Case study: Hector Rail – delivering environmental benefits through sustainable freight services

Hector Rail is the largest private rail freight provider in Scandinavia and has a growing presence in Germany, Europe’s largest freight market. By transporting essential goods and materials for commercial and industrial clients at a fraction of the carbon footprint of road, sea or air freight alternatives, Hector Rail plays an important role in the growth and decarbonisation of the European economy.

Transport currently accounts for a quarter of the EU’s greenhouse gas emissions and this is forecast to grow in line with increasing demand.[1] The urgent need to deliver on ambitious climate goals means that rail freight is becoming increasingly attractive due to its lower emissions compared to road or air. This is especially true in Scandinavia and Germany where most of the rail network is electrified.

Ancala’s long term value creation strategy is focused on realising operational improvements that drive cost efficiencies and deliver environmental benefits. Central to this are efforts to improve the energy efficiency of the fleet through introducing best practice in energy management. In 2020 Hector Rail piloted eco-driving through reduced, stable speed and by following the typography of the land. The pilot demonstrated that energy performance can be improved by 15% compared to the use of cruise control, without negatively impacting business performance and delivery times. Opportunities to enhance fleet utilisation have also been identified which will drive profitability and reduce the emissions per gross tonne km even further.

Other efforts to reduce the carbon footprint of the Group’s operations are also underway. In Sweden, Norway and Denmark – and from 2021 Germany – Hector Rail’s electricity for train operations is powered entirely by renewable power, limiting the Group’s emissions to the operation of diesel locos in remote areas without electrified tracks. Investments in energy efficient dual function locos are also planned to further reduce emissions associated with diesel locos and the company has engaged with policymakers to encourage further electrification of the railways and to advocate for subsidies for bio-diesel fuels.

These improvements will help to position Hector Rail as the greenest long distance transport option for freight in Northern Europe and help accelerate the transition to a net-zero carbon economy.