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▪ EU carbon market emissions fell 13.3% in 2020 –EU Commission
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In this issue of our “In Conversation with” we talked to Mr. Jeff Hove, acting Vice President and Executive Director at the Fuels Institute. In recent years we have seen some initiatives to consider policies to ban the sale of vehicles equipped with internal combustion engines (ICE), predominantly emerging in Europe, but also spreading out in parts of Asia. China and Japan have previously announced their ambitions to move to new energy sources, and last year Singapore followed suit. Other countries and regions have till now been more reserved but i.e. India has been increasingly present in news about alternative energy considerations. However, a growing number of concerns has been emerging, about resources needed and their environmental impact i.e. for power generation. Mr. Jeff Hove shared his views and observations about the proposals to ban the sale of combustion engine vehicles with us. We would like to thank Mr. Jeff Hove for his efforts to comprehensively answer our questions, which provide some valuable and very interesting insights into this matter, addressing a range of concerns, which require attention to make the pursuit of emission savings and CO2 neutrality targets viable and successful.
Mr. Jeff Hove
Jeff Hove has served and represented the downstream petroleum and alternative fuel industry for over 20 years. He has worked with primary UST and fuel dispensing insurers as well as underground storage tank release funding programs on education and site inspections. Mr. Hove authored the ULSD Quality Assurance Program which was a risk management and mitigation tool during the phase in of ULSD. Mr. Hove has also written industry guidance plans for sampling and analysis of fuels for the purpose of reducing risks and maintaining proper fuel quality. Most recently, Mr. Hove joined the Fuels Institute as Vice President in 2020.
A: The majority of consumers do not want a lifestyle change unless “change” equates to a better, more prosperous lifestyle. Current decarbonization initiatives do not necessarily include a reduction in energy consumption but rather an expansion of renewable energy production to bolster economies. This is especially true in emerging economies. With this in mind, policy makers have the complex challenge of increasing energy availability while decreasing the carbon intensity to levels of “net zero” GHG emissions. This is a difficult proposition and uphill battle.
If, however, it can be shown that this is possible (i.e., no negative impacts on lifestyles), then public acceptance will continue to drive change as we’ve seen in the financial industries (private investors demanding progress on Environmental, Social and Governance (ESG) improvements). Governments will have to show unified support of such programs and be willing to act on existing agreements and international accords. If the unified approach for decarbonization can be monetized by private industry, then competition between industries will rapidly drive decarbonization. This competition will ultimately drive down costs to consumers and not impede the economic growth.
However, if initiatives designed to reduce emissions impose on consumers financial burdens or force a change in lifestyle, they are unlikely to be successful in the long term. It is vital that any “environmental sustainability” initiatives must simultaneously be “economically sustainable” or they will fail. This has to be the central effort – reduce emissions while supporting consumers.
A: 1) Policy makers must understand the current fleet make-up and discern the relative carbon intensity of all vehicles. A basic understanding of all emissions sources is necessary for good policy making. Policy makers should be assessing vehicle use cases that can be easily decarbonized versus those that are more difficult to decarbonize – a one size fits all approach will not work. Not all use cases can be met with electric vehicles. Policy makers must review all options for decarbonization and include hydrogen fuel cells, renewable compressed natural gas, e-fuels, biofuels, advanced combustion engines, hybrid technologies and any other drivetrain and fuel types that can be reasonably supported by existing infrastructure and deliver progress in lowering overall emissions. Ignoring the role of these various alternatives to benefit various use cases will impede progress.
2) Creating simple policy concepts that conveniently fit into headlines and political stump speeches, such as banning the sale of internal combustion engines by a specific date, do not recognize the complexity of the market. From the diversity of transportation vehicles and their duty cycles to the potential impact on disadvantaged and rural communities, successfully pursuing decarbonization strategies require careful attention to nuances and long-term strategic planning. Nothing is impossible but bad policies always create unnecessary challenges that are often disproportionately distributed throughout society. Careful deliberations should consider all impacts and only move forward once that has been completed. Once completed, low carbon policies should move swiftly, attacking low hanging decarbonization fruit immediately (where existing infrastructure support already exists), while investing to support the decarbonization of the remaining transportation sectors which may take 20 - 30 years.
3) Addressing transportation emissions should be done by evaluating the lifecycle emissions of specific sectors and options, considering emissions that extend from cradle to grave. Critical to this evaluation is the incorporation of vehicles and fuels/energy in a holistic, systemic approach. One cannot and should not exist without the other and only a comprehensive assessment of potential solutions can yield the most effective results. Such lifecycle assessments should be completed using publicly available and transparent models, such as the GREET model developed by Argonne National Laboratory.
A: It appears as though refiners and automobile manufactures are taking steps to broaden their business models to include low carbon fuel and energy production and more low or zero emissions vehicles. The challenge facing both industries is the premature conclusion that there is only one solution to the decarbonize transportation, and this hamstrings opportunities to explore new options that might provide significant reductions in emission, faster and at a lower cost than the path towards electrifying everything. Electric vehicles have a bright future and will play a significant role in the transportation sector, but opening the opportunities for advanced biofuels, renewable fuels, lower carbon fuels and improved efficiency combustion engines could deliver emissions benefits in the near term while electrification is expanding. Meanwhile, we know there is significant investment in research to improve battery technology, to reduce the reliance on rare earths and to improve battery recycling and repurposing. All of this should be done concurrently, but the signals being given by global leaders to industry is that they see only one path forward, and that represents the greatest impediment to advancements.
A: If the transportation sector is to become more reliant on electric powertrains, then it is incumbent upon the power sector to decarbonize. A pending Fuels Institute report compared the lifecycle carbon emissions of combustion engines and electric vehicles when operating in low and high carbon intense sectors and found that combustion engines are cleaner over 200,000 miles that a comparable electric vehicle when the carbon profile of the power grid is high. Decarbonizing the power grid, however, seems to be tilting towards the extreme, casting doubt against using natural gas and nuclear in addition to coal. This would force the sector to rely exclusively on hydro, geo-thermal, wind and solar, a transition that will take a very long time and will likely be very expensive.
A: Exploring lower carbon liquid fuels options should be a priority for all regions, especially in developing economies where transitioning to new vehicle technologies may not be a feasible approach. It is important that decarbonization strategies are customized to take advantage of local resources and capabilities to make progress. Each country will have to assess the availability of necessary feedstocks and develop policies that are appropriate. The conversion of waste steams to fuels represents a viable opportunity that should be explored, especially if the process represents a lower lifecycle emissions profile that the fuel it is seeking to replace.
A: Early low carbon fuel programs will require significant investments and public funding support. However, they should be designed to help establish the industry and not sustain indefinitely. Credit based low carbon fuel programs and fuel/vehicle performance standards are good tools that allow industry to prepare and even take advantage of these programs. Early adopters will be increasingly competitive and will have advantages over non-adopters. Policies such as these must be clear and long-standing in order for stakeholders and industries to obtain the necessary finances to build and grow a new industry.
A: The Fuels Institute has published research on environmental policies and their impacts on emissions. This is one of the few reports that considers the costs of each policy. We would encourage others to review the document at https://www.fuelsinstitute.org/Research/Reports/Impact-of-Transportation-Related-Environmental-Ini , all of our research is peer reviewed and available at no cost.
We will also be publishing more whitepapers and research comparing the LCA evaluation of ICE vehicles versus EVs and the respective energy sources, the decarbonization potential of biofuels, the diversity and decarbonization potential of the medium and heavy duty transportation sector and an assessment of the potential advancements in the combustion engine and liquid fuels sectors that may derive from ongoing research and development projects. All will be published and available on our website within the next year.
We greatly appreciate this opportunity to work with ACFA and we hope some of our responses are helpful to your mission.
For our readers’ reference, a complete copy of the Fuels Institute’s policy consideration on the “Proposals to Ban the Sale of Combustion Engine Vehicles” can be downloaded here.
In March 2019 the Australian government released new fuel standards, set for implementation by 01-Oct 2019. At the time the release of the new requirements, after a three-year long review, was widely described as a major disappointment by clean fuels proponents and supporters, as the authorities missed the opportunity to align Australian standards with other developed markets by enhancing standards only cosmetically, not even matching long out-of-date Euro III standards for some parameters in the revised specifications.
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