Happy Thursday friends! Here’s my now monthly take on the five most interesting developments in future fuels and vehicles trends in August in more of a condensed form so that you can easily scan and jump to the item(s) that are of most interest to you. Items I selected this month run the gamut from car bans, electric vehicles and the internal combustion engine (ICE), the Dieselgate scandal, fuel economy and the IMO standards.
1. Vox: California Has Climate Problem, and Its Name Is Cars ― The ninth edition of the California Green Innovation Index was released this week finding that to meet climate targets, much more will need to be done to decarbonize transport. The recently passed SB 32 mandates 40% below 1990 levels by 2030, and the state is theoretically committed to 80% reductions by 2050. But in the last two years GHG emissions reductions have started to slow and one reason is transport, the largest source of the state’s carbon emissions, as shown in the figure below. Transport-related GHG emissions have spiked over the same time period because of increased vehicle miles traveled (VMT).
The article poses two solutions to the issue: speeding up the introduction to electric vehicles and tackling affordable housing as a means of reducing VMT. But I think there could be a third solution: find a way to restrict, limit or ban cars especially in the major cities where traffic is worst and where VMT is greatest. Before you scoff in disbelief, know that I’m not alone. A recent op-ed in the San Francisco Chronicle suggested the same. And many other cities (and now countries) are moving in this direction: either banning cars outright within the city or placing restrictions (e.g. removing parking, congestion mitigation pricing and other strategies) that make it difficult or unpalatable to drive.
2. Der Spiegel: ‘Made in Germany’ Label Badly Damaged By Car Scandal ― This article takes an scathing and unsparing look at the events preceding and following the Dieselgate scandal and highlights just how intertwined the Germany government and auto industry actually are. That is now a thorn in Chancellor Angela Merkel’s side as she campaigns for another term, for regulators in Brussels that are trying to crack down on emissions cheating and remedies for affected customers hit hard by the scandal. The reputational hit has spurred the car ban movement and served as a push toward a potential ZEV mandate or quota both within Germany and the EU as well.
3. Bloomberg: Carmakers Say Trump Should Want a Deal to Boost U.S. Fuel Economy ― The Alliance of Automobile Manufacturers is calling for a three-way pact with the Trump administration and California on fuel economy standards. “The auto industry wants a deal with Trump and California in part because it sees an opportunity for rules to be harmonized and made more rational…[the Alliance] discouraged the U.S. and the state from resorting to costly and protracted litigation and said California’s willingness to be flexible on rules leading up to 2025 could lead to an accord with the industry on standards in later years.” Trump could become interested in a deal, sure, but California? No way. And why would California want to cut another deal when it already cut a deal with the industry on fuel economy which the industry then reneged on (however the merits)?
4. The Economist: Death of the Internal Combustion Engine ― “The internal combustion engine has had a good run—and could still dominate shipping and aviation for decades to come. But on land electric motors will soon offer freedom and convenience more cheaply and cleanly. As the switch to electric cars reverses the trend in the rich world towards falling electricity consumption, policymakers will need to help, by ensuring that there is enough generating capacity—in spite of many countries’ broken system of regulation.”
I’m surprised The Economist would go along with the hype like this. Actually, I think it’s irresponsible. It’s true that the EV fleet will continue to grow, but for now, the majority of the vehicles out there are going to continue to be vehicles (ICEVs). More importantly, there are real GHG gains to be had and thus more to be done with the ICEV. One example: Mazda will be introducing Skyactiv-X powertrain technology. Executive Vice President Kiyoshi Fujiwara, Mazda’s global R&D Chief said to Automotive News: “Of course, electrification, including systems such as mild hybrids, are necessary. But the pursuit of the ideal internal combustion engine should come first. This is our unwavering strategy.”
5. Ship & Bunker: 2020 Regs Doing Little for the Uptake of LNG Bunkers, Scrubbers, or Alternative Fuels, a New Report Finds ― “By disincentivizing capital-intensive solutions and making low-sulfur fuel the default compliance option, however, the global sulfur cap entrenches, as it were, the role of oil in shipping more than it threatens to displace it with ‘cleaner’ options.” The report quoted in this story notes that due to market and regulatory uncertainty shippers by default have chosen the compliance option that requires the least planning and capital outlay but not necessarily the lowest-cost option in the long-run: low-sulfur residual fuel oil.
Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.