Railroads have a green advantage, but for how long?

Railroads have long touted the environmental advantages of moving freight on steel wheels that roll on steel rails. Now railroad customers are starting to pay attention. And they’re shifting some traffic from highway to rail to help reach goals for lower emissions. 

You may question that greenhouse gas emissions are responsible for climate change. Big business harbors no such doubts, and companies are intensifying efforts to reduce their carbon footprints. Walmart, for example, aims to eliminate emissions by 2040, a goal that hinges in part on electrifying its transportation fleet, including long-haul trucks. 

Activist investors, meanwhile, are pressuring companies to come up with ways to reduce and ultimately eliminate harmful emissions. Among them: TCI Fund Management, which is the largest single Canadian Pacific shareholder and also a major investor in Canadian National and Union Pacific. It’s pushing the railroads to develop alternatives to the diesel-electric locomotive.

Transportation is the largest single source of U.S. greenhouse gas emissions, according to the Environmental Protection Agency. Trucks account for 23% of those emissions, versus rail’s 2%, which is partly the result of rail being four times more fuel efficient. The Class I railroads say this green ace up their sleeve is beginning to drive new freight into their arms.  

“BNSF has seen sustainability become a bigger contributing factor to some customers’ supply chain decisions. Increasingly customers are looking at incorporating rail into their transportation mix as a good way to help lower their carbon emissions,” says John Lovenburg, vice president - environmental. Moving a container from Los Angeles to Chicago by rail instead of truck reduces the shipment’s carbon footprint by 65%, according to BNSF’s carbon estimator.

Railroads are reducing their emissions, too. Fuel efficiency is improving as railroads run longer trains, reduce horsepower:ton ratios, and adopt fuel-saving technology such as advanced cruise control systems and the automatic idling of trailing units whose horsepower is not needed.

Three exciting developments are under way for alternatives to the diesel engine.

First, Progress Rail’s EMD Joule battery electric switcher will debut in 2021 on Pacific Harbor Line, the short line that serves the ports of Los Angeles and Long Beach. 

Second, on the road locomotive front, Wabtec’s FLXdrive battery electric locomotive will begin testing on BNSF between Stockton and Barstow, Calif., in revenue service on Jan. 4. The FLXdrive is expected to reduce a conventional locomotive consist’s fuel consumption by 10% to 30%, depending on terrain and whether the FLXdrive is a 2,400 kilowatt hour machine like the prototype or a planned 6,000 kWh unit.

And, third, CP announced on Dec. 18 that it plans to pilot a hydrogen fuel cell road locomotive by retrofitting an older unit. “This is a globally significant project that positions CP at the leading edge of decarbonizing the freight transportation sector,” CP CEO Keith Creel says of the pilot project, which would be the first in North America. 

The railway did not provide a timeline for the project, and details were sparse, but the announcement came two days after the Canadian government released a report touting hydrogen power as a way to reduce reliance on fossil fuels. Of note: The report says that retrofitting locomotives and replacing their diesel engines with zero-emission fuel cells is a “viable and cost-effective alternative to purpose built hydrail trains, which is an important opportunity given the long (50 year-plus) lifecycle of locomotives.”

Which brings us back to trucks. The trucking industry can adopt new technology much faster than railroads due to the shorter lifespan of big rigs, which is measured in years instead of decades. Every week seems to bring another headline about a truck manufacturer testing a rig with batteries or a hydrogen fuel cell under the hood. Railroads are even jumping on the bandwagon. CN has ordered 50 electric trucks for delivering containers from intermodal terminals to the customer’s door, and BNSF is testing electric rigs for drayage and terminal use. 

A commercially viable long-haul truck that runs on alternative fuel may be years away. But diesel truck fuel mileage is getting better and technology like platooning may improve it further, which can only narrow trucking’s efficiency gap.

Oliver Wyman consultant Rod Case notes that investors are pouring billions into zero emission trucks because that’s where they can get more bang for their buck. There are 24 million heavy duty trucks on roads around the world compared to just 39,000 locomotives in North America, Case points out. And this means the railroad industry is utterly outgunned on research and development. 

As locomotive sales have dried up, Wabtec and Progress Rail have precious little money to spend on R&D. Despite record profits the Class I’s have until now lacked the appetite to help develop alternatives to locomotives that have diesel fuel tanks slung beneath their frames and exhaust stacks jutting from their long hoods. But don’t be surprised if other railroads follow CP’s lead.

Railroads know that over the long term merely focusing on fuel efficiency is the wrong battle. “If you look out further, then it becomes the next generation of propulsion, whatever that may be – whether it’s battery powered, electrification, LNG, hydrogen,” says CN Chief Operating Officer Rob Reilly. 

Developing new technology carries enormous risk, and there’s no guarantee that any of the three prototypes in various stages of development – Progress Rail’s Joule switcher, the Wabtec battery electric, or CP’s hydrogen unit – will prove to be operationally successful and economically viable. 

So perhaps rail’s answer to zero-emissions trucks should be tried and true electric locomotives. Yes, stringing catenary is prohibitively expensive. But it could one day make sense under any scenario you could cook up, like a carbon tax, shipper demands for greener railroads, or if catenary is powered by low-cost renewable sources of energy. If so, could the railroad answer to the zero-emissions truck be a modern version of the Pennsylvania Railroad GG1?

Perhaps. But it’s likely that there won’t be one replacement for the diesel. Electrification would seem to make sense only on the highest-density main lines. Batteries are logical for yard and local service. And perhaps hydrogen can rule regional railroads and lighter density main lines. Who knows. At this point there are more questions than answers around the technologies, costs, and even how green any zero emissions locomotive may be since there's no free lunch and energy has to come from somewhere.

The good news is that railroads have entered the zero-emissions race. It’s one they can’t afford to lose.

Editor's note: A version of this column appears in the February 2021 issue of Trains Magazine. The print version was written before Canadian Pacific announced its hydrogen fuel cell test project.

You can reach Bill Stephens at bybillstephens@gmail.com and follow him on twitter @bybillstephens