CAF at COP 27 - Electric Mobility to Decarbonize the Transport Sector in Panama, Paraguay and Uruguay

Transport accounts for nearly a quarter of current energy-related global greenhouse gas (GHG) emissions and is growing faster than any other energy end-use sector. Curbing global temperature rise to less than 2 degrees Celsius requires changing this transport emissions trend, which calls for the development of an integrated electromobility ecosystem encompassing several modes of transport, along with low-carbon electricity and hydrogen production (Paris Declaration on Electromobility and Climate Change and Call to Action, 2015). To this end, the International Energy Agency (IEA) model says electric vehicles (EVs) should account for 35% of global sales by 2030.

In this context, electrification is changing the rules of the game and becomes essential if carbon neutrality is to be achieved. No single change and no improvement measure will be able to achieve carbon neutrality in the transport sector. Transport electrification combined with a fossil-fuel-free grid creates this opportunity. In addition, the electrification of public transport (PT) buses and taxis is a key component not only to modernize and improve countries’ public transport system, but also to introduce new and more sustainable business models in the sector. This results in attractive new buses that encourage passengers to use public transport and also in better risk allocation for all stakeholders.

To reach this goal, public transport systems should require the establishment of new business models that improve the financial stability and economic efficiency of public transport operators and systems, for example through separate ownership of buses and bus operations and the introduction of new investors with a sound financial base for the sector. A clear example of this change in business models prompted by electric mobility can be seen in Chile and Colombia. The upshot is that electric mobility becomes a game-changer not only in terms of encouraging low-emission vehicles, but also in modernization of the public transport system, increasing its appeal and thus resulting in a major mode shift towards public transport, as opposed to a “business as usual” situation.

In order to address the region’s barriers and create an enabling environment, including investor confidence, the Electric Mobility and Low Carbon Transport (EMOTION) program seeks to accelerate EV deployment through a paradigm shift under a holistic approach. This will require country-specific financial and technical assistance components. The goal should be to move towards cleaner, better organized, more efficient, equitable, comfortable, safe, sustainable and affordable mass transit systems, using e-vehicles as a spearhead to advance this change.

EMOTION seeks to implement interventions to launch mass EV deployment much sooner than in an Business As Usual (BAU) scenario, by reducing the risk profile of investments and through comprehensive technical assistance. The key strategic value of the Program is that it operates as a market accelerator, enabling much faster adoption of e-mobility than in a BAU scenario, avoiding the lock-in of long-lifespan assets in fossil fuel technology. This program seeks to help bridge the gap between initial pilots and long-term goals.

Date: November 11, 2022

Time

: 2:30 p.m. - 3:30 p.m. (Egypt)