Shift key findings in short

• It is possible to drastically reduce transport GHG emissions and reach carbon neutrality in the Nordic region in the 2040-2050 time-frame but strong and immediate actions are required. The Nordic region can become frontrunner in solving the climate challenge in the transport sector but the deployment rate of low-carbon technologies and fuels as well as shift and avoid measures need to be accelerated.

• A combination of several transport mitigation measures is cost-effective for decarbonizing the Nordic transport sector. Transport modal shifts, innovative transport technology options, changes in travel behaviour and new business models are all needed. A considerable electrification and a concurrent modal shift towards low energy intense modes seem cost-effective to decarbonize the Scandinavian transport sector for passenger and freight road transport. However, biofuels are also needed, not least in shipping and aviation.

• The cost-effective fuel and technology mix in the future Nordic transport sector depends on several key factors. These include the development of carbon capture and storage (CCS), expansion of low-carbon electricity generation, availability of sustainable biofuels, and cost development of electrified options. CCS enabling negative emissions can reduce the need for the most expensive solutions for CO2 reduction in the transport sector and its deployment should be carefully assessed in the Nordic region.

• Enhanced policy measures are needed to decarbonize freight transport in the Nordic region. This includes actions to increase the use of low carbon vehicles in the Nordic region (both for long-haul and urban freight transport), measures for reducing transport demand, improving efficiency of transport modes, and stimulating modal shifts. Policy measures aimed at modal shifts may benefit from a more Nordic coordinated approach and should consider the effect on other emissions.

• Continue to commercialize and deploy a broad set of key transport innovations in the Nordic region. The Nordic countries have explored a broad set of innovations for decarbonization of the transport system and are currently regarded as international pioneers within areas such as electric vehicles, electrified roads, and combined mobility (mobility as a service). Attention should now be given to ways in which key transport related innovations can be commercialized and deployed within the marketplace in the short to medium term in all Nordic countries.

• Increased understanding needed for the role of business model innovation in successful implementation of novel transport innovations. It is critical that policymakers understand and promote the role of business model innovation as a mechanism that can: commercialize novel technologies reducing transport emissions; harness synergies between different types of transport innovations; and bring about significant changes in the ways in which transportation is produced and used.

• Maximum gains in reducing both energy use and emissions can be achieved if transport policies and programmes are designed to create inclusive solutions. The shift towards low-carbon transport, green transitions, smart cities and smart mobilities needs to address both the technical and social dimension. Policies should target building cities catering to walking, bicycling, public transport and sharing solutions. Infrastructure design and provision should be guided by needs-based assessments and target a low-carbon transport society.

• Improve the design and implementation of future urban and transport plans in the Nordic countries by mapping the systematic benefits of proposed transport and mobility solutions. This would highlight the potential gains in energy use and emissions reduction. Emerging concepts like Mobility-as-a-service (Maas), car/bike sharing, transit-oriented development, integrated urban logistics hub etc. needs to be linked with accessibility mapping exercises to plot the expected cut in emissions and energy use.

• Green shift must include low-carbon and efficient Nordic city logistics. Comprehensive urban freight strategies need to be formed by regional authorities and municipalities in due consultation with the urban freight stakeholders. Data collection and management is integral to frame and assess policy measures for reducing CO2 emissions from urban freight transport.

• Increased coordination of national policy instruments needed in the Nordic region to prevent that their potential effects overlap and reduce effectiveness of effects on actors’ decisions. Even when instruments partly overlap in their effects, the losses in effectiveness can be substantial. To prevent ineffectiveness, the effects from each policy instrument need to be understood and isolated already during development of new policy instruments, and in the evaluation of existing ones.

• Climate policies for transport must be reformed to meet and incentivize electrification and to consider target conflicts. Electrification of transport generates a target conflict between greenhouse gas reduction, regulating traffic volume and tax revenue to fund public infrastructure and social costs of traffic. The target conflict calls for reassessing the taxation for road transports in Nordic countries.

• Overall, the current climate policy instruments for zero emissions vehicles tend to undermine fuel taxation as a regulatory instrument for traffic volume. As drivers change their behaviour in line with these instruments, the effects on vehicle travelled distance of fuel taxes declines. Drivers of electric vehicles do not change their vehicle travel distance behaviour due to changes in fuel taxes. Thus, electrification of road transport requires a new general tax system in the transport sector for regulating traffic volume as well as restoring a socially efficient balance between road capacity and traffic volume.

• Charge vehicles on a per kilometre basis according to the marginal external costs of their driving. To maintain a long-term road infrastructure in the future for an expanded electric vehicle fleet, and to match the social costs of traffic, the lost tax revenue from fuel taxes will need to be covered by a new tax base. The charge on a per kilometre basis will also restore the socially efficient balance between road capacity and traffic volume.