REDUCING THE GROWTH OF MOTOR VEHICLE CO 2 EMISSIONS THROUGH 2050: EFFICIENCY, LOW-EMISSION FUELS AND ADVANCED TECHNOLO

1. REDUCING THE GROWTH OF MOTOR VEHICLE CO2 EMISSIONS THROUGH 2050: EFFICIENCY, LOW-EMISSION FUELS AND ADVANCED TECHNOLOGIES Carmen Difiglio U.S. Department of Energy (carmen.difiglio@hq.doe.gov) Erice Seminars on Planetary Emergencies August 20, 2007

2. Five Approaches to Reducing CO2 Emissions in Motor Vehicles • Improve fuel efficiency on current-technology vehicles. • Introduce new vehicle concepts that have lower emissions. • Substitute gasoline and diesel fuel with lower-emission fuels. • Shift to lower-emission travel modes. • Reduce travel.

3. Examples of IncrementalImprovements and their Cost

4. Main Advanced Concepts • Hybrid Vehicles (now commercialized) • “Toyota” system hybrids (2 or 4 electric motors) provide ~40% fuel savings and cost ~ $5,000. • “Honda” system hybrids (1 motor) provide ~30% fuel savings and cost ~ $3,000 (more cost-effective). • Plug-in Hybrid Vehicles (under development) • Plug-ins offer some degree of electric-vehicle operation with substantial cost increase for additional batteries. • Electric Vehicles • Probably niche markets due to limited energy density. • Hydrogen Fuel Cell Vehicles (longer term) • Other Alternative Fuel or Fuel Flexible Vehicles

5. Lower Emission Fuels • Cellulosic Ethanol (~ 90% reduction) • Biodiesel Fuel (~ 70% reduction) • Ethanol from sugar (~ 60% reduction) • Hydrogen (100% reduction to increased emissions depending on energy source and end-use efficiency) • Electricity (100% reduction to increased emissions depending on energy source and end-use efficiency) • Compressed Natural Gas (~ 30% reduction) • Liquefied Natural Gas (~ 20% reduction) • Ethanol from Corn (~ 20% reduction) • Liquefied Petroleum Gas (~ 20% reduction) • Methanol (< 10% reduction) • Gas-to-Liquids (5% higher; lower with CCS) • Coal-to-Liquids (110% higher; ~ 2% higher with CCS)

6. GHG Impacts of Alternative Fuels(2000 U.S. Data)

7. Hydrogen Production Costs(Gas Reforming the Least Expensive – Solar the Most Expensive)

8. Barriers to the Uptake of H2 Vehiclesby 2050 • Fuel cells need to cost ~ $50/kW to be competitive. • On board H2 is an unsolved problem (low energy density implies limited vehicle range between refueling). • Infrastructure investment for vehicles, fuel production and fuel distribution are all extremely high. • Without government intervention, vehicle manufacturers, fuel producers and fuel distributors face substantial investment risk (coordinated investment needed). • Low-emission sources of H2 are expensive and would be best used to decarbonize the electric power sector first. • Nonetheless, many governments (e.g., U.S., Japan, E.U.) have significant programs to overcome these barriers. • Why? Fuel cell H2 vehicles still appear to offer the best long-term option to fully decarbonize transport.

9. Biofuels Trends • Biofuels use is growing rapidly around the world due to market forces and government policies. • The cost-effectiveness of biofuels GHG reductions is improving due to higher oil prices. • Sugar ethanol GHG reductions are essentially free. • Advanced biofuels processes could provide greater GHG reductions and use non-food feedstocks. • Global biofuels potential appears substantial and free trade could benefit many less-developed countries.

10. Energy Technology Perspectives Model Primary energy Conversion sectors/processes Final energy Demand sectors/processes Useful energy Electricity production Industry Fossil fuels Gasoline Natural gas Electricity Coke Hydrogen Heat etc. Refineries Heating Cooling Power Moving etc. Coke ovens Transport Renewables Heat production Residential/ commercial Nuclear Hydrogen production

11. Reference Case: Distribution ofCO2 Emissions from LDVs in 2000

12. Reference Case: Distribution ofCO2 Emissions from LDVs in 2050

13. Policy Actions Analyzed to ReduceCO2 Emissions In Motor Vehicles • Fuel Economy/Advanced Technology Vehicles • Establish or raise fuel efficiency standards. • Alternatively use “feebates.” • Subsidize the purchase of advanced technology vehicles. • RD&D to develop improved advanced vehicles. • CO2 taxes/value. • Low Emission Fuels • Establish mandates to use minimum levels of qualified low-emission fuels. • Subsidize low-emission fuels or alt-fuel vehicles. • RD&D to reduce the cost to produce low-emission fuels. • CO2 taxes/value.

14. Fuel Economy Pays Off Without Considering Climate Benefits This will have to be redone

15. CO2 Values Have to be High toInfluence Fuel Efficiency

16. Reference Case: Light-Duty Vehicle Fuel Economy [litres/100 km)

17. Policy Scenario: Market Penetration of Biofuels

18. Emissions Growth – Reference, High-Tech,Carbon Policy & Biofuels Scenarios

19. Emissions Growth – Reference, High-Tech,Carbon Policy & Biofuels Scenarios

20. CO2 Intensity – Reference, High-Tech,Carbon Policy & Biofuels Scenarios

21. Sustainable vs. UnsustainableBiofuels Development • Biofuels should not be developed if they: • Compromise food supplies and food aid. • Replace rain forests and other CO2 sinks. • Adversely affect bio-diversity. • Deplete water supplies. • All governments should adopt sustainability safeguards in their biofuels policies.

22. Example: Indonesian Palm Oil • Indonesia’s 1997-8 forest and peatland fires were equivalent to 40% of all global emissions from burning fossil fuels that year (Nature, November 7, 2002). • 600 million tonnes of carbon released annually from draining peat for plantations • Most Indonesian Palm Oil has net emissions through: • 1. forest clearance • 2. peat decomposition • 3. both (where swamp forest is cleared for new oil palm plantations, as in areas of Riau and Jambi)

23. Biofuel Observations • Palm oil production in former rain forests do not provide net CO2 emission benefits except after 5-6 decades. • Therefore, rain forest palm oil/sugar cane is a counterproductive GHG mitigation strategy (& it has a catastrophic impact on biodiversity). • Available biomass resources can also be used to reduce emissions in the power generation sector. • The current interest in biofuels is mainly driven by two factors: agricultural policies and oil security policies.

24. Conclusions • Rapid growth of motor vehicles outside of EU and NA will increase motor vehicle emissions. • Nonetheless, reducing this growth is necessary to combat higher GHG concentrations. • We conclude that improving motor vehicle efficiency is the win-win GHG strategy. • Advanced technologies combined with regulatory policies can significantly reduce the growth of motor vehicle emissions without imposing high taxes/values on CO2 emissions. • CO2 taxes would have relatively small impacts on transport relative to other energy sectors.

25. BACKUP SLIDESREDUCING THE GROWTH OF MOTOR VEHICLE CO2 EMISSIONS THROUGH 2050: EFFICIENCY, LOW-EMISSION FUELS AND ADVANCED TECHNOLOGIES Carmen Difiglio U.S. Department of Energy Erice Seminars on Planetary Emergencies August 20, 2007

26. Reference Case: Distribution ofCO2 Emissions from Transport in 2000 & 2050

27. High Plug-in Hybrid Scenario

28. CO2 Intensity with High Plug-InScenario

29. Power Sector Carbon Intensity

30. ETP Model Regions OECD-Regions • US • Canada • Mexico • Western Europe • Eastern Europe • Japan • Australia and New Zealand • South Korea Non-OECD Regions • FSU • China • India • Rest of Asia • Latin America • Africa • Middle East

31. Technology Choice in MARKAL Technology Characteristics Energy Sources Used Efficiency Costs (Capital and O&M) Availability Dynamic LP Optimization Energy Resources Cost and Availability Energy Service Demands By Sector/Region Technology Mix for Each Time Period That Satisfies Energy Demand Given Constraints Other Assumptions Long-Term Discount Rate System Reserve Requirements Other Constraints Max. CO2 Emissions by Time Period

32. How Hybrids Work • Hybrid-electric vehicles (HEVs) combine the benefits of gasoline engines and electric motors. • They can be configured to obtain different objectives, such as improved fuel economy, increased power, or additional auxiliary power for electronic devices and power tools. • Some of the advanced technologies typically used by hybrids include • Regenerative Braking • Electric Motor Drive/Assist • Automatic Start/Shutoff

33. A Typical Hybrid Vehicle