Peru
Peru
March 25, 2024

Peru's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities

Electrification and Efficiency: Shifting Gears in Peru's Corporate Fleets for a Greener Tomorrow

Peru's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities
Peru
March 25, 2024
Peru's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities
Electrification and Efficiency: Shifting Gears in Peru's Corporate Fleets for a Greener Tomorrow
Summary

Peru's journey towards sustainable fleet management and the electrification of vehicles embodies a commitment to environmental stewardship and innovation in transportation. Despite facing significant challenges, including economic constraints and infrastructural gaps, Peru is making strides towards a greener future. The gradual increase in the adoption of Hybrid and Battery Electric Vehicles, coupled with the country's moderate electricity emission factor, presents a viable pathway towards reducing carbon emissions and fostering a more sustainable transportation ecosystem. As Peru continues to navigate the complexities of electrification, its efforts not only contribute to national environmental objectives but also resonate with global sustainability goals. The transition towards electrified corporate fleets in Peru exemplifies a broader shift towards sustainability, highlighting the critical role of strategic planning, policy support, and technological innovation in achieving a more sustainable and efficient transportation future.

Country General Overview

Introduction

Peru, a country with a rich cultural heritage and a diverse landscape, presents a complex scenario for corporate fleet management. With its significant progress in economic growth and poverty reduction prior to the COVID-19 pandemic, Peru has become an upper-middle-income economy. However, it faces challenges such as climate change, inequalities, and a dependency on natural resources which impact the corporate fleet management sector.

Geographic and Infrastructure

Peru's geography, characterized by the Andes Mountains, the coastal region, and the Amazon basin, poses unique challenges for transportation and logistics. The varied terrain requires adaptable fleet management strategies to navigate through its diverse landscapes efficiently. Additionally, Peru's road infrastructure, while extensive, varies in quality across regions, affecting fleet operations and necessitating strategic planning to optimize routes and ensure timely deliveries.

Economic

The Peruvian economy has shown remarkable growth, with per capita income increasing significantly over the last two decades. The World Bank highlights that despite the economic challenges, including low growth and uncertainties, Peru has managed to maintain macroeconomic stability. This economic environment impacts corporate fleet management, influencing operational costs and investment in new technologies or fleet upgrades. The reliance on the transportation and logistics sector is pivotal for supporting the country's economy, especially considering the density of motor vehicles and the need for efficient fleet management systems.

Environmental Considerations

Peru's environmental considerations are paramount, especially with its part in the Amazon rainforest and the Andes Mountains. These natural resources present both opportunities and challenges for corporate fleet management, especially in terms of reducing carbon emissions and aligning with global environmental standards. The World Bank's efforts in supporting transformative projects focused on the Peruvian Amazon underscore the importance of sustainable practices in all sectors, including transportation and logistics. With environmental sustainability becoming a pressing concern globally, incorporating fuel-efficient vehicles, optimizing routes, and adhering to emissions regulations are critical steps for corporate fleets in Peru​​​​​​.

Sustainable Fleet Management

Scopes Data - Electrification Recommendation Rank Icon

Electrification Recommendation Rank

Peru
's Category

Rank G : Difficult Environment for EVs

These countries are challenging environments for EV adoption due to economic difficulties and underdeveloped infrastructure. Here, transitioning to HEVs is the first choice for reducing CO2 emissions.

Same Category Countries

Argentina, Egypt, India, Kazakhstan, Philippines, Russia, Saudi Arabia, South Africa

Info:

The Electrification Recommendation is derived from two aspects: each country's EV Readiness assessment (based on factors such as Electric Vehicle market share, environmental consciousness, GDP, etc.), and the Electricity Emission Factor (EF). Even if a country has a low Electricity EF, enabling CO2e emissions reduction through transitioning to BEVs, the adoption of BEVs could be challenging if the country lacks adequate infrastructure or faces financial constraints.

Since every company operates in a unique environment, this recommendation might not apply in all cases. However, it can be useful for setting a general direction.

Scopes Data - CO2e From Electricity Icon

Electricity EF Category

Peru
's Electricity EF

0.473

CO2e kg/kWh

Ref:

The IFI Dataset of Default Grid Factors v.3.0 in 2021

Peru
's Category

Rank 2 : Moderate Emission Countries (0.25 - 0.50 kg/kWh)

Info:

Countries with high Electricity EF have less benefit for electrification

  • Rank 1: 0.00 – 0.25 kg/kWh (About 0 – 38 CO2e g/km)
  • Rank 2: 0.25 – 0.50 kg/kWh (About 38 – 76 CO2e g/km)
  • Rank 3: 0.50 – 0.75 kg/kWh (About 76 – 113 CO2e g/km)
  • Rank 4: 0.75 – 1.00 kg/kWh (About 113 – 151 CO2e g/km)
  • Rank 5: More than1.00 kg/kWh (About more than 151 CO2e g/km)
Scopes Data - EV Readiness Icon

EV Readiness Category

Peru
's Category

Rank 5 : Very Challenging Environment for EV Adoption

Market Share information
Scopes Data - BEV Icon
2022 BEV

0.1

%

2023 BEV

0.2

%

Scopes Data - HEV Icon
2022 HEV

1.5

%

2023 HEV

2.4

%

Scopes Data - Non-ICE Icon
2022 Non-ICE

1.7

%

2023 Non-ICE

2.7

%

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

2022 EPI Results
Rank

101

/180

Score

39.8

2022 EPI Results : Environmental Performance Index(EPI) provides a quantitative basis for comparing, analyzing, and understanding environmental performance for 180 countries.

Ref:Wolf, M. J., Emerson, J. W., Esty, D. C., de Sherbinin, A., Wendling, Z. A., et al. (2022). 2022 Environmental Performance Index. New Haven, CT: Yale Center for Environmental Law & Policy. epi.yale.edu

Introduction to Sustainable Fleet Management and Electrification Efforts

In Peru, the journey towards sustainable fleet management and the electrification of vehicles is gaining momentum amidst global environmental concerns and the pressing need for cleaner transportation solutions. This initiative reflects an acute awareness of the environmental impacts of corporate fleets and a committed effort to reduce carbon emissions through the adoption of Battery Electric Vehicles (BEVs) and Hybrid Electric Vehicles (HEVs). Despite facing infrastructural and economic challenges, Peru's efforts are crucial in setting the groundwork for a sustainable and electrified future, aligning with global trends towards greener mobility solutions.

Current Vehicle Landscape: Preferences and Powertrain Segments

The Peruvian vehicle landscape is characterized by a diverse mix of powertrains, with a strong presence of Internal Combustion Engine (ICE) vehicles. Popular models across various segments, from compact cars to SUVs, dominate the market, reflecting a traditional preference for ICE vehicles. However, a gradual shift is noticeable, with Hybrid Electric Vehicles (HEVs) and Battery Electric Vehicles (BEVs) beginning to make inroads into the market. Despite the nascent stage of EV adoption, there's a growing interest among consumers and corporations in exploring more sustainable vehicle options, driven by increasing environmental awareness and the potential for operational cost savings.

Peru

Grid.js Table

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

Electric Vehicle Market Overview and Trends

Peru's electric vehicle market, while still in its infancy, is showing signs of slow but positive growth. The adoption rate of BEVs and HEVs is gradually increasing, with sales data indicating a slight uptick in market share for these cleaner alternatives. The market's expansion is bolstered by a growing recognition of the need for sustainable mobility solutions and the long-term benefits of electrification. However, the transition is challenged by economic constraints and a lack of comprehensive EV infrastructure, making the journey towards a fully electrified fleet a complex but forward-looking endeavor.

Energy Context: Electricity Emission Factors and Implications for Electrification

Peru's moderate electricity emission factor reflects a balanced mix of energy sources, including renewable energy, nuclear power, and fossil fuels. This context provides a relatively favorable backdrop for the electrification of transportation, as transitioning from ICE vehicles to BEVs and HEVs can significantly reduce CO2 emissions. Despite the challenges, the energy landscape in Peru presents an opportunity to leverage cleaner electricity for sustainable fleet management, contributing to the global effort to combat climate change.

Challenges and Opportunities in EV Adoption

The path to widespread EV adoption in Peru is fraught with challenges, including economic barriers, infrastructure limitations, and low environmental awareness. Nevertheless, these challenges also present opportunities to innovate and develop targeted strategies for promoting electrification. Investments in EV infrastructure, incentives for EV purchases, and educational campaigns to raise awareness can catalyze the transition, positioning Peru to overcome obstacles and embrace the benefits of electrified transportation.

Additional Insights: Shaping the Future of Transportation

As Peru navigates the complexities of fleet electrification, the country stands at the cusp of shaping a more sustainable future for transportation. The gradual shift towards EVs, supported by policy measures and technological advancements, offers a glimpse into a future where corporate fleets are not only more environmentally friendly but also more economically efficient. This transition, though challenging, holds the promise of transforming Peru's transportation landscape, contributing to global sustainability goals, and paving the way for future generations.

Country Case Study

The "Base Fleet" percentage is set according to the sales ratio of each powertrain in Peru for the year 2023. (For countries where sales ratios cannot be obtained, it is assumed all are ICE vehicles.) The "Recommended Fleet" is designed to be realistic (based on a rank determined by the Electricity Emission Factor Category and EV Readiness Category, deciding a practical range) and efficient in reducing CO2e emissions. It is not expected that the entire fleet will switch to this mix at once but rather after one or two renewal cycles over about 4 to 8 years, considering the usual fleet renewal period is around 4 years. This is viewed as a recommendation for the fleet composition in 4 to 8 years.

The calculation of CO2e emissions is based on a fleet of 100 vehicles traveling an average of 30,000 km per year. Therefore, if your company's fleet size in Peru is 1,000 vehicles, multiplying the results by 10 will give you an approximate value. For fuel, it is assumed all vehicles use petrol (2345.02 CO2e g/L), and for electricity, the average emission factor of Peru is used. For PHEVs, it is calculated assuming 50% electricity usage and 50% fuel usage.

Analysis of Fleet Transition from Current State to Sustainable Future

This refers to the average CO2e emissions per kilometer calculated based on the actual energy (Fuel and Electricity) used. It also takes into account the size of the vehicles used in Peru's fleet.

Scopes Data - ICE Icon

ICE

(CO2e g/km)

Scopes Data - HEV Icon

HEV

(CO2e g/km)

Scopes Data - PHEV Icon

PHEV

(CO2e g/km)

Scopes Data - BEV Icon

BEV

(CO2e g/km)

ICE

HEV

PHEV

BEV

Peru stands at a pivotal point in transitioning its corporate fleet towards sustainability and electrification. Currently, the fleet is heavily dominated by Internal Combustion Engine (ICE) vehicles, with a substantial number pegged at 98 units. This baseline reflects a traditional reliance on fossil fuels, a common theme across corporate fleets globally. The path to a more sustainable future in Peru involves a radical reshaping of the fleet composition, emphasizing a shift towards Hybrid Electric Vehicles (HEVs), given the country's classification under the "Moderate Emission Countries" for electricity production.

The recommended transition delineates a significant reduction of ICE vehicles to 11 units, spotlighting a strategic pivot to embrace HEVs, which are set to rise to 89 units. This shift is not just a nod to environmental stewardship but also a pragmatic response to Peru's current electric vehicle (EV) infrastructure, which is ranked as presenting a "Very Challenging Environment for EV Adoption." The introduction of HEVs as a cornerstone of the fleet aligns with the country's moderate electricity emission factor and navigates the infrastructural and economic hurdles impeding a full leap to Battery Electric Vehicles (BEVs).

This transition underscores a tailored approach, recognizing the nuanced challenges and leveraging the existing potential within Peru's automotive and energy landscape. It reflects a commitment to reducing the environmental footprint while acknowledging the current limitations and opportunities for electrification within the country.

Analysis of CO2 Emission Reductions Through Fleet Transition

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

Base Fleet Mix Case
Reasonable Recommended Fleet Mix Case

Transitioning towards a greener fleet in Peru presents a significant opportunity for CO2 emission reductions, crucial in combating climate change. The current fleet setup, heavily reliant on ICE vehicles, results in a total CO2 emission of 346 tons. The move towards a fleet predominantly composed of HEVs marks a pivotal shift in environmental impact, dictated by the country's energy mix and the inherent efficiency of hybrid technology.

In the proposed reasonable recommended transition, the drastic reduction of ICE vehicles to 11 units results in a decrease of fuel-based CO2 emissions to 39 tons. Concurrently, the increase in HEVs to 89 units is expected to result in emissions of 236 tons, based on their operational efficiency and reduced reliance on fossil fuels. This transition highlights a substantial shift towards lowering the fleet's overall CO2 footprint to 275 tons from the original 351 tons in the base fleet mix case.

Such a transition is emblematic of Peru's strategic embrace of hybrid technology as a feasible step towards sustainability, amidst economic and infrastructural challenges. It leverages the current energy scenario, characterized by a moderate emission factor, to effectuate meaningful reductions in CO2 emissions, thereby contributing to global environmental goals.

Comparative Analysis of CO2e Emissions Across Fleet Scenarios

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

Evaluating various fleet scenarios in Peru offers insights into the potential impacts of different electrification strategies on CO2e emissions. The base case, predominantly ICE-based, sets a high benchmark for emissions at 351 tons. Transitioning to a reasonable recommended mix underscores the potential of HEVs in Peru's context, reducing total CO2e emissions to 275 tons. This reflects a significant improvement, highlighting the effectiveness of hybrids given Peru's moderate electricity emission factor and the challenging EV adoption landscape.

Alternative scenarios provide a broader perspective. An all-ICE fleet scenario would slightly increase emissions to 353 tons, underscoring the inefficiency of a uniform ICE strategy. In contrast, an all-HEV scenario could further reduce emissions to 265 tons, showcasing the potential of hybrids to mitigate environmental impact significantly. The PHEV and BEV scenarios, while promising, are contingent upon Peru's infrastructure and energy grid improvements. Specifically, transitioning to an all-BEV fleet, even under the current average emission factor, could dramatically lower emissions to 188 tons, with further reductions possible as the share of renewable electricity increases.

These comparisons elucidate the critical role of vehicle technology and energy sources in determining the environmental outcomes of fleet transitions. For Peru, the journey towards fleet electrification and sustainability is marked by strategic choices, emphasizing hybrids as an immediate step, while laying the groundwork for future BEV integration as infrastructure and energy mixes evolve.

https://scopesdata.com/sustainability-country-information/peru-2023

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