It’s green tech transition time in the infrastructure sector

It is green transition and transformation time in the infrastructure sector, delegates heard at Real Asset Media’s Infrastructure Summit: Transport & Logistics, which took place online recently on the REALX.Global platform.

“Technology has been so disruptive to our industry, bringing about change almost on a daily basis, so there has to be a constant effort to understand and adapt,” said Ben Segelman, DHL Supply Chain’s head of capital markets UK, Ireland, mainland Europe, Middle East and Africa, . “We expect technology to keep coming up with new, innovative solutions.”

DHL aims to get to net zero emissions by 2050 and it is making huge investments to reach that goal, from electrifying its van fleet to using “green fuel” in aviation to a specific technology that helps drivers find a quicker route to their destination.

“It entails a huge change in the way we operate but it’s the combination of all those small changes that leads to a general improvement and will help us reach our sustainability objectives,” Segelman said. “It is what our customers want, a better greener future.”

DHL’s large fleet of planes now includes eight entirely electric ones and in London they have invested in river boats, which are a speedier as well as greener alternative.

“We’re making substantial investments and seeing the benefits, but there’s a long way to go,” said Segelman. “Our scale allows us to shoulder these additional costs, but smaller groups would struggle with that.”

The need to move to net zero pledges is affecting transport infrastructure in a major way. But besides the cost of investing in new technologies there is also the uncertainty of which ones will perform and which might become obsolete.

Dominant technology will only emerge with time

“We are about to enter a very exciting stage in technology,” said Tobias Kassner, head of research, Garbe Industrial Real Estate. “Germany, like other countries, is experimenting with electric vehicles and hydrogen, but only time will tell which technology works best.”

A lot of attention is paid to the roll-out of charging points for electric vehicles, but there is a risk of the infrastructure becoming outdated and assets being stranded.

“Elsewhere in the world they are working on batteries that you can change, so you don’t need the charging point infrastructure anymore,” said Kassner.

Private capital will only get involved in a big way once things are more predictable and there is a business model that works.

“We’re at the beginning of the electrification journey and Europe is leading the way,” said Tania Tsoneva, senior director, global infrastructure research, CBRE Investment Management. “But it is still unclear how it will be rolled out and who will pay for it, there is finance and technology risk.”

In the end it will have to be a combination of different solutions that together change the picture.

“It will be a journey,” said Tsoneva. “You cannot bet on one solution, but all options must be kept open. You have to keep monitoring development in electrification, hydrogen and all innovations because the market is changing all the time.”