A Study of Decarbonization Initiatives in the Canadian Transportation System and Their Transferability to Indian Conditions

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Rahna Beevi


The aim of this study is to understand the existing transportation supply chain in Canada and the supply chain decarbonization initiatives. Furthermore, this study proposes ways to decarbonize the Indian transport supply chain based on the findings.


Canada, the second largest nation in the world, covers an area of nearly 10 million km2. Transportation is an integral part of the Canadian economy, facilitating the movement of goods and people, increasing economic opportunities, and promoting trade diversity. On the other hand, India, the seventh largest country, spans an area of roughly 3 million km2. Although both countries differ in geography, climate, and economic prosperity level, this study aims to study the transportation scenario in Canada, with an emphasis on the steps taken to reduce carbon emissions and what steps can be implemented in India.

Transportation Supply Chain in Canada

Transportation plays a vital role in Canada’s economic growth. By facilitating the movement of goods and people, it offers the opportunity for better economic prospects and diversification of trading activities. According to the Canadian Transportation Economic Account (CTEA) 2014, transportation contributed $153.4 billion or 8% of GDP, with household spending accounting for about 11%.

Through transportation, natural resources, agricultural products, and manufactured goods can access both domestic and international markets. Road transportation is the primary mode of transportation for both passengers and freight in Canada. The Trans-Canada Highway connects the country from the Pacific to the Atlantic coasts. Southern Canada is particularly well-serviced, with extensive road networks in the more populated areas.

Trucking is the most common freight transportation method in central Canada. It is used to move food products, manufactured goods, and processed goods. The busiest road border crossings in Canada are found in Ontario and Québec, where manufactured goods regularly cross and re-cross the Canada-U.S. border.

Yukon’s highway system is the most expansive in northern Canada and carries the highest volume of traffic in terms of tonnage. In some remote northern communities, ice roads are used during winter to transport passengers and essential supplies.

Transportation Sector Decarbonization Initiatives, Policies, and Targets

Canada has committed to reducing greenhouse gas emissions by 40 to 45% below 2005 levels by 2030, as part of its National Determined Contribution (NDC) under the Paris Agreement. Furthermore, Canada has pledged to set new national targets for reducing emissions every five years, with a goal of achieving net-zero emissions by 2050.

The transportation sector is one of Canada’s leading contributors to greenhouse gas emissions, accounting for around 25% of the nation’s total. On-road transportation, including light-duty vehicles (such as cars, SUVs, and pickup trucks) and medium- and heavy-duty vehicles (such as trucks, cargo vans, buses, and freight trucks), is the primary source of these emissions.

To facilitate a smooth transition to electric vehicles, the Government of Canada is investing significantly in purchase incentives and charging stations.

To help Canada achieve its emissions-reduction goals, the Government of Canada is focusing on two key areas in the transportation sector:

  1. Establishing an LDV ZEV (Zero Emission Vehicle) sales mandate that will incrementally increase the number of ZEVs sold until 2035, when 100% of LDVs will be ZEVs. This mandate will include interim targets of at least 20% of LDVs sold by 2026 and at least 60% by 2030.
  2. Developing and implementing an integrated strategy to reduce emissions from medium- and heavy-duty vehicles, with the aim of 35% of MHDV sales being ZEVs by 2030. The Government will also establish an MHDV ZEV regulation to require 100% of MHDV sales to be ZEVs by 2040, with interim 2030 regulated sales requirements that will vary for different vehicle categories based on feasibility. Additionally, the Government will explore interim targets for the mid-2020s.

Incentive Programs

1. Incentive Programs for Light-Duty Zero-Emission Vehicles

The Incentives for Zero-Emission Vehicles Program provides up to $5,000 in incentives for eligible light-duty zero-emission vehicles. As of October 2022, approximately $2.3 billion has been allocated for the program, and 37 vehicle models are eligible. Over 171,000 participants have already taken advantage of this program.

2. Incentive Programs for Medium- and Heavy-Duty Zero-Emission Vehicles

Budget 2022 allocated $547.5 million to incentivize Canadian businesses to purchase medium- and heavy-duty zero-emission vehicles. The Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles Program, which was launched in July 2022, offers up to $200,000 per eligible vehicle. As of October 2022, 40 models from 14 different manufacturers were eligible for the program, with 37 participants requesting a total of over $2.87 million in funding.

3. Zero Emission Transit Fund Program

Launched in 2021, the Zero Emission Transit Fund is a $2.75 billion program that helps transit agencies and school bus operators purchase zero-emission buses and related infrastructure. This fund works in conjunction with the Canada Infrastructure Bank’s Zero-Emission Bus Initiative, which offers financial solutions to offset the higher upfront costs of zero-emission buses. Thanks to this and other government programs, over 550 zero-emission transit and school buses have already been purchased.

Building Charging and Refueling Stations

1. Infrastructure for light-duty zero-emission vehicles

This $1.2 billion investment will create 85,000 charging and hydrogen refueling stations over the next nine years. Specifically, 35,000 of these stations will be completed by 2026, with an additional 50,000 to be completed by 2029.

2. Infrastructure for medium- and heavy-duty zero-emission vehicles

Adoption of zero-emission technologies for medium- and heavy-duty vehicles is lagging behind that of light-duty vehicles due to a number of obstacles, such as the lack of adequate charging and refueling infrastructure in both private and public spaces. These barriers could potentially impede the widespread adoption of such technologies.

In order to reduce emissions by 2030, the Government of Canada has allocated $33.8 million to fund hydrogen trucking demonstration projects. These projects will help to address barriers to the commercialization of long-haul zero-emission trucking, such as technical, regulatory, and standards issues.

Training and Awareness Programs

1. Smart Driver Training

SmartDriver offers a suite of free online courses to help professional drivers of medium and heavy-duty commercial vehicles maximize fuel efficiency, reduce operating costs, and minimize harmful emissions. The courses include both in-classroom and on-road instructor resources to ensure drivers get the most out of their training.

In collaboration with various stakeholders in the transportation industry, SmartDriver offers educational materials to promote fuel-efficient driving practices for truckers, urban fleets, school bus drivers, and other operators. Conservation of fuel helps the sector minimize its environmental footprint, reduce operational and maintenance expenses, and enhance its competitiveness for greater profitability.

SmartDriver training covers the following commercial and institutional fleets:

  1. SmartDriver for Highway Trucking
  2. SmartDriver for Work Truck
  3. SmartDriver for Forestry
  4. SmartDriver for School Bus
  5. SmartDriver in the City
  6. Zero Emission Vehicle Awareness Initiative

The Zero Emission Vehicle Awareness Initiative has allocated almost $7 million for 46 projects, with more to come. These projects include: creating an online platform for municipal practitioners to promote zero-emission vehicles; an electric vehicle information and education portal for car dealerships; an e-mobility awareness initiative; a hydrogen vehicle demonstration project for heavy-duty vehicles; a fleet electrification information portal; a mobile networking application for the electric vehicle community; an Indigenous electric vehicle ambassador project; an electric vehicle buyer’s guide; and an electric vehicle resource center.

Through 2026-27, up to $26 million has been allocated for education and awareness projects for personal and commercial on-road vehicles, as well as Indigenous-led awareness projects.

Indian Transport Sector

India is the world’s third-largest global emitter of greenhouse gases, making it a prime candidate for leading the way in decarbonizing transport. To achieve this, India needs to pair decarbonized transport with decarbonized electricity generation. With a rapidly growing small vehicle fleet relative to its population, India has the potential to become a leader in renewable energy and make a significant impact on reducing global emissions.

The transport sector in India contributes 13.5% of the country’s energy-related CO2 emissions, with road transport accounting for the bulk of the sector’s energy consumption (90%), followed by rail (4%) and domestic aviation (4%) (IEA, 2020).

Trucks are the predominant mode of freight transportation in India, with 65% of freight movement occurring in 2020. This is largely due to the expansion and construction of new national and state highways, which have improved road infrastructure and enabled longer-distance freight transport. The Indian trucking fleet mainly comprises medium-sized trucks with a gross vehicle weight between 3.5 tonnes and 12 tonnes, resulting in relatively lower tonnes of freight carried for a unit of energy consumed (ITF 2021).

Achieving India’s commitment to net-zero emissions by 2070 will require a strong decarbonization target specifically for the road transport sector to help meet its climate, air quality, and public health goals. Although India does not currently have a sector-specific target for transport as part of its Nationally Determined Contribution (NDC) under the Paris Agreement, decarbonizing road transport is of vital importance. Doing so will bring significant co-benefits such as cleaner air and healthier people.

Transport in India’s NDC

  • Increase the share of rail in land transport from 36% to 45%
  • Reduce 457 million tonnes of CO2 emissions through building dedicated rail freight corridors (DFCs)
  • Promote the growth of coastal shipping and inland transport
  • Focus on ‘moving people’ rather than ‘vehicles’ through Mass Rapid Transit Systems and mass urban transport projects
  • Develop 140,000 km of Green Highways
  • Improve fuel efficiency, promote electric vehicles, and biofuels

Decarbonization Efforts in India

1. Electric Mobility

The Department of Heavy Industries (DHI) has been promoting electric mobility through the National Electric Mobility Mission Plan (NEMMP). This has been followed by 21 states, which have either implemented or are in the process of implementing EV policies that include purchase and manufacturing incentives. The Ministry of Power and the Ministry of Housing and Urban Affairs (MoHUA) have been actively involved in developing the necessary charging infrastructure. The automobile industry has been supportive of the initiative, with legacy OEMs and start-ups alike getting involved in EV manufacturing.

2. Fuel Efficiency

In India, the first set of emission norms was introduced in 1991/92 for petrol and diesel vehicles. The National Auto Fuel Policy then formed the basis for the introduction of Bharat Stage emission standards, which focus on reducing air pollutants and improving vehicle performance. Since 2017, Corporate Average Fuel Economy (CAFÉ) norms have been implemented in the country, with a goal of reducing the weighted average CO2 emission from a manufacturer’s production line to below 130 gm/km by 2022 and 113 gm/km thereafter. The results have been encouraging, with estimates showing that the fleet’s average CO2 emission for FY 2018–19 was 121.9 g/km (International Council on Clean Transportation 2020).

The progress in fuel efficiency standards for commercial vehicles has been less encouraging. In 2017, the Bureau of Energy Efficiency notified fuel efficiency standards for vehicles above 12 tonnes, and standards for vehicles between 3.5 to 12 tonnes were subsequently notified in 2019. However, manufacturers have had objections related to the standards being imposed on individual vehicles instead of the whole fleet, as well as with the testing system, which uses lab-based tests rather than simulations. These issues have created bottlenecks in the implementation of these standards so far.

3. Promotion of Alternate Fuels

The Indian Government has taken several initiatives to promote the use of natural gas in transport. In pursuance of the Supreme Court’s order, CNG has been made mandatory for commercial vehicles in Delhi. Subsequently, other urban centers like Gujarat and Maharashtra have followed suit and embraced CNG as fuel for their commercial vehicles like taxis and autos. To further accelerate the spread of CNG, the Ministry of Petroleum and Natural Gas (MoPNG) has announced a plan to set up 10,000 CNG stations over the next 10 years. Additionally, the Central Motor Vehicle Rules were amended in 2017 to include liquefied natural gas (LNG) as an automobile fuel. It is estimated that to build infrastructure for the use of LNG as a fuel for long-distance transportation, investments of around Rs. 10,000 crores will be made over the next three years, and 1000 LNG stations will be installed. It is expected that LNG will be most suitable for heavy-duty trucks and buses.

4. Incentive Programs

FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) is the leading initiative in India for the advancement of electric mobility.

Under the FAME India Phase 1, around 2.8 lakh electric vehicles (xEVs) were supported with demand incentives worth approximately Rs. 360 Crore.425 electric and hybrid buses were deployed in various cities, and the Government provided incentives of about Rs. 280 crores for these. Additionally, Rs. 43 crores (approx.) were sanctioned for the installation of 520 charging stations/infrastructure.

FAME-II, the second phase of implementation which began on April 1st, 2019, with a budget of 10,000 Crores, has provided incentives worth Rs. 1869 Crores to support over 4,69,315 Electric Vehicles as of July 11, 2022. The program also offers financial support for the installation of charging points for electric vehicles, in order to build a reliable network that will enable greater adoption of electric vehicles in India.

First Movers Coalition to decarbonize carbon-heavy sectors

India has become part of the First Movers Coalition, a worldwide effort to reduce the carbon footprint of heavy industries and long-distance transport sectors, which contribute to 30 percent of global emissions.

Key Gaps and Issues in Transport sector decarbonization in India

  1. Lack of coordinated policy planning in transport planning due to the involvement of too many government agencies.
  2. Electric transportation is particularly important for two-wheelers, three-wheelers, passenger cars, light commercial vehicles, and urban buses.
  3. Deep decarbonization requires the development of effective technological solutions for hard-to-abate road segments, long-distance buses, and heavy-duty vehicles, which account for more than 40% of total energy consumption.
  4. Technological transitions are heavily dependent on the transition to a clean grid.
  5. Transport planning capacity at the government level remains limited, resulting in mobility plans not being implemented on time.
  6. Development of differentiated strategies for cities based on existing mobility patterns.

Suggestions for the Indian Scenario/ Conclusion

1. Improving the power system

The increasing adoption of electric vehicles (EVs) will cause a surge in demand for electricity, necessitating an improvement in power system capabilities. To meet these demands, strengthening power system capabilities, coordinated and integrated planning practices are essential to ensure that power sector plans are well-coordinated both within the power sector and with other sectors. Moreover, daytime charging of EVs may help augment the consumption of renewables during times of solar-based generation, thereby reducing storage requirements and ramping costs.

2. Coordinated policy planning

Coordinated policy planning is an important component of effective transport planning, yet India has struggled to implement such policies due to the large number of government agencies involved in the process. These agencies, which include the Ministry of Road Transport and Highways, the Central Road Research Institute, the National Highways Authority of India, the Ministry of Railways, and the Ministry of Urban Development, have all implemented their own policies, resulting in a disjointed and often conflicting approach to transport planning. This has made it difficult to develop cohesive policies, as each agency has its own priorities and interests. Furthermore, the lack of coordination between these agencies has also led to a lack of accountability, as the lines of responsibility for specific policies and projects are often blurred. In order to address this issue, it is essential that India implement a more coordinated policy planning process that better integrates the activities of the various government agencies. This could involve the formation of a single agency responsible for transport planning, or the formation of an oversight committee to ensure that the various agencies are working together towards a common goal.

3. Customized Strategies for Cities

Develop customized strategies for cities based on their unique transportation needs. This could involve analyzing the mobility patterns of a city to identify areas of improvement and develop tailored strategies to address them.

Establish mobility benchmarking metrics that cities can use to compare their performance to other cities. These metrics should include measures of access to public transportation, car ownership, walkability, transit ridership, and cycling infrastructure.

Invest in data-driven solutions that can help cities understand the impact of their transportation policies and identify areas of improvement. This could include the implementation of data-driven decision-making tools.

4. Proper Incentives to Switch to e-Mobility

In order to achieve a minimum of 30-40% electrification by 2030-35, a comprehensive electrification program should be implemented. This should include long-term incentives at both the Central and state level, along with a charging infrastructure plan, and a supply mandate or zero emissions mandate for the vehicle industry in order to create a secure policy landscape and market certainty. Even though the FAME scheme is active in India, more needs to be done.

5. Increasing the Modal Share of Public Transit

All classes of cities should set local, time-bound targets with measurable and verifiable results to increase the modal share of public transport, walking, cycling, and shared mobility. The aim should be to ensure that most of the motorized trips are done using public transport which, in turn, reduces the congestion on the road and helps to decrease carbon emissions.

6. Awareness and Promotion Programs

Despite over one million EVs being sold in India, the transition towards electric vehicles has been slow due to a lack of public awareness, slowdown in manufacturing and sale of EVs, and the unavailability of financing. The government can initiate awareness campaigns to educate people about the advantages of electric vehicles and the importance of reducing emissions.


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