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Market Overview


Milton D’Silva explores the options for decarbonising construction equipment – synthetic fuels, battery electric or hydrogen fuel cells?.


Scene of construction site with equipment (Image: Freepik)

Human history is one of migrations. Roughly around 1.75 million years ago, as the earliest human beings began their journey out of Africa, they travelled over land routes to the Eurasian region, before spreading to the rest of the world. Ever since, the migrations have continued, even as the reasons have perhaps changed, to the present day. Somewhere around 4000 years ago, human beings started, for the first time, building their own dwellings as caves were no longer adequate, nor comfortable. Building homes was just a beginning; homes grew into clusters of villages, towns and cities. Roads followed, as did public amenities. Thus began the long history of construction, which, in tandem with infrastructure development has grown into a big business opportunity centuries later. Today, the construction industry accounts for 13% of the global GDP and employs around 7% of the world's workforce, according to the World Economic Forum. With growing urbanisation, continuous building activities and upgrading of infrastructure, construction activity is expected to grow further as old structures make way for modern, environment friendly buildings.

All these massive projects and infrastructure growth are facilitated by a host of machinery and equipment ranging from various types of backhoe loaders, excavators, cranes, aerial lifts, concrete mixers, scrapers, trailers, generators, engines, welders and many more. Almost all this equipment, classified as Non-Road Mobile Machinery (NRMM), is powered by IC engines, mostly diesel, which cause emissions and that is the theme of this article.

Most Non-Road Mobile Machinery (NRMM) is powered by IC engines. Photo by Shane McLendon on Unsplash

The Impact of Construction Equipment on Environment
While construction of modern houses, housing complexes, government and municipal administrative buildings and commercial establishments like public buildings, offices, malls and multiplexes and the supporting road, rail and airport infrastructure have all contributed to the comforts of contemporary human life, there is a flip side to this development. This is the environmental impact caused by the construction activity as a whole, but specifically by the operation of construction equipment and machinery. Listed below are the primary ways in which construction equipment impacts the environment:
  • Air Pollution: Construction equipment typically runs on diesel fuel, emitting pollutants such as nitrogen oxides (NOx), particulate matter (PM), carbon monoxide (CO), and volatile organic compounds (VOCs). These emissions contribute to smog formation and respiratory problems in humans. In addition, the combustion of diesel fuel also releases significant amounts of carbon dioxide (CO2), a major greenhouse gas that contributes to global warming.
  • Noise Pollution: The operation of heavy machinery like bulldozers, excavators, and cranes generates high levels of noise, which can disturb local wildlife and communities, potentially leading to hearing loss and stress-related health issues.
  • Water Pollution: Leaks and spills of fuel, oil, and hydraulic fluids from construction equipment can contaminate nearby water bodies, harming aquatic life and degrading water quality. That apart, construction activities often disturb soil, increasing sediment runoff into water bodies, which can lead to siltation, disrupt aquatic ecosystems, and degrade water quality.
  • Resource Consumption: Construction equipment consumes large amounts of fossil fuels, contributing to the depletion of non-renewable energy resources. The manufacturing and maintenance of construction equipment require significant amounts of raw materials, including metals and other non-renewable resources.
  • Biodiversity Impact: Construction activities and the movement of heavy equipment can destroy habitats, leading to the displacement or loss of wildlife species.
While manufacturers of passenger cars and commercial vehicles like buses and trucks are now mandated to meet strict emission standards, construction equipment, until recently, was not required to adhere to these norms and as a result, emitted up to 10 times more ultrafine particles and gases. This is further complicated by the nature of the terrain and operating conditions of this equipment where it is working under varying load conditions and engine status. For heavy-duty applications, the fuel consumption increases and with it the emissions, in comparison with light duty work with the same equipment. So it is with the variation in working temperature where cold weather adversely impacts fuel consumption and engine performance. The age and maintenance of the equipment are additional factors that affect the performance. Often the equipment is poorly maintained delaying engine overhauls to the breakdown point which results in higher fuel consumption and emissions.

At the heart of the debate on emissions control by various types and categories of vehicles and equipment is the Paris Agreement, which is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016. The goal of the Paris Agreement is to keep the global average temperature to well below 2°C above pre-industrial levels, and make further efforts to limit it to 1.5°C above pre-industrial levels. Pursuant to this, various countries have embarked upon their own policies and programmes regarding greenhouse gas emissions and initiated measures to mitigate the same.

The United States Environmental Protection Agency (EPA), for example, has adopted multiple tiers of emission standards. Most recently, the EPA adopted a comprehensive national program to reduce emissions from non-road diesel engines by integrating engine and fuel controls as a system to gain the greatest emission reductions. To meet these Tier 4 emission standards, engine manufacturers will produce new engines with advanced emission control technologies, with the mandate to decrease the sulphur levels in diesel by more than 99 percent or drastically reduce the concentration in exhaust fumes. Similarly, the European Union through a directive issued in 2022 has mandated that all construction equipment should reduce their carbon emissions by at least 20% by 2025.

China too has initiated measures to reduce emissions from off-road equipment, implementing Stage IV tailpipe emission standards by the end of 2022. These standards require the adoption of diesel particulate filters, while in-use compliance is enhanced by requiring portable emissions measurement system testing and GPS remote monitoring systems. More importantly, in 2016 the country designed and implemented low-emission zones, mainly in cities, to restrict the use of old, high-emitting construction equipment. As a result, only equipment meeting minimum emission standards is allowed to operate in these zones. India too is committed to stay at par with developed countries such as the United States, EU and Japan in controlling emissions from diesel powered equipment. To this end, the country has adopted a set of consistent standards, the CEV Stage IV and V that are in general alignment with the European Stage IV and V standards for diesel engines used in construction equipment.

The Road to Decarbonisation
As the world is now preparing for a transition to a net zero energy system by 2050, it will no longer be enough to talk about the reduction in emissions but instead prepare for a zero emissions future for construction equipment together with all other fossil fuel burning segments of mobility. It is not a case where nothing is being done to address the issues of emissions in construction equipment. In fact, as seen from developments across the world in the paragraphs above, policy makers are pressing for progressively stringent regulations and manufacturers of IC engines working on the same with advanced engine design and exhaust gas after-treatment with catalytic converters.

It would be interesting to note that the Committee for European Construction Equipment (CECE) roots for a 4-pillar approach for decarbonisation of construction machinery. These are:
  • Machine Efficiency – Integration of optimised machine components like powertrain, hydraulics, tyres, etc
  • Process Efficiency – Optimal workflow, including the choice of best suitable machine or a combination of connected machines
  • Operational Efficiency – Operators trained for intelligent machine use, skilled teamwork and efficient management, and
  • Alternative Energy Sources – Use of bio- or synthetic fuels, electric drives, hydrogen, etc.
Out of these 4 pillars listed by the CECE, the first three are fuel or energy agnostic, and should be part of the standard operating procedure (SOP) for any equipment or machine operation. It is the fourth pillar that is going to be of critical importance, the choice of fuel – alternative energy sources. None of these three options – bio-fuels and synthetic or e-fuels, electric drives and the use of hydrogen either directly as fuel or with fuel cell for electric drives – is new. Rather they have been in operation for a while, with the electric drive emerging as the most popular option for passenger cars at the moment.

Synthetic Fuel
Synthetic fuel is a broad term that covers biofuels and e-fuels, often used interchangeably despite the differences between them. Synthetic fuels are basically synthetic hydrocarbons that mimic the properties of fossil fuels, but are produced artificially. These can be used, with suitable variations, for all applications where fossil fuels are used – as gasoline, diesel or aviation fuel. The production process of synthetic fuels is energy intensive and hence it makes practical sense only if renewable energy from wind, solar or hydel power is used.

Benefits of Synthetic Fuels for Construction Equipment
  • Carbon neutrality: Synthetic fuels are produced using carbon dioxide (CO2) captured from the atmosphere and hydrogen generated from water using renewable energy sources. When burned, they emit CO2 that was previously captured, making them potentially carbon-neutral over their lifecycle.
  • Compatibility: Synthetic fuels can often be used in existing internal combustion engines with little to no modification. This is advantageous for the construction industry, which has a large fleet of existing equipment that would be expensive to replace.
  • Energy Density: Like traditional fossil fuels, synthetic fuels have a high energy density, which is crucial for construction equipment that requires a lot of power and long operational hours without frequent refueling.
  • Infrastructure: Existing fuel distribution infrastructure (e.g., gas stations, fuel trucks) can be utilised with minimal changes, reducing the need for significant new investments.
  • Performance: Synthetic fuels can be designed to have specific properties that improve engine performance and reduce emissions of pollutants other than CO2, such as particulate matter and nitrogen oxides (NOx).
  • Production Costs: Currently, the production of synthetic fuels is more expensive than conventional fossil fuels. The costs are driven by the energy-intensive processes required to capture CO2 and produce hydrogen through electrolysis.
  • Energy Efficiency: The overall energy efficiency of producing and using synthetic fuels is lower compared to direct electrification or hydrogen fuel cells. This is because each step in the production process involves energy losses.
  • Renewable Energy Demand: Producing synthetic fuels at scale would require a significant amount of renewable energy, which could be a challenge given current renewable energy production capabilities.
  • Market Adoption: Despite their compatibility with existing engines, the adoption of synthetic fuels in the market is still limited. Incentives, regulatory support, and technological advancements are needed to encourage wider use.
  • Environmental Impact: While synthetic fuels can be carbon-neutral, their environmental impact depends on the source of the CO2 and the type of renewable energy used. Unsustainable practices in CO2 capture or energy production can reduce their overall environmental benefits.

Current Developments

  • Rolls-Royce is taking an important step towards a more climate-friendly future in construction equipment, industrial applications, agriculture and mining with the approval of mtu Series 1000, 1100, 1300, 1500 and 4000 engines for sustainable fuels.
  • CASE, in late 2022, announced the launch of a four-model E-Series wheeled excavator range, powered by EU Stage V compliant Cummins diesel engines. These engines are capable of operating with a range of fuels, including synthetic fuels, to suit the customer requirements.
  • Toyota, which has been skeptical of an all-electric approach, is now testing Exxon’s synthetic fuel blends, which use existing feedstock and ethanol. These are for engines powering its wide range of material handling equipment, many of which are used at construction sites.

Rolls-Royce mtu Series 2000 engines are compatible with synthetic fuels.

Battery Electric Vehicles (BEVs)
The history of the automobile had actually begun with the electric car over a century ago before the IC engines became popular in the early years of the last millenium. Environmental concerns brought the EV back to centrestage for the passenger segment in the new millenium and the usage is now spreading to the NRMM segment as well. Battery electric vehicles use electric motors powered by rechargeable batteries. These have zero tailpipe emissions and can be highly efficient compared to IC engine counterparts.

Benefits of BEVs for Construction Equipment

  • Zero Emissions: BEVs produce no tailpipe emissions, significantly reducing CO2, NOx, and PM levels.
  • Energy Efficiency: Electric motors are more efficient than combustion engines, with higher energy conversion rates.
  • Operational Cost: BEVs have lower operational costs due to cheaper electricity compared to diesel and reduced maintenance requirements.
  • Technological Maturity: Battery technology has seen rapid advancements, with improvements in energy density, charging times, and battery life.
  • Battery Weight and Size: Construction equipment requires substantial power, leading to large and heavy batteries which can impact the equipment’s design and functionality.
  • Charging Time and Infrastructure: Recharging batteries can take significant time compared to refueling. The need for widespread and robust charging infrastructure can also be a significant barrier, particularly on remote or temporary construction sites.
  • Range and Downtime: Limited battery range and the downtime required for recharging can reduce productivity compared to continuously operating diesel machinery.
Current Developments

Several companies are pioneering electric construction equipment:

  • Volvo Construction Equipment has launched a range of electric compact excavators and wheel loaders.
  • Caterpillar is developing electric versions of its existing machinery, focusing on integrating battery systems efficiently.
  • Bobcat has introduced an electric compact track loader, showcasing the feasibility of electric alternatives in smaller equipment categories.

Volvo CE’s EC230 Electric is one of the early examples of a successful launch at construction sites.

Hydrogen Fuel Cell Vehicles (HFCVs)
Hydrogen fuel cell vehicles generate electricity through a chemical reaction between hydrogen and oxygen, producing only water and heat as byproducts. HFCVs offer a competitive alternative to fossil fuels and BEVs in the construction equipment segment, with a clean and sustainable power source for various heavy equipment and machinery.

Benefits of HFCVs for Construction Equipment
  • Zero Emissions: HFCVs emit only water vapour, eliminating CO2, NOx, and PM emissions.
  • High Energy Density: Hydrogen has a higher energy density than batteries, which means it can provide longer operating hours and greater range for construction equipment without frequent refueling.
  • Fast Refueling: Refueling hydrogen tanks can be done quickly, similar to conventional diesel vehicles, reducing downtime significantly.
  • Scalability: Hydrogen fuel cells can be scaled to meet the high power demands of larger construction equipment.
  • Hydrogen Production: Most hydrogen is currently produced from natural gas, which is carbon-intensive. Green hydrogen, produced via electrolysis using renewable energy, is more sustainable but still developing.
  • Infrastructure: Hydrogen refueling infrastructure is limited and requires significant investment to expand.
  • Storage and Transport: Hydrogen storage and transportation pose technical challenges due to its low density and high flammability.
  • Cost: The production, storage, and distribution of hydrogen are currently more expensive than diesel or electricity.
Current Developments
Several projects and collaborations are pushing forward the adoption of hydrogen in construction equipment:
  • JCB has developed a hydrogen-powered backhoe loader and a hydrogen-fueled telescopic handler.
  • Hyundai Construction Equipment is working on hydrogen fuel cell excavators, partnering with companies like Hyundai Mobis for fuel cell technology.
  • Komatsu is exploring hydrogen fuel cell technology for its large mining and construction machinery.

A JCB machine – 100% electric with zero emissions and a lot less noise.

Comparative Analysis of the Three Options
The comparative analysis of the three options for construction equipment – synthetic oils, battery electric and hydrogen fuel cells – is presented below:

Emissions and Environmental Impact

  • Synthetic Fuels share the same chemical properties as conventional petrol and diesel and hence release toxic gasses into the atmosphere when burned. But they generate fewer particulates and since manufacturers actively capture atmospheric carbon to produce synthetic fuel, the CO2 emissions are offset.
  • BEVs offer immediate reductions in CO2 and other pollutants, provided the electricity comes from renewable sources.
  • HFCVs also offer zero emissions but rely on the green hydrogen supply chain to be truly sustainable.
Energy Efficiency
  • Synthetic Fuels have a high energy density, which is crucial for construction equipment that requires a lot of power and long operational hours without frequent refueling, but BEVs still have better energy efficiency.
  • BEVs generally have higher energy efficiency due to direct electricity use.
  • HFCVs are less efficient because energy is lost during hydrogen production, compression, and conversion back to electricity.
Infrastructure Requirements
  • Synthetic Fuels have an advantage as these can use existing fuel distribution infrastructure (e.g., gas stations, fuel trucks) can be utilised with minimal changes, with no need for significant new investments.
  • BEVs require robust electric charging networks, which can be challenging in remote construction sites.
  • HFCVs need hydrogen production and refueling infrastructure, which is currently underdeveloped but has the advantage of quick refueling times.
Operational Considerations
  • Synthetic Fuels compare favourably with traditional fossil fuels in terms of operational considerations. However, there may not be enough of it produced presently.
  • BEVs may face limitations in operational hours and downtime due to recharging needs.
  • HFCVs can potentially operate longer hours with quick refueling, making them suitable for large, high-power equipment.
Cost Factors
  • Synthetic Fuels currently are more expensive than conventional fossil fuels as the costs are driven by the energy-intensive processes required to capture CO2 which is essential to produce them.
  • BEVs have lower running costs and maintenance but higher initial costs and potential productivity losses due to charging.
  • HFCVs have higher fuel costs and require substantial investment in infrastructure but can offer better performance for high-power needs.

A front 3/4 view of a virtual rendering of Komatsu’s 930E mining truck that will be powered by HYDROTEC fuel cells.


The 28th meeting of the Conference of the Parties (COP 28) was held from 30 November to 13 December 2023 at Dubai, UAE. This was the fifth meeting of the COP that served as the Meeting of the Parties to the Paris Agreement and was attended by more than 150 Heads of State and Government. The meeting concluded with an agreement that signals the ‘beginning of the end’ of the fossil fuel era by laying the ground for a swift, just and equitable transition, underpinned by deep emissions cuts and scaled-up finance. By conservative estimates, worldwide carbon emissions of construction equipment are equivalent to the emissions from the global aviation industry. With the commitment of the majority of the signatories to the Paris Agreement for net zero carbon emissions by 2050, like all other industry segments, construction equipment too must minimise its carbon footprint if not eliminate it altogether.

As seen in the preceding paragraphs and the comparative analysis, all the three options have their advantages, along with a few drawbacks. It is not a situation of either or – in fact, it is a matter of comparative evaluation of the three options to arrive at the best solution for a given application based on the location and availability of grid power. Hypothetically, if renewable energy is available in abundance at all locations, direct electric drive would be the best option for decarbonisation of construction equipment. In the absence of that, synthetic fuels, battery electric drives and IC engines with hydrogen as fuel or hydrogen fuel cell powered electric drives offer the next best alternative.


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