The impact of CO 2 reducing tax policies on NO X emissions from passenger cars

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1 The impact of CO 2 reducing tax policies on NO X emissions from passenger cars EEA, 14 th June 2012 Stephan Leinert, Bernard Hyde, Eimear Cotter Environmental Protection Agency Hannah Daly, Brian O Gallachoir University College Cork

2 Introduction Q Passenger cars only Change in tax system, effect on fleet, mileage Using COPERT4v8.1 to calculate NOx emissions Look out to 2020

3 Content Introduction Context Methodology/Approach Results Conclusion

4 Context: EU EU climate and energy package: reduce GHG emissions to 20% below 1990 levels by 2020 ETS: 21% below 2005 levels by 2020 Non-ETS: 10% below 2005 levels by 2020 Individual countries have individual targets for non- ETS Non-ETS for Ireland: 20% below 2005 by 2020

5 Context: GHG in Ireland Non-ETS 2010: 44 Mt Transport + Agriculture more than two thirds ESD target: -20% by 2020, compared to 2005 Food Harvest 2020: Agriculture up 1% (2020 vs 2005) => other sectors reduce even more! other 31% 2010 non-ets agriculture 43% transport 26%

6 CO2 / Mt Context: CO2 trend, energy related emissions Passenger Cars Transport without PC Other Power Generation Transport 1990 to 2007 more than doubled (-15% 2007 to 10) CO2 from Passenger Cars 2000 to 2008 up 34%

7 Index (2000 = 100) Context: Specific CO2 emissions of passenger car fleet Technological efficiency improvements in private cars Vs car purchasing trend Leaves specific emissions for total fleet constant % total NOx NOx (g/km) total CO2 CO2 (g/km)

8 Context: New tax system to reduce CO 2 July 2008: change in Vehicle Registration Tax (VRT) and annual motor tax in Ireland Was based on engine size VRT as percentage of Open Market Selling Price (OMSP) Now based on CO 2 performance Aim: shift to lower emitting cars

9 Context: Old and New tax bands Old Bands Engine Size (cc) Vehicle Registration Tax A < 1, % B 1,400-1,900 25% C > 1,900 30% New Band CO 2 Emissions (gco 2 /km) Vehicle Registration Tax A 0-120g 14% 100 B > 120g/km - 140g/km 16% 150 C > 140g/km - 155g/km 20% 290 D > 155g/km - 170g/km 24% 430 E > 170g/km - 190g/km 28% 600 F > 190g/km - 225g/km 32% 1,000 G > 225g/km 36% 2,000 Annual Motor Tax

10 Context: New tax system to reduce CO 2 Result: decrease of average specific emissions by 13% over first year, for new cars [Fionn Rogan et al] Cause: shift to diesel cars (not reduction in engine size) (diesel fuel-share in 2008: 27.7%) Previous analysis shows a decrease in CO2 emissions of 7% in 2020, compared to baseline (Daly & O Gallachoir) Success!? 100% 80% 60% 40% Other Diesel Petrol 20% 0%

11 Index (2000 = 100) Context: What about NO X? In 2010, road transport contributed 45% to total national NO X emissions (adjusted) Passenger Cars accounted for 15% of total NO X emissions Decline in total NOx emissions total NOx NOx (g/km) total CO2 CO2 (g/km)

12 Context: What about NO X? General rule: diesel cars have higher NO X emissions per km than petrol cars Shift to diesel cars might be good for CO 2, but how does it affect NO X? => calculate future NO X emissions, and look at the impact of a shift to diesel cars

13 Approach: Future fleet/mileage calculated for three scenarios PRE: Pre-tax-baseline (diesel energy share 2020: 28.4%) Share of petrol and diesel vehicles in new car purchases is the same as in the year before introduction of the new tax system POST: Post-tax (diesel energy share in 2020: 44.6%) Total mileage same as pre-tax-baseline Share of petrol and diesel cars in new cars is assumed to be the same as that observed in the first year after introduction of the new tax system REB: Post-tax-rebound (diesel energy share in 2020: 44.9%) Same petrol vs diesel split as post-tax scenario Increased mileage due to lower cost per km driven

14 Approach: Modelling activity data (car stock and mileage) Econometric model Models car fleet activity (i.e. passenger kilometres) and sales National income (exogenous) and Cost of travel (depends on fuel efficiency of fleet, feedback) Car stock model Composition of the stock in a given year, by age and technology Based on sales scenarios and turnover of previous years Mileage is distributed across stock while maintaining the relative distances driven across different vehicle types according to age and technology

15 Approach: Total/Absolute NOx emissions for three scenarios Main: TOTAL/ABSOLUTE emissions Activity data time series: Car fleet (fuel, engine size) Vintage/technology Mileage COPERT 4v8.1 NO X emissions Activity data to 2020 taken from car stock model and activity model developed in UCC, provided by Hannah Daly For three scenarios

16 Approach: Relative NOx emissions, independent of scenario Side: RELATIVE emissions Passenger Cars for Irish context (temperature, Ratio and speed for urban/rural/highway) COPERT 4v8.1 NO X emissions g/km Activity data do not matter in this case (fleet, total mileage) Specific emissions in g/km Compare diesel vs petrol

17 mio vkm Results: Mileage by technology, PRE scenario 35,000 30,000 25,000 20,000 15,000 10,000 Euro 6 Euro 5 Euro 4 Euro 3 Euro 2 Euro 1 Pre Euro 5,000 0 Euro 4/5/6 share in activity (vkm) from 29.3% in 2008 to 91.6% in 2020 This will reduce NO X emissions

18 Results: Relative NO X emissions Side: RELATIVE Emission factor, g NOx/km Conventi onal Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6 PC petrol < 1.4 l PC petrol l PC petrol > 2.0 l PC diesel < 2.0 l PC diesel > 2.0 l Diesel vs petrol Conventi onal Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6 PC < 2.0 l PC > 2.0 l Euro 4/5: diesel about 8 times higher specific emissions Euro 6: diesel about 3-4 times higher specific emissions

19 Results: NO X emissions for PRE and POST 120% 100% 80% 60% Main: TOTAL/ABSOLUTE total NO X emissions for scenario PRE and POST, 2008 equals 100% 40% 20% Scenario A: NOx pre-tax-baseline PRE: Pre-taxbaseline 50% 0%

20 Results: NO X emissions for PRE and POST 120% 100% 80% 60% total NO X emissions for scenario PRE and POST, 2008 equals 100% POST: Post-tax 62% 40% 20% Scenario A: NOx pre-tax-baseline Scenario B: NOx post-tax PRE: Pre-taxbaseline 50% 0%

21 NOx emissions / t NOx Results: Baseline 2008 to 2020 Normal 12,000 Slide Bullet NOx emissions 10,000 8,000 6,000 4,000-50% % % diesel petrol 2, pre 2020 post 2020 rebound Scenario: PRE PRE POST REB

22 NOx emissions / t NOx Results: 2020, tax scenarios vs baseline Normal 12,000 Slide Bullet NOx emissions 10,000 8,000 6,000 4, % % diesel petrol 2, pre 2020 post 2020 rebound Scenario: PRE PRE POST REB

23 Summary/Conclusions Change in tax system seems to have achieved a reduction in specific CO 2 emissions for new cars This is mainly due to a shift from petrol to diesel Creates an unintended side effect: increase in NO X by 24% compared to baseline in 2020 Increase by 28% vs baseline in rebound scenario Side: EF for diesel vs petrol cars are approximately 8 times higher => with a focus on reducing GHG emissions, mind the impact on air pollutants!

24 Thank you!

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