Decarbonising Heavy Transport: Financial Innovation key to Climate and Economic Resilience

Decarbonising heavy transport is a crucial component in addressing both climate change and economic resilience. While passenger vehicles often dominate discussions, freight transport, primarily involving trucks and lorries, plays an even more significant role. In Spain, around 96 per cent of all goods are transported via road freight, with a national fleet of approximately 620,000 trucks. This segment's importance extends beyond logistics, affecting the entire economy and emissions profile.

Despite the recognised need to electrify this sector, progress remains limited. In 2025, electric trucks accounted for less than 0.6 per cent of sales, primarily due to financial and infrastructural barriers. The critical challenge is not technological capability—modern electric trucks typically offer ranges exceeding 500 kilometres, with recent models surpassing 700 kilometres—but rather access to finance and suitable charging infrastructure. Leasing and rental agreements, which depend heavily on predicted residual values, face uncertainty due to the lack of historical data on electric trucks depreciation.

This situation results in prohibitively high monthly payments, discouraging adoption. To foster significant progress, policy shifts must go beyond simple subsidies for vehicle purchase. While initial incentives reduce upfront costs, they do not mitigate the underlying financial risks or long-term costs associated with electric vehicle ownership. Innovative financial mechanisms are needed to unlock wider adoption and investment.

One promising solution involves public guarantees of residual value, which help distribute risk between government and finance providers. Under this model, a public agency, such as the Spanish ICO, offers to cover the difference if an electric trucks resale value falls below an agreed residual amount after a leasing period. If the resale value exceeds expectations, the surplus is shared, creating a reinvestment cycle that boosts funding for more electric trucks. This approach effectively reduces financing costs by 12 to 14 per cent, making electric trucks more affordable for transport operators.

Implementing these financial instruments could mobilise over 220 million euros in private investment with an initial guarantee fund of around 10 million euros. This scaling effect allows more practical progress compared to direct subsidies, which are limited by budget constraints. Once the second-hand market matures and sufficient data accumulates, private insurers will become more comfortable offering attractive finance products. Such innovative schemes are vital for establishing an autonomous and resilient low-carbon freight sector.

In addition to financial tools, sector-specific programmes like Auto 2030, the Spain Growth Fund, and guarantees from the European Investment Bank provide a comprehensive framework for accelerating this transition. The combined effort of policy, finance, and technological advancements can make the large-scale electrification of freight transport feasible, sustainable, and economically advantageous. Ultimately, the transition requires political will and a shift towards risk-sharing models that can de-risk investments and foster rapid adoption of zero-emission logistics solutions.