How to Decarbonize Rail Freight

A deep-dive and analysis on Voltify’s approach to net-zero rail freight

17 min readJan 22, 2025

Globally, transportation accounts for approximately 7 billion metric tons of CO₂. Of this, freight, or shipping goods, merchandise, and cargo from one location to another, contributes 2.1 billion metric tons, or 29 percent.

Most of this contribution can be attributed to trucking (76%), maritime shipping (14%), and aviation (8%) — areas where most current decarbonization efforts are focused.

In November, Philadelphia-based Voltify raised $2.5 million in funding from theDOCK, E44 Ventures, and J-Impact to take a different approach — turning their attention away from traditional target markets for decarbonization and towards rail freight.

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Key Gap Served

Rail freight handles 28% of freight ton-miles in the U.S., moving approximately 1.7B tons of goods annually. Ideal for long-haul routes, rail is critical for the movement of bulk commodities like grain, chemicals, coal, and manufacturing materials.

The majority of the remaining 72% of transport is carried out by trucking. Trucking dominates short and medium-haul freight due to its flexibility and ability to provide door-to-door service, something that is not achievable using rail infrastructure.

When looking at total emissions, there is a fundamental and potentially surprising imbalance in the makeup of total emissions. Though trucking only accounts for 68% of all ton-miles, it contributes an 85% share of freight emissions (around 400 metric tons of carbon). On the other hand, rail, handling 28% of ton-miles, only accounts for 2% of freight emissions (around 25 million metric tons of carbon).

This is an efficiency issue. On a per ton-mile basis, rail emits only 20 grams of CO₂, compared to 80 grams for trucks. As such, decarbonization efforts have, by and large, focused on the trucking industry. Intuitively, this makes the most sense. Attack the largest market. Find a solution to the biggest problem. This has left the rail industry largely untouched and undiscussed by emerging energy startups and major players alike.

An Alternative Approach

Reports from the International Energy Agency have highlighted that switching from road to rail where possible could significantly reduce total emissions. A 10% shift in freight-ton miles from trucks to rail in the U.S. could save approximately 16M tons of CO₂ on an annual basis.

This is entirely possible. Currently, medium-haul and long-haul freight (250–500+ miles) accounts for an estimated 45–55% of total trucking ton-miles. As opposed to short-haul freight, which trucks are necessary for, these longer trips could theoretically be moved over to rail for immediate reductions in emissions.

Why this hasn’t already happened

The transition from truck to rail faces several critical bottlenecks. Current infrastructure isn’t built for efficient intermodal transfers — the systems needed to move goods between rail and truck require significant optimization and capital investment. In addition, just-in-time logistics companies, which form the backbone of modern supply chains, favor trucking for its flexibility and reliability.

Rail’s legacy infrastructure poses another challenge. Built primarily for bulk commodities like coal and grain, the existing rail network struggles with diverse cargo movement. Limited intermodal facilities and capacity constraints in high-traffic areas create operational friction. Service reliability compounds this — weather delays, maintenance requirements, and passenger train prioritization often make rail significantly slower than trucking on crucial routes.

While rail offers lower costs per ton-mile for long distances, the economics get complicated when accounting for intermodal handling and infrastructure requirements. Add to this the trucking industry’s deep integration into existing supply chains and substantial political influence, and you get a system highly resistant to change.

Potential Future State

Despite the challenges discussed, several major policy moves could accelerate the shift to rail. The Bipartisan Infrastructure Law has allocated $66 billion for rail modernization, targeting safety, capacity, and connectivity. States are driving change too — California’s Sustainable Freight Action Plan aims to transition cargo from roads to cleaner alternatives like rail.

The global picture reinforces this trend. The EU targets a 50% increase in rail freight by 2030. China and India are building dedicated freight corridors to handle growing cargo volumes.

Implementation remains the key challenge. Success depends on overcoming entrenched logistical systems, economic incentives, and political resistance. If these hurdles clear, rail could emerge as a compelling alternative for medium and long-haul freight, addressing both emissions concerns and infrastructure strain.

Voltify

In my opinion, and based on my analysis, Voltify’s bet is that rail will become a more critical piece of our freight infrastructure in the future. As a result, their focus is on becoming a critical piece of the next-gen energy infrastructure of the market they believe is set to benefit the most from changing policies, enabling them to grow as the market does.

If they’re successful and actively cement themselves as a trusted provider of green solutions to the rail market now, they’ll benefit more later.

In the rest of this deep dive, we’ll discuss their approach, the feasibility of the technology, and the challenges they’ll have to overcome to achieve this.

Founding Story

Voltify is founded by Daphna Langer and Alon Kessel, serial entrepreneurs whose past companies have a combined valuation of over $1B.

The company’s values, as listed on its website, are as follows:

Sustainability: We are committed to driving sustainability by reducing emissions, conserving resources, and fostering a cleaner, greener future for rail transportation.
Innovation: We embrace innovation as the cornerstone of our mission, pushing the boundaries of technology to create cutting-edge solutions for sustainable rail travel.
Collaboration: Collaboration is at the heart of our success. We work hand-in-hand with rail companies, communities, and partners to achieve mutual goals.
Resilience: We build resilience into our solutions, ensuring they can withstand challenges and disruptions, while also adapting to industry changes.
Customer-Centric Approach: We prioritize our customers’ unique needs, striving to provide tailored solutions that add value to their operations.
Financial Responsibility: Our approach is rooted in financial responsibility, offering sustainable solutions that make economic sense for our clients.
Safety: Safety is paramount in our operations, with a focus on maintaining secure and reliable rail transportation.
Ethical Practices: We uphold the highest ethical standards, practicing transparency, integrity, and strict adherence to all laws and regulations.

Their stated mission is to offer an end-to-end, zero-emission alternative to rail freight operators at diesel parity, meaning there should be no additional cost for adoption.

Product and Technology

Voltify’s approach is centered around key efforts across both technological infrastructure for energy-efficient propulsion, plus the infrastructure necessary to maintain it.

Their core product is the “VoltCar”, a battery-equipped freight car that can be plugged into existing rail infrastructure to propel the train. These batteries are designed to supply electric power to locomotives, effectively replacing the need for diesel fuel and thereby significantly reducing emissions. This approach allows for the utilization of existing locomotive fleets without necessitating extensive modifications.

Key features and functionalities of the VoltCar include:

Battery Composition: VoltCars utilize sodium-ion batteries, which are known for their cost-effectiveness and abundance compared to lithium-ion alternatives. Sodium-ion technology offers a promising balance between performance and sustainability, making it suitable for large-scale applications like freight rail.

Dynamic Charging: The system is designed to charge the VoltCars dynamically while they are en route and during yard operations. This fast-charging capability ensures that the batteries are replenished without necessitating prolonged stops, thereby maintaining operational efficiency.

Dual-Energy Propulsion: Voltify’s solution includes a dual-energy propulsion system that allows locomotives to seamlessly transition back to diesel mode if necessary. This flexibility ensures that operations can continue uninterrupted in scenarios where electric power may be insufficient or unavailable.

Regenerative Braking: The VoltCars are capable of charging continuously using regenerative braking. This means that energy typically lost during braking is captured and stored in the batteries, enhancing overall energy efficiency.

AI-Powered Energy Management: An AI algorithm forecasts data and analyzes real-time information to maintain energy consistency without compromising capacity. This intelligent system optimizes energy consumption, ensuring reliable operation and reducing maintenance costs.

To supplement the dynamic charging of the VoltCars, Voltify will build and establish microgrids along freight lines. Powered by solar farms and grid-independent, these systems will enable stationary, in-yard charging of the VoltCars, while also providing extra energy to primary grids while not in use.

Business Model

Voltify’s selling point to rail operators is simple. They won’t pay anything more than they already do using diesel, and all infrastructure development and integration of technology will be handled by Voltify.

This removes the “green-premium” that is a common barrier that blocks the transition to zero-emission technology.

With that said, it’s not immediately clear to me how Voltify plans on achieving cost parity.

Currently, rail operators pay approximately $0.09/kWh, the price of energy Voltify will have to match, while also maintaining room for profit.

To implement their technology, Voltify will have to take on significant expenditures spanning solar farm implementation, battery storage, and microgrid control systems. A theoretical cost breakdown (not exact — very “back of the napkin”) can be found below, with the assumption that all infrastructure is installed in railyards.

Note: The following cost analysis is based on industry benchmarks and my own calculations. Voltify has released limited public information about its exact approach and business model. While this analysis aims to understand the scale of investment required, actual implementation costs and Voltify’s specific strategy may differ significantly:

Solar Farms

Solar farms are the foundation of Voltify’s renewable energy model, providing consistent power generation for charging infrastructure and microgrids. Their capacity is tailored to the energy demands of the rail yard, with sizing dependent on the volume of VoltCars serviced daily and the regional solar irradiance.

Size:

Medium yards: 5–10 MW capacity.
Large yards: 20–30 MW capacity.

Cost per MW: $1.5–2 million.

Total Solar Farm Cost:

Medium yard: $10–20 million.
Large yard: $40–60 million.

Battery Storage

Battery storage ensures uninterrupted power delivery by balancing the inherent intermittency of solar energy. These systems store excess energy generated during peak sunlight hours and discharge it to meet demand when generation drops, enabling Voltify’s off-grid model to function reliably.

Capacity:

Medium yard: ~10 MWh.
Large yard: ~20–50 MWh.

Cost per kWh: $400–600.

Total Battery Cost:

Medium yard: $6 million.
Large yard: $12–30 million.

Charging Infrastructure

Charging infrastructure includes high-capacity fast chargers, transformers, and associated installations. These systems are essential for maintaining operational efficiency, allowing VoltCars to charge quickly without disrupting freight schedules.

Number of Chargers:

Medium yard: 20–30 chargers.
Large yard: 50–75 chargers.

Cost Per Charger: $200,000–300,000.

Transformers and Power Lines: $500,000–1,000,000 per yard.

Installation Costs: ~$1 million per yard.

Total Charging Infrastructure Costs:

Medium yard: $7.5–11 million.
Large yard: $17–25.5 million.

Microgrid Control Systems

Microgrid control systems integrate the solar, battery, and charging components into a seamless network, ensuring energy flows are optimized and interruptions minimized. These systems are critical to managing the complexity of Voltify’s off-grid infrastructure.

Cost: ~10% of total yard infrastructure costs.

Total Control System Cost:

Medium yard infrastructure: Solar ($10–20M) + Batteries ($6M) + Charging ($7.5–11M) = $23.5–37M.
Microgrid system: $2.35–3.7 million.
Large yard infrastructure: Solar ($40–60M) + Batteries ($12–30M) + Charging ($17–25.5M) = $69–115.5M.
Microgrid system: $6.9–11.55 million.

All of this adds up. Undertaking the responsibility of installing new infrastructure is expensive. This raises some inherent concerns.

A) It’s not clear what their approach is to funding this effort.

B) To achieve diesel parity and produce an eventual profit, they’ll likely have to generate energy at around $0.03/kWh, the extreme low end of solar farm generation.

Theorized Cost Mitigation Approach

It seems like Voltify’s model has to hinge on the ability to drastically lower capital expenses and operating costs.

To make this feasible, leaning on future developments of tech in the long term, and leaning on short term government incentive programs and strategic partnerships will likely play a pivotal role.

Here’s how Voltify may be approaching this:

Solar Energy Cost Trends

The cost of solar power has seen a dramatic decline over the past decade due to advancements in technology, increased manufacturing scale, and government incentives:

Utility-Scale Solar Costs: The average cost of utility-scale solar power in 2023 was $0.03–0.06/kWh (National Renewable Energy Laboratory, NREL). This represents an 80% drop since 2010, when costs exceeded $0.15/kWh. Projections suggest further cost reductions of 15–25% by 2030, driven by more efficient photovoltaic cells, lower material costs, and innovations in solar farm deployment.
Solar Farm Capital Costs: Current installation costs are $1.5–2 million per MW, down from $3 million/MW in 2015. The introduction of emerging technology like bifacial solar panels and robotic cleaning systems could reduce costs further by increasing efficiency and lowering maintenance expenses.

Battery Storage Cost Trends

Battery storage costs are a critical factor for Voltify’s microgrid systems, ensuring consistent energy availability for rail operations:

Sodium-Ion Batteries: Sodium-ion technology, reportedly used by Voltify, is emerging as a cost-effective alternative to lithium-ion. These batteries are less expensive due to the abundance of sodium compared to lithium and have a lower environmental impact during manufacturing. While commercial deployment is still scaling, sodium-ion battery costs are expected to stabilize at $50–80/kWh by 2030.
Utility-Scale Storage: Current utility-scale battery systems cost $400–600/kWh installed, but this is expected to fall to $200–300/kWh by 2030, further improving project economics.

Government Incentive Programs

Government initiatives like the Inflation Reduction Act (IRA) and various state-level programs provide substantial opportunities to reduce Voltify’s upfront costs and improve financial viability:

Investment Tax Credits (ITC): The IRA offers a 30% ITC for renewable energy projects, including solar farms and battery storage. This could significantly reduce infrastructure costs. Example: For a 20 MW solar farm costing $30 million, ITCs could save ~$9 million upfront.
Production Tax Credits (PTC): Voltify could earn ~$0.025 per kWh of solar energy produced. Example: A 20 MW system generating 35,040 MWh annually could receive ~$875,000 per year, offsetting operational expenses.
Battery Storage Incentives: With batteries now qualifying for ITCs, Voltify could save ~30% on battery costs. For a 10 MWh system costing $6 million, this equates to a $1.8 million reduction.
Carbon Credits: Voltify could monetize emissions reductions through carbon markets, earning $20–40 per ton of CO₂ saved. Example: Saving 100,000 tons of CO₂ per yard annually could generate $2–4 million in revenue per year.
Freight Infrastructure Grants: Programs like BUILD (Better Utilizing Investments to Leverage Development) and RAISE (Rebuilding American Infrastructure with Sustainability and Equity) could provide direct funding for infrastructure projects.

Strategic Public-Private Partnerships (PPPs)

Voltify could mitigate costs further by partnering with government agencies and rail operators to share risks and benefits:

Cost Sharing with Rail Operators: Rail companies could co-invest in microgrid development, leveraging the long-term savings from reduced maintenance and carbon credits.
Subsidized Financing: Accessing low-interest loans through the Department of Energy’s Loan Programs Office (LPO) or similar entities could lower the financial burden of upfront costs.

Revenue Opportunities from Surplus Energy

Voltify’s solar farms, installed in rail yards, could generate excess energy during non-peak freight operations. Selling this surplus energy to the grid creates an additional revenue stream:

Revenue Potential: For a 20 MW solar farm generating 35,040 MWh/year, selling 25% of surplus energy at $0.04/kWh could yield ~$350,000 annually per yard.

Across 1,500 rail yards, this could generate $525 million/year.

Wrap Up

In sum, this could result in the following total reductions in cost:

Solar Costs: Declining costs could reduce Voltify’s per MW installation costs by 20–25%
Battery Storage Costs: Sodium-ion adoption and ITC incentives could lower battery costs by 50–80%
Government Programs: Incentives like ITCs, PTCs, and carbon credits could offset 30–40%
Revenue from Surplus Energy: Selling excess solar power could offset long-term costs by generating $350,000 per yard annually, amounting to $525 million per year across 1,500 yards.

I want to add a disclaimer here. Voltify has released very limited public information on their progress or plans, so all of the above is pure, analysis-based theory. That said, based on it, there are a few more considerations I want to make.

Limited Funding: Voltify has raised only $2.5 million to date, a modest amount compared to the capital-intensive nature of its proposed infrastructure. Even with future reductions in cost and incentive programs, the scale of development — spanning solar farms, battery storage, microgrid systems, and dynamic charging infrastructure — requires substantial investment well beyond their current funding.

Resource Constraints: Supporting a team of approximately 20 employees, Voltify’s current operational capacity is likely focused on research, development, and early-stage business planning rather than large-scale implementation.

Funding Requirements for Scaling: To transition from concept to reality, Voltify will need to secure:

A significantly larger funding round from venture capital, strategic investors, or infrastructure-focused funds.
Debt instruments, such as green bonds or loans, to finance large-scale infrastructure.
Government grants or subsidies, which could offset a substantial portion of upfront costs if aligned with federal and state decarbonization initiatives.

Competitive Landscape

The race to decarbonize freight transport is accelerating across multiple fronts. While rail offers inherent efficiency advantages, competing technologies and approaches are evolving rapidly. Let’s examine each potential threat to Voltify’s market position.

Battery-Electric and Hydrogen Trucking

The trucking industry is investing heavily in electrification. Companies like Tesla, Volvo, and Daimler are pushing battery-electric trucks beyond previous limitations, achieving ranges of 300–500 miles with improving economics. Total ownership costs are projected to reach diesel parity by 2030, supported by $7.5 billion in federal funding for charging infrastructure.

Hydrogen fuel cell trucks, led by Toyota and Hyundai, present another compelling alternative. Their longer range and faster refueling could make them ideal for long-haul routes where battery-electric trucks struggle. While both technologies face significant infrastructure challenges — particularly in rural areas — their continued advancement could eventually challenge rail’s cost advantages for long-distance freight.

Alternative Rail Decarbonization Methods

Within rail itself, several competing approaches warrant attention:

Renewable diesel offers immediate emissions reductions of 50–90% without major infrastructure overhaul. Its compatibility with existing locomotives makes it attractive for rapid deployment, but limited supply and high costs restrict its scalability.
Hydrogen fuel cell trains, already operational in parts of Europe, demonstrate zero-emission capability for non-electrified lines. However, the economics remain challenging — infrastructure costs and locomotive conversion expenses create significant barriers to widespread adoption.
Traditional catenary electrification has proven successful globally but faces unique challenges in the U.S. The massive cost of retrofitting existing freight corridors makes this solution less viable in the American market.

Emerging Disruptions

Looking further ahead, autonomous trucking could fundamentally reshape freight economics. Companies like Waymo and Aurora are working to eliminate driver costs, which currently represent 40–50% of trucking expenses. The ability to operate continuously without human limitations could significantly narrow the efficiency gap between rail and road for long-haul routes.

More speculative technologies like Virgin Hyperloop’s 600 mph system represent potential long-term disruption. While currently cost-prohibitive and unproven at scale, these innovations could eventually compete for high-value, time-sensitive cargo.

Policy and Integration Advantages

Government initiatives could provide tailwinds for rail adoption. The EU’s aggressive Green Freight Strategy, targeting a 30% shift from road to rail for long-distance freight by 2030, demonstrates growing policy support for rail transport. Similar U.S. initiatives focusing on intermodal infrastructure development suggest increasing recognition of rail’s role in sustainable freight.

Complementary innovations in logistics are making rail more competitive. Companies like J.B. Hunt are optimizing intermodal transfers, while AI platforms reduce coordination friction and idle time. These advancements help address traditional pain points in rail freight adoption.

Critical Success Factors

For Voltify to succeed in this dynamic landscape, several factors appear critical:

Rapid deployment to secure market share before competing technologies mature
Seamless integration with existing rail operations and intermodal systems
Cost advantages that persist even as competing technologies improve
Ability to leverage policy support while maintaining commercial viability

Challenge and Opportunities

Challenges

High Capital Requirements

The capital needed for Voltify’s vision is staggering (unless I’m completely wrong in my assumptions). Each rail yard implementation demands tens of millions of dollars for solar farms, battery storage, and microgrid systems. Their current $2.5M in funding doesn’t cover even a pilot deployment. Scaling nationwide would require potentially hundreds of billions through venture capital, debt financing, and government subsidies.

Cost Parity and Profitability

The economics are challenging. Achieving diesel parity at $0.09/kWh requires generating power at $0.02–0.03/kWh — a difficult target even with advanced solar technology. Energy price fluctuations and potential yard underutilization threaten profitability while trying to cover massive infrastructure costs.

Implementation Challenges

Physical deployment faces significant hurdles. Land near rail yards is often limited or expensive, and local permitting processes could create substantial delays. Their reliance on dynamic charging and regenerative braking may struggle to meet energy demands in high-traffic corridors.

Evolving Technological Threats

Competition is emerging from multiple directions. Electric and hydrogen trucks could eventually negate rail’s efficiency advantages by offering zero-emission alternatives with greater flexibility. Meanwhile, hydrogen rail solutions might provide a simpler path to decarbonization, requiring fewer systemic changes.

Market and Regulatory Barriers

The fragmented nature of U.S. freight rail complicates adoption. With multiple operators like Union Pacific, BNSF, and CSX each having different priorities, coordinated implementation becomes complex. While government support exists today, policy incentives remain subject to political shifts.

Integration Across a Complex Network

Integrating across 140,000 miles of rail infrastructure presents enormous challenges. The variety in terrain, traffic density, and existing infrastructure conditions means significant customization would be required, further complicating scalability.

Opportunities

Market Timing and Urgency

The momentum behind decarbonization is accelerating, with rail becoming increasingly central to emissions reduction strategies. Voltify’s position as a first mover in zero-emission rail freight is well-timed. The Inflation Reduction Act provides substantial tax credits and funding aligned directly with their infrastructure needs.

Cost-Reduction Trends in Renewable Energy

The economics continue to improve. Solar and battery costs have dropped over 80% since 2010, with further declines expected. Voltify’s reported use of sodium-ion batteries could provide additional cost advantages over traditional lithium-ion technology, improving their path to profitability.

Complementary Modal Shifts

Policy support for rail transport is growing. The EU’s Green Freight Strategy targeting 30% shift from road to rail signals broader momentum. U.S. Department of Transportation initiatives supporting intermodal facility development suggest increasing recognition of rail’s role in sustainable freight.

Scalability Through Rail Yards

The focus on rail yards as deployment sites simplifies implementation compared to network-wide solutions. These fixed locations with established infrastructure provide natural nodes for energy generation and distribution, creating a clearer path to scale.

Revenue from Surplus Energy

With over 1,500 rail yards in the U.S., surplus energy generation during non-peak freight operations could create significant additional revenue through grid sales. This secondary income stream strengthens the overall business model.

Synergies with Rail Operators

Voltify’s infrastructure development and maintenance service model provides compelling value for operators looking to reduce costs and emissions without capital expenditure. The operational savings from reduced maintenance and fuel expenses create natural adoption incentives.

Conclusion

I’m writing about Voltify because of their vision. It’s compelling, and they’re doing something I haven’t seen anyone else think of or work towards. That said, success hinges on incredible execution. Scaling from concept to deployment and implementation requires navigating immense capital requirements, complex logistics, and an evolving competitive landscape, while also relying on a variety of shifting factors in future markets.

The team has proven technically capable, and market timing appears favorable with the growing momentum behind rail decarbonization. However, the narrow path to success demands flawless execution across multiple dimensions — from securing massive funding to coordinating with fragmented rail operators to hitting aggressive cost targets.

That said, this is the kind of ambitious infrastructure play needed to address climate challenges. Whether they can overcome the substantial hurdles ahead remains to be seen, but they’re asking the right questions and tackling the problem at the necessary scale.

I’ll continue to update this article as rounds are raised and progress is made.

Thanks for reading.

Updates to this article will be made with every subsequent funding round. Stay tuned.

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