Contents lists available at ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy The role of modal shift in decarbonising the Scandinavian transport sector: Applying substitution elasticities in TIMES-Nordic Raffaele Salvucci a, ⁎ , Maurizio Gargiulo b , Kenneth Karlsson a a Technical University of Denmark, Department of Management Engineering, Produktionstorvet, Building 424, 2800 Kgs. Lyngby, Denmark b E4SMA S.r.l., Via Livorno 60, 10144 Turin, Italy HIGHLIGHTS • Model passenger and freight elastic modal shift in TIMES energy system models. • Substitution elasticities characterize modal substitution across distance classes. • Long-term own-price transport elasticities are adopted from the literature. • Modal shift is cost-effective for decarbonising the Scandinavian transport sector. • Modal competition requires a well-balanced technology description among modes. ARTICLEINFO Keywords: Energy system models Low-carbon transition Scenario analysis Sustainable mobility Transport elasticities ABSTRACT IntheNordics,transportationaccountsforalmost40%ofenergy-related CO 2 emissions,ahighersharethanmost European countries. The International Energy Agency identifies modal shift as pivotal for a sustainable transition of the transport sector. This study analyses the role of modal shift in the decarbonisation of the Scandinavian energy system with TIMES-Nordic, the TIMES (The Integrated MARKAL-EFOM System) model depicting the nationalenergysystemsofDenmark,NorwayandSweden.Forthefirsttime,passengerandfreightmodalshiftis modelled through substitution elasticities for a real case study. Transport elasticities from the literature are discussed in light of the modelling environment, and long-term direct elasticities are identified as suitable for the purpose. The results obtained with TIMES-Nordic and its version equipped with modal shift are compared under an increasing CO 2 tax. For passenger, car is mainly substituted by rail and non-motorised modes, while for freight, rail replaces truck and ship. Modal shift results in a cost-effective mitigation measure, responsible for 26 PJ of lower fuel consumption in 2050, and 2.2% lower cumulative CO 2 emissions from transport. A sensitivity analysis on the investment costs for electric cars reveals the ineffectiveness of the CO 2 tax in stimulating car substitution in a future where electric cars are more competitive and the power sector almost decarbonised. Estimates of modal shift potentials from alternative methodologies are comparable to the results obtained, highlighting the methodology solidity. Lastly, a well-balanced technology characterization among modes is identified as crucial when enabling modal shift. 1. Introduction The transport sector is responsible for approximately 28% of total final energy use and for 23% of global energy-related CO 2 emissions [1]. In the baseline scenario of the Energy Technology Perspectives (ETP), the International Energy Agency (IEA) estimated that by 2050 global transport energy demand will increase by 75%, with a con- comitant doubling of associated CO 2 emissions [2]. Low-carbon trans- port technologies are already available in the market, but the high costs hampering their widespread adoption calls for policy support [3]. Countries have announced policy ambitions and commitments in their Nationally Determined Contributions under the Paris Agreement, but these mitigation measures are far from sufficient to limit the average increase in temperature to “well below 2 degrees” above pre-industrial levels, as assessed by [4] and reflected in the New Policy Scenario outlined by the IEA [5]. In the Nordics, transportation accounts for almost 40% of energy-related CO 2 emissions [6], representing a higher share than most other European countries. However, so far the Nordics https://doi.org/10.1016/j.apenergy.2019.113593 Received 11 February 2019; Received in revised form 19 May 2019; Accepted 19 July 2019 ⁎ Corresponding author. E-mail address: rafs@dtu.dk (R. Salvucci). Applied Energy 253 (2019) 113593 0306-2619/ © 2019 Elsevier Ltd. All rights reserved. T