Roland Berger study outlines integrated vehicle and fuels roadmap for further abating transport GHG emissions 2030+ at lowest societal cost
A new study by consultancy Roland Berger defines an integrated roadmap for European road transport decarbonization to 2030 and beyond; the current regulatory framework for vehicle emissions, carbon intensity of fuels and use of renewable fuels covers only up to 2020/2021.
The study was commissioned by a coalition of fuel suppliers and automotive companies with a view to identifying a roadmap to 2030+ to identify GHG abatement options at the lowest cost to society. The coalition comprises BMW, Daimler, Honda, NEOT/St1, Neste, OMV, Shell, Toyota and Volkswagen. Among the key findings of the study were:
Maintaining the existing vehicle efficiency and fuels regulations to 2030 will lower tank-to-wheel GHG emissions from road transport to 647 Mt representing a 29% reduction compared to 2005 levels, achieving almost aspired level for 2030.
Transport will also deliver tank-to-wheel emissions savings of 191 Mt CO2e between 2015 and 2030 to reduce the total well-to-wheel GHG emission in 2030 to 862 Mt CO2e. The well-to wheel-emission savings represent a 23% reduction in tank-to-wheel emissions and a 22% reduction in well-to-tank emissions.
Optimized internal combustion engines are the major contributor to the reduction of passenger car GHG emissions with significant improvements until 2020 and the subsequent penetration of more effective alternative technologies into the fleet.
Despite the expected reduction in cost of alternative technologies, the share of new car sales will remain relatively small; the influence of these technologies on overall emissions currently remains marginal. Even until 2030 many alternative powertrain technologies such as PHEV, BEV and FCV lack relative cost competitiveness—but are important cornerstones in vehicle manufacturers’ CO2 emission compliance strategies.
GHG abatement in road transport sector will cost approx. €150-200 (US$172-229) per ton of CO2e avoided. Bringing optimized ICEs as well as alternative fuels and powertrain technologies to market will account for €380-390 billion (US$435-446) of cumulated incremental powertrain costs from 2010 until 2030.
To further abate GHG emissions in road transport by 2030, more biofuels and hybrid powertrains for passenger cars as well as more biofuels and new truck concepts for commercial vehicles are a cost effective way of delivering more GHG savings from transport and with supportive polices they can deliver an extra 34 Mt CO2e by 2030.
From the GHG abatement cost perspective, the study found that the most efficient technologies are full deployment of the E10 grade, to reach the 7% energy cap of conventional biofuels; higher advanced ethanol blends for gasoline such as E20; drop-in advanced biofuels for diesel; and hybridized powertrains, such as mild hybrids and full hybrids.
These technologies have not yet realized their full GHG reduction potential in terms of deployment under the current regulatory framework and come at costs of 0–100 €/ton-CO2 abated. The additional abatement potential of these technologies is approx. 34 Mton CO2e (WTW).—Roland Berger study
For the longer-term (beyond 2030), the study indicates that the only fuel and vehicle combinations technically suited to achieving “ultra-low carbon emission mobility” are:
- Highly-efficient conventional powertrains (Mild- and full-Hybrid) fueled with advanced and waste based biofuels/-gases (for passenger cars (PC) and commercial vehicles (CV))
- PHEVs fueled with advanced biofuels and low carbon, renewable electricity (for PC)
- BEVs fueled with low carbon, renewable electricity (for PC)
- FCVs fueled with low carbon, renewable hydrogen (for PC)
The latter powertrain technologies also offer the advantage of zero pollutant emissions.
Policy makers should adopt an integrated approach in policy design and promote the deployment of cost-efficient GHG abatement technologies post-2020.
Market-based mechanisms (MBMs) are an option as complementary policy to vehicle CO2 standards, fuels and infrastructure policies generating funds for member states to support new ultra-low-carbon vehicle and fuel technologies.
Placing fuels in a market-based system (MBM) will also lead to GHG abatement becoming an economy-wide rather than a sectorial issue based on the lowest cost to society.
Initially, the MBM should be designed to recycle the revenues from the sale of allowances for fuels to provide the funding needed to bring new low carbon fuels and vehicles to market. Once low-carbon fuels and vehicles can be deployed affordably en masse, then the MBM can be the primary GHG reduction policy and other policies (vehicle efficiency, fuels etc.) can be removed.
Methodology. The study developed a realistic reference case for potential GHG emission reductions under the current regulatory framework with predicted market improvements. The abatement effect of enabling vehicle and fuel technologies was assessed with a comprehensive vehicle fleet and fuel model for EU-28, covering GHG emissions from passenger cars, light commercial vehicle and other commercial vehicles as well as indirect emissions from fuel and electricity production.
For the model, the team derived a likely powertrain mix for different vehicle groups until 2030. These powertrain mix forecasts are based on projected fuel and vehicle costs for conventional internal combustion engines (ICE); mild and full hybrids; and alternative powertrains such as plug-in hybrids (PHEV); battery electric vehicles (BEV); natural gas vehicles (CNG); and fuel cell electric vehicles (FCV).
The reference case predicts, within two different scenarios for oil price development and battery technology progress, an expected market development for each technology under the current regulatory framework.
For the reference case, the model assumed extension of the existing legislation to 2030. After comparing transport sector emissions under the current regulatory framework with the 2030 GHG emissions reduction targets, the study authors identified technologies to achieve additional GHG abatement at the lowest cost to society. In order for these technologies to contribute to the abatement of road transport sector GHG emissions, the recommended policies need to address the current obstacles these technologies face.