Tickets please! transport sector decarbonization opportunities for infrastructure investors | Bryan Cave Leighton Paisner

The UK government launched its transport decarbonization plan – A Better, Greener Britain on July 14, 2021.

This 220-page report details the UK government’s bold ambitions to:

(1) Decarbonize all transport

  • Road sector – Decarbonize all road transport by 2040
  • Rail sector – All diesel-only trains will be removed from the UK rail network by 2040 and the overall rail network will be net zero by 2050
  • Maritime / maritime sector – UK maritime sector net zero by 2050
  • Aviation Sector – Net Zero Aviation Emissions by 2050
  • Active travel – Half of all active transport trips – by bike or on foot by 2050

(2) Commitments to multimodal decarbonisation and main catalysts

  • Freight & Logistics Sector – Provide a zero emission freight and logistics sector
  • Offer decarbonation by places
  • Maximizing the Benefits of Sustainable Low Carbon Fuels
  • Develop a Hydrogen Strategy for its role in a low-carbon transport sector
  • More choice, more efficient transport
  • Support R&D as a catalyst for decarbonization

It is, by all accounts, an ambitious list of goals – a mix of new funding, policies, laws, regulations and incentives.

Infrastructure investors looking for inspiration for their investment pipeline need look no further than the transport decarbonization plan as it not only shows the scale of ambition and opportunity in the UK. United, but signals a change that will create similar (if not greater) opportunities across Europe, Asia and North America with the rest of the world following thereafter.

As infrastructure investors develop their investment thesis for the next five, 10 and 15 year horizons, the opportunity to deploy patient capital in the medium and long term to support the decarbonization of transport is evident, whether in deploying capital for fleet modernization. , technology, associated physical infrastructure or “fuel” / storage / production and distribution of energy. The risk / reward spectrum of potential investment opportunities in this sector is vast.

The volume of capital spending in this shift to zero emissions transportation is staggering and will not happen overnight, there will also be winners and losers in terms of the technology ultimately adopted to make these changes – it is very likely some of the technological solutions have yet to be invented at the time of writing, let alone commercialized on a large scale. The risk of technology obsolescence will clearly be a hurdle for infrastructure investors to consider, and we anticipate that the government can play a role in the early stages of many of these opportunities.

Balancing these impressive ambitions will be against that of post-pandemic recovery, the need to balance many competing forces such as customer / passenger affordability, convenience, customer fairness and choice.

The private sector, through the infrastructure investor community, has a huge opportunity to deploy expertise, innovation and capital to help deliver real solutions on these UK (and possibly global) ambitions – the decarbonization of transport is, in our opinion, the ultimate public objective -private partnership model.

We hope to help many of our infrastructure clients capitalize on this vast opportunity for their investors looking for ESG-compatible investments.

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