Spotlight from TheFutureEconomy.ca

Canada’s Fleet Decarbonization Journey

TheFutureEconomy.ca: Where is Canada with regard to the decarbonization of road transport in Canada?

Naeem Farooqi: I have had the opportunity to work in many continents in this space, including Europe, South America, North America, and even Australia. Every country is at a different stage of that journey, which depends on the infrastructure available. Canada is moving in the right direction, but are we as advanced as Europe or California? No, we are not. They are substantially ahead and have stern mandates to ban internal combustion engines (ICE) in the heavy-duty freight space. Additionally, there is typically no one-size-fits-all solution when it comes to heavy-duty freight transportation. Different sectors within transportation are moving at different speeds with it comes to the implementation of vehicle chargers, for instance. 

For example, if you just look at first-mile and last-mile delivery services, like Purolator or UPS—they are starting to invest in vans that are fully electric. A lot of this progress is happening in Canada, and at the same time, there is an increasing interest in the technology. However, in this regard, our incentives are not as enriched as those in California or Europe. 

TheFutureEconomy.ca: What are the main challenges that Canadian fleets face in going through the process of decarbonization? 

Naeem: It truly depends on whether these organizations have five cars or five thousand cars. On top of that, their understanding of the challenge varies depending on their knowledge of the issue, too. However, the main challenge is range. Ultimately, what fleets want to know is that they can use this truck, trailer, or van every day to fulfill the same operational criteria their ICE vehicles do. This is what is called range anxiety. 

Remember, fleets are very different from private vehicles. Private vehicles in North America are parked 94% of the time, and their uptime is less than 6%. On the other hand, a fleet’s uptime is between 40% to 60%, depending on the duty cycles. Range means something different to different operators. 

The second question is about power. Where do they get the power for their yards or depots? If they have to go elsewhere and charge in between delivery, where do they get the power to do so publicly? These are the two overarching themes that we have to look at.

TheFutureEconomy.ca: What does it take to completely decarbonize a fleet and convert it, either entirely or partially, to electric power? 

Naeem: At FleetZero, we have a guideline called “The Playbook to Zero.” It has six distinct chapters that cover the challenges and opportunities for a fleet, starting first with stakeholders. It is very important that the mechanic and the operator both feel comfortable working on the electric vehicle. Yesterday, I spent the day with a mechanic, who said to me, “Naeem, I will never work on an electric vehicle,” because he has seen some videos of EV fires. I said, “Listen, we’ll sit down, get you the proper PPE, and get you the proper training.” It is extremely important that these stakeholders know that their organization is fully behind them in this transition. Getting that buy-in from the shop floor all the way to the C-suite is very important.  

Next is the vehicle itself. You need to make sure you have the right battery chemistry, density, and capacity to achieve the range that is needed. I recently participated in the first electric coach intercity operational test run in northern Ontario, from North Bay to Sudbury. When we first started on that trip, there was a lot of anxiety because the last time they did this with a different manufacturer, they did not make it back. They had to tow the vehicle. These are people pushing the envelope, but we should also recognize that it takes time for technology to advance. 

Infrastructure is the next big task. Fleets must speak with their utilities provider to find out where they will get power for their depots and chargers and how that system will work. Whenever you want to make modifications to your facility, there are different standards and norms that have to be taken into account. You also have to think about the environment. Do you know what your carbon footprint is currently? Fleets need to identify a baseline and establish reduction goals as they transition to vehicles that run on electricity or hydrogen. 

The key is to obtain the appropriate vehicles for your fleet and the infrastructure needed to support those vehicles. When you get into operations, you also have to think of things as simple as the mechanic’s tools. What is the difference between a wrench used on ICE vehicles and the wrenches needed for EVs? Wrenches needed for EVs are insulated for 1000 volts, protecting mechanics.

The final consideration is economics. Fleets need to look at their bottom lines and be able to present a business case to senior leadership and convince them that any one transition plan makes sense. 

TheFutureEconomy.ca: What are the challenges you see when it comes to training and preparing workers for this transition? 

Naeem: One of the big challenges is training and awareness. People today have short attention spans, and all that social media buzz about EV fires will trend far more than the story of someone who successfully repaired an electric vehicle for the first time. Companies need to have appropriate training for the workers on the shop floor and guide them through the basics of PPE and more. 

At FleetZero, we have a training department that assists companies in this. As vehicles are rolled out, we send our staff to these fleets to help them write standard operating procedures, conduct maintenance gap assessments, and evaluate what particular tools and training the mechanics will need. I cannot stress the importance of these measures enough. Training mechanics is very important for adoption because if you do not give them the tools and training that they need, the fleet will turn into an orphan fleet. An orphan fleet is one that no one really takes ownership of and, as such, will likely fall into an endless cycle of pilots. Whereas, if you have buy-in from the shopfloor from day one, you can be sure that the workers have an interest in the operation and success of the vehicles. 

I am writing a series called “The Future Mechanic,” where I am talking to past, present, and future mechanics who are getting certified. One of the things I discovered is that we do not have a national standard. We have heavy-duty 310T mechanics and 310S mechanics in Ontario. Then there are the red seals, as seen all across the country. There are many guidelines within that regarding what they can truly fix. There is also a mismatch. As a country, we must be flexible and ensure that people have the necessary credentials and training to ensure that they can operate these vehicles. There is a lot of work to be done, and I would estimate that we are only 5% to 10% of the way there. 

TheFutureEconomy.ca: Which stakeholders would you identify to help us get further with this task of creating a national standard for mechanic certifications?

Naeem: The government needs to continue to invest and invest more in training. They need to work with trade colleges and make sure that they are developing the programs and requirements for the mechanics of tomorrow. The mechanic of the future, in a nutshell, is an electrician, a traditional diesel tech, and a computer programmer all wrapped in one. We are reinventing the next generation of mechanics. These are the key ingredients you need for their success. No single program or school currently addresses all of that. To establish a road for this new class of mechanics, the government must come to the table and work with the apprentice programs, training programs, and trade schools.

Infrastructure for Decarbonization

TheFutureEconomy.ca: How is Canada doing in terms of the implementation of the public infrastructure needed to support the wide-scale electrification of fleets? 

Naeem: Public infrastructure is another elephant in the room that we constantly talk about. Canada has a very low population and a large geographic area, but most of our transportation is within 150 kilometres in terms of population and movement. The belt from the US needs a lot of chargers. According to some estimates, there should be between 100,000 and 200,000 fast chargers installed nationwide, but we are nowhere close to that number. Even if we do have those chargers, they are not yet reliable enough to be trusted. 

There are networks out there where 60% of the charging stations are not functional. It is really important that this be examined. At the same time, Canada is also ramping up investment. We are seeing specific grants from the Canada Infrastructure Bank to support companies that want to set up EV charging networks. However, we also need to consider energy resilience. Where will all this power come from? Is the power available where we need it? We need to bring utilities into the fold. Utility providers are already looking into providing charging as a service or energy as a service. 

We need to find a solution that makes sense and is economically attractive to fleets as well as individuals who are trying to electrify. I just recently read a report that most EV adopters who are not driving Tesla cars are saying that their next vehicle is going to be an ICE vehicle because they have had horrible charging experiences. It makes sense because Tesla boasts one of the best charging networks in North America. While you may be able to persuade someone to start a journey, if they don’t have that customer experience, then they will eventually step away from it. That is a reality that we have to consider. 

TheFutureEconomy.ca: What wider role do you believe utilities should play in Canada’s decarbonization journey?

Naeem: If we travel to America’s southern border and look around, we will see that they have prepared programs where utilities have found some of the transformer infrastructure behind the meter for the end user. Their utilities are stepping up to support the right fleet electrification transition. Utilities are actually the ones who write the transition path to zero for clients. There is a huge opportunity here that comes only once in a lifetime. 

Let’s talk about Hydro-Québec for a second. Their tariff structure is completely different for EVs. They’re even taking the risk of having models where they just charge you per kilometer driven. The Canada Infrastructure Bank is also helping utilities with their loan guarantees so that they can deploy faster, and utilities are putting this on their balance sheets and amortizing these assets. These are all advancements being made much quicker than traditional corporations would be able to. 

Utilities must collaborate with their local fleets and transportation networks to develop solutions rather than saying, “Oh, in two years, we will have new power.” Instead, we need to look at actionable items that can be done now. We need to look at early-stage planning. Are there interim measures? Can we invest in microgrids, for instance? Utilities can accomplish a lot, but their traditional “generate, distribute, consume” model might get shaken up a little. 

Pillars for Decarbonization

TheFutureEconomy.ca: What do you think needs to be done by the public sector to really accelerate, support, and enable the decarbonization of road freight?

The government has to do two things. The first is to create a policy that fosters the adoption of electric and hydrogen vehicles. If you look at our national carbon credit mark market and the incentives offered by various grant programs to private and public sector entities, I believe those are good positive steps. If you continue down that path, the government will eventually be able to demonstrate leadership. The market that is growing the fastest is public transit. In cities like Vancouver, Edmonton, Toronto, and Montreal, you can see a lot of electric buses. From coast to coast, electric buses are operating in cities. It’s proof of leadership because they are saying, “Look, we’re not just telling you to do it, we’re going to do it ourselves.” That goes a long way to building confidence in the private sector. 

TheFutureEconomy.ca: If you had the opportunity to lay out a national strategy focused on accelerating the decarbonization of road freight, what would those main pillars be?

Naeem: I go back to the playbook. The playbook is designed with six pillars that allow you to get to net zero. It’s a strategy that’s tactical in nature. We can write a great report and put it on a shelf, but if you write that report with a tactical execution element to it, it becomes something that you can actually aspire to get done. That’s one of the challenges here nationally. We’re talking about these great plans, but at the end of the day, we’re not talking to the end users. We’re not taking those stakeholders. We’re not going to move these trucking companies and these massive fleets unless they see the buy-in and see how they can do it.

We cannot be sitting somewhere in an ivory tower. Writing a strategy with just a little bit of stakeholder engagement will not go far, because you’re not talking to the communities or the drivers who actually turn that ignition on and pull out of the yard. This first pillar, which is about community, is something I really want to stress. 

On top of that, we have to understand how all levels of government can build tactical plans for this transition as well. Making bold statements like “No more ICE vehicle sales by 2040” is one thing, but actually giving people the tools and pathway to get to zero-emission vehicles in 2035 or 2040 for their fleets is very important. 

I was talking to a colleague the other day about multi-residential apartments and how they actually don’t have parking, and people have to do on-street parking instead. These add up to the challenges you have to deal with from jurisdiction to jurisdiction in terms of EV charge points and how they get installed. You can set the tone nationally, but you need to work with each level of government and collectively come up with a solution.

All levels of government must work collectively to create more incentives that not only assist with the capital purchase of the vehicle but with the ongoing operations of those vehicles. Carbon credits are a great step, and so is the provision of training dollars. Those training dollars will go a great way in building confidence for the individuals who actually have to maintain and operate these vehicles. 

My next call to action would be to industry. There are innovative ways that you can reward people; it’s not just monetary. When you talk to these big Fortune 500 companies that talk about decarbonization, they don’t actually translate their plans into their tender process and say, “Hey, we’re only going to accept zero-emission trucks moving our products.” Industry must implement incentives in their tendering process for first movers who are willing to invest in new technologies and test the waters. Big companies need to actually implement this through their supply chain, starting with their procurement stage.

Finally, research and innovation centers need to continuously invest dollars into batteries. We have not seen the end battery. I am still a firm believer that the battery that will win this war is sitting on someone’s lab floor right now and that it’s not commercially produced yet. I’ll give you one example. In Novi, Michigan, there’s a company called Our Next Energy that has done some of the greatest range runs for vehicles. They call their battery the Gemini, and it is a dual chemistry battery that goes beyond the range as are currently seeing. They ripped the battery out of a Tesla, put the Gemini in, and hit 1,200 kilometres. We need more investment if we’re actually going to make it. The entire scientific community, plus our universities and colleges, need to come together to continue to advance this innovation because we have still not yet seen the chargers and batteries of tomorrow.

TheFutureEconomy.ca: Do you think Canada could win in decarbonization and lead the world on this?

Naeem: Yes, but it is a big burden. The other day, I was reading the autobiography of President Kennedy. His call to action on the moon, which was a historic moment for humanity, was that we do not travel to the moon because it is simple but because it is hard. We must approach this technology with the understanding that we are at a pivotal moment in climate change, where we need solutions and we individuals to step up. Government dollars are one thing, and policy incentives are another. However, action is required, and people must take the necessary steps. It is a societal shift, and we need everyone there.  

We all need to promote this. Whenever I hear someone having a conversation at the local Tim Hortons about EVs or when I am at a conference, I will usually stop and have that conversation with that person and attempt to educate them a little. If they are skeptical about the technology, I can address any of their comments. If we want to overcome climate change and decarbonize transportation, which accounts for 25% of GHG emissions in our country, we will need the right planning and execution and take it one step at a time.

Calls to Action

1. On Innovation

• More investment and research into improving the range of electric vehicles to match that of ICE vehicles is needed to improve the decarbonization rate of fleets
• We need to continually invest in battery innovation as we still do not have battery that can overcome range issues for long-haul drives.

2. On the Role of Utilities

• Fleets need to communicate with their utilities provider to understand how to upgrade their facilities to accommodate their electrified fleets and how the new power systems will work

3. On Training the Next Generation of Mechanics

• Companies need to have appropriate training for the workers on the shopfloor to give them confidence in the transition and ensure that the workers take ownership of the fleet’s success
• The government must work with trade colleges to make sure they are developing the right programs and requirements for the mechanics of tomorrow

4. On Making a Successful Fleet Transition

• Fleets need to identify a baseline for their carbon emissions and establish reduction goals as they transition to vehicles that run on electricity or hydrogen
• Fleets need to think about the smallest things too, such as the PPE or tools required by their mechanics as the fleet transforms 
• Understanding the business case for fleet electrification is crucial for ensuring that the transition can be undertaken successfully with buy-in from all stakeholders

French version of the article can be found here.