european climate foundation decarbonising road freight in ...€¦ · britain’s future’, 20152,...
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FinalReport August2018
CambridgeEconometricsCambridge,UK
EuropeanClimateFoundation
DecarbonisingroadfreightinEurope:Asocio-economicassessment
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DecarbonisingroadfreightinEurope:Asocio-economicassessment
2Cambridge Econometrics
Ourmissionistoprovideclearinsights,basedonrigorousandindependenteconomicanalysis,tosupportpolicy-makersandstrategicplannersingovernment,civilsocietyandbusinessinaddressing
thecomplexchallengesfacingsociety.
CambridgeEconometricsLimitedisownedbyacharitablebody,theCambridgeTrustforNewThinkinginEconomics.
www.neweconomicthinking.org
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DecarbonisingroadfreightinEurope:Asocio-economicassessment
3Cambridge Econometrics
AuthorisationandVersionHistory
Version Date Authorisedforreleaseby
Description
1.0 21/08/18 JonStenning Finaltechnicalreport
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DecarbonisingroadfreightinEurope:Asocio-economicassessment
4Cambridge Econometrics
Acknowledgments
Inrecentyearsanumberofstudieshaveassessedthesocio-economicimpactofatransitiontolow-carboncarsinEurope,attheleveloftheEUasawhole(‘FuellingEurope’sFuture’,2013and20181)andMemberState(‘FuellingBritain’sFuture’,20152,‘Enroutepouruntransportdurable’,20163,‘Low-carboncarsinGermany’,20174,‘FuellingSpain’sFuture’,20185).However,thisisthefirststudythathaslookedatthewhole-economyimpactofasimilartransitionintheheavy-dutyfreighttransportsegment.
CambridgeEconometricsprovidedtheanalyticalworkpresentedinthisreport,includingvehiclestockanalysisandeconomicmodelling(usingtheE3ME6model).
ThereportwasfundedbytheEuropeanClimateFoundationwhoconvenedacoreworkinggrouptoadviseandreviewtheanalysisandreporting.Theauthorswouldliketothankallmembersofthecoreworkinggroupfortheirrespectiveinputs.
Thestakeholderswhocontributedtothisstudysharedtheaimofestablishingaconstructiveandtransparentexchangeofviewsonthetechnical,economicandenvironmentalissuesassociatedwiththedevelopmentoflow-carbontechnologiesforHGVs.TheobjectivewastoevaluatetheboundarieswithinwhichvehicletechnologiescancontributetomitigatingcarbonemissionsfromHGVsacrossEurope.Eachstakeholdercontributedtheirknowledgeandvisionoftheseissues.Theinformationandconclusionsinthisreporthavebenefittedfromthesecontributionsbutshouldnotbetreatedasnecessarilyreflectingtheviewsofthecompaniesandorganisationsinvolved.
ThetechnologycostdatausedinthisanalysiswasindependentlyreviewedbyFelipeRodriguezandRachelMuncriefoftheInternationalCouncilforCleanTransportation.TheinfrastructuredataandassumptionsusedweresimilarlyreviewedbyCélineCluzelofElementEnergy.
1https://www.camecon.com/how/our-work/fuelling-europes-future/2https://www.camecon.com/how/our-work/fuelling-britains-future/3https://www.camecon.com/how/our-work/en-route-pour-un-transport-durable/4https://www.camecon.com/how/our-work/low-carbon-cars-in-germany/5https://www.camecon.com/how/our-work/fuelling-spains-future/6Moredetailonthismodelispresentedinanannextothisreport,andcanalsobefoundatwww.e3me.com
Background
Coreanalyticalteam
Disclaimer
Review
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DecarbonisingroadfreightinEurope:Asocio-economicassessment
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Contents
Page
Acronymsandabbreviations 6
Executivesummary 8
1 Introduction 10
2 Overviewofscenarios 13
3 Modellingassumptions 18
4 Infrastructurerequirements 34
5 Hauliers’Perspective 42
6 Economicimpacts 45
7 Environmentalimpacts 51
8 Conclusions 52
AppendixA E3MEmodeldescription 53
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Acronymsandabbreviations
Table0.1setsouttheacronymsandabbreviationscommonlyusedinthereport.Table0.1Acronymsandabbreviations
Abbreviation Definition
Powertrain types
Internal combustion engine
ICE These are conventional diesel vehicles with an internal combustion engine. In the various scenarios modelled there is variation in the level of efficiency improvements to the ICE. Efficiency improvements cover engine options, transmission options, driving resistance reduction, tyres and hybridisation.
Plug-in hybrid electric vehicle
PHEV Plug-in hybrid electric vehicles have a large battery and an internal combustion engine. They can be plugged in to recharge the vehicle battery. EVs with range extenders are not included in the study.
Battery electric vehicle
BEV This category refers to fully electric vehicles, with a battery but no internal combustion engine.
Fuel cell electric vehicle
FCEV FCEVs are hydrogen fuelled vehicles, which include a fuel cell and a battery-powered electric motor.
Zero emissions vehicle
ZEV Includes all vehicles with zero tailpipe emissions (e.g. FCEVs and BEVs).
Electric vehicles EV All vehicles which are fuelled directly via electricity (i.e. BEVs and PHEVs)
Electric road system
ERS Refers to electrified infrastructure to supply EV vehicles with a constant power supply across portions of the road network. PHEV-ERS and BEV-ERS are vehicles with the required pantograph to enable them to draw charge from ERS.
Economic terminology
Gross domestic product
GDP A monetary measure of the market value of all final goods and services produced in the national economy
Gross value added
GVA A measure of the total value of incomes generated from production (largely wages and gross profits); it is equal to the difference between the value of output and the value of bought-in goods and services (hence ‘value added’).
Other acronyms
Original equipment manufacturers
OEMs Refers to equipment manufacturers of motor vehicles
Million/billion barrels of oil equivalent
Mboe/Bboe A unit for measuring oil volumes
Total Cost of Ownership
TCO Total cost of owning and operating (fuel etc) a vehicle
Light Heavy goods vehicles
LHGVs Heavy goods vehicles with a gross vehicle weight of 3.5-7.5 tonnes
Medium Heavy goods vehicles
MHGVs Heavy goods vehicles with a gross vehicle weight of 7.5-16 tonnes
Heavy Heavy goods vehicles
HHGVs Heavy goods vehicles with a gross vehicle weight of greater than 16 tonnes
Operations and maintenance
O&M Refers to the category of expenditure covering the operations and maintenance to provide a good or service.
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Hyrdogen refuelling station
HRS Refers to infrastructure for the dispensing of hydrogen for motor vehicles
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Executivesummary
ThisreportassessestheeconomiccostsandbenefitsofdecarbonisingHeavyGoodsVehicles(HGVs)inEurope.Ascenarioapproachhasbeendevelopedtoenvisagevariouspossiblevehicletechnologyfutures,andtheneconomicmodellinghasbeenappliedtoassessimpacts.
CambridgeEconometricswascommissionedbytheEuropeanClimateFoundation(ECF)toassessthelikelyeconomicimpactsandthetransitionalchallengesassociatedwithdecarbonisingtheEuropeanfleetofvansandheavygoodsvehicleinthemediumterm(to2030)andthelongterm(to2050).
Thistechnicalreportsetsoutthefindingsfromouranalysis.Itprovidesdetailsaboutthecharginginfrastructurerequirements,technologycostsandeconomicimpactsofthetransitiontolow-carbonmobilityinthefreightsector.Asummaryreport,presentingthekeymessagesfromthestudy,isalsoavailable7.
Thestudyshowsthat,whiletherearepotentiallylargeeconomicandenvironmentalbenefitsassociatedwithdecarbonisingroadfreightinEurope,therearealsotransitionalchallengeswhichmustbeaddressedifthebenefitsaretoberealised.UpuntilnowtherehasbeenlittleeffortfromOEMandpolicymakerstodecarbonisevansandHGVs.Buttherearesignsthatthemarketisabouttochange.InMay2018theEuropeanCommissionputforwardaproposalforthefirsteverEuropeanCO2emissionstandardsforHGVs,busesandcoaches8.Throughout2017and2018,anumberofOEMshaveunveiledprototypesofelectricandhydrogen-fuelledpropulsionsystemsforHGVs.
ThepotentialbenefitsifEuropeembracesthetransitionaresubstantial:
• Reduceduseofoilandpetroleumproductswillcutenergyimportdependenceandbringaboutlargereductionsincarbonemissions.
• Therearenetgainsinvalueaddedandemploymentwhichincreaseasoilimportsarereducedovertime.By2030,ineachoftheZero-EmissionVehicletechnology(ZEV)scenariosthereisanincreaseinGDPof0.07%comparedtothe‘BusinessasUsual’case,andanincreaseinemploymentofaround120,000jobs.
• Thetransitionofferstheopportunityoflowercostsofroadfreighttransportation,withlowertotalcostofownershipassociatedwithBEVandERStechnologies,andFCEVsachievingcostparitywithICEsby2050.
However,ourmodelling,incombinationwithinsightfromtheCoreWorkingGroup,alsohighlightsanumberoftransitionalchallenges:
• Theimplementationofarapidcharginginfrastructureandhydrogenrefuelingstationswillrequireinvestmentsreachingseveralbillioneuros
7See:https://www.camecon.com/how/our-work/trucking-to-a-greener-future8EuropeanCommission(2018),ReducingCO2emissionsfromheavydutyvehicles,Accessed02/08/18https://ec.europa.eu/clima/policies/transport/vehicles/heavy_en
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peryearfrom2030to2050.Alltechnologyoptionsrequireadeterminedandjointeffortoftheindustry,governmentandcivilsocietytodeploysufficientfuelingandcharginginfrastructure.Timing,location,capabilityandinteroperabilityarekeyissues.
• Thetransitiontolow-carbonmobilitycausesawiderangeofimpactsinemploymentacrossseveralsectors.EmploymentinthemotorvehiclessectorintheZEVscenariosatthestartoftheprojectedperiodisalittlehigherthaninthe‘BusinessasUsual’case.ButthegrowingimportanceoftheZEVvaluechaininvolvesashiftinthesupplychainawayfromtraditionalmotorvehiclecomponentsandtowardstheproducersoftheadvancedpowertraintechnologies.Jobsarealsocreatedintheprovisionofchargingandrefuelinginfrastructurewhiletheshiftawayfromoiltolower-costmobilityleadstoincreasedemploymentinservicesasconsumersbenefitfromlower-costgoodsastransportationcostsfall.
• ThetransitionposesasignificantchallengetomaintainthecompetitivenessandmarketshareoftheEuropeanautoindustry,byremainingatthecuttingedgeofcleantechnologyinnovation.
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1 Introduction
1.1 Background
TomeetclimategoalsoftheParisAgreementtheEuropeanCommission’s“StrategyonLowEmissionsMobility”envisagesashiftawayfromtheuseofpetroleumtowardsgreenerenergysources.Policyisinplacetopromotethisinpassengertransportation:theEuropeanParliamentandtheCounciloftheEuropeanUnionsetoutlegislationtolimittheemissionsofnewpassengercars.Untilrecently,roadfreighthaslaggedbehind.Butnowchangeisontheway;inMay2018,theEuropeanCommissionputforwardaproposaltotheEuropeanParliamenttointroduceasetofemissionsstandardsforHGVs,busesandcoaches.TheproposalrecognizesthatallformsofHGVsneedtobeincluded,butinitiallytheregulationwillbelimitedtolargearticulatedtrucksandthenin2022extendedtoothersmallertruckssuchasdeliveryvansincities,aswellasbusesandcoaches.Ifaccepted,therewillbeamandatorytargetfornewheavy-dutyvehiclestoonaverageemit15%fewerCO2emissionsin2025comparedto2019.
AheadofthesetargetsmajorHGVsmanufacturersaredevelopingnewproductlinesthatareincreasinglyfuelefficient,andarealsostartingtoreleasevehicleswithalternativepowertrains,includingelectricdrivetrainsandfuelcells.Theseannouncementssignifyapushtokeepupwithpotentialfutureemissionsstandardsandhelppavethewaytowardsadecarbonisedfreightsector.
Therehasbeenmuchdebateaboutthepotentialrolefor,andimpactof,thetransitiontoZEVswithinthefreightsector.ThepurposeofthisstudyistoshedlightontheeconomicimpactsandthetransitionalchallengesofdecarbonisingvansandHGVsfortheEuropeanautomotiveindustryandthewidereconomyovertheperiodto2050.Indoingso,ithighlightssomeofthekeyissuesthatpolicymakersshouldfocuson,including;
• Whatisthescaleandpaceofinvestmentininfrastructurerequired?Willinfrastructureactasacatalystforsalesofalternativepowertrains;ifso,sufficientinfrastructureneedstobeinplacebeforehauliersbegintotransition.
• Howwillgovernmenttaxrevenuesbeaffectedduetoreducedfuelduty?
• Inwhatareasoftheeconomyshouldgovernmentsofferretrainingprogramstoensureworkersfrom‘losing’sectorscanberedeployed?
• Whatwillbetheimpactontheelectricitygrid,andpeakelectricitydemand,andhowcouldthisbebettermanaged?
1.2 Methodology
Forthisstudy,asetofscenariosweredefinedineachofwhichitwasassumedthatacertainlow-carbonvehicletechnologymixwouldbeintroducedandtakenup.Theparticularfactorsaffectinghauliers’decisionstopurchasealternativevehicletechnologieswerenotassessed.
Low-carbonfreighttransportpolicy
Motivationforthestudy
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Asshowninthegraphicbelow,themethodologyinvolveddistinctstages:
1) Stakeholderconsultationtodefinethescenariosandagreeonthekeymodellingassumptions.
2) Anintegratedmodellingframeworkthatinvolved(i)applicationoftheCE’svehiclestockmodeltoassesstheimpactofalternativelow-carbonvehiclesalesmixonenergydemandandemissions,vehicleprices,technologycostsandthetotalvehiclecostofownershipand(ii)applicationoftheE3MEmodeltoassessthewidersocio-economiceffectsofthelow-carbonvehicletransition.
Figure1.1:Ourapproach
ThetwomodelsthatwereappliedinourframeworkareCambridgeEconometrics’VehicleStockModelanditsE3MEmodel.
Thevehiclestockmodelcalculatesvehiclefueldemand,vehicleemissionsandvehiclepricesforagivenmixofvehicletechnologies.Themodelusesinformationabouttheefficiencyofnewvehiclesandvehiclesurvivalratestoassesshowchangesinnewvehiclessalesaffectstockcharacteristics.Themodelalsoincludesadetailedtechnologysub-modeltocalculatehowtheefficiencyandpriceofnewvehiclesareaffected,withincreasinguptakeoffuelefficienttechnologies.Thevehiclestockmodelishighlydisaggregated,modelling16differenttechnologytypesacrossfourdifferentclassesofcommercialvehicles(Vans,LHGV,MHGV,HHGV)9.
Outputsfromthevehiclestockmodel(includingfueldemandandvehicleprices)arethenusedasinputstoE3ME,anintegratedmacro-econometricmodel,whichhasfullrepresentationofthelinkagesbetweentheenergysystem,environmentandtheeconomyatnationalandgloballevel.Thehighregionalandsectoraldisaggregation(includingexplicitcoverageofeveryEU
9SeeSection3,Table3.1formoredetails.
VehicleStockModel
E3ME
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MemberState)allowsmodellingofscenariosspecifictoEuropeanddetailedanalysisofsectorsandtraderelationshipsinkeysupplychains(fortheautomotiveandpetroleumrefiningindustries).E3MEwasusedtoassesshowthetransitiontolowcarbonvehiclesaffectshouseholdincomes,tradeinoilandpetroleum,consumption,GDP,employment,CO2,NOxandparticulates.
Formoreinformationseewww.e3me.com.AsummarydescriptionofthemodelisalsoavailableinAppendixAofthisreport.
MuchofthetechnicalanalysispresentedinthisreportfocusesontheHHGVsegment;however,similaranalysishasbeencarriedoutforvans,LHGVandMHGVsegments.ThefocusisprimarilyplaceduponHHGVsbecausethesedeliverthevastmajorityoffreighttonnekilometres,andassuchdominatethecost,economicandenvironmentalimpactsofthetransitionofroadfreight.
1.3 Structureofthereport
Thereportisstructuredasfollows:
• Section2setsoutthescenariosthatweredevelopedtoinformtheanalysisandarerequiredtoanswerthequestionsraisedbytheCoreWorkingGroup.
• ThemainmodellingassumptionsandtechnologycostdataaresetoutinSection3.
• Newinfrastructurerequirementsareakeyconsiderationforthedeploymentofzeroemissionvehicles;theseareconsideredinSection4.
• Aboveall,atransitionrequireshaulierstoadoptlowandzeroemissionvehicles.InSection5welookatthecapitalandfuelcostsfacinghauliersinthefuture.
• Thecoreanalysisfocusesonthemacroeconomicimpactofthedifferentscenarios.ThenetimpactsandtransitionalchallengesaresetoutinSection6.
• Themainmotivationforpromotingadoptionoflowemissionsfreightvehiclesistoreducetheharmfulimpactthatroadtransporthasontheenvironment.ThecontributionofroadfreighttoCO2emissionsissetoutinSection7.
• ThereportfinisheswithourconclusionsinSection8.Thesearetheviewsofthereport’sauthorsanddonotnecessarilyrepresenttheviewsoftheEuropeanClimateFoundationorthemembersoftheCoreWorkingGroup,eitherindividuallyorcollectively.
Scopeoftheanalysisandthe
report
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2 Overviewofscenarios
2.1 Scenariodesign
TheanalysissetoutinthisreportisbasedonasetofscenariosdevelopedbytheCoreWorkingGroup,eachassumingadifferentnewvehiclesalesmix.Theserepresentarangeofdecarbonisationpathwaysandaredesignedtoassesstheimpactsofashifttowardslowcarbonpowertrains;theydonotnecessarilyreflectcurrentpredictionsofthefuturemakeupoftheEuropeanheavygoodsfleet.Uptakeofeachkindofvehicleisbyassumption:implicitlyweassumethatthischangeisbroughtaboutbypolicy.Thefivecorescenariostobemodelledforthisstudyaresummarisedinthetablebelow:Table2.1:Descriptionofthefivecoremodellingscenarios
Scenario Scenariodescription
REF(Reference)
• Nochangeinthedeploymentofefficiencytechnologyorthesalesmixfrom2018onwards
• Someimprovementsinthefuel-efficiencyofthevehiclestock,duetostockturnover
TECH-ICE(Fuelefficienttechnologiesonly)
• AmbitiousdeploymentoffuelefficienttechnologiestoimprovetheefficiencyofICEvehicleovertheperiodto2050(e.g.light-weighting)
• Nodeploymentofadvancedpowertrains
TECH-BEV(HighTechnology,BEVsdominate)
• Ambitiousdeploymentoffuel-efficienttechnologiesinallnewvehiclesovertheperiodto2050(e.g.light-weighting)
• Deploymentofadvancedpowertrains(predominatelyBEVs)from2025
• BEVsdominatethesalesmixfrom2040onwards
TECHERS(HighTechnology,ERSsystemdominates)
• Ambitiousdeploymentoffuel-efficienttechnologiesinallnewvehiclesovertheperiodto2050(e.g.light-weighting)
• Deploymentofadvancedpowertrains(predominatelyPHEVandBEVsreliantonERSinfrastructure)from2025
• DeploymentofadvancedpowertrainsisdominatedbyPHEV-ERSvehiclesuntil2040,afterwhichBEV-ERSsalesbegintoaccelerate,reaching70%ofsalesby2050
TECHFCEV(HighTechnology,Fuelcellvehiclesdominate)
• Ambitiousdeploymentoffuel-efficienttechnologiesinallnewvehiclesovertheperiodto2050(e.g.light-weighting)
• Deploymentofadvancedpowertrains(predominatelyFCEVs)from2025
• FCEVsslowtodeployintonewsalesuntil2030,butincreaserapidlytodominatethesalesmixfrom2040onwards
2.2 Vehiclesalesandstock
Inthissectionweoutlinethesalesmixbypowertraindeployedacrosseachofthescenariosandvehiclesizeclass.Wethenshowtheimpactoftheseassumedsalesmixesontheresultingstockascalculatedbythevehiclestockmodel.
Thereferencescenarioexcludesanyfurtherimprovementsinnewvehicleefficiencyafterthelastyearofhistory,2018.Thisisthebaselineagainstwhich
Referencescenario
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allotherscenariosarecompared.IntheabsenceofanyexistingEUfuelstandardsforHGVs,thisscenarioshowstheimpactof‘currentpolicy’.
Thescenariosfocusonthedeploymentofadvancedpowertrainsintoheavygoodsvehicles.ForvansandLHGVS(<7.5t)weassumethedeploymentofadvancedpowertrainsisthesameacrossallTECHscenariosexceptTECH-ICE,whichhasnodeploymentofadvancedpowertrains.Amongstvans,advancedpowertrainsare50%ofnewsalesby2030,and100%by2040,withBEVsemergingasthedominanttechnology.Intermsofimpactontheoverallstock,overhalf(60%)ofthestockin2040isadvancedpowertrains,withBEVscontributing34%.By2050BEVsmakeupoverhalfofthetotalstock(55%).Figure2.1:SalesandStockcompositionforVansintheTECHscenarios
AcrossLHGVs,PHEVsandBEVsaccountfor30%ofnewsalesin2030.By2050newICEsarecompletedphasedout,andnewsalesaresplitevenlybetweenPHEVsandBEVs.By2050thereisanevensplitofadvancedpowertrainsinthestock,with34%PHEVsand34%BEVs.
TreatmentofMHGVsinthestockmodel
ThesectionsbelowexplicitlyrefertoHHGVsonly,becauseitisthemostimportantvehiclesegmentintermsofmileageandemissions.However,MHGVsfollowtheexactsamedeploymentofadvancedpowertrainsintosalesasHHGVsineachofthebelowscenarios.Note,however,thattheydonotfollowthesamestockcomposition,aseachvehiclesegmenthasdifferentsurvivalrates.
Asdiscussedabove,theTECH-ICEscenariohasnodeploymentofadvancedpowertrainsinHHGVs,insteadonlyfuel-efficienttechnologiesaredeployed.
VansandLHGVS
HHGVpowertraindeploymentintheTECH-ICEscenario
Figure2.2:SalesandstockcompositionforLHGVsintheTECHscenarios
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IntheTECH-ERSscenario,ERS-enabledvehiclesemergeasthedominanttechnology,buttakesometimetoemergeduetotheirdependenceuponERSinfrastructurebeinginplace.PHEV-ERSandBEV-ERSvehiclescombinedareonly12%ofsalesin2030;however,theirmarketsharerapidlyexpandsthereafter,reaching55%in2040and80%in2050.BEVsdominatetheERSsegmentandarebythemselves70%ofnewsalesin2050.Theslowbuild-up,atleastinitially,meansthatlessthan30%ofthevehiclestockin2040areERS-enabled,andthestockremainsdominatedbyICEsatthispoint.However,by2050ERS-enabledvehiclesare60%ofthestock,andICEshaveshrunktoonly32%.
AsthedeploymentofERSroadsincreases(seeInfrastructuresectionformoredetail),ERS-enabledvehiclesbecomemoreattractivetohauliers.Vehiclecostsarerelativelylow(ascomparedtonon-ERSadvancedpowertrains),becausetheERSvariantsdonotneedlargebatteries.ThebatteryinanERS-enabledvehicleisassumedtobesmallerinsize(50kWhforPHEV-ERSand200kWhforBEV-ERS)thanthebatteryinaBEV(700kWh)in2025.Furthermore,asmoreERSinfrastructureisdeployed,thesizeofthebatteryinERS-enabledvehiclesfalls,andsodothecosts10.
Inthisscenario,BEVsreach80%ofnewsalesby2050(upfrom12%in2030),whichtranslatesto60%ofthestockinthe2050(upfrom5%ofthestockin2030),enabledbyimprovedbatterytechnologyandthedeploymentofrapidrecharginginfrastructure.
In2025,only5%oftotalsalesareBEVs.ThosewhopurchaseBEVsdosobecausethetechnologyissufficienttomeettheircurrentrequirements(e.g.rangebetweendistributioncentrescanbemetbyonefullchargeofaBEV).InthesameyearthereisasmallpercentageofPHEVssold,4%,tofleetoperatorswhorequiretheabilitytotravellongerdistances.
10FormoredetailonsizeandcostofbatteriesofPHEV-ERSandBEV-ERSseeSection3.3,Table3.15andTable3.17.
HHGVpowertraindeploymentintheTECH-ERSscenario
HHGVpowertraindeploymentintheTECH-BEVscenario
Figure2.3:SalesandStockcompositionforHHGVsinTECH-PHEV
Figure2.4:SaleandStockcompositionforHHGVsinTECH-BEV
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However,asadvancesinbatterytechnologyaremade,reducingthecostsandincreasingtherangeofBEVs,thesalesofPHEVsarereplacedbyBEVs,andby2045PHEVsnolongerfeatureinsales.Thereislow-levelpenetrationofPHEV-ERSvehiclesfrom2025,withBEV-ERSenteringthemarketsoonafter,butneitherestablishasubstantialmarketshare.
IntheTECH-FCEVscenario,FCEVsemergeasthedominatepowertrainandby2050theymakeup80%ofnewsales.Duetotherelativelyhighstartingcostsforthetechnology,FCEVdeploymentdoesnotstartinearnestuntil2030,whenitachieves12%ofsales.Underthisscenario,vehicleswithbatteries(BEVsandPHEVs)failtoestablishamarketshare,andinsteadFCEVsachieverapiddeploymentfrom2030onwards,reaching27%ofthestockin2040and60%in2050.
2.3 Fueldemand
Figure2.6showsthecombinedeffectsofefficiencyimprovementsanddeploymentofadvancedpowertrainsonfuelconsumptionbytheEuropeanvehiclestockintheTECHscenarios.By2030,weseeamodestreductionindemandforfuel,withan8%reductioninfossilfueldemandrelativeto2015intheTECH-ICEscenarioanda20%reductionindemandintheTECHscenarios.By2050,thedemandforfossilfuelsintheadvancedpowertrainscenarioswillhavefallenby82%comparedto2015levels.Thesereductionsarestarkerwhencomparedtothereferencecase,wherefossilfueldemandincreasesby23%over2015-2050duetoincreasesinfreightdemand.
HHGVpowertraindeploymentinthe
TECH-FCEVscenario
Figure2.5:SaleandStockcompositionforHHGVsinTECH-FCEV
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Electricityandhydrogendemandgrowinlinewiththerolloutofthestockoftherelevantadvancedpowertrains.By2050,duetotheirhigherefficiencies,theirshareoftotalenergydemandislowerthantheirshareofthevehiclestock.
Figure2.6:Stockfuelconsumptionoffossilfuels,hydrogenandelectricity(Mtoe)
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3 Modellingassumptions
Thissectionsetsoutthekeymodellingassumptionsunderpinningtheanalysis.
Thescenariosaredefinedby(i)thenewsalesmixbyvehiclepowertraintypeand(ii)theuptakeoffuelefficienttechnologies.KeyassumptionsthatarecommontoallscenariosandarebrieflyoutlinedinTable3.1.Thesubsequentsectionsprovideinformationaboutourassumptionsfortechnologycostsanddeployment,batterycosts,fuelcellvehicleandthepowersector.
3.1 CommonmodellingassumptionsTable3.1:Keyassumptionsusedinstockmodel
Detailsofassumptionsused
Vehiclesales • Historicalsalesdatafor2005-2016takenfromtheACEAnewHGVregistrationstatistics.
• Totalnewregistrationsbeyond2016arecalculatedtoensurethestockmeetfreightdemandthroughaccountingforbothreplacementdemandanddemandfromgrowingfreightdemand.
Mileagebyagecohort
• Weassumethataverageannualmileagefallsgraduallyoverthelifetimeofavehicleandvariesdependingonsizeandpowertrain.FromtheTRACCS11databasewehavederivedmileagefactorswhichshowtheannualmileageofeachvehicle.Mileagefactorswerecalibratedtomeetthetotaltonnekilometrestravelled(exogenouslydefined).
Totaltonnekmtravelled
• TotaltonnekmtravelledbyroadfreightareincreasedinlinewiththeEuropeanCommission’sPRIMES2016referencescenario.Thisresultsina48%increaseintotaltonneskmtravelledfrom2015-2050.
Vehiclesurvivalrates
• ThesurvivalratewasderivedfromanalysisoftheagedistributionofthetotalEUHGVstockbetween2005-2010(usingstockdatafromtheTRACCSdatabase).DifferentsurvivalratesareusedforeachsizeofHGV.
Fuelprices • HistoricaldataforfuelpricesistakenfromtheEuropeanCommission’sOilBulletin.
• Forthecentralscenarios,weassumeoilpricesgrowinlinewiththeIEAWorldEnergyOutlookCurrentPoliciesScenario(andaconstantpercentagemark-upisappliedtoderivethepetrolanddieselfuelprice).
• PricesexcludeVAT,asthiscanberecoveredbyhauliers.
Electricityprices • ElectricitypricesassumethatadditionalcapacityisprovidedtomeetdemandfromEVsinthesamemixasinthePRIMES2016ReferenceScenario.
• TheelectricitypriceforEVusersisassumedtobethesameasthatpaidbyindustrialusers.
11Transportdatacollectionsupportingthequantitativeanalysisofmeasuresrelatingtotransportandclimatechange,EuropeanCommission,2013.
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Restofworld • Therestoftheworldassumptionsonlowcarbontransportpolicyaffecttheglobaloilpriceandaretestedthroughsensitivityanalysis.
Valuechains • Inallscenarios,weassumethatMemberStatescaptureaconsistentshareofthevehiclevaluechainforconventionalICEs.FortheZEVdeploymentscenarios,weassumethat,forEVs,batterymodulesandbatterypacksareassembledintheEUbutthatthebatterycellsaremanufacturedinAsia,inlinewithcurrentpractice.
Tradeinmotorvehicles
• Weassumethesamevolumeofvehicleimportsandexportsineachscenario.Thepriceofvehicleimportsandvehicleexportschangesinlinewiththechangeindomesticvehicleprices(reflectingthattransportpolicyisassumedtobeconsistentacrosstheEU).
Vehicledepreciation
• Weassumeanannualdepreciationrateof20%.
3.2 ICEefficiencygains
Fuel-efficienttechnologiesforHGVsegmentswerecollectedfromfourdifferentsources:
• Ricardo-AEA2011,ReductionandTestingofGreenhouseGas(GHG)EmissionsfromHeavyDutyVehicles–Lot1:Strategy
• TIAX2012,EuropeanUnionGreenhouseGasReductionPotentialforHeavy-DutyVehicles
• Ricardo-AEA2012,Areviewoftheefficiencyandcostassumptionsforroadtransportvehiclesto2050forUKCCC
• Ricardo-AEA2017,HeavyDutyVehiclesTechnologyPotentialandCostStudyforICCTTechnology
Wheretherewasoverlapintechnologies,datafromthelatestRicardo-AEA(2017)tookprecedence.
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Technologycostsandenergysavings
ThreeaerodynamictechnologiesfromR-AEA(2017)havebeenincludedinthetechnologylistforHGVs(seeTable3.2).Thesetechnologiesincludeseveralaerodynamictechnologies,forexample,aerodynamicbodies/trailersandboxskirts,whichwhendeployedtogethergivethepercentagereductioninaerodynamicdrag.However,thereportbyR-AEA(2017)isnotexplicitintermsofwhichspecificaspectsareincluded;aerodynamictechnologiesfromolderstudieshavethereforebeenremovedtoavoiddoublecounting.Table3.2:Aerodynamictechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
10%reductioninaerodynamicdrag 0.6% - - 250 - -
15%reductioninaerodynamicdrag - 6.3% - - 375 -
25%reductioninaerodynamicdrag - - 10.6% - - 2000
Light-weightingtechnologiesweretakenfromR-AEA(2017),mostofthissaving(R-AEA,2017)occursduetomaterialsubstitution.Thus,materialsubstitution(TIAX,2012)hasbeenremoved.Notethatthelight-weightingtechnologies(light-weighting1,2and3)areadditive,rathermutuallyexclusive.Table3.3:Light-weightingtechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Light-weighting1 0.5% 0.2% 0.3% 0 0 0
Light-weighting2 0.03% - 0.1% 1 - 53
Light-weighting3 0.7% 0.7% 0.3% 91 300 300
EnergysavingandcostsforLowrollingresistancetiresarefromR-AEA(2017)whereasdataonsingle-widetiresisfromR-AEA(2012).Automatictirepressureadjustmentisanuncertaintechnology,thepaybackperiodisunknownandtheimpactonTotalCostofOwnership(TCO)isnegative,accordingtoourcalculation.TirePressureMonitoringSystem(TPMS)supersedesit,sinceTPMSisfarcheaperwithonlyasmallsacrificeinenergysavingreduction.Table3.4:Tireandwheeltechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Lowrollingresistancetires 2.5% 4.8% 5.1% 644 1820 5880
Singlewidetires 4.0% 4.0% 5.0% 866 866 1364Automatictirepressureadjustment 1.0% 1.0% 2.0% 10111 10111 14633
TirePressureMonitoringSystem(TPMS) 0.4% 0.4% 0.4% 250 250 475
Aerodynamictechnologies
Light-weightingtechnologies
Tireandwheeltechnologies
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Transmissionfrictionreduction(TIAX,2012)andimprovedcontrolswithaggressiveshiftlogicandearlylockup(TIAX,2012)canbedeployedalongsideautomatedmanual.Table3.5:Transmissionanddrivelinetechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Transmissionfrictionreduction 0.5% 1.3% 1.3% 204 204 204Improvedcontrols,withaggressiveshiftlogicandearlylockup 2.0% - - 49 - -
Automatedmanual 7.0% 5.0% 1.7% 2300 2300 1500
Improveddieselengine(TIAX,2012)hasbeenremovedfromourtechnologylistasitoverlapswithnearlyalltheothertechnologiesincludedinthiscategory.Infact,thesumofalltheotherengineefficiencytechnologies(16%)isroughlythesameenergysavingpercentageastheimproveddieselengine.Mechanicalandelectricalturbocompoundaremutuallyexclusive.Table3.6:Engineefficiencytechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGVControllableaircompressor - - 1.0% - - 199Mechanicalturbocompound 0.7% 0.7% 2.0% 2393 2393 1800Electricalturbocompound 1.0% 1.0% 2.0% 6002 6002 1800Turbocharging 1.9% 2.0% 2.5% 1050 1050 1050Heatrecovery 1.5% 1.5% 4.5% 9922 9922 5000UnspecifiedFMEPimprovements 3.7% 2.3% 1.4% 0 0 0Variableoilpump 2.0% 1.5% 1.0% 90 90 90Variablecoolantpump 1.2% 0.8% 0.5% 90 90 90Bypassoilcooler 0.8% 0.5% 0.2% 25 25 25Lowviscosityoil 2.0% 2.0% 1.0% 410 1550 0Engineencapsulation 1.5% - - 25 - -
Enhancedstop/start(R-AEA,2017)isdeployedonlyinLHGVsandMHGVsaslong-hauldrivingismorecontinuous.Forlonghaulthedualmodelhybridelectricsystemisdeployedasanalternative.Table3.7:Hybridisationtechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Dual-modehybridelectric 25.0% 30.0% 6.5% 23694 18997 8535
Enhancedstop/startsystem 4.5% 4.5% - 1160 1160 -
VehicleimprovementsusingdriveraidsfromtheTIAX(2012)onlycamewithfuelsaving-nocostswereincluded.Thecostwasestimatedbysummingsimilartechnologies,routemanagementandtrainingandfeedbackfromR-AEA(2012).
Transmissionanddriveline
technologies
Engineefficiencytechnologies
Hybridisationtechnologies
Managementtechnologies
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Table3.8:Managementtechnologies
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Predictivecruisecontrol - - 2.0% - - 640SmartAlternator,BatterySensor&AGMBattery 1.5% 1.5% 1.5% 548 548 986
Vehicleimprovementsusingdriveraids - - 10.0% - - 1144
Auxiliarycomponentsinthevehiclealsohaveroomforimprovement.Electriccoolingfansofferagreateramountofenergysavingforaslightlysmallercost.Table3.9:Reductionofauxiliary(parasitic)loads
Energysaving Cost(€,2015)
LHGV MHGV HHGV LHGV MHGV HHGV
Electriccoolingfans 0.5% 0.5% 0.5% 50 90 180
Electrichydraulicpowersteering 1.3% 0.8% 0.3% 95 180 360
Highefficiencyairconditioning 0.5% 0.3% 0.1% 55 105 210
TomakeastandardelectricHHGVcompatiblewithERS(definedasaPHEV-ERSandBEV-ERSvehicles),technologiesneedtobeaddedtothevehicle.Foracatenarywiresystem,apantographattachedtothehoodofthecabisneeded.Siemenshavedevelopedan‘activepantograph’whichcanconnecttotheERS-highwayatspeedsof90km/h.Builtinsensortechnologyadjuststhepantographtomaintaincontactwiththecatenarywireswhichwouldotherwisebedisplacedfromthetruckslateralmovementsinthelane.Thistechnologyisassumedtocost€17,000pervehicleininitialdeployments,andfalltoroughly€11,000duetomarketmaturity12.
ThecostofthepantographisaddedtobaselinecostofaPHEV-ERSandBEV-ERSasitisastandardrequirementofthevehicletobecompatiblewiththeERS.Thecostdoesnotfeatureinthetechnologypackagesbelow.
Deploymentrates
ThedeploymentoftechnologiesisbrokendownintofourdifferentTechnologyPackages.Technologiesaregroupedbasedonthepaybackperiodoftechnologies,withspecificdeploymentsdrawnfromR-AEA(2012).Thepaybackperiodmeasureshowlongitwouldtaketopayoffthetechnologyintermsoffuelexpendituresaved.Atechnologyissaidtohaveapaybackperiodofoneyearifthefuelsavinginthefirstyearamountstotheup-frontcostofthetechnology.Thedeploymentrateshavebeendrawnfromthe2012Ricardo-AEAstudy,andadjustedtocorrespondbroadlytothefollowingaims:
• TechnologyPackage1assumesthatby2025therewillbedeploymentofnewtechnologiesintovehicleswheretheyhaveapaybackperiodof2yearsorless.Thiswillnotcorrespondto100%coverageofsales,duetothedifferentusecaseswithineachcategory(i.e.actualcostsavingdependsupontotaldistancedriven).
12SeeSection3.3,Table3.15.
Reductionofauxiliary
(parasitic)loads
ERScompatibletechnologies
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• TechnologyPackage2assumesthatover2025-33therewillbedeploymentinnewvehiclesoftechnologiesinusecaseswheretheyhaveapaybackperiodof3.5yearsorless.
• TechnologyPackage3assumesdeploymentinnewvehiclesover2033-42oftechnologiesincaseswheretheyhaveapaybackperiodof5yearsorless.
• TechnologyPackage4assumesthatby2050therewillbefulldeploymentinnewvehiclesofalltechnologieswheretheyhaveapositiveimpactontheTCO.
Fortechnologieswithnoavailablepaybackperiod,deploymentratesinpreviousstudieswereusedinstead.Table3.10:DeploymentratesoftechnologiesforLHGVs
Technology TechnologyPackages,LHGVs1(2025) 2(2033) 3(2042) 4(2050)
10%reductioninaerodynamicdrag 0% 0% 50% 100%Light-weighting2 100% 100% 100% 100%Light-weighting3 30% 60% 100% 100%Light-weighting4 15% 30% 60% 100%Lowrollingresistancetires 50% 75% 50% 0%Singlewidetires 0% 25% 50% 100%TirePressureMonitoringSystem(TPMS) 0% 0% 30% 100%Transmissionfrictionreduction 0% 100% 100% 100%Improvedcontrols,withaggressiveshiftlogicandearlylockup 0% 100% 100% 100%
Mechanicalturbocompound 0% 10% 30% 40%Electricalturbocompound 0% 1% 15% 30%Turbocharging 0% 0% 30% 100%Heatrecovery 0% 0% 5% 20%UnspecifiedFMEPimprovements 100% 100% 100% 100%Variableoilpump 100% 100% 100% 100%Variablecoolantpump 100% 100% 100% 100%Bypassoilcooler 100% 100% 100% 100%Lowviscosityoil 100% 100% 100% 100%Engineencapsulation 100% 100% 100% 100%Enhancedstop/startsystem 35% 25% 15% 0%Fullhybrid 20% 30% 50% 100%SmartAlternator,BatterySensor&AGMBattery 20% 60% 100% 100%
Electriccoolingfans 50% 100% 100% 100%Electrichydraulicpowersteering 100% 100% 100% 100%Highefficiencyairconditioning 20% 100% 100% 100%
Lowrollingresistancetiresandsinglewidetirescannotbothbedeployedonthesamevehicle–thetotaldeploymentofthesetwotechnologiescannotexceed100%.Lowrollingresistancetiresfeaturein50%ofallsalesinTechnologypackage1becausethecostsandenergysavingarebothlower.Purchasersinvestasmallamount(€644)andarecompensatedbysmallenergysavings(2.5%).Thedeploymentincreasesto75%by2033,withthe
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remainingusecasesincludingsinglewidetires,across25%ofnewsales.By2050singlewidetiresmakeupalltiresalesbecauseofthelargeenergysavingpotential.
Thesameistrueofenhancedstop/startsystemsandfullhybridtechnologies.Bothcannotfeatureonasinglevehicle.Thecostofenhancedstop/startissmaller,soitisimplementedinafewbusinesscases,covering35%ofnewsales.Fullhybridtechnologyismoreexpensivebutinthelong-runtheenergysavingsaremuchhigher(soitsuitsusecaseswhichcoveralargermileage).Itonlymakeseconomicsensefor20%ofsalesinTechnologypackage1.By2033,fullhybridsbegintodominateasthepotentialTCOsavingcoversmoreusecases,attheexpenseofenhancedstop/start.Moreover,theimplementationofastop/startsystemiscomplex,requiringhightorqueanddurabilityrequirementswhichmaymeanitismorelikelyhauliersinvestinafullhybridsysteminstead(R-AEA,2017).Table3.11:DeploymentrateoftechnologiesforMHGVs
TechnologyTechnologyPackages,MHGVs
1(2025) 2(2033) 3(2042) 4(2050)15%reductioninaerodynamicdrag 100% 100% 100% 100%Lightweighting1 100% 100% 100% 100%Lightweighting3 20% 50% 100% 100%Lightweighting4 0% 50% 100% 100%Lowrollingresistancetires 100% 100% 100% 100%TirePressureMonitoringSystem(TPMS) 0% 50% 100% 100%Transmissionfrictionreduction 0% 0% 100% 100%
Mechanicalturbocompound0% 10% 30% 40%
Electricalturbocompound 0% 1% 15% 30%Turbocharging 0% 0% 0% 100%Heatrecovery 0% 0% 5% 20%UnspecifiedFMEPimprovements 100% 100% 100% 100%Variableoilpump 100% 100% 100% 100%Variablecoolantpump 100% 100% 100% 100%Bypassoilcooler 100% 100% 100% 100%Lowviscosityoil 100% 100% 100% 100%Enhancedstop/startsystem 100% 75% 50% 0%Fullhybrid 0% 25% 50% 100%SmartAlternator,BatterySensor&AGMBattery 20% 60% 100% 100%Electriccoolingfans 100% 100% 100% 100%Electrichydraulicpowersteering 100% 100% 100% 100%Highefficiencyairconditioning 20% 60% 100% 100%Table3.12:DeploymentrateoftechnologiesforHHGVs
TechnologyTechnologyPackages,HHGVs
1(2025) 2(2033) 3(2042) 4(2050)25%reductioninaerodynamicdrag 50% 100% 100% 100%Lightweighting1 50% 100% 100% 100%
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Lightweighting2 50% 100% 100% 100%Lightweighting3 50% 100% 100% 100%Lightweighting4 15% 30% 60% 100%Singlewidetires 50% 75% 100% 100%TirePressureMonitoringSystem(TPMS) 50% 100% 100% 100%Transmissionfrictionreduction 100% 100% 100% 100%
Controllableaircompressor20% 50% 100% 100%
Mechanicalturbocompound 50% 100% 100% 100%Turbocharging 50% 100% 100% 100%Heatrecovery 0% 100% 100% 100%UnspecifiedFMEPimprovements 50% 100% 100% 100%Variableoilpump 50% 100% 100% 100%Variablecoolantpump 50% 100% 100% 100%Bypassoilcooler 50% 100% 100% 100%Lowviscosityoil 50% 100% 100% 100%Dual-modehybridelectric 0% 30% 50% 100%Predictivecruisecontrol 100% 100% 100% 100%SmartAlternator,BatterySensor&AGMBattery 45% 50% 70% 100%Vehicleimprovementsusingdriveraids 50% 75% 100% 100%Electriccoolingfans 100% 100% 100% 100%Electrichydraulicpowersteering 25% 75% 100% 100%
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Totalimpactoftechnologypackages
Table3.13showsthetotalenergysavingandcostofeachtechnologypackagetobedeployedinICEHGVs.Thetechnologypackagesvarybypowertrainbecausenotalltechnologiesareapplicabletoalladvancedpowertrains.Forexample,therewillbenodeploymentofheatrecoveryinBEVsorFCEVsasthereisnointernalcombustionenginetorecoverheatfrom.TheimplicationisthatthetotalenergysavingandcostsforeachtechnologypackagedecreaseasyoumovethroughpowertrainsfromICEtoPHEV/PHEV-ERSandPHEV/PHEV-ERStoBEV/FCEV.Table3.13:TechnologyPackagesforICEs
LHGV Energysaving
Cost Incrementalenergysaving
IncrementalCost
Technologypackage1 19.9% €4,254 19.9% €4,254Technologypackage2 26.3% €6,700 6.4% €2,446Technologypackage3 32.4% €11,858 6.1% €5,158Technologypackage4 45.0% €22,108 12.5% €10,250MHGV Energy
savingCost Incremental
energysavingIncrementalCost
Technologypackage1 22.3% €5,571 22.3% €5,571Technologypackage2 26.4% €9,454 4.1% €3,883Technologypackage3 31.6% €15,117 5.2% €5,663Technologypackage4 39.3% €24,714 7.7% €9,598HHGV Energy
savingCost Incremental
energysavingIncrementalCost
Technologypackage1 20.4% €5,992 20.4% €5,992Technologypackage2 35.9% €17,572 15.6% €11,580Technologypackage3 39.8% €20,082 3.9% €2,510Technologypackage4 42.2% €24,746 2.3% €4,663
ApatternseenacrossallpowertrainsintheHGVsegmentisthepotentialenergysavingsinTechnologypackage1,whichareconsiderablylowerintheotherpackages.
3.3 Vehiclecosts
ThecostofabaselineICEHHGVwastakenfromareportwastakenfromCEDelft(2013)13,andre-basedto2015.Thecostofatractorwascalculatedtobe€85,201,and€15,243foratrailer.
Allcostsstatedbelowaretheproductioncostandexcludetaxesandmargins.Allcostsareexpressedin2015Euros.Notethecostengine,tractorandtrailerinthetablesbelowexcludethecostoffuelefficienttechnologies.
ThecostestimatefortheadvancedpowertrainHHGVswascalculatedbysubtractingthecostoftheenginefromthebaselineICEHHGV,andthenaddingthecostoftheadvancedpowertrainandotheradditionalcomponents.
13Zeroemissionstrucks:Anoverviewofstate-of-the-arttechnologiesandtheirpotential,CEDelft(2013),Accessedhereon11/12/2017
Baselinevehicle
Advancedpowertraincosts
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HybridvehiclesaddthecostoftheadditionalpowertrainandcomponentstothebaseICEcost.
Thetablesbelowbreakdownthesize,marginalcostandtotalcostofeachcomponentforeachadvancedpowertrain.
ThecostoftheICEinthebaselinevehicleisapproximately€37,000.ThiswascalculatedfromthecostoftheengineperkW(106€/kW)14multipliedbytheassumedenginesized(350kW)fromthearchetypeHHGVfromR-AEA(2017).
Theadditionalrequiredbatteryelectricsystemsaretheelectricsystems(powerelectronics,batterymanagementsystems,etc.)necessarytocontrolthepowertransfer(ICCT,2017).Theyarescaledwiththesizeoftheelectricmotor.Table3.14:SizeandcostbreakdownofPHEV
2025 2030 2040 2050Enginesize(kW) 322 322 322 322Enginemarginalcost(€/kW) 106 106 106 106Costofengine(€) 37224 37224 37224 37224Batterypack(kWh) 165 165 165 165Batterymarginalcost(€/kWh) 113 90 82 70Costofbatterypack(€) 18563 14850 13530 11550Electricmotor(kW) 350 350 350 350Electricmotormarginalcost(€/kW) 16 14 14 14Additionalsystemrequirements(€/kW) 41 37 37 37Costofelectricmotor(€) 5477 4861 4861 4861Costofadditionalelectricsystemrequirements(€) 14511 12934 12934 12934
Costoftractor(excl.ICE)(€) 47977 47977 47977 47977Costoftrailer(€) 15243 15243 15243 15243TotalcostofPHEV(€) 138995 133089 131769 129789ThemarginalcostestimatesforabatterypackarefromtheOEMannouncementscenarioofElementEnergy’s(EE)workonFuellingEurope’sFuture(2018).ThemarginalcostoftheelectricmotorandadditionalsystemrequirementsweretakenfromICCT(2017)15.Thisreportonlyconsidersthecoststo2030;thesecostsarethenassumedtoholdconstantoutto2050.
14TransitioningtoZero-EmissionHeavy-DutyFreightVehicles,ICCT(2017).Accessedhereon5/12/201715TransitioningtoZero-EmissionHeavy-DutyFreightVehicles,ICCT(2017).Accessedhereon5/12/2017
Plug-inhybrid(PHEV)
Batterycosts
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Figure3.1:BatterycostperkWhestimatesfromE
Intermsofcomponents,therearetwomaindifferencesbetweenPHEVandthePHEV-ERSvehicles.First,thebatteryissmallerinaPHEV-ERS.Second,aPHEV-ERSincludesanactivepantograph,whichenablescompatibilitywithERS.Table3.15:SizeandcostbreakdownofPHEV-ERS
2025 2030 2040 2050Enginesize(kW) 350 350 350 350Enginemarginalcost(€/kW) 106 106 106 106Costofengine(€) 37224 37224 37224 37224Batterypack(kWh) 50 50 50 50Batterymarginalcost(€/kWh) 113 90 82 70Costofbatterypack(€) 5625 4500 4100 3500Electricmotor(kW) 350 350 350 350Electricmotormarginalcost(€/kW) 16 14 14 14Additionalsystemrequirements(€/kW) 41 37 37 37Costofelectricmotor(€) 5477 4861 4861 4861Costofadditionalsystemrequirements(€) 14511 12934 12934 12934
Costofactivepantograph(€) 17670 10591 10591 10591Costoftractor(excl.ICE)(€) 47977 47977 47977 47977Costoftrailer(€) 15243 15243 15243 15243TotalcostofPHEV-ERS 143727 133330 132930 132330ThemarginalbatterypackcostiscalculatedbasedonElementEnergy’scostprojections.TheelectricmotorandadditionalsystemrequirementscostsarefromICCT(2017).ThecostoftheactivepantographwassuppliedbySiemens.
WeassumeanaveragebatterysizeinaBEVof700kWh,baseduponanefficientvehicleconsuming1kWhperkm(1.6kWhpermile,inlinewiththelowerendofefficienciesannouncedbyTesla(1.5–2kWhpermile),andassumingan80%usablestateofcharge,arangeof580km(inthemiddleofTesla’sstatedrangesof300and500miles).
PHEV-ERS
BEV
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Table3.16:SizeandcostbreakdownofBEV
2025 2030 2040 2050Batterypack(kWh) 700 700 700 700Batterymarginalcost(€/kWh) 113 90 82 70Costofbatterypack(€) 78750 63000 57400 49000Electricmotor(kW) 350 350 350 350Electricmotormarginalcost(€/kW) 16 14 14 14Additionalelectricsystemrequirements(€/kW) 41 37 37 37
Costofelectricmotor(€) 5477 4861 4861 4861Costofadditionalsystemrequirements(€) 14511 12934 12934 12934Costoftractor(excl.ICE)(€) 47977 47977 47977 47977Costoftrailer(€) 15243 15243 15243 15243TotalcostofBEV 161958 144015 138415 130015Thesourceforthemarginalbatterycosts,electricmotorandadditionalsystemrequirementsisthesameasthecostsusedforPHEV-ERSandPHEV(theICCTandEE’sOEMannouncementscenario).
Table3.17showsadetailedbreakdownofthecostsofaBEV-ERS.ThedifferenceincostbetweenaBEV-ERSandPHEV-ERSisthecostoftheinternalcombustionengine.Table3.17:SizeandcostbreakdownofBEV-ERS
2025 2030 2040 2050Batterypack(kWh) 200 200 200 200Batterymarginalcost(€/kWh) 113 90 82 70Costofbatterypack(€) 22500 18000 16400 14000Electricmotor(kW) 350 350 350 350Electricmotormarginalcost(€/kW) 16 14 14 14Additionalsystemrequirements(€/kW) 41 37 37 37Costofelectricmotor(€) 5477 4861 4861 4861Costofadditionalsystemrequirements(€) 14511 12934 12934 12934Costofactivepantograph(€) 17670 10591 10591 10591Costoftractor(excl.ICE)($) 47977 47977 47977 47977Costoftrailer(€) 15243 15243 15243 15243TotalcostofBEV-ERS 123378 109606 108006 105606Table3.18showsthebreakdownofcomponentsrequiredinaFCEV.ThesizeoftheindividualcomponentsandthecostsweretakenfromICCT(2017).TheICCTreportassumesthattheperkWcostofHHGVFCEVcomponentsisthesameasforpassengercars;thisissupportedbytheannouncementfromToyotathattheirnewfuelcelldrayagewillcontaintwoMiraifuelcellstacks(asusedintheMiraipassengercar),suggestingthatsuchscalingofcostsisareasonableassumption.
ThesizeofthecompressedH2tank(63kg)isdeterminedbythemid-pointoftheestimatedrangeoftheNikolaOneSemiTruck16,theenergyefficiencyofaFCEVin2025;6MJ/km,andanenergydensityof120MJ/kg.
16NikolaOneSemiTruck.Accessedhereon15/01/2018
BEV-ERS
FCEV
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Table3.18:SizeandcostbreakdownofFCEV
2025 2030 2040 2050Batterypack(kWh) 12 12 12 12Batterymarginalcost(€/kWh) 113 90 82 70Costofbatterypack(€) 1350 1080 984 840Electricmotor(kW) 350 350 350 350Electricmotormarginalcost(€/kW) 16 14 14 14Additionalelectricsystemrequirements(€/kW) 41 37 37 37
Costofelectricmotor(€) 5477 4861 4861 4861Costofadditionalelectricsystemrequirements(€) 14511 12934 12934 12934
Fuelcell(kW) 350 350 350 350Fuelcellmarginalcost(€/kW) 80 53 42 33Additionalfuelcellsystemrequirements(€/kW) 28 25 25 25
Costoffuelcell(€) 28076 18612 14709 11407Costofadditionalsystemrequirements(€) 9779 8833 8833 8833CompressedH2tankcapacity(kg) 63 62 61 61H2tankmarginalcost(€/kg) 630 570 507 475CostofcompressedH2tank(€) 39974 35603 31162 29181Costoftractor(excl.ICE)(€) 47977 47977 47977 47977Costoftrailer(€) 15243 15243 15243 15243TotalcostofFCEV 162387 145142 136703 131276
3.4 Fuelcosts
ThepriceofpetrolfacedbyhauliersintheEUexcludesVAT(becausethisisreclaimed)butincludesfuelduty.FuturepetrolpricesareprojectedtobeconsistentwiththeoilpriceforecastintheIEACurrentPoliciesScenario(2016).
ThepriceofdieselfacedbyhauliersintheEUdoesnotincludeVATandineightofmemberstatestheycanreclaimfuelduty.TheimpactoffueldutyontheEUaveragepriceiscalculatedbyTransportandEnvironment17tobe€0.04/L.Thedieselpricesareadjustedtoreflectthis.FuturedieselpricesareprojectedtobeconsistentwiththeoilpriceforecastbytheIEAintheirCurrentPoliciesScenario(2016).
Thehistoricaldataforelectricprices(excludingVATandotherrecoverabletaxies/levies)fornon-householdsfromEurostat18isusedinthemodel.Thepricevariesbyconsumptiontype;forthismodellingtheconsumptionBandIE:20000MWh<Consumption<70000MWhisused.Table3.19:Realelectricitypricesfornon-householdsformEurostat(BandIE)
2010 2011 2012 2013 2014 2015Total(€/MWh,real2015) 78 85 91 92 92 93
17TransportandEnvironment.Europe’staxdealsfordiesel.Accessedhereon11/01/201818Dataseries:nrg_pc_205
Petrol
Diesel
Electricity
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ProjectedelectricitypricesarebasedonthegrowthrateofelectricitypricesforfinaldemandsectorsfromPRIMESreferencescenario(2016)19(seeFigure5.2).
OurassumptionsforhydrogenproductioncostsarebasedonworkdonebyElementEnergyinFuellingEurope’sFuture(2018).Thefollowingtextisdrawnfromthetechnicalreportforthatstudy.
Hydrogenproductionforthetransportsectorisexpectedtobedominatedbywaterelectrolysers,steammethanereforming(SMR)andby-productfromindustrialprocesses(forexamplechloralkaliplants).Thesesourcesformthebasisoftheproductionmixinthisstudy.Otherpotentialsourcesincludewasteorbiomassgasification,orSMRwithcarboncaptureandstorage.Theseadditionalroutescouldpotentiallyprovidelowcost,lowcarbonhydrogen,butarenotyettechnicallyoreconomicallyprovenandhavenotbeenincludedinthecostassumptionsbelow.
HydrogenproductioncostdatawassourcedfromtheUKTechnologyInnovationNeedsAssessment,andElementEnergyandE4Tech’sDevelopmentofWaterElectrolysisintheEuropeanUnionstudy.ThecapitalandfixedoperatingcostsperkgofhydrogenproducedareshowninFigure3.2.SMRandby-producttechnologiesarealreadymature,andsofuturecostreductionsareassumedtobezeroforthisstudy.Currentelectrolysercostsarerelativelyhigh,drivenbylowmanufacturingvolumesandrelativeimmaturityatthescaleexpectedforhydrogenproduction(e.g.500kg-5t/day).Compression,distributionandmargincostsforSMRandby-productarespecifictoeachsupplier,thenumberofstationsservedandthegeographicaldistributionofrefuellingstations.Valuesforcompressioncosts,distributionandmarginareconsistentwithobservedpricesinfundeddemonstrationprojects(whichalsoshowsignificantlyhigherandlowercosts)andwereagreedbyindustryparticipantsfortheFrenchenRoutePourunTransportDurablestudy.
19Europeancommission2016:EUReferenceScenario,2016Energy,transportandGHGemissionsTrendsto2050.Accessedhere30/08/2016
Hydrogen
Hydrogenproductioncosts
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Figure3.2-Capitalcosts,fixedoperatingcostsandcompression,distributionandmargincostsinEUR/kg
ThetotalproductioncostsfromeachproductionrouteareshowninFigure3.3.Thesecostsincludethefeedstockcostsassumptionsforgas(30EUR/MWhin2015risingto40EUR/MWhby2030)andelectricity(107EUR/MWhin2015risingto148EUR/MWhin2050).TheresultsbelowshowsignificantlyhighercostsforelectrolyserhydrogencomparedtoSMRandby-product.Thisisduetotheuseofastandardelectricitypriceinthebaselinescenariothatdoesnotaccountforoptimisationintermsoftimeofdayusageortheprovisionofgridservices.InsomeMemberStatessuchasFrance,electrolyseroperatorsareabletoaccesselectricitypricesofc.€65/MWh,whichissufficientlylowtobecompetitivewithhydrogenfromSMR(oncedeliverycostsforthelatteraretakenintoaccount)Theimpactoflowerelectricitypricesthroughoptimiseduseofrenewablesinperiodsoflowdemandwillbeconsideredasaseparatesensitivity,asthisisacriticalfactorifelectrolysersaretobecompetitivewithotherhydrogensourcesinthefuture.ThewaterelectrolysercostsinFigure3.3alsoincludearevenueof1EUR/kgfromtheprovisionofbalancingservicestotheelectricitygrid.ThisisanindicativevaluebasedondiscussionswithRTEinFranceandtheNationalGridintheUK.
Figure3.3-Totalcostsofhydrogenproduction,€/kg
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Thehydrogenproductionmixinanygivenhydrogenmarketwillbeinfluencedbyrelativecostsofeachproductionsource,customerdemand(intermsofthecarbonfootprintofthehydrogen)andpoliciessuchasincentivesforgreenhydrogen.TheproductionmixalreadyvariessignificantlybetweenleadinghydrogenmarketsinEurope.Forexample,most,ifnotall,ofthefirst100stationsdeployedbyH2MobilityGermanywillusehydrogenfromsteammethanereformingorindustrialby-producthydrogendeliveredbytruck.Incontrast,mostoftherecentstationsdeployedintheUKundertheEU-FinancedHyFIVEandH2MEprojectsaresuppliedbyon-sitewaterelectrolysers.ThisisdueinparttoelectrolysisspecialistsmakingsignificantinvestmentsintheUK(astheyareinScandinavia),butalsoduetotherelativeeaseofguaranteeinghydrogenpurityfromelectrolyserscomparedwithSMRroutes.TheproductionmixusedtocalculatetheCO2footprintofhydrogenisshowninFigure3.4,andshowsaslightdominanceofSMR-derivedhydrogenin2015,withequalquantitiesofelectrolyserandSMRhydrogenbeyond2020.Itshouldbenotedthatiftheelectrolysermarketdevelopsquickly,bothintermsoftechnologycostreductionsandtheabilitytoprovidegridservicesandtakeadvantageofotherwise-curtailedrenewableenergy,greenhydrogencouldbecomethedominantproductionmethodduringthe2020s.Gridservicescanpotentiallyprovideuptoanadditional€80000perMWcapacityperyearandcouldprovetobeasignificantincentivetodevelopingtheelectrolysermarket.Theproductionmixshownbelowin2020woulddeliveranapproximately50%well-to-wheelCO2savingrelativetoanequivalentdieselcar(assumingtheelectricitysuppliedtothewaterelectrolysersisgreen).
Figure3.4-Hydrogenproductionmixscenarios
Hydrogenproductionmix
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4 Infrastructurerequirements
Thissectiondescribesthedefinition,costsandrateofdeploymentof
• electricroadsystems• electricchargingposts• hydrogenrefuellingstations
Italsoprovidesabreakdownofourcalculationfortotalinfrastructurerequirements.
ThemainsourceofelectricityforERS-enabledvehicleswillbeviaanelectricroadsystem(ERS).Therewillalsobearolloutofslowdepotchargers(22kW)foreachvehicle,tofacilitateovernightchargingofvehicles.AsthedeploymentofERSincreasesthetimespentinelectricmodewillincrease,reflectinganincreaseduseoftheERSinfrastructure.ToincentivisethetakeupofERSvehiclestheERSinfrastructuredeploymenthasbeenfront-loaded.
ThemaininfrastructuretoserveBEVswillberapidchargersonhighways,withanoutputof700kW.AlongsidethesetherewillalsobeBEVdepotchargers(90kW)forslowchargingovernight.
ThemaininfrastructurerequiredtoserveFCEVswillbehydrogenrefuellingstations(HRS).Forthistechnologytotakeoff,sufficientfrontloadingisneededtoincentivisehaulierstoinvestinFCEVHGVs.Afteraninitialspikeindeploymenttherolloutofhydrogenrefuellingisdeterminedbyarefuellingdensityassumption.
4.1 ElectricRoadSystems
ThecentralcostassumptionsforinstallationandoperationandmaintenanceofERSintheHGVstockmodelisUmweltBundesamt(2016)20.Therearetwoinstallationcosts:thefirst,‘Installationcostin2020(€m/km)’representsthecostintheearlierstagesofdeployment,andthesecond‘Installationcostin2050(€m/km)’isthecostestimateofamaturedeployment,afterlearninghastakenplace.Linearinterpolationisusedtoderivethecostineachyearbetween2020and2050.Table4.1:CostassumptionforERS
Figure4.1:CumulativeERSinfrastructurecostsinTECHERSscenarioFigure4.1belowshowsthecumulativecostofinstallationandO&Mcostfrom2020and2050.By2050thetotalamountofinvestment(includingO&M)reaches€45billion.
20UmweltBundesamt(2016)ErarbeitungeinerfachlichenStrategiezurEnergieversorgungdesVerkehrsbiszumJahr2050)20,accessedhere.
Costs
Installationcostin2020(€m/km)
Installationcostin2050(€m/km) O&Mcost(€m/km)
Centralassumption 2.43 2.02 0.05
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Figure4.1:CumulativeERSinfrastructurecostsinTECHERSscenario
ERSwillbedeployedacrossthecoreTEN-Tnetwork.ThedeploymentofERSenvisagedintheTECH-ERSscenarioisthemostambitious(relativetotheotherTECHscenarios).ItisbasedonadensityassumptionderivedfromFraunhofer(2017)21.Thestudyassumesthat19%ofGermanhighwaysareelectrifiedby2030.Thisenables25%oftheHHGVstocktobeERS-enabledvehicles;weestimatethistoequatetoapproximately300HHGVsERS-enabledvehiclesinthestockforeverykmofERS.AssumingthatthedensityofERS-enabledvehiclesperkmchangesasthevehiclesachievegreaterpenetrationinthestock,weassume300vehiclesperkmisthe‘peak’density,i.e.thatatlowerlevelsofERSinstallation,therearefewervehiclesperkm(whichrepresentssufficientfrontloading),andthatbeyondthispointeachadditionalkmofERSinstalledisalesser-usedroad,meaningthattherearenofurtherincreasesinvehicledensityinadditionalinstalledERS(andinfactvehicledensityfallsslightly).
21Fraunhofer(2017):MachbarkeitsstudiezurErmittlungderPotentialedesHybrid-Oberleitungs-Lkw,accessedhereAug2018
Deployment
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Figure4.2:DeploymentofERSbyscenario
ThedensityassumptionfortherolloutofERSinTECHBEVandTECHFCEVscenariosisbasedonfixingthepeakvalueofvehiclesperkilometreatthelowerfigureof220.TherolloutofERSinfrastructureinthesescenariosismuchlessbecausethestockofERS-enabledvehiclesissmaller.
ThepercentageoftimespentinelectricmodeisanimportantdeterminantforcalculatingthefuelconsumptionofbothPHEVandPHEV-ERSvehicles.Figure4.3illustratesthepercentageofthetimeeachvehiclespendsinelectricmode–eitherdrawingelectricityfromERSorusingtheon-boardbattery.ABEV-ERSspends100%ofitstimeinelectricmode.Figure4.3:Timespentinelectricmode(completetrend)
ThetimespentinelectricmodeforaPHEViscalculatedbasedonanumberofassumptions.TheaveragetriplengthofanHHGVinEuropeisapproximately525km(TRACCS).ForaHHGVtravellingatanaveragespeedof80km/h,the
Percentageoftimespentinelectric
mode
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timetakenforacompletetripisjustunder7hours.Withabatterycapacityof165kWhandelectricityconsumptionof1kWh/km,afullychargedbatteryhasarangeof150km.Afterthis,thevehicleswitchestodiesel.However,theWorkingTimeDirectivemeansthatthedrivermuststopafter4½hours(i.e.afterdrivingaround360km).Assumingthatthis45-minuterestisusedtorechargethePHEVbattery(usingarapidcharger),thefirst150kmafterthestopcanagainbedoneusingtheelectricmotor,andtherestofthetripontheICE.Bytheendofthetrip,thevehiclehascoveredjustover300kminelectricmodeofatotalof525km,oraround57%,whichisourworkingassumptionfortimespentinelectricmodebyaPHEV.
However,whilethetimespentinelectricmodebyaPHEVisconstantovertime,thesameisnottrueofaPHEV-ERS.Forthesevehicles,thetimespentinelectricmodeincreasesovertime,inresponsetotheincreasingdeploymentofERS.TheinitialstartpointforPHEV-ERSisthesameasPHEV,fromwhichitincreasesbasedondatafromthreeGermanstudies(seeTable4.2).Table4.2:ModelledestimatesoftimespentinelectricmodebyERSvehicles
4.2 Rapidcharging
AfewfirmshaverecentlyannouncedbatteryelectricHGVswhichwillrelyuponrapidchargingtechnologyforon-routerecharging.Suchvehicleswillrequirededicatedhigh-powercharginginfrastructureinstalledalongkeytransportroutes(e.g.thecoreTEN-Tnetwork)andlower-poweredchargersinstalledathaulagedepotstoenableovernightcharging.
ThecostsfordepotandrapidcharginghavebeenbasedoncostanalysisforchargersfromFuellingEurope’sFuture(2018).Thestudyexploredtheproductionandinstallationcostofrapidchargers(150kWand350kW)forlightdutyvehicles.ArapidchargerneedstobeabletodispensehigherpowertorechargeaHHGVwitha700kWhbatteryinareasonabletime.However,thereisanabsenceofcostdataonrapidchargersoftherequiredsizeso,theseareestimatedbylinearlyscalingup(ordown,for‘slow’chargers)thecostsfromFuellingEurope’sFuture(2018).TheanalysisfromFuellingEurope’sFuture(2018)showedclosetoalinearrelationshipofa150kWand350kWcharger,suggestingthatthisisareasonableassumption.
Depotchargershavebeenincludedatdifferentsizestosupportdifferentsizebatteriesinthefleet.Thefunctionofthesechargersistoenableovernightslowchargingofvehicles,anditisassumedthatdepotownerswouldbuythecheapestchargerthatfulfilstheirneed.
Study ERSdeployed(km) Timespentinelectricmode(%)
UBA72(2016) 4000 75RenewbilityIII–Endbericht(2016) 8000 80IFEU(2015) 10400 90
Costs
Source:eHighway,Siemens(2017)
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Table4.3:Rapidcharginginfrastructure
Theinstallationcostofpreparingthesesiteswilldependonthenumberofchargingpostsinstalled,thelocationandexistingfacilitiesofthesite,andmostsignificantly,thelevelofgridreinforcementneededtocopewiththeincreasedlocalelectricitydemand.Thesecostsarebasedonlinearscaleupoftheadditionalcostsof350kWchargingpostsfromFuellingEurope’sFuture(2018),seeTable4.4below.Wehaveassumedthatalldepotchargersarebrownfieldsites,andrapidchargingsiteswillbegreenfield,reflectingthesubstantialadditionalspacerequirementsofnewrapidchargingstationsandthetightlimitstoexistingHGVstoppingandrefuellingspaceinmuchofEurope.Table4.4:Additionalcostsforpreparingsitesforrapidcharging
Source:SDGfortheEC,CleanPowerforTransportInfrastructureDeployment,2017.
TodeterminetherolloutofrapidcharginginfrastructuretomeetthedemandofHGVswehavederivedaninfrastructuredensityassumption.Withstaggeredchargetimesandotherlogisticaloptionssuchasadvancedbookingofchargingslotsbyhauliers,weassumethatanaverageusagefactorof50%couldbeachieved.Assuch,16vehiclescanuseasinglechargerinoneday,for
Mainapplication
Chargingpointfeatures
Power(kW)
Chargetime(emptytofull)
Cost(€)
Production Installation
Depot–vans
VanwallboxBrownfield
7kW
Battery:33kWhTime:5hr
800 400
Depot–PHEV&ERSHHGVs
OvernightchargingBrownfield
22kWBattery:165kWhTime:7.5hr
10,000 3,813
Deport–BEVHHGVs
OvernightchargingBrownfield
90kWBattery:700kWhTime:7.7hr
36,000 13,775
Rapidcharging Greenfield 700kW
Battery:700kWhTime:1hr
480,000 373,125
Item Initialstage(2chargers)
MatureStage(8ormorechargers)
BrownfieldsiteGridconnection €10,000 €345,000
Civils €64,000 €82,000
TOTAL €74,000 €427,000
Greenfieldsite
Accessroads €50,000 €50,000
Siteworks €100,000 €100,000
Professionalfees €33,000 €33,000
Gridconnection €5,000 €340,000
Civils €64,000 €82,000
TOTAL €252,000 €605,000
Deployment
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aperiodof45minuteseach.Furthermore,becauseonly34%oftripsaregreaterthan600km(accordingtodatafromEurostat),onlyathirdofvehiclesneedtouseachargeratall(theremainderwouldbeabletocompletethejourneyfromasinglechargeatthedepotandwouldstoponlytoadheretothelawratherthanrefuel).Finally,weassumethattherearethreeindividualchargersperstation.Therefore,theinfrastructuredensityrequiredisonerapidchargingstationforevery141HHGVs.
Rapidchargingstationsaretheonlyinfrastructurethatdonothaveanydegreeoffrontloading(i.e.buildingouttheinfrastructureinadvanceofthestockrequirements).Thisisbecause,foreveryBEVinthestock,oneovernightchargerisavailable;onafullchargeaBEVcancompletetheaveragetripdistance,essentiallygoingfromdepottodepotwithoutrequiringanyrapidchargingstations,alongtheroute.WethereforeimplicitlyassumethattheinitialdeploymentofEVswillbeusedforshortertriplengths(althoughcompletingonanannualbasisatotalmileageconsistentwiththewholefleetaverage).
Figure4.4belowshowsthegrossadditionalrapidchargingpointsrequiredtoservetheEV(PHEVandBEV)fleetintheTECHBEVscenario.Figure4.5showsthegrossadditionaldepotchargingpointstoserveEVfleetintheTECHBEVscenario.Thegraphshavebeensplittoshowthenumberofrapidchargingpointsinmoredetail.Figure4.4:AdditionalrapidchargingpointstosupportEVfleetinTECHBEV
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Figure4.5:AdditionaldepotchargingpointstosupportEVfleetinTECHBEV
4.3 Hydrogenrefuellingstations
Themaincomponentsofahydrogenrefuellingstation(HRS)areacompressor,refrigerationequipmentandadispenser.AnHRSwilldispense700barhydrogeninconjunctionwiththeperformancespecificationsetoutintheSAEJ2601internationalstandard.Thecurrenttechnologylevelandmanufacturingvolumesmeansthatthecostsofahydrogenrefuellingtankarerelativelyhigh.Ourassumptioninthisanalysis(inlinewithmodellingofhydrogenrefuellingstationsinFuellingEurope’sFuture(2018)andpreviousstudies)isthathydrogenisproducedlocallybyanon-siteelectrolyser;notethatthisgenerationcostisnotincludedintheinfrastructurecostsconsideredbelow;itmattersonlyinasmuchasitaffectsthepriceofhydrogenfuel.
WehaveselectedtwodifferentHRSsizesforthestockmodel;10,000kg/dayand25,000kg/day.TheuppersizeisinlinewithNikola’sannouncementthattheywillbuildHRSwhichcandispenseupto25,000kgofhydrogenperday22.
OurcostestimatesofHRSarelinearlyscaledusingthe0.6powerrulefromthecostofa3000kg/daystationinitialconceivedforhydrogenbuses23.Thecostofadispenser(includinginstallation&civiletc.)isintherangeof€100,000–€300,000.Notea3000kg/daychargerrequires5dispensers,thisratioisusedtodeterminethenumberofdispensersneededfora10,000kgand25,000kgHRS.Theinvestmentcostofastorageandcompressionunitcombinediswithintherangeof2,500–5,000€/(kgH2/day).LargerHRScanachievecostsatthelowerendoftherange,andsincethemodelledchargersarelarge,weassumecostsatthebottomendoftheseranges.
22FuelCellCars.Accessedhereon11/07/201723NewBusFuel.Accessedhereon07/12/2017
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Table4.5:Installationcostsforhydrogenrefuellingstations
Theinfrastructuredensitywasbasedonourassumptions,andcrosscheckedagainstNikolaestimates.Assuminganefficiencyof6MJ/km(2025efficiencyestimateofrealworldefficiency)andenergydensityofhydrogenof120MJ/kgandanaveragetriplengthof525km,eachtriprequiresaround26kgofhydrogenThisislessthantheNikolaestimatewhichisbetween50-70kg/dayperFCEVHHGV,reflectingtheloweraveragedistancecoveredbyEuropeanHHGVscomparedtothoseintheUS.Assuming75%usageofthecapital,26kg/daymeansthat286vehiclescanbesupportedbyasingle10,000kg/dayHRSand714vehiclesbya25,000kg/dayHRS.
InthefirstfouryearsofFCEVHHGVdeploymentweassumesomefront-loadingofinfrastructure.GrossadditionalHRSisillustratedinFigure4.6below.AseachHRSisassumedtohavea20-yearlifespan,thefirstreplacementchargersareintroducedin2046.Figure4.6:AdditionalHRStosupportFCEVfleetinTECHFCEV
Sizeofcharger
Numberofdispensersperstation
Installationcostofdispensers(€m)
Installationcostofstorageandcompressionunit(€m)
Totalinstallationcost(€m)
10000kg 17 1.7 24.7 26.4
25000kg 42 4.2 42.8 44.5
Deployment
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5 Hauliers’perspective
5.1 Vehiclecosts
Thecapitalcostofeachvehicleisderivedbycombiningprojectionsofthepowertrainandglidercostwithestimatesofthecostoffuel-efficienttechnologiesinstalledinthevehicle(includinglow-rollingresistancetyres,aerodynamicimprovements,weightreductions).
Inthiscapitalcostcalculation,onlythemanufacturingcostofthevehicleisconsidered,thereforeexcludingmargins,distributioncostsandVAT.Totheextentthattheselattercostsareproportionaltothefinalsaleprice,theywouldbehigherinabsolutetermsforadvancedpowertrainsthanforICEvehicles;however,theywouldnotimpacttherelativedifferenceincapitalcost.
InFigure5.1below,andinallsubsequentchartswherethecostofdifferentpowertrainsarecompared,wecomparetechnologiesatthesamelevelofmaturity((i.e.similarpercentagecostreductionshavebeenachievedthrougheconomiesofscaleandlearningeffects).
ThecostoftechnologieswhichreduceCO2emissionsfromroadfreightwillreduceovertimeasscaleeconomiesareachieved,butthecostfacedbyhaulierswillincreaseasmoretechnologiesareaddedtoreachtighterCO2limits.In2030,battery-electricandfuel-cellelectricvehiclesareprojectedtobesignificantlymoreexpensivethandieselandgasolinevehiclesandtheirhybridvariants.By2050,thedifferenceinpricewillbenarrowedslightlybutstillsomedistancefromconvergencewithICEpurchasecosts,eventhoughthecostofdieselvehiclesisincreasing(asadditionalfuelefficienttechnologiesaredeployedtomeetenvironmentalgoals)andzero-emissionsvehiclesbecomecheaperastheystartbeingmanufacturedatscale.
Figure5.1CapitalcostofanewheavyHGVsizedvehicleintheTECHscenarios
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5.2 Fuelcosts
OnefeatureoftheTECHscenariosisthesubstantialimprovementtotheefficiencyofconventionalICEs,leadingtofuelbillsavingsforoperatorsofdieselvehicles.Inaddition,thetransitiontowardsanincreaseintheshareofadvancedpowertrainshasimplicationsforfuelbillsintheTECHscenariosduetothedifferencesinthecostsofthesealternativefuels,aswellastheimprovementsintheefficiencyofenergyconversioninanelectricpowertrainrelativetoaconventionalICE.
TheoilpriceprojectionsusedforthisanalysisaretakenfromIEA’sNovember2016WorldEnergyOutlookandthecostofpetrolanddieselproductionisassumedprojectedtobeconsistentwiththeseoilpricesovertheperiodto2050.TheelectricitypriceisconsideredattheEUlevelandincreasesinlinewiththe2016PRIMESReferenceScenario24;anEUaverageispresentedinthechartbelow.
Asadvancedpowertrainsbecomemoreprevalentinthevehiclemix,assumptionsaboutthepriceofelectricityandhydrogenbecomemoreimportantanddomesticelectricitypricesaremodelledasrelativelyconstantreflectingthetrendinthewholesalecostofproductionfromthegenerationmixinPRIMES.
5.3 Totalcostofownership(TCO)
Toevaluatetheimpactofthelowcarbontransitiononhauliers,itisalsoimportanttolookatthetotalcostofowningavehicleforthefirstowner,whosepurchasingdecisionwilldeterminewhetherthelow-carbontechnologiesenterthevehiclefleetornot.Tounderstandthisrequiresthatovertheinitialownershipperiodthecapitalcost,thecostsoffuellingthevehicle,shareofinfrastructurecosts,andtheamountforwhichitcanberesoldattheendoftheownershipperiodareallconsidered.Figure5.3shows
24Europeancommission2016:EUReferenceScenario,2016Energy,transportandGHGemissionsTrendsto2050.Accessedhere30/08/2016
Figure5.2Projectedcostofpetrol,diesel,hydrogenandelectricity(2016€/MWh),EUaverage
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thisperspectiveovera5-yearownershipperiod,andagainconsiderssimilarmaturitylevelsacrossthedifferenttechnologies.Figure5.3TotalcostofowningandrunningaheavyHGVover5yearswithvariouspowertrainsintheTECHscenariosin2030and2050(€)
ThemainfindingoftheTCOanalysisisthatduetothehighmileageofHHGVsandincreasedefficiencyoftheelectricmotor,thelowerrunningcostsofBEVandPHEVbasedpowertrainsmorethanoutweighthehighercapitalcosts.ForFCEVs,thevehiclesachievecost-competitivenesswithICEsby2050,althoughremainmoreexpensivethanotheradvancedpowertrains.Thislargelyreflectsthefactthathydrogenfuelcostsaresubstantiallyhigherthanobtainingtheequivalentenergycontentdirectlyfromelectricity.
OveralltheTCOcomparisonshowsthattheuptakeoffuelefficientvehiclesshouldnotraiseoverallcoststohauliers.However,thereareotherchallengestoovercometoensureuptakeofmorefuel-efficientvehicles:
• fuelexpensesarecoveredbytheclientsaspartofstandardcontracts,reducingtheincentiveofhaulierstoreducethesecosts
• thehaulagesectorhasmanySMEoperatorsthatlackthecapacitytofinanceinvestmentsinmorefuel-efficientrollingstock
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6 Economicimpacts
TheeconomicimpactofdecarbonisingEurope’sgoodsvehicles,comparedtoareferencecase(REF)inwhichvansandheavygoodsvehiclesremainunchangedfromtoday,wasmodelledusingE3ME25.
6.1 GDPimpacts
AllscenariosshowasmallpositiveimpactonGDPfromthetransitiontomoreefficientvehiclesandalternativepowertrains.Thiscomesfromtheshiftinspendingawayfromimportedoilandtowardsahighercapitalcontentinvehiclesandspendingondecarbonisedfuels.SinceoilisimportedintoEuropeandthedecarbonisedfuels(hydrogen,electricity)areproducedwithinEurope,theshiftinspendingonfuelreducesleakagefromtheEuropeaneconomyandisreflectedinanimprovementinthebalanceoftrade.
Thehighercostofvehiclesraisespricestoconsumersanddepressesrealincomesandspending.Itdivertsspendingtowardsthevaluechainformanufacturingvehiclesandtheircomponentpartsandawayfromothersectorsoftheeconomy.However,wherethisisdisplacingspendingonoil,sincethereisgreaterdomesticsupplycontentinmotorvehiclesascomparedtooil,thisrepresentsanetbenefittotheEuropeaneconomy.Inaddition,whentheTCOofvehiclesislowerinthescenariothaninthereferencecase,theoverallcostofmobilityofroadfreightisreduced.Thishastheeffectofreducingcostsfacedbyhauliers,thebusinessesthattheysupply(assomeofthecostreductionispassedonintheformoflowerprices)andultimatelyconsumers.Whenconsumersarefacedwithlowerprices,theyareabletore-allocatetheirexpenditureontoothergoodsandserviceswhichfurtherboostsGDP.AsummaryofthemaineconomicindicatorsispresentedinTable6.1.Table6.1:Mainmacroeconomicindicators
TECHICE TECHBEV TECHFCEV TECHERS
2030impacts (relativetoREF)
GDP(%) 0.03% 0.07% 0.07% 0.06%
Employment(000s) 80 121 122 116
Oilimports(mboe) -106 -197 -192 -193
CO2emissionsfromroadfreight(mtCO2) -43 -80 -78 -79
TECHICE TECHBEV TECHFCEV TECHERS
2050impacts (relativetoREF)
GDP(%) 0.03% 0.24% 0.24% 0.22%
Employment(000s) 215 288 341 223
Oilimports(mboe) -188 -749 -749 -743
25https://www.camecon.com/how/e3me-model/
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CO2emissionsfromroadfreight(mtCO2) -77 -307 -307 -304
Thescaleofthelong-termeconomicimpactisuncertain,dependingonanumberofcompetingfactors:thecostofvehicles,low-carbontechnologiesandEVbatteries;thelocationofvehiclesupplychains;andfutureoilprices,amongstothers.However,thedominantimpactarisesfromthereductioninoilimports.ThisisevidentinthemacroeconomicresultsintheTECH-ICErelativetootherTECHscenarios,inwhichthereductioninoilimportsismuchsmallerwithouttheshifttoadvancedpowertrainsinHGVs.
ComparedtotheTECHBEVandTECHFCEVscenario,TECHERSleadstoasmallerimprovementinemployment,asmallerreductioninemissionsandaslightlylowerboosttoGDP.Thisisduetothesmallerinfrastructureinvestmentrequiredinthisscenario,andthefactthatoilimportsarereducedbyslightlyless,duetothecontinuedroleforPHEVvehiclesinthescenario.ThedifferencebetweenTECHBEVandTECHFCEVismarginalintermsofboththeimpactonbothGDPandemployment,withasimilarreductioninoilimportsinbothscenarios.
Figure6.1showstheGDPimpactsunderdifferentscenarios.IntheTECHscenarios,by2030thereisaverysmall(0.07%)GDPimprovementcomparedtobaseline,astheeconomicbenefitsofreducedspendingonoilandpetroleumimportsoutweighthenegativeeconomicimpactsassociatedwithhighervehicleprices.However,by2050thishaswidenedtojustover0.24%,asspendingonimportedfuelsfallsfurtherduetocontinuedimprovementinefficiencyofthestockandacontinuedshiftawayfromICEsandtowardseitherERS-enabledvehicles,BEVsorFCEVs.Figure6.1GDPresultsrelativetothereferencescenario
6.2 Sectoralimpacts
Thecostsandbenefitsvarybysector:somebenefitandsomeareadverselyaffectedbythetransition.
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IntheTECHBEVscenario,spendingonfossilfuelimportsis€18billionlower(in2015prices)thaninthereferencescenarioby2030.WhilemuchofthisspendingintheREFscenarioflowstoproducersbasedoutsideofEurope,reducedspendinghasanadverseimpactondomesticrefining.IntheTECHscenario,grossoutputinthepetroleumrefiningsectorisconsiderablylowerthaninthereferencescenarioby2030.
Theelectricityandhydrogensectorsbenefitfromimprovedcapitalstockthroughinvestmentincharginginfrastructureandthroughhauliers’expenditureonelectricityandhydrogen.IntheTECHBEVscenario,grossoutputintheelectricitysectoris€2.6bnhigherthaninthereferencescenarioby2030.
IntheTECHBEVscenario,theautomotivesupplychainshowsanetincreaseingrossoutputof€9billionandanincreaseof31,000jobsin2030comparedtothereferencescenario.However,withinthesupplychainthereisasubstantialtransitionincontentfromtraditionalmotorvehiclesproductiontoelectricalequipmentinthelongtermnettingoutwithamoderateincrease.By2050,outputintraditionalmotorvehiclesfallsby€22billionwhereaselectricalequipmentoutputincreasesby€34billion.
6.3 Employment
Thepatternofimpactsonemployment,whilerelatedtotheoutputimpacts,aresomewhatdifferent.Toassesstheimpactonemployment,wealsoneedtotakeaccountofthedifferentemploymentintensitiesinthevarioussectorsthatareaffected.Thetrendtowardsgreaterautomationintheautoindustryisexpectedtoreducethenumberofjobs,regardlessofthelow-carbontransition.Buildingbattery-electricvehiclesisexpectedtobelesslabourintensivethanbuildingthegasolineanddieselvehiclestheywillreplace,whilebuildinghybridsandplug-inhybridsisexpectedtobemorelabourintensive(reflectingthefactthatthesevehicleshavedualpowertrains).Ourmodellingconfirmsthatthenetemploymentimpactfortheautosectorfromthetransitiondependsonthemarketsharesofthesevarioustechnologies,andthedegreetowhichtheyareimportedorproducedinEurope.
Figure6.2showstheevolutionofjobsinEuropebecauseofthetransitiontolow-carbonroadfreightin2030and2050underourTECHBEVscenario,relativetotheReferencecase.Thereisanetincreaseinemploymentinthefollowingsectors:electricity,hydrogen,servicesandmostmanufacturingsectors.Employmentinthepetrolanddieselfuelssectorisreduced.Employmentintheautomotivemanufacturingsectorishigheruntil2030butislowerthereafterinourTECHBEVscenario.
Oilandpetroleumrefining
Otherenergyindustries
Theautomotivesupplychain
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Figure6.2Theemploymentimpactpersectorofthetransitiontolow-carbonroadfreight(TECHBEVcomparedtoREF)
InourTECHBEVscenario,by2050,thenetimpactonautojobsisnegativebecauseICEswithfuelefficienttechnologiesareincreasinglyreplacedbybattery-electricvehicles,whicharesimplertobuildandthereforerequirefewerjobstoproduce.
Employmentimpactswithintheautosectorareanimportantissue.Thebenefitofusingamacro-economicmodellingapproachisthatitallowsustoassesstheeconomy-wideimpactsofthistransition,buttherearelimitstothelevelofdetailthatcanbeprovided.Forthelow-carbontransitiontobesuccessful,carewillneedtobetakentosupportthosewholosetheirjobsintechnologiesthatarebeingphasedout.Managingtheswitchinthemotorvehiclesindustry,toensurea“justtransition”,shouldbeakeyfocusofpolicy,particularlyagainstanoverallbackgroundofincreasingautomation.
6.4 Oilimports
By2030,IntheTECHBEVscenario,cumulativeoilimportssince2018arereducedbyaround1billionboe.By2050,thecumulativereductioninoilimportscomparedtotheReferencecaseincreasesto11bboe.(seeFigure6.3).
ThereductioninoilimportsisthemaineconomicdriverandexplainsthelevellingoffoftheeconomicbenefitsintheTECHICEscenariofrom2030onwards,comparedtotheincreasingGDPbenefitsintheotherTECHscenariosoutto2050.
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Figure6.3Oilimports(differencefromREF)
6.5 Governmentrevenues
InmanyEuropeancountries,fueltaxisleviedtoraisegeneralrevenueandtopayforroadinfrastructureimprovements.Vehicleefficiencyimprovementsandaswitchtolow-carbonvehicleswillreducespendingonpetrolanddieselfuelswithconsequentimpactsontaxrevenuesandthemodelforfinancingroadmaintenanceandroadinfrastructureimprovements.InsomeMemberStates,hauliershavetaxexemptionswhichmeanthattheimpactonfueldutieswouldbeminimal;intheanalysisthatfollows,weadoptaconservativeperspective,andassumethatallfossilfuelsalesthatareforegoneintheTECHscenarioswouldbesubjecttofuelduty.Thisthereforerepresentsa‘worstcase’oflostrevenues,withtheactualimpactonfueldutyrevenuesataEuropeanlevellikelytobesomewhatsmaller.
OuranalysisshowsthattheadvancedpowertrainsasintheTECHBEVscenariowouldcutfueldutyrevenuesby€23billionin2050.However,asdescribedabove,thestructuralshiftspromptedbythistransitionleadtoincreasedeconomicactivitywhichboostsothertaxrevenues.Thismitigatessomeofthelossofrevenues,and,toclosethegapentirelycomparedwiththebaseline,thestandardrateofVATwasincreasedby1-2%(varyingbyMemberState).Thisensuresthatnoneoftheeconomicbenefitsoutlinedabovearetheresultofunfundedborrowingbygovernment;thetotaltaxtakebygovernmentisunchanged,andtheincreaseinVATratesthatismodelledservestodepresstheeconomicoutcomesintheTECHscenariossomewhat.
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Figure6.4Fueldutyrevenuesin2050(€2015bn)
Whiletheeconomicmodellingdemonstratesthisbalanceinrevenues,Europeangovernmentsmayfocusonthelossoffueltaxrevenuesandattempttorecoupthelostrevenuedirectlythroughothertaxesonthesamegroup,forexamplethroughincreasesinexciseduties(wheretheyexist)orroadcharging.Theneteconomiceffectwoulddependonwhichtaxesarechanged.Thishighlightstheimportanceofindustry,governmentandcivilsocietyworkingtogethertofindconsensusontheoptimalapproach.
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7 Environmentalimpacts
7.1 ImpactonCO2emissions
TheevolutionofaverageCO2emissionsfornewHGVsineachscenarioisshowninFigure7.1.ApartfromtheREFscenario,allscenariosmeetorexceedtheEuropeanCommission’sproposedreductionsof15%by2025and30%by2030.IntheTECHBEVscenario,theaverageHGVsis25%moreefficientin2025and39%in2030.Figure7.1AverageCO2emissionsofHGVsfrom2018-2050
Figure7.2showsthevehiclestock’sCO2tailpipeemissionsundereachscenario.IntheTECHBEVscenario,CO2emissionsfromvansandHGVSarereducedfromaround290Mtperannumin2018to51Mtperannumin2050.Thisisachievedviaacombinationofincreasedfuelefficiencyandswitchingtheenergysourcefromdieseltolow-carbonelectricity.
Figure7.2TotalEUvehiclestockCO2tailpipeemissions(Mt)
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8 Conclusions
ThisstudyfocusedonthepotentialeconomicimpactsofdecarbonisingvansandHGVsinEurope.
Wefindthatallthescenariosyieldneteconomicbenefitsintheshort,mediumandlongterm,strengtheningEurope’seconomy.Thiscomesaboutbecauseoftheeconomicbenefitsofreducingoilimports,andallscenariosleadtoreductionsinoilconsumptionandemissions.Theeconomicbenefitsincreaseovertheperiodto2050andoveralltherearemildbenefitstobothGDPandemployment,asoilimportsarefurtherreducedasefficientvehiclesandadvancedpowertrainstakeahighershareofthestock.TheimplicationofthisfindingisthatatransitiontowardslowcarbonroadfreighttransportationtomeetEurope’sclimategoalscanbeachievedwithoutfearofeconomiccollapse,buttherearesignificantchallengesalongtheway.
Policymakersmustbereadytomanagethetransitionandshouldfocustheireffortsonafewkeyareas:
• Theinvestmentofrecharginginfrastructuremustbedeliveredinanefficientfashion,likelybybothprivateandpublicactors,tosupporthauliertake-upofnewpowertrains.
• Retrainingprogramsmustbeavailabletomanagethelabourmarketimpactsofthetransition,givingworkersinvolvedintraditionalICEmanufacturingtheopportunitytore-skilltotakeupjobseitherinthenewsupplychainsaroundelectricvehicles,ortotakeadvantageofthewideropportunitiescreatedbyhighereconomicgrowth.
• Fueldutyrevenueswilldeclineduetothetransition,butthenetbenefitstotherestoftheeconomywouldmakeupmuchoftheshortfallbyexpandingthetaxbaseelsewhere.Thescaleofnetdeclineinrevenuescouldbemetinanumberofdifferentways;however,politiciansmightbeinclinedtointroduceothertaxesonthesamegroupofroaduserstoavoidchangingincentivesaroundexistingroadfreighttransportationbehaviours.
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AppendixA E3MEmodeldescription
Introduction
E3MEisacomputer-basedmodeloftheworld’seconomicandenergysystemsandtheenvironment.ItwasoriginallydevelopedthroughtheEuropeanCommission’sresearchframeworkprogrammesandisnowwidelyusedinEuropeandbeyondforpolicyassessment,forforecastingandforresearchpurposes.
RecentapplicationsofE3MEinclude:
• aglobalassessmentoftheeconomicimpactofrenewablesforIRENA
• contributiontotheEU’sImpactAssessmentofits2030climateandenergypackage
• evaluationsoftheeconomicimpactofremovingfossilfuelsubsidiesinIndiaandIndonesia
• analysisoffutureenergysystems,environmentaltaxreformandtradedealsinEastAsia
• anassessmentofthepotentialforgreenjobsinEurope
• aneconomicevaluationfortheEUImpactAssessmentoftheEnergyEfficiencyDirective
ThismodeldescriptionprovidesashortsummaryoftheE3MEmodel.Forfurtherdetails,thereaderisreferredtothefullmodelmanualavailableonlinefromwww.e3me.com.
E3ME’sbasicstructureanddata
ThestructureofE3MEisbasedonthesystemofnationalaccounts,withfurtherlinkagestoenergydemandandenvironmentalemissions.Thelabourmarketisalsocoveredindetail,includingbothvoluntaryandinvoluntaryunemployment.Intotalthereare33setsofeconometricallyestimatedequations,alsoincludingthecomponentsofGDP(consumption,investment,internationaltrade),prices,energydemandandmaterialsdemand.Eachequationsetisdisaggregatedbycountryandbysector.
E3ME’shistoricaldatabasecoverstheperiod1970-2014andthemodelprojectsforwardannuallyto2050.ThemaindatasourcesforEuropeancountriesareEurostatandtheIEA,supplementedbytheOECD’sSTANdatabaseandothersourceswhereappropriate.ForregionsoutsideEurope,additionalsourcesfordataincludetheUN,OECD,WorldBank,IMF,ILOandnationalstatistics.Gapsinthedataareestimatedusingcustomisedsoftwarealgorithms.
Themaindimensionsofthemodel
ThemaindimensionsofE3MEare:
• 59countries–allmajorworldeconomies,theEU28andcandidatecountriesplusothercountries’economiesgrouped
Overview
Recentapplications
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• 43or69(Europe)industrysectors,basedonstandardinternationalclassifications
• 28or43(Europe)categoriesofhouseholdexpenditure
• 22differentusersof12differentfueltypes
• 14typesofair-borneemission(wheredataareavailable)includingthesixgreenhousegasesmonitoredundertheKyotoprotocol
Thecountriesandsectorscoveredbythemodelarelistedattheendofthisdocument.
Standardoutputsfromthemodel
Asageneralmodeloftheeconomy,basedonthefullstructureofthenationalaccounts,E3MEiscapableofproducingabroadrangeofeconomicindicators.Inadditionthereisrangeofenergyandenvironmentindicators.Thefollowinglistprovidesasummaryofthemostcommonmodeloutputs:
• GDPandtheaggregatecomponentsofGDP(householdexpenditure,investment,governmentexpenditureandinternationaltrade)
• sectoraloutputandGVA,prices,tradeandcompetitivenesseffects
• internationaltradebysector,originanddestination
• consumerpricesandexpenditures
• sectoralemployment,unemployment,sectoralwageratesandlaboursupply
• energydemand,bysectorandbyfuel,energyprices
• CO2emissionsbysectorandbyfuel
• otherair-borneemissions
• materialdemands
Thislistisbynomeansexhaustiveandthedeliveredoutputsoftendependontherequirementsofthespecificapplication.Inadditiontothesectoraldimensionmentionedinthelist,allindicatorsareproducedatthenationalandregionallevelandannuallyovertheperiodupto2050.
E3MEasanE3model
Thefigurebelowshowshowthethreecomponents(modules)ofthemodel-energy,environmentandeconomy-fittogether.Eachcomponentisshowninitsownbox.Eachdatasethasbeenconstructedbystatisticalofficestoconformwithaccountingconventions.Exogenousfactorscomingfromoutsidethemodellingframeworkareshownontheoutsideedgeofthechartasinputsintoeachcomponent.Foreachregion’seconomytheexogenousfactorsareeconomicpolicies(includingtaxrates,growthingovernmentexpenditures,interestratesandexchangerates).Fortheenergysystem,theoutsidefactorsaretheworldoilpricesandenergypolicy(includingregulationoftheenergyindustries).Fortheenvironmentcomponent,exogenousfactorsincludepoliciessuchasreductioninSO2emissionsbymeansofend-of-pipefiltersfromlargecombustionplants.Thelinkagesbetweenthe
TheE3interactions
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componentsofthemodelareshownexplicitlybythearrowsthatindicatewhichvaluesaretransmittedbetweencomponents.
Theeconomymoduleprovidesmeasuresofeconomicactivityandgeneralpricelevelstotheenergymodule;theenergymoduleprovidesmeasuresofemissionsofthemainairpollutantstotheenvironmentmodule,whichinturncangivemeasuresofdamagetohealthandbuildings.Theenergymoduleprovidesdetailedpricelevelsforenergycarriersdistinguishedintheeconomymoduleandtheoverallpriceofenergyaswellasenergyuseintheeconomy.
TechnologicalprogressplaysanimportantroleintheE3MEmodel,affectingallthreeEs:economy,energyandenvironment.Themodel’sendogenoustechnicalprogressindicators(TPIs),afunctionofR&Dandgrossinvestment,appearinnineofE3ME’seconometricequationsetsincludingtrade,thelabourmarketandprices.InvestmentandR&DinnewtechnologiesalsoappearsintheE3ME’senergyandmaterialdemandequationstocaptureenergy/resourcesavingstechnologiesaswellaspollutionabatementequipment.Inaddition,E3MEalsocaptureslowcarbontechnologiesinthepowersectorthroughtheFTTpowersectormodel26.
Treatmentofinternationaltrade
Animportantpartofthemodellingconcernsinternationaltrade.E3MEsolvesfordetailedbilateraltradebetweenregions(similartoatwo-tierArmingtonmodel).Tradeismodelledinthreestages:
• econometricestimationofregions’sectoralimportdemand
26SeeMercure(2012).
Theroleoftechnology
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• econometricestimationofregions’bilateralimportsfromeachpartner
• formingexportsfromotherregions’importdemands
Tradevolumesaredeterminedbyacombinationofeconomicactivityindicators,relativepricesandtechnology.
Thelabourmarket
TreatmentofthelabourmarketisanareathatdistinguishesE3MEfromothermacroeconomicmodels.E3MEincludeseconometricequationsetsforemployment,averageworkinghours,wageratesandparticipationrates.Thefirstthreeofthesearedisaggregatedbyeconomicsectorwhileparticipationratesaredisaggregatedbygenderandfive-yearageband.
Thelabourforceisdeterminedbymultiplyinglabourmarketparticipationratesbypopulation.Unemployment(includingbothvoluntaryandinvoluntaryunemployment)isdeterminedbytakingthedifferencebetweenthelabourforceandemployment.Thisistypicallyakeyvariableofinterestforpolicymakers.
ComparisonwithCGEmodelsandeconometricspecification
E3MEisoftencomparedtoComputableGeneralEquilibrium(CGE)models.Inmanywaysthemodellingapproachesaresimilar;theyareusedtoanswersimilarquestionsandusesimilarinputsandoutputs.However,underlyingthisthereareimportanttheoreticaldifferencesbetweenthemodellingapproaches.
InatypicalCGEframework,optimalbehaviourisassumed,outputisdeterminedbysupply-sideconstraintsandpricesadjustfullysothatalltheavailablecapacityisused.InE3MEthedeterminationofoutputcomesfromapost-Keynesianframeworkanditispossibletohavesparecapacity.Themodelismoredemand-drivenanditisnotassumedthatpricesalwaysadjusttomarketclearinglevels.
Thedifferenceshaveimportantpracticalimplications,astheymeanthatinE3MEregulationandotherpolicymayleadtoincreasesinoutputiftheyareabletodrawuponspareeconomiccapacity.Thisisdescribedinmoredetailinthemodelmanual.
TheeconometricspecificationofE3MEgivesthemodelastrongempiricalgrounding.E3MEusesasystemoferrorcorrection,allowingshort-termdynamic(ortransition)outcomes,movingtowardsalong-termtrend.Thedynamicspecificationisimportantwhenconsideringshortandmedium-termanalysis(e.g.upto2020)andreboundeffects27,whichareincludedasstandardinthemodel’sresults.
KeystrengthsofE3ME
InsummarythekeystrengthsofE3MEare:
27Whereaninitialincreaseinefficiencyreducesdemand,butthisisnegatedinthelongrunasgreaterefficiencylowerstherelativecostandincreasesconsumption.SeeBarkeretal(2009).
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• thecloseintegrationoftheeconomy,energysystemsandtheenvironment,withtwo-waylinkagesbetweeneachcomponent
• thedetailedsectoraldisaggregationinthemodel’sclassifications,allowingfortheanalysisofsimilarlydetailedscenarios
• itsglobalcoverage,whilestillallowingforanalysisatthenationallevelforlargeeconomies
• theeconometricapproach,whichprovidesastrongempiricalbasisforthemodelandmeansitisnotreliantonsomeoftherestrictiveassumptionscommontoCGEmodels
• theeconometricspecificationofthemodel,makingitsuitableforshortandmedium-termassessment,aswellaslonger-termtrends
ApplicationsofE3ME
AlthoughE3MEcanbeusedforforecasting,themodelismorecommonlyusedforevaluatingtheimpactsofaninputshockthroughascenario-basedanalysis.Theshockmaybeeitherachangeinpolicy,achangeineconomicassumptionsoranotherchangetoamodelvariable.Theanalysiscanbeeitherforwardlooking(ex-ante)orevaluatingpreviousdevelopmentsinanex-postmanner.Scenariosmaybeusedeithertoassesspolicy,ortoassesssensitivitiestokeyinputs(e.g.internationalenergyprices).
Forex-anteanalysisabaselineforecastupto2050isrequired;E3MEisusuallycalibratedtomatchasetofprojectionsthatarepublishedbytheEuropeanCommissionandtheIEAbutalternativeprojectionsmaybeused.Thescenariosrepresentalternativeversionsofthefuturebasedonadifferentsetofinputs.Bycomparingtheoutcomestothebaseline(usuallyinpercentageterms),theeffectsofthechangeininputscanbedetermined.
Itispossibletosetupascenarioinwhichanyofthemodel’sinputsorvariablesarechanged.Inthecaseofexogenousinputs,suchaspopulationorenergyprices,thisisstraightforward.However,itisalsopossibletoaddshockstoothermodelvariables.Forexample,investmentisendogenouslydeterminedbyE3ME,butadditionalexogenousinvestment(e.g.throughanincreaseinpublicinvestmentexpenditure)canalsobemodelledaspartofascenarioinput.
Model-basedscenarioanalysesoftenfocusonchangesinpricebecausethisiseasytoquantifyandrepresentinthemodelstructure.Examplesinclude:
• changesintaxratesincludingdirect,indirect,border,energyandenvironmenttaxes
• changesininternationalenergyprices
• emissiontradingschemes
AllofthepricechangesabovecanberepresentedinE3ME’sframeworkreasonablywell,giventhelevelofdisaggregationavailable.However,itisalsopossibletoassesstheeffectsofregulation,albeitwithanassumptionabouteffectivenessandcost.Forexample,anincreaseinvehiclefuel-efficiencystandardscouldbeassessedinthemodelwithanassumptionabouthow
Scenario-basedanalysis
Priceortaxscenarios
Regulatoryimpacts
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efficientvehiclesbecome,andthecostofthesemeasures.Thiswouldbeenteredintothemodelasahigherpriceformotorvehiclesandareductioninfuelconsumption(allotherthingsbeingequal).E3MEcouldthenbeusedtodetermine:
• secondaryeffects,forexampleonfuelsuppliers
• reboundeffects28
• overallmacroeconomicimpacts
Table1:MaindimensionsoftheE3MEmodel
Regions Industries
(Europe)Industries
(non-Europe)1 Belgium Crops,animals,etc Agricultureetc2 Denmark Forestry&logging Coal3 Germany Fishing Oil&Gasetc4 Greece Coal OtherMining5 Spain OilandGas Food,Drink&Tobacco6 France Othermining Textiles,Clothing&Leather7 Ireland Food,drink&tobacco Wood&Paper8 Italy Textiles&leather Printing&Publishing9 Luxembourg Wood&woodprods ManufacturedFuels10 Netherlands Paper&paperprods Pharmaceuticals11 Austria Printing&reproduction Otherchemicals12 Portugal Coke&refpetroleum Rubber&Plastics13 Finland Otherchemicals Non-MetallicMinerals14 Sweden Pharmaceuticals BasicMetals15 UK Rubber&plasticproducts MetalGoods16 CzechRep. Non-metallicmineralprods MechanicalEngineering17 Estonia Basicmetals Electronics18 Cyprus Fabricatedmetalprods ElectricalEngineering19 Latvia Computersetc MotorVehicles20 Lithuania Electricalequipment OtherTransportEquipment21 Hungary Othermachinery/equipment OtherManufacturing22 Malta Motorvehicles Electricity23 Poland Othertransportequip GasSupply24 Slovenia Furniture;othermanufacture WaterSupply25 Slovakia Machineryrepair/installation Construction26 Bulgaria Electricity Distribution27 Romania Gas,steam&aircond. Retailing28 Norway Water,treatment&supply Hotels&Catering29 Switzerland Sewerage&waste LandTransportetc30 Iceland Construction WaterTransport31 Croatia Wholesale&retailMV AirTransport32 Turkey WholesaleexclMV Communications33 Macedonia RetailexclMV Banking&Finance34 USA Landtransport,pipelines Insurance35 Japan Watertransport ComputingServices36 Canada Airtransport ProfessionalServices37 Australia Warehousing OtherBusinessServices38 NewZealand Postal&courieractivities PublicAdministration39 RussianFed. Accommodation&foodserv Education40 RestofAnnexI Publishingactivities Health&SocialWork41 China Motionpic,video,television MiscellaneousServices42 India Telecommunications Unallocated43 Mexico Computerprogrammingetc.
28Intheexample,thehigherfuelefficiencyeffectivelyreducesthecostofmotoring.Inthelong-runthisislikelytoleadtoanincreaseindemand,meaningsomeoftheinitialsavingsarelost.Barkeretal(2009)demonstratethatthiscanbeashighas50%oftheoriginalreduction.
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44 Brazil Financialservices 45 Argentina Insurance 46 Colombia Auxtofinancialservices 47 RestLatinAm. Realestate 48 Korea Imputedrents 49 Taiwan Legal,account,consult 50 Indonesia Architectural&engineering 51 RestofASEAN R&D 52 RestofOPEC Advertising 53 Restofworld Otherprofessional 54 Ukraine Rental&leasing 55 SaudiArabia Employmentactivities 56 Nigeria Travelagency 57 SouthAfrica Security&investigation,etc 58 RestofAfrica Publicadmin&defence 59 AfricaOPEC Education 60 Humanhealthactivities
61 Residentialcare
62 Creative,arts,recreational
63 Sportsactivities 64 Membershiporgs 65 Repaircomp.&pers.goods 66 Otherpersonalserv. 67 Hholdsasemployers 68 Extraterritorialorgs 69 Unallocated/Dwellings Source(s):CambridgeEconometrics.