Hello friends! Here’s my monthly take on the five most interesting developments in future fuels and vehicles trends. Items I selected include:
1. The Atlantic: A Frightening New Reason to Worry About Air Pollution ― What’s so frightening? For the first time, scientists have been able to directly link diabetes to PM2.5 emissions. The study, published in The Lancet Planetary Health this month, is the largest one of its kind and quantifies just how many diabetes cases in the world are attributable to PM2.5 emissions: about 3.2 million cases of incident diabetes, and about 8.2 million healthy life years lost due to diabetes attributable to PM2.5 emissions. Scientists linked data from 1.7 million American veterans who had been followed for a median of 8.5 years with air data from the EPA and NASA. It also aggregated past international research on diabetes and air pollution to devise a model to estimate diabetes risk based on the level of pollution, and it used the Global Burden of Disease study to estimate how many years of healthy life were lost due to this air-pollution-induced diabetes. The study authors also controlled for things like obesity and BMI.
PM2.5 is emitted from many sources, but the one of the authors told The Atlantic that in the U.S., the largest PM2.5 source is cars. Moreover, the risk of diabetes starts when PM2.5 levels at about 2.4 μg/m3, lower than U.S. and even WHO limits. For each 10 μg/m3 increase in PM, the risk of developing diabetes goes up by 15 percent, according to the study. The authors also looked at diabetes risk from PM2.5 emissions in other countries. The figure below shows that the burden of disease was highest in parts of Africa, the Middle East and Asia, as well as Mexico in Latin America.
Study authors and others interviewed for the story “said the real answer lies with public policy—stricter limits on fossil-fuel emissions and a move to cleaner energy sources.”
2. Wall Street Journal: Oil, Utilities Fight to Fuel Vehicles of the Future ― This article starts with Saudi Aramco Detroit Research Center’s efforts to create a more efficient internal combustion engine, but moves on to describing the battle between utilities and the oil industry already underway at the U.S. state level. One example: Utilities around the U.S. are pushing politicians and regulators to let them build car-charging networks, arguing they would help spur EV growth that in turn will help reduce pollution and GHG emissions. And they are seeking approval from several states to pass on the cost of these networks to electric customers through higher rates. Another example cited in the article: The oil industry pushed model legislation recently at the American Legislative Exchange Council (ALEC) that would prevent regulated utilities from charging ratepayers to create a charging network. The power industry defeated the measure, but the issue remains a point of contention, the article notes.
Not mentioned in the article, but yet important in the mix is the power of cities in promoting electrification. In fact, cities banded together this month with the Climate Group and C40 to issue the “ZEV Challenge” to the auto industry. They are also pooling their purchasing power to purchase EVs for their fleets. American Fuel & Petrochemical Manufacturers’ (AFPM) President and CEO Chet Thompson noted in the Journal article that, “We’re more engaged at the state and local level on this issue than we have ever been before.” I’ve been saying this for a few years now, and I’ll say it again: that’s a trend that’s only going to continue. The battle for the future of fuel markets is getting more and more local and it will be hand-to-hand combat for each market.
3. The Hill: The ‘Octane Olive Branch’ Is Full of Thorns ― It’s not just the utilities and the oil industry fighting to be the fuel of the future. So is the ethanol industry. This op-ed challenges the notion that I think some people have that the proposal to go to 95 RON and dump the Renewable Fuels Standard (or the guts of it) is in the bag. The ethanol industry is not going to make it easy. A quote from this op-ed sums it up:
“To somehow now turn this failure to comply with the law into an olive branch for higher octane by the oil industry is somewhere between sad and insulting. Moreover, many touting this approach confuse their octane numbers, mixing retail octane at the pump with research octane (RON). Refiners offering to agree to a 95 octane standard is a mere one or two point increase in what we call AKI — the anti-knock index. The result is a pump octane of 88 or 89. That is not enough to incentivize automakers to make a high compression engine that would significantly increase mileage and can easily be made with petroleum, leaving ethanol with no role to play. The toxic, carbon intensive aromatics refiners use for octane present a host of health and associated problems when ethanol is readily available.
And it is hard to swallow the audacity of those in the oil industry who suggest they will ‘give’ the ethanol industry this meager increase if they can do away with the pesky renewable requirement — including a number of environmental safeguards — and institute other provisions that would pretty much guarantee no market growth from corn, cellulose, or anything else.”
4. The Washington Post: The Trump Administration Decides That The Air You’re Breathing Is Way Too Clean ― The impending revocation of California’s waiver to set its own fuel economy/GHG vehicle standards has larger implications than just for fuel economy, even larger than its ability to move aggressively to implement its Zero Emission Vehicle (ZEV) program. To me, it gets back to the earlier item where I noted the tension between states/federal governments and cities to decide the best way to combat climate change, air pollution and direct transport in their borders. The author sums up the issue as follows:
“Just like Democrats, Republicans are happy for states to have power when the states are doing things they like, and happy for the federal government to have power when it’s doing things they like. If a state wants to force transgender people to use the wrong bathroom, well that’s just what the framers intended. But regulating carbon emissions? No dice.
This works further down as well. States that are run by Republicans but include liberal cities have passed a broad array of ‘preemption’ laws, which forbid municipalities from making their own rules on things such as guns, increasing the minimum wage and gay rights. ‘Local control’ is good, unless the locality does things we disagree with.”
Last year for Future Fuel Outlook clients I reviewed climate plans in more than 25 U.S. cities to see what they intended in the transport arena, and what it could mean for them. I plan to update that report this year to track progress in those cities, add others and delve more deeply into the “preemption law” issue as it may impact transport.
5. European Automobile Manufacturers’ Association (ACEA): ACEA Study Finds Cost Still Strong Deterrent for EV Uptake Across Europe; Calls for “Realistic” Targets Recognizing Affordability― A new study from ACEA finds that the affordability of electric cars remains a strong deterrent for customers across the EU, along with lack of infrastructure and lack of investment in infrastructure. The analysis, which compares national data on the market uptake of EVs with GDP per capita, shows that the market share of EVs is close to 0% in countries with a GDP below €18,000 (~US$21,000), while it is no more than 0.75% in half of all EU member states, shown in the figure below.
Source: ACEA, July 2018
The European Parliament’s Committees on industry (ITRE) and transport (TRAN) will vote on the European Commission’s proposal for future car and van CO2 targets on 10 July. (See post Nov. 9, 2017) The Commission has proposed a ‘benchmark’ for the sales of full battery-electric cars at the level of 15% by 2025, and 30% by 2030. Battery-electric cars accounted for just 0.7% of total EU car sales in 2017.
I’ve done a similar analysis, but on a global basis for the top 30+ automobile markets for Future Fuel Outlook members. I found that in addition to the political will to combat climate change, decarbonize transport and develop EV markets to meet these two objectives, a country’s wealth is the other single most important factor of whether a EV market can take off at all. And the list of rich countries in this world is pretty darn short.
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.