The Top 5: Americans Want Alternative Energy

Happy Thursday friends!  Here’s my weekly take on the five most interesting developments in future fuels and vehicles trends over the last week:

1. Gallup Poll: 71% of U.S. respondents say the development of alternative energy sources need to be emphasized and 59% say protection of the environment should be given priority. Interestingly, because energy prices are lower and the U.S. economy is doing better, poll respondents are “freed” to focus on alternative energy and the environment.
2. Fuel Economy Mid-Term Review Reopened: No surprises there, but the state of California is not about to go down without a fight. The Governor filed a motion to intervene this week and delivered a scathing letter to the heads of the auto trade associations and EPA Administrator Scott Pruitt, calling the move “an unconscionable gift to polluters.”
3. Green Finance for Ships: The Economist notes 15 ships alone emit more NOx and sulfur than all the world’s cars put together and the pressure is on to meet sulfur emission caps established by the International Maritime Organization by 2020. The problem, the article notes, is getting finance to improve vessels.
4. ITS-Davis 3 Revolutions Policy Initiative Survey: This week Institute of Transportation Studies at the University of California, Davis (ITS-Davis) released a survey of transport experts as part of its “3 Revolutions Policy Initiative” finding, among other things, 70% of survey participants think fully driverless vehicles will account for more than 20% of vehicles sold by 2040.
5. DHL Going to Net Zero by 2050: Deutsche Post DHL Group, the world’s largest mail and logistics company, announced last week it will reduce all logistics-related emissions to net zero by the year 2050. Other companies will continue to follow.

1. Gallup: Americans Tilt Toward Protecting Environment, Alternative Fuels

Gallup said this week that, given a choice, the majority of Americans think protecting the environment should take precedence over developing more energy supplies, even at the risk of limiting the amount of traditional supplies the U.S. produces. An even larger majority (71%) would prioritize developing alternative energy sources such as wind and solar power over the production of oil, gas and coal. Although these have been Americans’ preferences for some time, support in the past two years has been at record highs. The figure below summarizes these poll results.

Americans have usually, but not always, favored the environment when given this choice, Gallup says. The exceptions came in early 2010 and from 2011 through 2013 as the nation recovered from the Great Recession. Americans’ preferences temporarily shifted back toward environmental protection in May 2010, after the BP oil spill in the Gulf of Mexico, Gallup notes. The gap has widened in favor of the environment in the past four years. In both 2016 and this year, 59% of Americans have favored the environment versus 34% who have favored the production of oil, gas and coal ― the 25-percentage-point difference is the highest such margin in Gallup’s history of asking the question, according to Gallup.

Fewer Americans are worried about the availability and affordability of energy than any of 12 other problems measured in Gallup’s March Environment survey, and worry about energy is the lowest it has been in 14 years. The percentage of Americans rating energy as a serious problem is at a 15-year low, and almost no one mentions energy as the most important problem facing the nation. Gallup notes that underlying views of an abundant and affordable energy supply may free Americans to prioritize the environment and to stress the development of alternative energy. Statistical analysis shows a significant year-by-year relationship between views of the seriousness of the energy situation and views of the trade-offs between traditional energy and the environment, as well as between traditional energy and alternative energy sources.

2. EPA: EPA to Reexamine Emission Standards for Cars and Light Duty Trucks — Model Years 2022-2025

Yesterday, concurrent with President Donald Trump’s visit to Michigan to meet with auto workers and industry representatives, EPA and the Department of Transportation issued a Notice of Intent that will be published in the Federal Register re-opening the mid-term review of the 2022-2025 fuel economy standards. Read more about it here.

3. The Economist: Green Finance for Dirty Ships (Subscription Required)

The Economist notes this week that while ships carry 90% of the world’s trade and produce 3% of GHGs. However, by using heavy fuel oil, 15 ships alone emit more NOx and sulfur than all the world’s cars put together. This has been well known for a number of years now, and the industry, under the International Maritime Organization agreed to cap sulfur emissions by 2020. Shipping will now be included in the European Union’s emissions trading scheme (ETS) by 2021. The problem, the article notes, is getting finance to improve vessels. The Economist notes that the industry can barely pay its existing debts, and freight rates have collapsed because world trade has slowed down since the financial crisis and in response to overcapacity. Earnings reached a 25-year low in 2016.

Ship owners, who would normally borrow for such upgrades, do not benefit from lower fuel bills. It is the firms chartering the vessels that enjoy the savings. But their contracts are not long enough to make it worthwhile to invest in green upgrades. The average retrofit has a payback time of three years, whereas 80% of ship charters are for two years or less. Green-lending structures, such as a program called, “Save as you Sail”, comes from the Sustainable Shipping Initiative. The idea is to share the fuel savings between the ship owner and the charterer over a longer contract, giving both an incentive to make the upgrades.

4. UC Davis: The Future Car Is Driverless, Shared and Electric

In November 2016, the Institute of Transportation Studies at the University of California,  Davis (ITS-Davis) convened leading academic, government, private industry, and public interest stakeholders to explore solutions to “steer the three transportation revolutions — shared mobility, electrification, and autonomous vehicles, toward the public interest.” Out of that conference came the “ITS-Davis 3 Revolutions Policy Initiative.”  The initiative will primarily serve in a convening role; bringing academic, government, private industry, and public interest stakeholders together to work toward ensuring that the three transportation revolutions, vehicle sharing, electrification and automation are steered towards the public interest.

This week the Initiative released a survey of transport experts on the “3 Revolutions” finding that:

• 70% of survey participants think fully driverless vehicles will account for more than 20% of vehicles sold by 2040.
• 88% think commercially offered shared rides will make up more than 5% of all U.S. passenger miles by 2030, and 78% think commercially offered shared rides will account for more than 20% of U.S. passenger miles traveled by 2040.
• 70% think that by 2050, the majority of vehicles used commercially for ride and car sharing in the nation will be zero-emission vehicles, including battery, plug-in hybrid, and fuel-cell electric vehicles.
• 30% think driverless vehicles will account for 20% of passenger vehicle sales by 2030.
• 30% think ride-sharing services will account for 5% of passenger miles traveled in the U.S. by 2020 and 40% by 2030.
• 50% think that ZEVs will comprise most of the fleet for ride and vehicle-sharing by 2050.

When respondents were asked to specify which companies are best positioned to capitalize on the revolution in autonomous, shared and electric vehicles, 67% listed Google, 64% named Tesla and Uber, and 48% chose Lyft and General Motors.

Without policy actions, 77% of survey respondents said that the benefits of shared, automated vehicles will not be evenly distributed across income levels, and 80% said that sales of automated vehicles will result in more greenhouse gas emissions.

A series of briefing papers has been produced in conjunction with the survey.

5. DHL: Deutsche Post DHL Group Commits to Zero Emissions Logistics by 2050

Deutsche Post DHL Group, the world’s largest mail and logistics company, announced last week it will reduce all logistics-related emissions to net zero by the year 2050. There will be

four interim milestones to be achieved by the year 2025 as part of the Group’s environmental protection program, GoGreen:

• Globally, DHL will increase the carbon efficiency of its own activities and those of its transport subcontractors by 50% compared to the 2007 baseline.
• At the local level, it aims to improve the lives of people right where they live and work using clean transport solutions. DHL will operate 70% of its own first and last mile services with clean pick-up and delivery solutions, e.g., by bike and electric vehicle.
• More than 50% of sales will incorporate Green Solutions, making customers’ supply chains greener.
• The Group will train and certify 80% of its employees as GoGreen specialists by 2025, and actively involve them in its environmental and climate protection activities.

The previous climate target – to improve carbon efficiency by 30% over the 2007 baseline – was achieved in 2016, four years ahead of schedule, thanks to a diverse range of measures to optimize the Group’s vehicle fleet, buildings and logistics networks.

GoGreen is built on two basic principles: “Burn Less and Burn Clean.” The “burn less” approach is about reducing energy consumption without changing the energy source, such as measures to improve load capacity. The “burn clean” focuses on using green energy sources and fuels, such as electric vehicles for pickup and delivery.

Regardless of the Trump Administration’s position on climate change, companies are going to continue to tread down this path.