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Powering Ahead the Future of Low-Carbon Cars and Fuels

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Powering Ahead the Future of Low-Carbon Cars and Fuels Powering Ahead The future of low-carbon cars and fuels Duncan Kay, Nikolas Hill and Dan Newman Ricardo-AEA April 2013 b The UK Petroleum Industry Association (UKPIA) represents the interests of nine member companies engaged in the UK oil refining and downstream industry on a range of common issues relating to refining, distribution and marketing of oil products, in non-competitive areas. UKPIA’s role is to inform its members of proposed legislation and related developments, and to help form and advocate the industry’s position. UKPIA is also an authoritative source of information or reference on the UK downstream industry. The Royal Automobile Club Foundation for Motoring is a transport policy and research organisation which explores the economic, mobility, safety and environmental issues relating to roads and their users. The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist. RAC Foundation 89–91 Pall Mall London SW1Y 5HS Tel no: 020 7747 3445 www.racfoundation.org Registered Charity No. 1002705 April 2013 © Copyright Royal Automobile Club Foundation for Motoring Ltd c Powering Ahead The future of low-carbon cars and fuels Duncan Kay, Nikolas Hill and Dan Newman Ricardo-AEA April 2013 i About the Authors Duncan Kay is a senior technical consultant for Ricardo-AEA and has a background of 16 years’ experience in the automotive sector, working as a research and development engineer developing new technologies to improve fuel economy and reduce emissions from passenger cars. Since leaving the industry he has spent the last 5 years advising and consulting on a wide range of transport issues, particularly analysis of the automotive industry and transport greenhouse gas emissions reduction. Duncan has led studies for the Low Carbon Vehicle Partnership, the European Environment Agency and the European Commission amongst others. In 2012, he completed a study for the Joint Research Council of the European Commission examining the role of research and development in maintaining the competitiveness of the European automotive industry. Nik Hill is Ricardo-AEA’s Knowledge Leader for Transport Technology and Fuels and has over 13 years of experience of consultancy project work on transportation issues for a range of public and private sector clients. He has particular expertise in transport emissions, low-carbon vehicle technologies and fuels, and in developing models to simulate future emissions trajectories. Nik’s expertise includes assessing the energy and environmental impacts of transport, including model development, life cycle analysis and the economic evaluation of future vehicle technologies and fuels. Nik has led a number of influential projects for the UK government and European Commission in recent years, one of which was a high-profile European Commission project to identify and analyse potential options for a long-term policy framework to reduce transport greenhouse gas emissions out to 2050. Dan Newman is a consultant for Ricardo-AEA with over two years of experience on sustainable transport projects for both governments and the private sector. Dan has particular expertise in battery/hybrid electric vehicles and natural gas fuelled vehicles. He has been involved in a range of work for the European Commission and has recently been instrumental in investigating the effect of environmental regulations and standards on vehicle prices over the past 15 years. Dan has led tasks assessing the impact of information communications technology (ICT) of the large-scale deployment of battery electric vehicles for the European Commission, and has modelled how natural gas can contribute to achieving cost-effective greenhouse gas emissions reductions across the European transportation sector. ii Acknowledgements The authors would like to thank Prof. Stephen Glaister of the RAC Foundation and Nick Vandervell of the UK Petroleum Industry Association for commissioning this work and providing valuable input and advice. Particular thanks are also due to Luca Lytton for his useful comments and efforts in the design and preparation of this report and to other members of the RAC Foundation (David Quarmby and Philip Gomm) and UKPIA (Nunzia Florio, Hugh Tucker and Chris Hunt), as well as Ben Kennington for his excellent and thorough proofreading of the final draft. Disclaimer This report has been prepared for the RAC Foundation and UKPIA by Duncan Kay, Nikolas Hill and Dan Newman at Ricardo-AEA Ltd. Any errors or omissions are the authors' responsibility. The report content reflects the views of the authors and does not necessarily represent the views of the RAC Foundation or UKPIA. iii Contents Viewpoint viii Executive summary xii 1 The Challenge 1 1.1 Introduction 1 1.2 Meeting UK greenhouse gas reduction targets 2 1.3 Road transport’s contribution globally 6 1.4 Europe and the UK’s role 8 2 The Policy Context 11 2.1 Introduction 11 2.2 European transport and fuel policy 12 2.3 Existing UK policy framework 20 2.4 Future policy changes 35 2.5 Conclusions 41 3 Future Fuels 43 3.1 Introduction 43 3.2 Review of fuels 45 3.3 Comparison of fuels 58 4 Future Vehicles 63 4.1 Overview 64 4.2 Review of vehicle technologies 67 4.3 Further improving internal-combustion engine and transmission technology 75 4.4 Weight, drag and rolling resistance reduction 78 4.5 Powertrain electrification 83 4.6 Real-world emissions and driving style 91 4.7 Comparison of technologies 92 5 Predicted Market Shares of Future Technologies and Fuels 97 5.1 Predicted market shares of future technologies 101 5.2 Predicted future mix of fuels 112 iv 5.3 Assessment of the key sensitivities 117 5.4 Analysis of the wider factors affecting uptake 119 5.5 Evolution or revolution? 125 6 Conclusions and Future Potential 127 6 References 133 v List of Abbreviations ACEA European Automobile Manufacturers’ Association (‘Association des Constructeurs Européens d’Automobiles’) AFV alternative fuel vehicle BEV battery electric vehicle BRIC Brazil, Russia, India and China B7 diesel with a FAME content of up to 7% by volume B10 diesel with a FAME content of up to 10% by volume B30 diesel with a FAME content of up to 30% by volume Bio-CNG bio-compressed natural gas, biomethane BSG belt-driven starter-generator BSI British Standards Institute CARS21 Competitive Automotive Regulatory System for the 21st century CCC Committee on Climate Change CCS carbon capture and storage CEN European Committee for Standardisation (‘Comité Européen de Normalisation’) CFRP carbon-fibre-reinforced plastics CNG compressed natural gas CO2 carbon dioxide CO2e carbon dioxide equivalent CTL coal to liquid DECC Department of Energy & Climate Change Defra Department for Environment, Food and Rural Affairs DfT Department for Transport E5 petrol with up to 5% ethanol by volume E10 petrol with up to 10% ethanol by volume E85 petrol with up to 85% ethanol by volume E100 pure bioethanol EARPA European Automotive Research Partners Association EGR exhaust gas recirculation ERTRAC European Road Transport Research Advisory Council ETP European Technology Platform EUCAR European Council for Automotive R&D EUROBAT Association of European Storage Battery Manufacturers EV electric vehicle FAME fatty acid methyl ester (first-generation biodiesel) vi FCC Future Car Challenge FCV fuel cell vehicle FT-BTL ‘Fischer–Tropsch biomass to liquid’ – refers to both the process and the resultant diesel fuel GHG greenhouse gas GTL gas to liquid HCCI homogenous charge compression ignition HEV hybrid electric vehicle HFCV hydrogen fuel cell vehicle HGV heavy goods vehicle HMRC HM Revenue & Customs HVO hydrotreated vegetable oil ICE internal-combustion engine IEA International Energy Agency IFS Institute for Fiscal Studies ILUC indirect land-use change IMF International Monetary Fund IPCC Intergovernmental Panel on Climate Change JRC Joint Research Council (of the European Commission) LCVIP Low Carbon Vehicles Innovation Platform LCVPPP Low Carbon Vehicle Public Procurement Programme LDV light-duty vehicle LBM liquid biomethane LiPF6 lithium hexafluorophosphate, used in battery chemistry LFP lithium–iron phosphate, used in battery chemistry LMO lithium–manganese oxide, used in battery chemistry LMP lithium–metal polymer, used in battery chemistry LNG liquefied natural gas LPG liquefied petroleum gas LTO lithium–titanate oxide, used in battery chemistry MJ megajoules MPV multipurpose vehicle NCA lithium–nickel cobalt aluminium oxide, used in battery chemistry NEDC New European Drive Cycle NiCd nickel–cadmium, used in battery chemistry NiMH nickel–metal hydride, used in battery chemistry NMC lithium–nickel manganese cobalt oxide, used in battery chemistry vii OECD Organisation for Economic Co-operation and Development OEM original equipment manufacturer OLEV Office for Low Emission Vehicles PEM polymer electrolyte membrane PEMS portable emissions measurement system PFCC Polymer Fuel Cells Challenge PHEV plug-in hybrid electric vehicle PICG Plug-in Car Grant PIP Plugged-in Places R&D research and development RED Renewable Energy Directive REEV range-extended electric vehicle RPI Retail Prices Index RTFC Renewable Transport Fuel Certificates RTFO Renewable Transport Fuels Obligation SMMT Society of Motor Manufacturers and Traders SULTAN SUstainabLe TrANsport illustrative scenario tool TMO transition metal oxide, used in battery chemistry TPMS tyre pressure monitoring systems TSB Technology Strategy Board TTW tank-to-wheel TWh terawatt-hours
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