Barriers and solutions to the successful diffusion of dual-fuel trucks in Europe; An innovation systems approach

The transport sector is one of the major contributors to anthropogenic GHG emissions. In particular, road freight transport contributes to approximately 7% of global energy-related emissions (Mattila and Antikainen, 2010). To reduce this impact, low-carbon technologies are being developed. In this thesis we focus on the dual-fuel truck. This new product has the potential to contribute to GHG emissions reduction in the freight transport sector. Even though this product is technically available and economically feasible it is facing difficulties to diffuse in the European market. The purpose of this thesis is to identify the main barriers, and suggest solutions, to the successful introduction and diffusion of dual-fuel trucks on the European market. In order to address this question we use the Technological Innovation Systems (TIS) framework. Our analysis reveals that the TIS is facing five mechanisms blocking the development of the system. These main barriers include the lack of European standards and regulations for the dual-fuel trucks and the LNG filling stations; the lack of customers‘ experience and familiarity with a dual-fuel truck; the current small market size of LNG for vehicles which is not attractive for oil/gas companies; the ―chicken and egg‖ dilemma regarding the launching of trucks and the construction of filling stations; and, the concerns about the fossil origin of LNG which might affect customer‘s acceptance of the dual-fuel truck. Using the results of our analysis we develop strategy recommendations for Volvo Truck. These solutions could help weaken/remove the five blocking mechanisms and speed up the diffusion of the dual-fuel truck in the European market. First, in order to accelerate the creation of standards and regulations Volvo Truck could join existing groups working at the EU level. Second, in order to alleviate the lack of experience and familiarity with the dual-fuel truck Volvo should prioritize demonstration programs and adopt a clear communication strategy. Third, in order to stimulate the LNG demand from the transport sector Volvo Truck should support the use of this fuel in other transport modes. Fourth, in order to solve the ―chicken and egg‖ dilemma Volvo could establish formal and informal networks with key actors at the national level. Finally, Volvo should adopt a PR and marketing strategy considering the country-specific environmental concerns about the fossil origin of LNG