With the march towards decarbonization, Automotive Tech Week Europe asked in September as part of a fireside chat, whether governments and industry are ‘Barking up the Wrong Tree’.
As part of its own drive to decarbonization, the UK has set a 2030 deadline for the ban of all new gasoline and diesel cars. Yet electric vehicles are still quite expensive and out of the price range of most consumers. Many of them won’t be able to afford to replace their vehicles.
This is raising questions about whether it is better to focus on providing greener fuels for all types of vehicles, including for electric and connected and autonomous vehicles (CAVs), rather than banning the internal combustion engine and hybrid vehicles outright. Andreas Follér, head of sustainability at Scania, who participated in the conference, says the premise of the debate is about focusing on technology with regard to combustion engines today and electric tomorrow. They could also focus on energy, which is what goes into the drivetrain and what out of the tailpipe.
“Both are needed if we are going to address the climate crisis but the primary focus must be on energy; it is both the villain and the savior,” he claims. However, he offers a third option which requires focusing on the actual transport systems because he finds that there is a dichotomy between the technology (the engines) and the energy used to power them. In his view they do not capture the full spectrum of interventions that government have at their hands.
He explains: “Governments should help the transport providers to adopt the technology of the future. There might be a situation where a ban is appropriate if it drives innovation at the right moment but that being said the focus should be on energy. Our customers will choose battery electric within 10 or 20 years depending on their transport assignment and on the charging infrastructure.
“It’s a long way until we have a complete fleet of heavy trucks being electric. Until then we need to focus on phasing out fossil fuels and we do have fantastic liquid and gaseous fuels. A vast majority of our customers could switch from natural gas to biogas, or from diesel to bio-diesel, and governments have a role to play to encourage the production of sustainable bio-fuels to ensure that it becomes an attractive option for our customers.”
Free market forces
Governments aren’t the only ones to give impetus to this transformation. Follér agrees that the free market has a role to play too. So, the switch to electric vehicles will be driven largely by market forces. While he suggests that the total cost of operations “is superior with electric drivetrain than with a combustion engine”, the uptake of electric vehicles depends on having the right infrastructure in place.
He elaborates: “Even there, the free market has a role to play. It will have to be a handshake between governments, markets, and cities. We need to make sure the charging infrastructure is adopted to where the freight transport occurs. With Scania and the other OEMs, we have the data from our rolling vehicles, and so we know how our freight system works.”
He foresees that the first wave of electric vehicles will require charging at depots and distribution centers. “The second wave has to kickstart as soon as possible along the major highways and Scania has a Memorandum of Understanding with Daimler and Volvo to invest in charging along the highways in Europe but this needs to be matched by government funding.”
Phil Hopwood, head of engine and emissions control products at Ricardo, says manufacturers are essentially following legislation as they driven and being judge by a fleet CO2 basis. “The way they will reduce their CO2 is by removing high emitting vehicles from sale and marketing lower emissions and battery electric vehicles,” he comments before adding: “Legislation is on a tank-to-wheels basis, involving super credits for zero emitters and also company car taxation and grants for electric vehicles.”
He believes there is no level playing field at the moment, arguing that there needs to be a more equitable way of accounting for CO2, which should ideally be on a lifecycle basis: “When viewed in this way, you can envisage a break-even point for different vehicle types for electricity supply. Customers are not seeing the whole story when CO2 is accounted on a well-to-wheels basis; they are only seeing part of the information. If vehicles have a tailpipe and use renewable fuels the difference between them and vehicles with no tailpipe isn’t that significant, so customers can’t make that comparison.”
In his opinion, it’s right for the long-term focus to be on creating and adopting zero CO2 solutions. However, he recognizes the “growing argument for a shorter-term focus to develop drop-in renewable fuels to address the current vehicle park and also hybrid vehicles with smaller batteries”. He adds that renewable fuels are already available from bio sources. They include ethanol and natural gas at different blend rates in different regions of the world.
There is an element of regionality in terms of the policies and strategies that reflect government support for these fuels and for alternative land use. His key point, though, is for carbon accounting to change to a lifecycle basis because the vehicles with biofuels will, his view, become more attractive.
There is also a growing development for synthetic fuels. However, the same lifecycle CO2 accounting principle applies. Yet, for now at least, he explains there will be a limited supply of bio and synthetic fuels. So, Ricardo expects them to be reserved for transport sectors that can’t electrify, such as marine and aviation. He explains: “Marine and aviation are the two most significant ones. Sustainable aviation fuels are the main route for decarbonizing air transport. Yet, we need a change in policy direction to make this more significant for other transport sectors, otherwise there won’t be enough fuels. It comes back to the government, which needs to set the rules equitably – without which the fuels, and then the vehicles, will be restricted.”
Focus on greener fuels
So, why should the focus be on creating greener fuels for existing vehicles, while also developing new types of greener vehicles? Andreas Follér emphasizes that energy is everything: “At the end of the day, it’s all about getting rid of fossil fuels. So, moving away from oil to renewables and from coal-powered electricity to renewable electricity to reduce carbon emissions is the most effective way to decarbonize.”
He adds that it’s about technology and the vehicles themselves. For example, having the ability to run fleet vehicles on renewable fuels. Scania has this ability already and his company produces electric trucks. The key conundrum is about finding a better way to use energy with electric drivetrains to make them more efficient, while arguing that the efficiency of an electric truck is far better than one power by traditional fuels and an internal combustion engine.
Another approach to reducing the cost of electric vehicles, to increase their uptake, would be to change how they are used or purchased. Their batteries are one of the most expensive elements in electric vehicles and buying a vehicle outright is often expensive. Yet, with “normal usage the costs go down with an electric vehicle – making it cheaper than a diesel truck”, argues Follér.
From CAPEX to OPEX
That said, there is a need to change how people buy electric vehicles and this requires some focus on financial models to turn, with regard to haulage companies, capital expenditure (CAPEX) into operation expenditure (OPEX). This could also apply to passenger vehicles, including cars, whereby the purchase is about operational leasing rather than actually owning a vehicle. Automakers could also provide vehicle-as-a-service or transport-as-a-service as a way to handle the initial high level of investment of an electric vehicle, or of one powered by alternative sources of energy than gasoline and diesel.
So, there are different ways to address decarbonization. Just focusing on banning vehicles alone is, therefore, perhaps ‘barking up the wrong tree’ because greener fuels could provide a more immediate solutions to reducing pollution and carbon emissions. However, they don’t just come out of a tailpipe. They will also come from power stations and there needs to be consideration to how biofuels are produced. At the end of the day, the leasing model could a greener difference too, making it possible for people to lease rather than own an electric vehicle they wouldn’t otherwise be able to buy.
by Graham Jarvis