Fuel For Thought
December 2016

White House, 35 states to boost electric vehicle charging stations

▪ White House, 35 states to boost electric vehicle charging stations

During the last few weeks before the recent US presidential elections, the White House said it will establish 48 national electric-vehicle (EV) charging networks on nearly 25,000 miles of highways in 35 U.S. states.

The Obama administration said 28 states, utilities and vehicle manufactures, including General Motors, BMW and Nissan Motor, and EV charging firms have agreed to work together to jump-start the additional charging stations. The corridors were required to be established by December under a 2015 highway law.

The White House said 24 state and local governments have agreed to buy hundreds of additional electric vehicles for government fleets and add new EV charging stations. California will buy at least 150 zero-emission vehicles and provide EV charging at a minimum of 5 percent of state-owned parking spaces by 2020. The city of Atlanta will add 300 charging stations at Hartsfield-Jackson International Airport by the end of 2017. Los Angeles agreed to nearly triple the city's current plug-in electric fleet to 555 vehicles from about 200 by the end of 2017. Of those, 200 will be for the police department. The city is also adding another 500 stations by 2017.

One hurdle to the mass adoption of EVs has been the difficulty in finding places to recharge vehicles. In July, the White House said it was expanding a federal loan guarantee program to include companies building EV charging stations. The U.S. Energy Department said in July that charging facilities are now an eligible technology for the program that can provide up to $4.5 billion in loan guarantees. Till date, no loans have been made to EV charging projects yet.

Administration efforts come as U.S. EV sales have not met early expectations. EV sales have fallen well below President Barack Obama's goal of reaching 1 million by 2015. U.S. Energy Secretary Ernest Moniz told Reuters in January that the country may hit the figure in three to four years with continuing improvements in battery technology, but he acknowledged low gasoline prices have hurt EV sales.

In August 2008, Obama set a goal of getting 1 million plug-in electric vehicles on the roads by 2015. Only about 520,000 electric cars have been sold in the United States since 2008. There are about 250 million cars and trucks on U.S. roads. The White House has repeatedly tried to boost EV sales, including hiking the EV tax credit and converting it to a point-of-sale rebate, but the proposals have yet to pass Congress.

▪ Electric car development roadmap to be unveiled in China

In December, China will release the first new energy vehicle industry development roadmap, possibly proposing mild hybrid cars as energy saving vehicles, as one of the moves to guide the sector's development in the world's largest electric car market.

The drafting of the industry roadmap, including roadmaps for seven related technologies, was led by the Society of Automotive Engineers of China, and is now subject to government review and modifications.

"The nation's electric vehicle sector may need another 15 years of development before reaching a world-leading level, so the government weighs in heavily on new energy vehicle research and development," Fu Yuwu, chairman of the Society, told a forum on Oct 12. The event took place on the sidelines of the Wuhan Motor Show 2016, organized by Hannover Milano Fairs Shanghai.

The society will propose mature mild hybrid technologies as an alternative approach to cut fuel consumption and emissions. "Mild hybrid consumes less fuel than combustion, so our society propose hybrid technologies without plugs be included in the roadmap as energy saving vehicles.", Fu said.

If listed among energy saving vehicles, mild hybrid car buyers will be eligible for thousands of yuan purchase tax cut. A stimulus measure, effective from Oct 1, 2015, halved the tax on purchases of passenger vehicles with engines that are 1.6 litres or smaller.

Efforts were also made to boost the new energy sector's development through guiding the input of social resources toward the emerging sector, now that the fiscal subsidies provided to purchase them are shrinking.

Aiming at increasing carmakers' R&D activities relating to new energy vehicles, the Ministry of Industry and Information Technology is about to roll out a dual-credit scheme for mandatory production, in the hopes of at least highlighting the social costs incurred in reducing car emissions.

The country is only admitting new energy carmakers into the auto manufacturing industry, halting the approval of conventional vehicle makers.

Beijing-based vehicle design firm CH Auto Technology received approval to be a standalone new energy passenger carmaker on Oct 10. It is the third of its kind approved by the National Development and Reform Commission, after BAIC Group's electric car making arm Beijing Electric Vehicle and Hangzhou Changjiang Passenger Vehicle.

The Society views the manufacturing levels of the emerging battery powertrains as being the main issue for the Chinese new energy sector. Gao Bowen, sales director of Dongfeng Electric Vehicle, said that the nation's new energy vehicle development is in its elementary stage. She said the domestic technology in traction batteries is not mature, so many companies have concerns about promoting the wide usage of fully electric cars. Customers also worry about safety issues. "Dongfeng employs a safety monitor system that tracks each individual electric car in its lifetime, to detect every single flaw. Besides, the battery rental and replacement model is in our survey and research plan, to save customers from concerns regarding battery life."

▪ Porsche targets 20,000 electric car sales a year

Further to the preceding articles and according to Germany’s weekly car magazine Automobilewoche, Volkswagen's Porsche division expects annual sales of about 20,000 for its first all-electric car, the Mission E.

Porsche, the second-largest contributor to VW's group profit, plans to create at least 1,400 jobs to develop, build and sell its rival to Tesla's Model S. The Porsche Mission E is slated to hit the market in 2019.

"We have calculated a quantity in the order of about 20,000 for the Mission E," Porsche CEO Oliver Blume was quoted as saying in an Automobilwoche interview. Porsche labor boss Uwe Hueck in July declined to specify production targets for the Mission E, but said that Porsche needs to sell at least 10,000 of a model per year to make a profit.

U.S. electric car specialist Tesla had total vehicle deliveries of 50,580 in 2015.

▪ BMW to offer new version of i3 electric car in 2017

Also with reference to the articles above and as reported by Germany’s weekly newspaper Welt am Sonntag, German luxury carmaker BMW plans to launch a new version of its i3 electric car next year with a longer range and revamped design.

(BMW's first all-electric car, i3, is unveiled at a ceremony in Beijing July 29, 2013. REUTERS/Kim Kyung-Hoon/File Photo)

BMW will rework the front and rear of the i3 and equip the car with a new battery to increase its range substantially beyond the current 300 km maximum, the paper said, adding that the increase would be below 50 percent.

BMW has been torn about whether to accelerate development of new electric cars given its expensive early investment has only resulted in lacklustre sales, with 25,000 i3s delivered last year. To help improve sales, BMW has already increased the battery range of its i3 city car by 50 percent this year.

▪ Oil majors join forces in climate push with renewable energy fund

Top oil companies including Shell, BP and Total are joining forces to create an investment fund to develop technologies to promote renewable energy, as they seek an active role in the fight against global warming. The chief executives of seven oil and gas companies - BP, Eni, Repsol, Saudi Aramco, Royal Dutch Shell, Statoil and Total have met to agree on details of the fund and other steps to reduce greenhouse gases in London.

The sector faces mounting pressure to take an active role in the fight against global warming, and Friday's event will coincide with the formal entry into force of the 2015 Paris Agreement to phase out man-made greenhouse gases in the second half of the century.

The group is part of the Oil and Gas Climate Initiative (OGCI), which was created with the backing of the United Nations in 2014 and includes 11 companies representing 20 percent of global oil and gas production.

The company leaders are expected to detail plans to create an investment vehicle that will focus on developing technologies to lower emissions and increase car engine and fuel efficiency, according to the sources involved in the talks. The size and structure of the fund were unclear.

The fund will also focus on ways to reduce costs of carbon capture and storage (CCS) technology, which involves capturing carbon dioxide emissions produced from fossil fuel burning plants and re-injecting them into underground caverns.

The CEOs are also expected to announce the next phase of their plan to reduce the oil sector's emissions, primarily by reducing flaring of excess gas at fields, increasing the use of CCS and limiting the release of methane, a highly polluting gas often emitted through pipe leaks.

OGCI leaders called on governments last year to set a price on carbon emissions to encourage the use of cleaner technologies, although some companies including Exxon Mobil have resisted the idea. They now hope to show they can play an active role.

The drive to limit global warming to 1.5 degrees Celsius by the end of the century poses a threat to oil and gas companies as transport and power sectors gradually shift towards renewable sources of energy such as solar and wind.

Oil majors including Norway's Statoil, France's Total and Italy's Eni, have increased their investments in renewable energy in recent years, although it is still dwarfed by the main fossil fuel business. Oil producers have also lobbied for the phasing out of coal in favor of the less pollutant natural gas in the power sector.

Total CEO Patrick Pouyanne said last month that OGCI leaders will announce plans "to work collectively to develop technologies which will be needed to face climate change issues."

Delegates from signatory nations meet in the Moroccan city of Marrakesh on Nov. 7-18 to start turning their many promises into action and draw up a "rule book" for the sometimes fuzzily worded Paris Agreement on climate change, reached last December.

▪ China vows better environmental monitoring to improve health

China aims to create a comprehensive environmental monitoring system by 2030 in its efforts to boost citizens' health and raise life expectancy, the government has said.

Pollution has been identified as one of the biggest threats to public health in China, with smog in the northern region blamed for higher rates of cancer, respiratory disease and premature death. Widespread soil and water contamination have also caused health hazards.

Air pollution killed more than 1 million people in China in 2012 alone, the World Health Organisation said in a study published in September.

(People walk with their faces covered on a polluted day in Shenyang, Liaoning province, March 31, 2016. REUTERS/Stringer/File Photo)

The State Council, or cabinet, said it would set up the "strictest environmental protection system" to oversee construction, noise and atmospheric pollution, soil and water quality and the rural environment.

The new system would identify high-risk pollution zones and establish a unified disclosure platform for environmental information, the cabinet said in its "Healthy China 2030" plan, published late on Tuesday.

It said China aimed to raise average life expectancy to 79 years by 2030, up from 76.3 years in 2015, and would also work to tackle a gender imbalance by setting up a "complete birth monitoring system".

It aims to strengthen public sanitation and provide clean drinking water, among the rural health issues tackled.

It will also seek to cut infant mortality, traffic deaths, smoking and alcohol abuse, work to improve cancer survival rates, rein in early deaths from chronic diseases and step up intervention for psychological illnesses, it added.

To help reduce health risks, it would also aim to raise the number of active participants in sport to 530 million by 2030, up from 360 million in 2014, besides promoting the "leading role" of Chinese medicine in disease treatment.

Also on the cards is the creation of "mature" forms of health insurance, with more balanced contributions from government, enterprises and individuals, as part of efforts to cut individual health costs to about a quarter of total spending, versus 29.3 percent in 2015.

▪ IMO sets 2020 date for ships to comply with low sulphur fuel oil requirement

In a landmark decision for both the environment and human health, 1 January 2020 has been set as the implementation date for a significant reduction in the sulphur content of fuel oil used by ships.

The decision to implement a global sulphur cap of 0.50% m/m (mass/mass) in 2020 was taken by the International Maritime Organization (IMO), the regulatory authority for international shipping, during its Marine Environment Protection Committee (MEPC), meeting for its 70th session in London.

It represents a significant reduction from the 3.5% m/m global limit currently in place and demonstrates a clear commitment by IMO to ensuring shipping meets its environmental obligations.

IMO Secretary-General Kitack Lim welcomed the decision which he said reflected the organisation’s determination to ensure that international shipping remains the most environmentally sound mode of transport.

“The reductions in sulphur oxide emissions resulting from the lower global sulphur cap are expected to have a significant beneficial impact on the environment and on human health, particularly that of people living in port cities and coastal communities, beyond the existing emission control areas,” Lim said.

Further work to ensure effective implementation of the 2020 global sulphur cap will continue in the Sub-Committee on Pollution Prevention and Response (PPR).

Regulations governing sulphur oxide emissions from ships are included in Annex VI to the International Convention for the prevention of Pollution from ships (MARPOL Convention). Annex VI sets progressive stricter regulations in order to control emissions from ships, including sulphur oxides (SOx) and nitrous oxides (NOx) – which present major risks to both the environment and human health.

The date of 2020 was agreed in amendments adopted in 2008. When those amendments were adopted, it was also agreed that a review should be undertaken by 2018 in order to assess whether sufficient compliant fuel oil would be available to meet the 2020 date. If not, the date could be deferred to 2025. That review was completed in 2016 and submitted to MEPC 70. The review concluded that sufficient compliant fuel oil would be available to meet the fuel oil requirements.

Under the new global cap, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%, which has been in effect since 1 January 2012. The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers. Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged.

Ships can meet the requirement by using low-sulphur compliant fuel oil. An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions. This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services.

Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere. In this case, the equivalent arrangement must be approved by the ship’s administration (the flag state).

The new global cap will not change the limits in SOx Emission Control Areas (ECAs) established by IMO, which since 1 January 2015 has been 0.10% m/m. The ECAs established under MARPOL Annex VI for SOx are: the Baltic Sea area; the North Sea area; the North American area (covering designated coastal areas off the United States and Canada); and the United States Caribbean Sea area (around Puerto Rico and the United States Virgin Islands).

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