The Top 5 Issues in LCFVs This Week: Is Diesel Over for Passenger Cars?

06.24.16 | Blog | By:

Happy Friday everyone! Here’s my weekly take on the five most interesting developments in low carbon fuels and vehicles trends:

  • Is diesel over in the U.S. (and elsewhere)?
  • Transport GHG emissions are higher than ever in Europe – what does it mean?
  • Mapping coal’s decline and renewables’ rise to push for decarbonization in power – and transport.
  • Incentivizing fuel efficient behaviors in pilots – can the same be done for other transport modes?
  • Designing effective electric vehicle (EV) incentives.

1. Forbes: Dieselgate: The End Is Nigh, If Not For Volkswagen, Then At Least For Diesel

Is diesel for passenger cars over in the U.S. (and elsewhere)? I think it could be and advocates (especially those in the transport and environment space) are working hard to make sure that happens. This has profound implications, among other things, for those car companies that had planned to use diesel as a compliance strategy to meet fuel economy standards. This quote from Forbes caught my eye this week:

If Volkswagen is not quite at its end, then at least the diesel is, Volkswagen’s CEO Matthias Müller signaled in an interview with Germany’s Handelsblatt. “At some point in time, there will be the question whether we should continue to invest a lot of money into the further development of the diesel powertrain,” Müller said. “To clean the diesel exhaust will become involved, and expensive,” Müller told the Handelsblatt. Actually, it already is involved and expensive to build exhaust treatment that works reliably in all traffic, and not just when the car is on the test bench. Volkswagen already stopped the sales of all diesel models in the U.S.A., “and it is a completely open question whether Volkswagen will offer diesel models in America ever again,” writes Der Spiegel. Müller also expects that at some point, diesel fuel could not be as tax-advantaged as it currently is in Europe.

2. European Environment Agency (EEA): Overall GHGs At Lowest Levels Since 1990But Not Transport

Somewhat obscured in EEA’s annual inventory of GHGs is a little statement about transport emissions, which are increasing in Europe: “Not all sectors were able to reduce emissions. Road transport, responsible for the largest increase in CO2 emissions, grew by 124 Mt from 1990-2014, and 7 Mt from 2013-14.” Read more about it here.

3. MIT: Mapping the Decline of Coal and the Rise of Renewables in the U.S.

Researchers have created an online tool, CoalMap, that compares the levelized cost of electricity (LCOE) (the minimum electricity price a power plant must receive to break even on investment costs over its lifecycle) of existing coal-fired plants with the expected LCOE of potential new utility-scale solar and wind generation in the same locations.

As LCOE continues to decline as solar and wind technology improves and they become more cost-competitive, MIT estimates they will catch up to coal. That conclusion agrees with the Bloomberg’s New Outlook, discussed in last week’s post. The “effect is even more staggering” if a carbon price is implemented.

According to MIT, with a carbon price and improvements in technology, nearly all aging coal-fired plants could be retired in 20 years even without subsidies and in areas with poor solar and wind resources. What does this have to do with transport?  The idea is the quicker the grid is decarbonized, the quicker transport can be truly decarbonized as well. The idea is also to use this in public policy outreach to bring about this decarbonization.

The figure below shows a sample map from the site. It shows locations of current coal plants, with markers indicating each plant’s nameplate capacity and relative cost are shown, and as users apply different carbon prices, deployment subsidies, and rates of cost decline for solar and wind, they can observe the effects of these changes on the cost-competitiveness of renewable energy across the country.

MIT says about the chart above:

“Here, the variable being tested is a carbon price, set to $50/ton. The map shows the number of coal plants (red dots), wind farms (green dots), and solar photovoltaic plants (yellow dots) that could exist in the market at this price point. Gray dots represent coal plants in the process of retiring, and black dots represent those that have already retired.”

4. Virgin Atlantic: The Effects of Giving Captains Feedback & Targets on Fuel & Carbon Efficiency

Virgin Atlantic partnered with the London School of Economics and the University of Chicago to devise a new approach to delivering standard fuel and carbon efficiency information to pilots. In the study, a process was developed that increased captains’ awareness of the measures they could take to improve on fuel efficiency. Captains were randomized into four different groups:

  • Group one – a “business as usual” control group, who continued receiving standard fuel efficiency information in the usual way,
  • Group two – were sent information on the three sets of behaviors, once a month by post, along with personalized feedback about their fuel efficiency practices,
  • Group three – the same as group two, but with targets to aim for,
  • Group four – the same as group three, but with a donation to charity, if targets were met.

Data from more than 40,000 flights was independently analyzed by the university team. Of all the groups, numbers three and four produced the most savings, but there was a significant improvement in fuel efficient behaviors in all groups – with the study concluding that raising awareness among pilots is enough to drive significant changes.

In addition, in an anonymous post-study satisfaction survey, the Captains reported high levels of job satisfaction, with 81% of those responding suggesting they’d like more fuel efficiency information in future. Virgin says the project resulted in savings of 21,500 tons of carbon, and £3.3 million (US$4.5 million) in fuel costs. I include this because of the implications this study may have for other forms of transport. Will we see more targeted education of consumers about topics such as fuel efficiency or even incentives that promote GHG-reducing behaviors in transport? Maybe.

5. ICCT: Principles for Effective Electric Vehicle Incentive Design

The International Council on Clean Transportation (ICCT) released this week an analysis assessing best practices in the design on EV incentives, comparing incentives in North American, European and Asian countries (see figure below), and noting that the type of incentives vary greatly and that fiscal incentives get the most attention.

ICCT notes four principles are emerging to define the optimal design of EV incentives:

  • Move incentives up front to the vehicle purchase and make their value visible to dealers and prospective consumers.
  • Make the value of incentives clear to consumers and dealers
  • Ensure the incentives are available to the full target market.
  • Commit to durable incentives that allow manufacturers, dealers, public outreach campaigns, and consumers to rely on them for at least several years.

Look for countries (especially in the above-noted regions) to introduce more EV incentives in the coming years that reflect these principles.