that technological innovations are gaining both traction and interest across several markets. Fossil fuel-powered vehicles have set a strong benchmark for zero- and low-carbon technologies to replicate and meet going forward. Global transport operators are evaluating the carbon reduction potential of greener energies with pragmatism.
This joint analysis by IRENA and WIPO shows that the decarbonization of heavy-duty vehicles will leverage a combination of greener powertrains and greater operational efficiency. The most anticipated solutions focus on electrification, given the rapid advancements being made in this area. Biofuels, carbon-neutral fuels, and hydrogen are alternative decarbonization pathways, with varying degrees of expectation. From an efficiency point of view, efforts are focused on improving driver performance, improving fleet efficiency through more energy-efficient vehicles replacing older ones, and more efficient logistics to reduce the number of empty miles and increase vehicle occupancy rates. The adoption and integration of new digital technologies can help in better understanding current operations before optimizing them, and in facilitating communication among multiple stakeholders. This deeper understanding will maximize the potential of existing technologies and practices to lower carbon emissions – the potential for efficiency-driven decarbonization is enormous.
Recommendations
Accelerating sustainability efforts within the heavy-duty road transport sector is a conduit that can greatly contribute toward the decarbonization of the global transport industry. This in turn can have positive spillover effects on other aspects of the energy transition. Considering the analysis and perspective that have been presented in the report thus far, an overview of targeted and actionable recommendations to decarbonize heavy-duty vehicle under each enabler is presented below. These recommendations are presented for the consideration of policymakers, transport associations, and industry representatives in pursuit of effective policy and financial frameworks for this category of transport.
Policy and regulations
A supportive policy environment is required in order to accelerate massive investments into technology and infrastructure for heavy-duty vehicles in the coming decades. A robust regulatory framework is crucial in order to give developers and investors the confidence to make final investment decisions based on clear, stable and credible decarbonization objectives.
Recommendation: Establish specific and binding decarbonization targets able to accelerate and complement policy initiatives for green public procurement and fiscal support.
Governments are in the best position and have most capacity to catalyze decarbonization of the heavy-duty road transport sector by setting long term and specific targets. Such targets should be discussed and formulated together with private stakeholders and industry associations. Targets, when reflected in government policy and legislation, are an important tool for signaling intent. They give technology providers and investors the confidence to accelerate innovation activities in regard to sustainable transport and facilitate the introduction of new products and services to existing markets. Targets backed by scenarios and plans can be useful in highlighting compatibility with other sectors and trade-offs in order to secure more buy-in for targets and policy initiatives.
Public procurement of sustainable transport options where public and state-owned enterprises purchase goods and services from the private sector can ensure competitive pricing, as well as accelerate the deployment of solutions at scale. Such initiatives can also drive tangible progress toward achieving transport decarbonization targets. Notable initiatives such as the EU’s Clean and Energy-Efficient Road Transport Vehicles Directive, as well as Singapore’s investments into expanding public electric bus fleets, are examples demonstrating the importance and benefits of public procurement. Another untapped opportunity lies in public tenders for products or services requiring heavy-duty road transport and logistics.
Robust policy and regulatory frameworks can allow greater access to finance, which is a catalyst toward the adoption of sustainable trucks and buses. The combination of government subsidies with the aggregation of sustainable truck and bus procurement can further reduce upfront costs – as has been proven for electric variants. Active efforts by governments to ensure that sustainable trucks and buses are eligible for reductions in taxes or tariffs is another enabler to drive adoption of these models. Ireland’s Zero Emission Heavy-duty Vehicle Purchase Grant Scheme and India’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles are examples of how governments can address fiscal barriers to the adoption of zero-emission vehicles.
Technology and infrastructure
The development of resilient and diverse renewable energy supply chains is a key pillar of transport sector decarbonization. Economies are increasingly requiring a scale-up in renewable power generation capacity to cater either to direct electrification or produce green hydrogen/clean synthetic fuels. The latest IRENA analysis has found that, in 2025, a record 692 GW of capacity was installed, but that this needs to reach 1,043 GW per year to comply with a 1.5°C scenario. Furthermore, there is a strong impetus toward a scale-up in investments into power grids and enabling infrastructure at all levels (i.e., in transmission and distribution, including EV charging infrastructure), which can accelerate the application of smart electrification strategies to transport and power grids.
Recommendation: Catalyze the deployment of critical infrastructure and innovative technologies. There should also be priority given to ancillary considerations such as standardization and accelerated permitting.
Governments can support transition in the transport sector by strengthening cross-sectoral infrastructure planning and international coordination in the deployment of fast charging public infrastructure (MW scale), storage depots, battery swap facilities, and sustainable fuel terminals. Fleets could also confidentially share 1–5-year planning data with utilities and regulatory bodies to the cost-effective upgrade of the grid at critical locations and during the time needed.
Multilateral development banks can support the financing of zero-emission vehicles by offering concessional loans in cooperation with public transport authorities and national development banks. Working with the private sector to establish mechanisms for providing funding can facilitate the uptake of zero-emission heavy-duty vehicles. Leasing companies could also serve as intermediaries for receipt of the funding and in so doing act as demand aggregators.
Along with the deployment of critical infrastructure to power sustainable truck and bus variants, there is also a requirement to standardize the common design and operational requirements of ancillary infrastructure assets to ensure harmonization and broader market access to products and services across geographies. This is particularly true in regard to the infrastructure requirements for electric trucks and buses, whose charger and charging systems are not standardized. The design of these two crucial components is currently driven by individual manufacturers and thus could hamper the large-scale adoption of electric trucks and buses.
Electrification is the leading decarbonization pathway for heavy-duty vehicles (as confirmed by patent data trends). There should therefore be an emphasis on more research and innovation into new battery chemistries, such as lithium ferro phosphate, lithium manganese iron phosphate and sodium-ion batteries, which all have higher energy capacity and lifecycle stability when compared to current technologies available. There is also new and efficient charging infrastructure (such as MW chargers) that should continue to be deployed at strategic locations to maximize route efficiency for trucks and buses. Governments should provide regulatory and financial support to boost research and development in these technologies.
Besides regulatory and financial, the development of national and regional capacity/ecosystems for research (e.g., institutions such as NREL, EPRI, Fraunhofer, CSIRO) is crucial in supporting the identification and deployment of green innovations into markets.
Business models
Decarbonization of the heavy-duty road transport sector offers new business opportunities to private and industry stakeholders. Some options gaining in popularity include pay-as-you-go, truck-as-a-service, battery-as-a-service, and fleet aggregation. These business models offer economic benefits across different strata of society, facilitating a just and inclusive transition.
Recommendation: Develop new initiatives designed to spotlight green alternatives for heavy-duty trucks and buses. These initiatives should also catalyze new business models.
Governments can work together with the private sector and industry to develop targeted programs designed to increase the market share of sustainable transport products and services. For small fleet operators, focusing on demand aggregation initiatives can support positive market initiatives, as well as enable government and industrial actors to collaborate in shaping manufacture. For example, the Global Drive to Zero coalition is an international initiative that works with governments and industry leaders to promote the adoption of zero-emission vehicles, particularly buses and trucks.
Government and private sector players should explore the development of new business models to facilitate the adoption of sustainable trucks and buses. One example is “mobility as a service”, a model wherein state operators purchase vehicle fleets that are then offered as a service to operators, thereby reducing financial risks. Another popular option is “pay as you drive” wherein companies acquire vehicles at a cost comparable to diesel variants. Companies can then charge operators a subscription fee based on kilometers driven.
Battery-swapping is a potential business model that can support the increased electrification of trucks and buses. The availability of optimally-charged batteries at dedicated depots is the core business mechanic of this model, and can address the challenge of the long charging time required by the batteries for these vehicles. Furthermore, the standardization of battery design and chargers will be a crucial enabler supporting the development of a battery-swapping business model.
Supply chains and skills development
As the heavy-duty road transport sector continues its journey toward phasing out legacy fossil-based technologies and replacing them with green technologies, it is inevitable that global, regional and national transport supply chains will need to be reimagined and made more resilient. The technologies that underpin this sustainable transition rely on different parameters, the most crucial of which is access to critical minerals. Hence, ensuring supply chains are equitable rather than monopolistic will be crucial as this shift continues. There will also be a concurrent requirement for the development of a skilled workforce able to manufacture and utilize innovations to their full potential.
Recommendation: Facilitate international collaboration, as well as the development of a skilled global workforce.
Strategic alliances and South–South cooperation will be crucial in addressing technical and economic barriers, as well as in enabling a more rapid deployment of new green transport projects and initiatives. Countries can work together to accelerate an international convergence in definitions, standards, thresholds and certification procedures to enable the international trade of these technologies.
(88)IRENA (2024d). Global Trade in Green Hydrogen Derivatives: Trends in Regulation, Standardisation and Certification. Abu Dhabi: International Renewable Energy Agency. Available at: https://www.irena.org/Publications/2024/Oct/Global-trade-in-green-hydrogen-derivatives-Trends-in-regulation-standardisation-and-certification. Maximizing international collaboration is also crucial if technology monopolization is to be avoided, as well as the introduction of resilience/alternative mechanics into the new supply chains that will likely emerge.Government will need to play a leading and convening role in the development of the knowledge and skills necessary to facilitate the transition for heavy-duty vehicles. Key activities for government to facilitate include exchange of the latest innovations together with guiding financial resources toward the development of specialized educational programs and training.
There is a growing necessity to adopt a multilateral collaborative approach, with leaders from national governments, international organizations, industry stakeholders and educational institutions working together to foster a world-class global workforce in the transport sector. The development and availability of specialized laboratories and institutions for the conducting of research and innovation activities in this area would also be a useful complement to skills development programs.
Deployment pathways for zero-emission trucks
In 2025, the World Economic Forum’s First Movers Coalition, in collaboration with Deloitte, interviewed several logistics providers who highlighted that the decarbonization of medium- and heavy-duty trucking – responsible for around 5% of global CO₂ emissions – sits at the intersection of technology progress, infrastructure readiness and capital deployment.
In particular, it emerged from interviews that, as battery-electric and fuel cell vehicle capabilities improve, grids strengthen and diesel regulations tighten, the transport sector is moving from strategic ambition to operational implementation. However, while adoption is accelerating, it remains at an early stage, and for many demand-side actors the challenge is increasingly systemic rather than technological.
Three recurring bottlenecks have been identified. The first relates to infrastructure versus timeframe: hydrogen refueling and electric charging infrastructure deployment, as well as grid upgrades, remain fragmented and slow, relative to corporate decarbonization targets, creating a persistent chicken-and-egg dynamic between fleet procurement and infrastructure investment.
Second, even when the infrastructure is in place, operations often determine the economics. Total cost of ownership parity is highly sensitive to consistent vehicle utilization, with idle assets quickly eroding expected savings. According to logistics actors, a powerful near-term lever for improving utilization is not necessarily new hardware or connectors, but operational orchestration. In practice, this involves coordinating when, where and how trucks charge in order to reduce peak demand, minimize waiting times and lower per-kilometer energy costs. Joint routing and charging optimization has shown the potential to align vehicle flows with station capacity and charger power, directly supporting higher asset productivity.
Orchestration is, however, constrained by the third bottleneck, which is the fragmentation of international frameworks and standards. Regulatory drivers are becoming more sustainability-oriented, yet remain regionally fragmented and mixed in design. For operators running international networks, this misalignment introduces the kind of uncertainty that can affect near-term utilization and revenue planning.
In this context, clear, transparent and predictable licensing practices can help support interoperability, enable cross-border deployment and reduce investment risk, allowing zero-emission technologies to diffuse more rapidly across fleets and regions. Patents remain essential to sustaining innovation in zero-emission trucking, but their contribution to scale depends on how well they align with system deployment and operational realities.