The Top 5 Issues in LCFVs This Week: Statoil Sees Substantial EV Penetration by 2040

Here’s my pick of the top five interesting issues in fuels this week with a little insight and analysis as well. Topics covered include air pollution, vehicle and oil demand as projected by Statoil, a comprehensive cradle-to-grave analysis on fuels-vehicles released by Argonne National Laboratory, an outlook on electric vehicle (EV) growth by IEA and car banning as climate/air pollution mitigation strategy.

1. Statoil: 2016 Energy Perspectives

Statoil’s 2016 Energy Perspectives highlights a number of emerging trends in the transport space:

• Autonomous vehicles;
• The rapidly growing urban population;
• Severe congestion from vehicles and air pollution and need for more efficient ways to organize transport;
• Lack of interest from younger people to own vehicles;
• Governments’ interest and increasing action to encourage EV penetration.

The company used three scenarios the company used to analyze trends in the global energy space:

• Reform: “is influenced by the Nationally Determined Contributions (NDCs) that form the basis for the Paris agreement, supplemented by further tightening of energy and climate policies from 2025 onwards, and builds on other assumptions for energy efficiency improvements and economic restructuring.”
• Renewal: “a story about one possible pathway to energy-related CO emissions consistent with the target to limit global warming to 2°Celsius (C). It includes rapid improvements in energy efficiency and large changes in the global energy mix driven by revolutionary development in electricity generation and parts of the transport sector.”
• Rivalry: “a story about diversified regional development, affected by geopolitical conflict and lack of coordinated policies, and where focus on security of supply and other priorities overshadow global climate targets.”

As the charts below show, there is substantial EV penetration for light-duty vehicles under all three scenarios by 2040, particularly under the renewal (nearly 60% of sales) and reform (nearly 90%) scenarios. Statoil expects electrification will take longer for heavy-duty vehicles.

Oil demand drops in the renewal scenario by 2030 and progresses further in 2040. Under the reform scenario, there is some decrease in oil demand by 2040. Demand for non-road transport such as marine, aviation and rail is expected to rise as global population grows and economic activity increases. In all three sub-sectors combined energy demand is expected to grow by nearly 60% from 2015 to 2040, according to Statoil.

2. OECD: The Economic Consequences of Air Pollution

I noted earlier this week that despite the actions taken by many governments to reduce stationary and mobile source air pollution – ozone and particulate matter (both PM10 and PM2.5) is expected to increase substantially in the coming years concurrent with increased economic activity and energy demand. This week, the Organisation for Economic Co-operation and Development (OECD) released a report assessing the potential economic impacts of spiraling air pollution through 2060, finding 1% loss of GDP or $2.6 trillion annually in losses.  Read more about it here.

3. Argonne National Laboratory/U.S. DRIVE Partnership Cradle-to-Grave (C2G) Working Group: Cradle-to-Grave Lifecycle Analysis of US Light-Duty Vehicle-Fuel Pathways: A Greenhouse Gas Emissions and Economic Assessment of Current (2015) and Future (2025–2030) Technologies

This study provides a comprehensive lifecycle analysis (LCA) of the cost and GHG emissions of a variety of vehicle-fuel pathways, the levelized cost of driving (LCD) and cost of avoided GHG emissions and estimates the technology readiness levels (TRLs) of key fuel and vehicle technologies along the pathways. Read more about it here.

4. IEA: Global EV Outlook 2016

Well-publicized but still worth mentioning is IEA’s Global EV Outlook 2016. A few key nuggets:

• 80% of the electric cars on road worldwide are located in the United States, China, Japan, the Netherlands and Norway. The U.S. was overtaken by China as the largest market for EVs in 2015, with over 200,000 new registrations; these two markets accounted for more than half the global new EV registrations in 2015.
• Battery costs have fallen by a factor of four since 2008.
• China tackles its pressing traffic and air pollution issues by restricting opportunities to own conventional internal combustion engine (ICE) cars and favoring EVs.
• 14 countries have announced quantitative EV stock objectives, aspiring to bring 13 million EVs on the road by 2020: Austria, China, Denmark, France, Germany, India, Ireland, Japan, Netherlands, Portugal, South Korea, Spain, UK and U.S. Many of these countries already offer different types of incentives to encourage EV uptake.
• Publicly accessible charging facilities have been following the growth trend of the electric car stock.

There are some great statistics in the back of the report covering number of electric cars by type and year, market share and charging stations.

5. Norway: To Ban or Not to Ban Cars?

Proving that Google Translator might not be accurate and perhaps checking facts pre-publication may be advisable, social media was set aflame this week on the news that Norway had planned to ban all petrol vehicles beginning in 2025. Not true, as it turned out. It seems the political parties in Norway have agreed to set targets for low- and zero-emissions vehicles to meet climate goals that will be presented next year in the country’s national transport plan.

Why bother mentioning this at all? Because, I think banning cars is going to increasingly be a primary strategy to combat air pollution (see first point) and climate change, perhaps starting in less populated or smaller countries or cities with the potential to spread from there. Such strategies are already being deployed in Paris, New Delhi, Oslo, Zurich, Curitiba and Bangalore.