Environmental Benefits and Cost Analysis of New Vehicles-Technologies - The Case of Hong Kong’s Taxi Fleet

To comply with national and international environmental goals and to accelerate the transition towards a more sustainable urban environment, the Hong Kong government set an ambitious carbon intensity target. Transportation is a key area for improvement accounting for 18% of local greenhouse gas emissions, with road transport as the main contributor.
At present there are 18,163 taxis in Hong Kong, of which the great majority are outdated vehicles. Recently the government started considering the substitution of the actual fleet with less carbon intensive and more efficient vehicles.
Our work compared existing and emerging technologies available to date to reduce the global warming potential of the Hong Kong taxi fleet.
An environmental cost-benefit analysis was developed, considering as benefits the tons of carbon dioxide equivalent potentially abated over the period 2021-2030 by the substitution of the actual fleet with different vehicle technologies, among which electric vehicles (EVs) and fuel cell electric vehicles (FCEVs).
In the context of the Hong Kong taxi fleet, our result highlights that EV vehicles can reduce by 25-50% the well-to-wheel emissions over the 10-years projection period with respect to the business-as-usual scenario.
FCEVs show a decrease in GHG emissions between 20-60% when fueled with hydrogen produced from fossil fuels (i.e., gray hydrogen) and 65-95% emission reduction when using green hydrogen from renewables. Although green hydrogen presents the highest GHG reduction potential, the net present value of capital and operative expenditures shows that EVs with both fast charging and battery swap infrastructure are the technology with the lower abatement cost.
Our results underline that without a drastic decrease in the emissions of electricity production, EVs cannot be considered the optimal solution for the Hong Kong taxi. For hydrogen instead, logistic and technical challenges, as well as the uncertainty regarding the future development of the technology, impose limits to the diffusion of FCEVs. The impact of the critical carbon intensity of the electricity mix and the cost of future hydrogen price on the optimal decision is also shown through sensitivity analysis. Other critical factors such as daily operation schedule were also examined to understand the impact on the optimal decision.
Our work can assist policy makers, government, and companies in the identification of the most appropriate investment decision. Despite the framework being calibrated in the context of Hong Kong taxi business, the framework can be adapted to provide insights also for vehicles used in other cities for sustainable taxi fleet.

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