Emissions and Climate Change

What can Europe do?

Cutting transport CO2 emissions:

Putting effectiveness & value for money centre stage

Stephen Perkins

Does cost-effectiveness matter?

• 2nd best argument – transport should mitigate more

because limited de-localisation effects

• High cost measures have attracted political support

– Hydrogen

– Biofuels

– Modal shift

– Hybrids

• Despite low effectiveness

• Effective measures weak political support

-

1,000

2,000

3,000

4,000

5,000

6,0001990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Mil

lio

n t

on

nes o

f C

O2

The 400 transport measures adopted

so far should save 700 Mt CO2 in 2010

IEA projection of transport emissions

700 Mt CO2

-

1,000

2,000

3,000

4,000

5,000

6,0001990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Mil

lio

n t

on

nes o

f C

O2

The 400 transport measures adopted

so far should save 700 Mt CO2 in 2010

IEA projection of transport emissions

700 Mt CO2

ITF Transport Sector Emissions:

Potential Impact of Current Policies

4

Policy Implications

• More action needed if growth in transport emissions is to be cut.

• How much?

– Power & heat sector will make biggest cuts

– Some relatively low cost measures available in all sectors

– Within transport some expensive measures implemented while cheap measures ignored

IPCC Sectoral GHG Abatement Potential for the World

(Gt CO2 eq/yr at less than $100/tCO2)

0

1

2

3

4

5

6

7

TransportEnergy Supply Buildings Industry WasteForestryAgriculture

IPCC Fourth Assessment Report

1.5-2.5 Gt/CO2/yr

Gt C

O2

eq

/yr

UK Modeled CO2 Emission Reductions by SectorScenario Showing Least Cost Route to 60% Reduction by 2050

Source: Markal-Macro model

UK Marginal abatement cost curve 2020

Abatement potential 2020 (MtC)

VA RTFO

Dti

2.1 Mt/yr

-100

0

100

200

300

400

500

Low rolling resistance tyres (73€)

CNG (268€)Fuel efficient AC (24€-37€)

European Ethanol (65€-451€)Brazilian Ethanol (-28€-34€)

Biodiesel (53€-268€)Eco-driving – existing drivers (-45€)

Vehicle technology to 130g by 2012 (135€)Tyre pressure monitoring (-50€)

Low Viscosity lubricants (113€)Eco driving - new drivers (-69€)

Vans, 45g/km reduction (88€)Eco driving - gear shift indicator (-78€)

1.5 Mt1.8 Mt

2.0 Mt

4.0 Mt

3.1-4 Mt

1 Mt

2.4 Mt

3.7 Mt

2 Mt/yr

6.8 Mt

3.1-4 Mt

3.1-4 Mt2.1 Mt

Annual reduction in 2012 ~ 38 Mt

4.4 Mt5.5Mt

9.6Mt9.1 Mt

3.1-4 Mt

2.7 Mt

5.3Mt

11.7Mt

9.6Mt/yr

21.4 Mt

3.1-4 Mt

3.1-4 Mt

6.4Mt

Annual reduction in 2020 ~ 96 Mt

EU Car & Van GHG Abatement

Costs & Mitigation Potential

Source: TNO, IEEP, LATS

€/t CO2eq

Possible regulatory standard & energy efficiency ―bins‖ for tyres

P metric STH

5,0

6,0

7,0

8,0

9,0

10,0

11,0

12,0

13,0

14,0

15,0

550 600 650 700 750 800 850

Diameter (mm)

R/R

T (

kg

/t)

STH

LET1

LET2

ULET1

ULET2

SULET

REG STH

Data based on rolling resistance measurements of Original Equipment and replacement tires from

Europe, North America and Asia

-$300

-$200

-$100

$0

$100

$200

$300

$400

Ele

ctric

Wat

er P

ump

Efficie

nt A

lter

nat

ors

Efficie

nt A

ir C

ondi

tion

ers

Hea

t Pum

ps for

A/C

Hea

t Bat

tery

Dual C

oolin

g Circu

its

Idle

Sto

p/Sta

rt (42

V s

ys)

Low

RR T

yres

0W-5

W/20

Oils

Tyr

es In

flation

Monito

r

Shift

Ind L

ight

(m

an tr

ans)

Drive

r Tra

inin

g

Adap

tive

Cru

ise

Con

trol

do

lla

rs p

er

ton

ne

CO

2

US / Cold US / Hot EU / Cold EU / Hot

Low Cost Vehicle Component Improvements

• Tyres, cruise control, air con effective under all

conditions

– combined these could save up 5-10% of fuel.

• Most technologies are most effective under cold

conditions with dense traffic

– water pump, energy efficient alternator, heat battery

and 5W-20 oil most cost-effective

– combined these could save up to 10% of fuel.

– especially important for Northern climates

• Diesels: lower potential for improvement

Core Vehicle Technology

Source: King 2007 based on IEA, IEEP, CARB, Ricardo.

Differentiation of annual circulation tax for private cars in the UK

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

70 80 90 100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

CO2 g/km

An

nu

al

VE

D R

ate

s (

£)

B101 to 120

D151-165

C121-150

E166-185

FOver 185

AUpto 100

GOver 225

Rates from 2001

Rates from 23-3-2006

Source: DfT,

Company car tax differentiation in the UK

10

15

20

25

30

35

40

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

260

270

280

290

300

CO2 g/km

% o

f C

ar

pri

ce

ta

xe

d

2002/3

2003/4

2004/5

2005-7

2005-7

2003/4

2004/5

2002/3

2005-7

2003/4

2004/5

2002/3

Source: DfT,

Impact of UK tax differentiation

160

165

170

175

180

185

2001 2002 2003 2004 2005

CO

2 (

g/k

m)

company private

Source: DVLC

High cost GHG mitigation:

Biofuel subsidies

Average performance Euros/tCO2eq USD

US corn-ethanol 390 520

EU sugar-beet ethanol 450—620 610—840

EU rapeseed biodiesel 750—990 1 000—1 340

Sources: Koplow 2007; Kutas et al., 2007.

Biofuels: EU tax subsidies increasing rapidly(Excise tax exemptions - revenue loss)

Biodiesel

Ethanol

Billion Euro

Sources: Koplow 2007; Kutas 2007; for GSI

US biofuel tax subsidies to grow and grow

0

5

10

15

20

25

30

35

2002 2004 2006 2008 2010 2012 2014 2016

Billi

on

s o

f U

.S. D

oll

ars

(n

om

inal)

Farm payments Ethanol tax credit Biodiesel tax credit

$4Bn $16Bn

GSI 2007

Biofuels GHG emissions balance

• Wide range of uncertainty in the estimation of

life-cycle GHG emission balances;

• Farming practice can shift the balance from

positive to negative;

• Oxidation of soil carbon and emissions of N2O

from fertiliser application are big sources of GHG

emissions.

Designing support for biofuels

• Volumetric targets inappropriate– Likely to favour worst performing, lowest cost production

• Transport fuel carbon content targets better

• Certification for biofuels production– Should improve outcomes even if it is difficult

– Not suited to indirect effects – forest destruction

– Requires extensive stakeholder consultation

– Crude system better than no certification

… designing support cont.

• UK, NL, Germany, Switzerland, California, EU developing certification to regulate market

• Range and poor performance of today’s biofuels partly result of absence of regulation or incentives linking support to CO2 balance

• Fuel carbon taxes, including for biofuels, would be more cost-effective than subsidies or targets

Biomass better for heat and power£ / tonne CO2 abated

-100

-50

0

50

100

150

200

250

300

350

Industrial / commercial

boilers

CHP Co-firing in coal power

plant

Biodiesel Wheat Ethanol

Source: Dti

Paris 21 March 2006 23

Policy package

• Integrated packages of measures needed

– Vehicles, fuels, demand mgmt, modal shift

• But vehicle efficiency measures deliver most

• Off-cycle components and eco-driving are most

cost-effective

– Large, immediate savings – should be core measures

– Switch attention to efficiency, away from fuels & modal

shift co-benefits approach (currently 1/3 of all national

policies reported)

24

Priorities

• Differentiate vehicle taxes by CO2

– More countries

• In EU, no need to wait for Directive

– stronger incentives

• Linear incentives to avoid fragmenting car market

• New low cost efficiency measures

– Off-test vehicle component standards / incentives

• tyres, lights, air conditioners, lubricants.

– On-road efficiency

• driving style training / instruments

References:

• www.cemt.org.– Environment pages

– Research Centre pages

• www.internationaltransportforum.org.