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Shell's Energy Security Scenarios: Exploring the Future of Logistics Industry

Shell’s Energy Security Scenarios: Exploring the Future of Logistics Industry

Explore how the road freight, aviation and shipping industries could change in the coming decades as per Shell’s Energy Security Scenarios report.

Shell has released its Energy Security Scenarios report, which looks at the possible energy and climate outcomes that could result from a world focused on security. The report explores two scenarios: Archipelagos and Sky 2050. These scenarios provide insights into how the logistics industry, specifically road freight, aviation, and shipping could evolve in the coming decades.

Sky 2050 is a normative scenario, where global climate security becomes the primary concern, and nations race to switch to cleaner energy. The scenario requires major interventions from policymakers, including the forced retirement of fossil-fuel assets, punitive carbon prices, and the rapid introduction and scaling up of early-stage technologies. Competition drives rapid change, and the world reaches net-zero emissions in 2050.

Archipelagos begins with a trade-off between solving short-term needs using fossil fuels and meeting longer-term goals. The stronger use of fossil fuels results in higher short-term energy prices worldwide, with price rationing having a significant effect in balancing global supply. This scenario sees higher fossil-fuel demand compared to Sky 2050, and meeting this demand requires investment. Governments are forced to step in to ensure money flows under the threat of significant financial penalties. By the end of the century, net-zero emissions are achievable, but the world has failed to meet the goal of the Paris Agreement.

Road Freight

Archipelagos scenario predicts that road freight will become more fragmented, with smaller, more specialised vehicles replacing larger, multi-purpose trucks. This shift is due to the increased demand for personalised logistics services, where companies require specific products delivered at specific times. In contrast, the Sky 2050 scenario predicts that road freight will be dominated by electric and autonomous trucks, which will lead to significant cost savings and environmental benefits. This scenario sees the emergence of hydrogen fuel cell vehicles as the preferred solution in the late 2020s.

Aviation

Archipelagos scenario predicts that the aviation industry will continue to grow, albeit at a slower pace due to economic and environmental pressures. Airlines will focus on improving fuel efficiency and reducing emissions, but the overall demand for air travel will remain strong. Sky 2050 scenario predicts a much more significant shift towards sustainable aviation. Airlines will transition towards electric and hybrid-electric planes, and there will be a greater focus on reducing air travel’s overall carbon footprint. The major shift comes in the formulation of jet fuel, with sustainable aviation fuels taking market share from the 2020s onwards.

Shipping Predictions

The Archipelagos scenario predicts that the shipping industry will undergo significant changes, with more demand for small, fast vessels that can navigate through narrow waterways. This shift is due to the growth of e-commerce and the need for faster, more flexible shipping options. Sky 2050 scenario predicts a shift towards zero-emissions shipping, with a greater focus on using alternative fuels such as hydrogen or biofuels. In the mid-2030s, the industry settles firmly on the hydrogen-based solution, working in close cooperation with shipbuilders, fuel suppliers and key bunkering ports.

Shell’s Energy Security Scenarios report sheds light on the potential future of the logistics industry in two contrasting scenarios. Both Archipelagos and Sky 2050 scenarios predict significant changes across road freight, aviation, and shipping, which could have a profound impact on the logistics industry’s future. With the report providing valuable insights and recommendations, logistics industry players can make informed decisions that enable them to thrive in a changing world.

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