ESPOO 2008 VTT RESEARCH NOTES 2426 This outlook report reviews the situation for motor fuels and vehicle NOTES 2426 Status and outlook for biofuels, other alternative fuels and new vehicles VTT RESEARCH technology analysing the aspects of energy security, climate change, local emissions as well as sustainability. The focus is on alternative fuels, biofuels and new vehicle technologies in the time perspective until 2030. The study was carried out within IEA Advanced Motor Fuels Implementing Agreement and within the EU Bioenergy Network of Excellence (NoE). Gasoline and diesel are projected to remain the dominant automotive fuels until 2030. Vehicle technology and high quality fuels will eventually solve the problem of harmful exhaust emissions. The problem with greenhouse gas, CO2, still remains, and much attention will be given to increase efficiency. Hybrid technology is one option to reduce fuel consumption. Diesel engines are fuel efficient, but have high emissions compared with advanced gasoline engines. New combustion systems combining the best qualities of gasoline and diesel engines promise low emissions as well as high efficiency. By 2030, alternative fuels could represent a 10–30% share of transport fuels, depending on policies. Ambitious goals for biofuels in transport have been set. Currently the sustainability of biofuels is discussed extensively. Synthetic fuels promise excellent end-use properties, reduced emissions, and if produced from biomass, also reduced CO2 emissions. In the short term, energy savings will be the main measure against climate change in transport, fuel switches will have a secondary role. Nils-Olof Nylund, Päivi Aakko-Saksa & Kai Sipilä Status and outlook for biofuels, other alternative fuels and new vehicles Julkaisu on saatavana Publikationen distribueras av This publication is available from VTT VTT VTT PL 1000 PB 1000 P.O. Box 1000 02044 VTT 02044 VTT FI-02044 VTT, Finland Puh. 020 722 4520 Tel. 020 722 4520 Phone internat. + 358 20 722 4520 http://www.vtt.fi http://www.vtt.fi http://www.vtt.fi ISBN 978-951-38-6989-2 (soft back ed.) ISBN 978-951-38-7196-3 (URL: http://www.vtt.fi/publications/index.jsp) ISSN 1235-0605 (soft back ed.) ISSN 1455-0865 (URL: http://www.vtt.fi/publications/index.jsp) Bioenergy NoE VTT TIEDOTTEITA – RESEARCH NOTES 2426 Status and outlook for biofuels, other alternative fuels and new vehicles Nils-Olof Nylund, Päivi Aakko-Saksa & Kai Sipilä ISBN 978-951-38-6989-2 (soft back ed.) ISSN 1235-0605 (soft back ed.) ISBN 978-951-38-7196-3 (URL: http://www.vtt.fi/publications/index.jsp) ISSN 1455-0865 (URL: http://www.vtt.fi/publications/index.jsp) Copyright © VTT 2008 JULKAISIJA – UTGIVARE – PUBLISHER VTT, Vuorimiehentie 3, PL 1000, 02044 VTT puh. vaihde 020 722 111, faksi 020 722 4374 VTT, Bergsmansvägen 3, PB 1000, 02044 VTT tel. växel 020 722 111, fax 020 722 4374 VTT Technical Research Centre of Finland, Vuorimiehentie 3, P.O. Box 1000, FI-02044 VTT, Finland phone internat. +358 20 722 111, fax +358 20 722 4374 VTT, Biologinkuja 5, PL 1000, 02044 VTT puh. vaihde 020 722 111, faksi 020 722 7048 VTT, Biologgränden 5, PB 1000, 02044 VTT tel. växel 020 722 111, fax 020 722 7048 VTT Technical Research Centre of Finland, Biologinkuja 5, P.O. Box 1000, FI-02044 VTT, Finland phone internat. +358 20 722 111, fax +358 20 722 7048 Technical editing Leena Ukskoski Edita Prima Oy, Helsinki 2008 Nylund, Nils-Olof, Aakko-Saksa, Päivi & Sipilä, Kai. Status and outlook for biofuels, other alternative fuels and new vehicles. Espoo 2008. VTT Tiedotteita – Research Notes 2426. 161 p. + app. 6 p. Keywords biofuels, alternative fuels, synthetic fuels, biodiesel, alcohols, ethanol, natural gas, biogas, vehicle technology, engine technology, emissions, legislation, standards Abstract The report presents an outlook for alternative motor fuels and new vehicles. The time period covered extends up to 2030. The International Energy Agency and the U.S. Energy Information Administration predict that the world energy demand will increase by over 50% from now to 2030, if policies remain unchanged. Most of the growth in demand for energy in general, as well as for transport fuels, will take place in non- OECD countries. Gasoline and diesel are projected to remain the dominant automotive fuels until 2030. Vehicle technology and high quality fuels will eventually solve the problem of harmful exhaust emissions. However, the problem with CO2 still remains, and much attention will be given to increase efficiency. Hybrid technology is one option to reduce fuel consumption. Diesel engines are fuel efficient, but have high emissions compared with advanced gasoline engines. New combustion systems combining the best qualities of gasoline and diesel engines promise low emissions as well as high efficiency. The scenarios for alternative fuels vary a lot. By 2030, alternative fuels could represent a 10–30% share of transport fuels, depending on policies. Ambitious goals for biofuels in transport have been set. As advanced biofuels are still in their infancy, it seems probable that traditional biofuels will also be used in 2030. Ethanol is the fastest growing biofuel. Currently the sustainability of biofuels is discussed extensively. Synthetic fuels promise excellent end-use properties, reduced emissions, and if produced from biomass, also reduced CO2 emissions. The report presents an analysis of technology options to meet the requirements for energy security, reduced CO2 emissions, reduced local emissions as well as sustainability in general in the long run. In the short term, energy savings will be the main measure for CO2 reductions in transport, fuel switches will have a secondary role. 3 Preface This outlook report reviews the current situation for energy supply, motor fuels and vehicle technology, and summarizes projections into the future. The focus is on alternative fuels and new vehicle technologies. The time perspective of this report extends to 2030. The report deals with energy for transportation on many levels: energy resources, policies, fuel technology, vehicle technology, and environmental impacts. Special attention is given to fuel/vehicle interaction. Based on available data, an evaluation of the promises and potential of different fuel and vehicle options under consideration is carried out to estimate future development. The study was carried out within Annex XXVIII (AMFI Information Service, www.iea- amf.vtt.fi) of the IEA Advanced Motor Fuels Implementing Agreement. The authors would like to acknowledge the IEA Advanced Motor Fuels Implementing Agreement and the Technical Research Centre of Finland VTT for support for this work. Additional biofuels-related information was gathered from the assessment work done within the EU Bioenergy Network of Excellence (NoE). The report highlights the strong links between alternative fuel production, distribution, and end-use, considering both current and future technology. In order to have new options on the market in large scale by 2020, a strong increase in joint R&DDD activities is essential. IEA’s various Implementing Agreements, EU’s 7th Framework Programme, as well as many national activities provide efficient platforms in catalyzing international and national innovation management. The report at hand is a condensed public report based on the full background document, which is restricted for use within the Executive Committee of IEA AMF and EU Bioenergy NoE. The full background document was distributed in February 2007. Most parts of the background report were written in the autumn of year 2006. Some 2007 data has been added to the condensed public version of the report. The views and opinions of authors expressed herein do not necessarily state or reflect those of the IEA Advanced Motor Fuels Implementing Agreement or EU Bioenergy Network of Excellence. Espoo, December 31st, 2007. Nils-Olof Nylund D.Tech, Principal of TEC TransEnergy Consulting Ltd Kai Sipilä Research Director, VTT 4 Contents Abstract..............................................................................................................................3 Preface ...............................................................................................................................4 Abbreviations and definitions............................................................................................7 1. Introduction................................................................................................................10 2. Energy figures............................................................................................................12 2.1 Reserves and projections for supply.................................................................12 2.2 Energy demand.................................................................................................21 3. Policy .........................................................................................................................30 3.1 General .............................................................................................................30 3.2 Agreements to mitigate Climate Change..........................................................31 3.3 European, U.S. and Japanese policies ..............................................................32 3.4 Biofuel policy and sustainability criteria..........................................................37 4. Fuel alternatives.........................................................................................................40