June 30, 2007
MIT Model Compares Effects of Different Carbon Cap and Trade Proposals in Congress
The MIT Joint Program on the Science and Policy of Global Change recently applied its Emissions Prediction and Policy Analysis model to evaluate a set of cap-and-trade proposals under consideration by the US Congress.
The proposals, which specify emissions reductions to be achieved through 2050 for the standard six-gas basket of greenhouse gases, fall into two groups: one specifying reductions of 50% to 80% below 1990 levels by 2050; the other establishing a tightening target for emissions intensity and stipulating a time-path for a “safety valve” limit on the emission price that approximately stabilizes US emissions at the 2008 level.
The MIT researchers defined a set of three synthetic emissions paths that spanned the range of stringency of these proposals, and the analyzed those cases for their consequences in terms of emissions prices, effects on energy markets, welfare cost, the potential revenue generation if allowances are auctioned and the gains if permit revenue were used to reduce capital or labor taxes.
Those proposals with goals of substantially cutting US emissions between now and 2050 would likely generate prices in the range of $30 to $55 per ton of CO2-e in 2015, rising to the range of $120 to over $200 by 2050: economic welfare losses from the mitigation policy are estimated to rise to 1.1% to almost 2% by 2050. If economic decision-makers were less than confident that measures would be imposed without relaxation to 2050 then there might be somewhat lower levels of banking, leading to lower prices and costs in early periods and higher prices and costs later.
Optimism about future technology would reduce banking and near-term abatement and CO2-e prices. Greater pessimism on future technology or abatement potential would drive near term prices and abatement higher. No assessment was carried out of the economic effects of climate change avoided or ancillary benefits of emissions mitigation, but of course these benefits would provide at least a partial offset to the mitigation cost. However, because of the long-lived nature of greenhouse gases and the moderating influence of the ocean, much of the climate benefit of reductions through 2050 would accrue beyond the horizon of this analysis.
Those proposals that would slow or stop the rise in emissions but not substantially cut them from today’s levels have somewhat lower costs. A policy that froze emissions at 2008 levels would generate a price of $18 per ton of CO2-e in 2015, rising to around $70 by 2050. Related proposals specify a safety valve of $6 per ton of CO2-e rising to $39 by 2050. If the US pursued this target alone it would essentially freeze emissions at 2008 levels and have welfare costs that rose to just above 0.4%, but the effectiveness and cost of this proposal depends highly on assumptions about policy abroad, as well as other uncertainties that we have not explored.
Simulations using the MIT Integrated Global System Model show that the proposals with 50% to 80% targets are consistent with global goals of atmospheric stabilization at 450 to 550 ppmv CO2—but only if other nations, including the developing countries, follow. The MIT model predicts that if no action is taken, US greenhouse gas emissions will double by 2050, with global levels growing even faster and continuing to rise for the rest of the century.
The authors of the report conclude that more important than the specific numbers resulting form the analysis are some derived broad insights that may help shape US greenhouse gas mitigation policy:
The cost of policy in the US is greatly affected by policies in the rest of the world.
International emissions trading does not lead to substantial economic efficiency gains unless the US policy is much more stringent than the policy in other regions. If the US policy is similar in stringency (comparing pre-trade CO2-e prices) trade can be welfare worsening because of terms-of-trade effects. One reason emissions trading is less important is that trade in biofuels tends to close the gap between pre-trade emissions prices so that this energy-trade substitutes for trading in emissions allowances.
Cutting emissions in the US and world implies a transition to carbon-free transportation fuels. One of the more technology-ready options is biofuels. The scale of production required to substantively contribute to abatement would require extensive conversion of land to bioenergy crops and in the process could release carbon stored in vegetation and soils.
“We were not able to investigate the magnitude of this effect, but given the area of land involved it would be large. ”
To avoid reductions in carbon dioxide emissions from fuel use being offset by land use emissions, it will be necessary to price land-use emissions similarly to emissions from fossil fuel. Ideally, land-use emissions would be part of the same cap-and-trade system as fuel emissions, or would be subject to the same CO2-e tax or price incentive.
With no restrictions on biomass trade, the US would mainly be an importer of biofuels when there is a stringent domestic mitigation policy. Rather than going to biofuels production, US farmland would be used to produce food for export; regions abroad would devote more of their agricultural land to biomass and import agricultural products from the US.
If the US restricts biofuels use to domestically produced feedstock more than the total of all current US cropland would be required. In this case, the US would become a large importer of food, fiber, and forest products, rather than the net exporter of these products as is currently the case.
Potential revenue from allowance sales or a CO2-e tax (or windfall gain to those to whom allowances were freely distributed) are substantial under the emissions limits examined, ranging from about $130 to $370 billion per year in 2015 to $250 to $515 billion per year in 2050. The CO2-e revenue is on the order of 10 to 15% of estimated future total Federal tax revenue, ranging across scenarios and over time from 5 to nearly 20%.
One use of auction or tax revenue is to cut existing taxes, for example, on labor and capital.
Isuzu and Hino Motors Work Together on Diesel Emissions Reduction
The Nikkei reports that Isuzu Motors and Hino Motors, the Toyota commercial vehicle subsidiary, are teaming up to develop technology for diesel engine emissions reduction.
By adopting the same technology and supplying related parts to each other, they aim to reduce costs. The technology would be applied to their new truck models beginning in 2009.
In November 2006, Toyota took a 5.9% stake in Isuzu and the two companies began “studying the synergic effects of business collaboration” much of it focused on the development of advanced diesels for the light duty market.
The two are jointly developing a 1.6-liter advanced, low-emissions diesel engine that features cutting-edge fuel injection and catalyst technologies. Toyota reportedly will outsource production of advanced diesels to Isuzu. (Earlier post.)
China CNPC Secures Oil Sands Rights
Rigzone. Alberta (Canada) has granted China National Petroleum Corp. exploration rights for 11 oil sands fields with estimated reserves of 2 million barrels of bitumen, marking the first instance of major Chinese oil company winning a majority stake in a Canadian oil sands project.
Sinopec (China Petrochemical Corp.) has a 40% stake in the Northern Lights project with Calgary-based energy firm Synenco. CNOOC Ltd. (CEO) has a 16.69% stake in privately-owned Canada-based MEG Energy Corp.
June 29, 2007
PSA Peugeot Citroën to Study JV with Chinese Carmaker Hafei
PSA Peugeot Citroën and Chinese carmaker Hafei will study the feasibility of a 50-50 joint venture that would manufacture people movers with a capacity of 10 passengers or less for the Chinese market.
Hafei would produce the vehicles in its plant in Shenzhen.
PSA Peugeot Citroën is trying to speed up its development in China, one of its three international strategic growth regions. The company currently operates in China through Dongfeng Peugeot Citroën Automobiles (DPCA), a 50-50 marketing and manufacturing joint venture established in partnership with Dongfeng Motor. DPCA sold 201,300 vehicles in 2006 and 87,100 vehicles in the first five months of 2007.
Hafei is a Chinese carmaker and a subsidiary of the AVIC aeronautics company. Its primary products are mini-cars, mini-buses, mini-trucks, MPV and 3-box cars. Production reached 260,000 units in 2006.
British Company Developing Home Electrolyzer for Hydrogen Production; Dual-Fuel Conversion Offers Hydrogen Range of 25 Miles
|The home electrolyzer unit. Click to enlarge.|
A British company is developing a low-cost home electrolyzer for the production of hydrogen to refuel a converted dual-fuel vehicle that uses both low-pressure hydrogen and gasoline.
The ITM Power electrolyzer uses a 10 kW electrolyzer operating at 75 bar pressure. ITM Power modified a gasoline engine Ford Focus to make it a dual-fuel vehicle, and has fueled the converted car with the output from the electrolyzer.
The refueling is also only at 75 bar, compared to the 350- to 700-bar storage systems being developed for hydrogen fuel cell vehicles. As a result, the hydrogen on-board the converted vehicle is limited, and supports an all-hydrogen range of about 25 miles before switching back to run on gasoline.
That distance, says ITM Power, is more than the more than the average commuting distance in the UK.
The bi-fuel car and refuelling system clearly demonstrate a simple, convenient and low-cost transportation solution that can significantly reduce greenhouse gases and help mitigate climate change. We believe combining electrolyzers with an internal combustion-engined vehicle brings affordable hydrogen transportation forward by many years.—Jim Heathcote, ITM Power CEO,
Both the refuelling system, which will be able to generate and store hydrogen at home or at work, and the dual-fuel car will be demonstrated publicly later this year. Meanwhile, ITM Power is finalizing the design of a manufacturing facility in Sheffield which will deliver one of the largest electrolyzer production capabilities in the world. Manufacturing is expected to commence as early as the first half of next year.
House Energy Package Heading to Floor Dodges CAFE, Offers Incentives for Plug-in Hybrids
The leadership of the US House of Representatives yesterday staged a press event to broadly discuss the package of energy legislation that is on its way for consideration in the full House floor in July, after appropriations measures are finished.
The package does not contain vehicle fuel-efficiency standards. During the event, House Energy and Commerce Committee Chairman John Dingell (D-MI) noted that the question over altering fuel economy rules (CAFE) will re-emerge in the climate change/global warming legislation that his committee will tackle beginning in September. However, one of the elements of the legislation currently heading to the floor is a bill to promote plug-in hybrid electric vehicles and components.
The component of the package for plug-ins and electric transportation:
Establishes a loan guarantee program for the construction of advanced battery manufacturing facilities.
Amends the language in the Energy Policy Act of 2005 that provides manufacturing conversion grants for hybrid-electric vehicles to include plug-in hybrids and components.
Establishes a program to provide grants on a cost-shared basis to State governments, local governments, metropolitan transportation authorities, air pollution control districts, private or nonprofit entities or combinations thereof, to carry out projects to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies.
Provides incentives for federal and state fleets for medium- and heavy-duty hybrids.
Amends the Energy Policy Act of 1992 to include a number of forms of electric drive vehicles, including plug-in hybrids, for the allocation of credits.
During the committee markup sessions, a number of amendments were added, including:
Establishing a 5,000-vehicle PHEV conversion pilot program that would involve 5 cities with 1,000 conversions per city.
Establishing a revolving loan program for qualified electric transportation projects, which includes ship-side or shore-side electrification; truck-stop electrification; electric truck refrigeration units; battery powered APUs for trucks; electric airport ground support equipment; electric or dual-mode electric freight rail; any distribution upgrades required to supply electricity to the projects; and any ancillary infrastructure.
Authorizing grants to owners of electric drive transportation technology to use off-peak electricity or to have the load managed by the utility.
Establishing a market assessment program for electric-drive transportation technologies.
Establishing a program to determine how to integrate PHEVs into the transmission grid, to develop systems and processes to allow plug-ins to function as emergency back-up power sources for consumers.
Ordering a study from the DOT, DOE and other agencies on the benefits of and barriers to the widespread use of city electric cars (higher speed than neighborhood electric vehicles, lower speed than passenger vehicles) and which may be battery electric, fuel-cell electric or plug-in hybrids.
Specifically including hydraulic hybrids in the vehicle mix.
CAFE. The original CAFE proposal under consideration in the House Energy and Commerce Committee would have mandated an increase in fuel economy to 36 mpg US by model year 2021 for passenger cars and 30 mpg US after model year 2024 for light-duty trucks. It also would have blocked states from establishing standards for the reduction of greenhouse gases from automobiles. (Earlier post.)
Facing stiff opposition, including that of the Speaker of the House, that proposal did not make it through this markup session. During markup deliberations yesterday, however, Rep. Joe Barton (R-TX) submitted an amendment that would have instituted fuel economy standards of 35 mpg for cars and 27.5 mpg for trucks, both by 2022, for vehicles that run on blends of renewable fuel and gasoline and diesel—in effect, every new vehicle.
The amendment was shot down in a straight partyline vote, and the package thus head to the House for consideration without a CAFE provision.
Asked specifically about the prospects for CAFE during the leadership press event, Speaker Pelosi—who also said that she supported the Senate’s CAFE standard of 35 mpg for both cars and trucks by 2020—said:
Let meet be very specific. Mr. Dingell [chairman of the Energy and Commerce committee] and I are in conversation, as with Mr. Boucher, the chairman of the subcommittee [on Energy and Air Quality], about how we proceed on some of the other issues. The committee, the subcommittee, the full committee, will work its will and so will the Congress, and it will do so in the fullest and most open way.
Toyota Down On Plug-In Conversions
In a memo sent to the US Senate Finance Committee during their deliberations, Toyota outlined its concerns with the conversion of existing hybrids such as the Prius to plug-in hybrids (PHEV) in the context of proposed incentives to spur PHEV adoption. CalCars published the document.
Toyota’s view, according to Charles Ing, Director, Government Affairs Toyota Motor North America, is that PHEV converters should comply with existing standards governing second-stage manufacturers; that NHTSA and EPA should be required to establish new regulations for the certification of conversions of used vehicles—thereby putting the product liability and warranty risk onto the converter; and that the government should assure that there be no degradation in emissions and vehicle safety before it provides taxpayer incentives for conversion.
At the top of Toyota’s list is the concern over the degradation of emissions (higher NOx and total HC emissions) exhibited by a converted Prius PHEV than by a stock Prius. (Earlier post.)
This raises the question of whether the government should be paying people to make their cars dirtier?—Toyota memo
Toyota also expressed a specific concern over converted PHEVs being out of compliance with Federal Motor Vehicle Safety Standards (FMVSS), noting that after-market converters do not perform crash testing to certify that the converted vehicle meets or exceeds FMVSS.
Toyota also cited a number of general concerns:
Increased risk of fire from lithium-ion batteries. This may particularly resonate with Toyota given its delay of introducing lithium-ion batteries in the next-generation Prius, reportedly due to thermal management problems.
Increased risk of injury in an accident. Aftermarket batteries, Toyota argues, can compromise the fuel system and/or crashworthiness, even becoming projectiles in an accident.
Adverse effect on rear suspension. The addition of hundreds of pounds of extra weight in the rear of the vehicle compromises the rear suspension and handling and stability.
Compromised powertrain and voiding of warranty. Toyota charges that converters “hack into and modify” the software in the engine control module, which may damage the battery pack and engine, and also voids the warranty.
Increased risk of electrical shock. Toyota said it was unaware of any testing to ensure compatibility between the conversion kit batteries and home electrical wiring.
Removal of spare tire. Removing the spare tire to allow placement of the battery “poses a risk in the event of a flat tire in an emergency situation.”
Non-compliance with EPA regulations. To the extent hybrid plug-in converters interfere with the ECM and the vehicle's emissions, the vehicle may then not be in compliance with EPA regulations.
In response, CalCars founder Felix Kramer commented that the bill’s definition of “qualified plug-in electric drive motor vehicle” means they must meet environmental, as well as National Highway Traffic Safety Administration (NTSA) and Federal Motor Vehicle Safety Standards. Most of Toyota’s objections, in other words, will not apply to eligible vehicles as defined in the bill.
CalCars values conversions because they increase awareness and support for PHEVs. At the same time, they offer a partial response to the intense demand for PHEVs from people who can’t believe we have to wait for years for something we should already have. Our strategic goal in promoting conversions is to motivate, pressure and incentivize carmakers to build PHEVs. Of course, once automakers finally do sell PHEVs, there will also be many hundreds of thousands of hybrid candidates for safe, affordable, warranted retrofits.
Our large international car companies are the ones who should be resolving the issues raised—they can do the job right!—Felix Kramer
BP and D1 Oils Form Joint Venture to Develop Jatropha Biodiesel Feedstock
BP and D1 Oils plc are forming a 50/50 joint venture, to be called D1-BP Fuel Crops Limited, to accelerate the planting of Jatropha curcas—a drought-resistant, inedible oilseed bearing tree which does not compete with food crops for good agricultural land or adversely impact the rainforest—in order to make more sustainable biodiesel feedstock available on a larger scale.
Under the terms of the agreement, BP and D1 Oils intend to invest around $160 million over the next five years. D1 Oils will contribute into the joint venture their 172,000 hectares of existing plantations in India, Southern Africa and South East Asia and the joint venture will have exclusive access to the elite jatropha seedlings produced through D1 Oils’ plant science program.
As jatropha can be grown on land of lesser agricultural value with lower irrigation requirements than many plants, it is an excellent biodiesel feedstock. D1 Oils’ progress in identifying the most productive varieties of jatropha means that the joint venture will have access to seeds which can substantially increase jatropha oil production per hectare.—Phil New, head of BP Biofuels
The joint venture will focus on jatropha cultivation in South East Asia, Southern Africa, Central and South America and India. The partners estimate that some one million hectares will be planted over the next four years, with an estimated 300,000 hectares per year thereafter. Investments will be made through directly managed plantations on owned or leased land, which will also provide employment for local communities, and through contract farming and seed purchase agreements.
Jatropha oil produced from the plantations will be used to meet both local biodiesel requirements and for export to markets such as Europe, where domestic feedstock produced from rapeseed and waste oil is unlikely to be sufficient to meet anticipated regulatory led demand for biodiesel of around 11 million tonnes a year from 2010.
Once all the planned plantations are established, the joint venture is expected to become the world’s largest commercial producer of jatropha feedstock, producing up to 2 million tonnes of jatropha oil a year, according to New.
D1 Oils plc is a UK-based global producer of biodiesel. Its operations cover agronomy, refining and trading and includes pioneering the science, planting and production of inedible vegetable oils. D1 Oils also design, build, own, operate and market biodiesel refineries and source, transport and trade seeds and seedlings, seedcake, crude vegetable oils and biodiesel. (Earlier post.)
Earlier this week, BP announced that it was partnering with DuPont and ABF to build a $400M bioethanol and biobutanol plant in the UK. (Earlier post.)
GM Europe Advances ecoFLEX Downsizing Initiatives; Opel Diesel E-Flex Model to Debut at Frankfurt
|The coming ecoFLEX Corsa 1.3 CDTI emits 119 g/km of CO2 (equivalent to about 4.4 l/100km fuel consumption or 53 mpg US). Click to enlarge.|
In a press briefing in Berlin today, GM Europe outlined an environmental strategy that focuses in the short-term on reducing CO2 emissions through engine downsizing, systems optimization (through the use of technologies such as start/stop) and alternative fuels (including CNG and E85); and in the long-term on introducing new propulsion technologies.
The strategy includes the use of downsized ecoTurbo engines in ecoFLEX models in each Opel/Vauxhall model line, with new models making their debut at the Frankfurt motor show (IAA) in September. GM will also use the IAA for the introduction of its next-generation HydroGen4 (the European counterpart to the fuel-cell Equinox in the US), and for an Opel diesel-engine variant of the E-Flex architecture (currently embodied in the two variants of the Chevrolet Volt). E-Flex, said GM Vice Chairman Bob Lutz during the briefing, “is the top priority program for GM.”
GM Europe also announced that Cadillac will launch its BLS model as an E85 variant in fall 2007, and that Opel/Vauxhall and Chevrolet will offer E85 technology in their vehicles as of 2010.
ecoFLEX. GME Europe launched ecoFLEX as a broad environmental initiative earlier in June with the announcement of a campaign to encourage the scrapping of older cars which do not meet current environmental standards. EcoFlex also serves as the umbrella for GM’s shorter-term initiatives on improving fuel consumption and reducing greenhouse gas emissions through the use of downsized, turbo-charged engines and the optimization of a number of other vehicle systems.
Downsized Eco-Turbo and CNG (Compressed Natural Gas) engines are at the core of Opel/Vauxhall’s ecoFLEX models. Engines with larger displacements are being replaced by new Eco-Turbo units with smaller displacement.
The new engines operate at higher efficiency than the naturally aspirated units, leading to a significant reduction in fuel consumption and CO2 emissions. This reduction is achieved through less friction and increased thermal efficiency by shifting the operating points to higher loads.
The Eco-Turbo concept is used in both gasoline and diesel engines. For example, the 1.6 turbo gasoline-fueled ECOTEC in the Opel Astra (132 kW/180 hp) replaces the older 2.0-liter turbo (125 kW/170 hp), reducing fuel consumption by 14%. The new 1.7 CDTI turbo-diesel (81 kW/110 hp and 92 kW/125 hp) consumes 7% less fuel than the 1.9-liter diesel engines (74 kW/100 hp and 88 kW/120 hp) it replaces. There is no penalty in acceleration or top speed; the three new engines deliver slightly higher performance.
GM Europe (GME) is also successively adapting gasoline engines with larger displacements to direct injection. Current offers are the 2.2 DIRECT ECOTEC in the Opel/Vauxhall range, and the 2.0 turbo ECOTEC unit from the new Opel GT, which boasts a power output of 132 hp per liter. This engine also features “Cam-Phase” variable camshaft phasing, which together with other measures reduces fuel consumption by a further 3 to 10 percent. The 1.6 and 1.8 TwinPort ECOTEC engines also feature this technology.
Opel/Vauxhall will unveil more ecoFLEX models at the Frankfurt motor show in September. The premiere model is a Corsa 1.3 CDTI emitting 119 g/km of CO2, which will be launched in 2008.
Systems efficiency and start/stop. GME aims to further reduce fuel consumption in the short and mid-term through a number of technologies. These include:
The introduction of Electric Power Steering (EPS) across all model lines;
The use of start/stop systems;
A High Efficiency Alternator in cars without the start-generator system for start/stop;
A Variable Displacement Oil Pump (VDOP) that only pumps as much lubricant into the engine as needed;
Low-rolling resistance tires; and
Enhancements to vehicle aerodynamics.
E85 and CNG. In the mid-term, GM will increase the number of its models that run on alternative fuel. Cadillac will offer an E85 variant of its BLS as of this fall, followed by Opel/Vauxhall and Chevrolet Europe in 2010. Saab will feature its BioPower flex-fuel engines throughout the 9-3 model line s of this fall.
Opel currently offers two models with compressed natural gas (CNG) 1.6-liter engines: Zafira CNG and Combo CNG (Compressed Natural Gas). These consume 5.0/4.9 kg of gas per 100 km (corresponds to 138/133 g CO2/km respectively). Opel’s CNG cars offer low operating costs (50% below that of gasoline or diesel in Germany), beat the strictest exhaust standards by up to 80%, and offer a range of up to 380 km in CNG operation and ensure unrestricted use of the passenger compartment and trunk.
The 1.6-liter engine operates on CNG, biogas or any mixture of the two. Opel plans to introduce a more powerful turbocharged CNG (“TNG”) engine.
E-Flex. E-Flex—not to be confused with ecoFLEX—describes an all-electric drive architecture that can use a variety of sources to provide the electric power. GM introduced E-Flex in January 2007 at the Detroit auto show with the unveiling of the first variant of the Chevrolet Volt—a plug-in series hybrid that uses a small flex-fuel engine for a genset coupled with a lithium-ion battery pack. (Earlier post.)
At the Shanghai motor show, GM introduced a second E-Flex variant: a Volt that combines a hydrogen fuel cell with a lithium-ion battery pack. (Earlier post.) GM is co-developing both of these E-Flex models with the intent that they both go into production, Lutz said at the briefing.
Earlier, GM announced that it had awarded battery development contracts to both CPI and Continental for the E-Flex. (Earlier post.) One of those battery systems will end up as the production system, according to Lutz.
GM will unveil a third E-Flex application at the Frankfurt show in September: an Opel concept model that uses a diesel engine in combination with the electric drive system of the E-Flex architecture.
E85 Comes to Washington, D.C.
GM and VeraSun Energy announced the opening of the first retail pump for VE85, VeraSun’s branded E85 ethanol, in Washington, D.C. Concurrently, Enterprise Rent-A-Car designated its premier rental location in Washington, D.C. as an official “E85/FlexFuel branch.”
The VE85 pump is located at the Georgetown Chevron, 2450 Wisconsin Ave, N.W. Additional public refueling sites will follow in the coming months. A second VE85 fueling site is also available to the public at the Navy Exchange station near the Pentagon in Arlington, VA.
VeraSun and GM have been working in partnership since 2005 to increase the availability of both flexible fuel vehicles and VE85 pumps. Today, VE85 is available at more than 90 stations in nine states and DC
Enterprise Rent-A-Car’s E85/FlexFuel branch—located at 1029 Vermont Ave. NW in Washington, DC—will include 50 GM E85 ethanol-capable vehicles stocked with materials about the Georgetown Chevron fueling station location and the benefits of E85 ethanol.
Enterprise has the world’s largest fleet of FlexFuel vehicles: 41,000 cars and trucks. Nationally, Enterprise is actively deploying as many of its FlexFuel vehicles as possible near E85 fueling stations in order to increase the number of cars being fueled with E85.