FUEL ECONOMY OF FUTURE INDIAN ROAD VEHICLES

TECHNOLOGY FORESIGHT FUEL FUEL ECONOMY OF FUTURE INDIAN ROAD VEHICLES For a long-term vision of the country, the future of the transportation sector should be taken into consideration as it plays a major role not only in the economic development of the country, but also towards its social transformation. The major issues involved in the transportation sector are energy, emission, and accessibility, among others. While it is essential to know what will be the travel demand in terms of passenger km or tonne-km, knowing the amount of energy that will be required to support transportation is equally important. 22 www.autotechreview.com

AUTHORS ARGHYA SARDAR is Scientist E & Head, Transportation Division at TIFAC, Department of Science & Technology, Government of India INTRODUCTION The demand for transportation energy depends on the travel demand as well as the fuel economy of vehicles. Hence, to understand the future transportation scenarios in the country, it is important to analyse trends in fuel economy. Many countries globally have mandatory standards on fuel economy, along with future pathway for such norms. Thus, a detailed discussion on this is relevant in the context of analysing future transportation scenarios. The major driving forces for fuel economy are energy security and environmental concerns. On the other hand, high economic growth with affluent consuming class generally increases demand for bigger, more comfortable vehicles, resulting in reduction in fleet fuel economy. The historical perspectives of the interplay of energy security, environmental concerns and consumer preferences are presented in this paper, and an assessment is made of the present scenario, to get an idea of the future fuel economy of Indian road vehicles. ENERGY SECURITY CONCERNS FOR INDIA For any growing economy, energy is a critical input. India imports over 75 % of its domestic petroleum requirement owing to limited domestic production of oil and gas. In FY12, India imported 171.728 MMT of crude oil, valued at ` 672,220 cr [1]. The proven reserve may not be enough for sustained demand in the future, and hence, the Ministry of Petroleum and Natural Gas (MoPNG) has taken measures to enhance exploration and exploitation of petroleum resources in the country. Domestic crude oil production in FY12 was only 38.09 MMT, ➊, and projected production in FY13 was 41.12 MMT only. Indian oil and gas PSUs also procured assets abroad to enhance production. One of them, ONGC Videsh produced 8.75 MMT of oil and equivalent natural gas from its assets abroad during FY12. Domestic refining capacity was expected to reach 218.37 MMTPA by March 2013, while the refinery production (crude throughput) achievement was 211.424 MMT during FY12. As per the latest available estimate, the crude oil and natural gas reserve in India are 760 MMT and 1330 BCM respectively, ➋. In terms of refining capacity, India is able to meet the domestic requirements but due to the dependence on imported crude oil, the Indian economy is vulnerable to a large extent to the fluctuations of international crude oil prices. Moreover, should there be any disruption in the supply of petroleum, it is expected to have a huge impact on the Indian economy. Thus, energy security is a prime concern for India. ➊ India's crude oil production for FY12 was recorded at 38.09 mmt autotechreview January 2014 Volume 3 Issue 1 23

TECHNOLOGY FORESIGHT FUEL ➋ Estimated crude oil and natural gas reserve in India The MoPNG has adopted an ambitious vision of reducing crude oil imports by 50 % by 2020, 75 % by 2025 and achieve energy independence by 2030. This target is a challenge as per International Energy Agency (IEA), about 94 % of the entire requirement of India will have to be imported by 2030. It may not be possible to achieve energy security only through discovery of domestic oil reserves or acquiring foreign assets. It is required to ensure that petroleum consumption is maintained within some manageable limits. It is in this context, the issue of fuel economy assumes great significance for future development of India. Fuel economy of future vehicles in India will be driven more by the energy security concerns, although environmental concern also remain a key driver. HISTORY OF FUEL ECONOMY For many years since the advent of internal combustion engine powered vehicles, major priorities for technology developments in this field had been power, speed, performance and comfort. Fuel consumption by the vehicle was not so much a concern. The idea of depletion of oil reserves did not crop up. The United States was a major producer as well as consumer of petroleum. In fact until 1947, the USA was a net oil exporter. But backed by significant domestic oil production capacity, the country had the power to play a balancing role in the global oil economy. Many oil producing countries lobbied for permission to sell more oil to US consumers. In 1959, the USA established a quota system for import of oil. There were a few occasions, when the external supply of oil was hit, but the USA could manage by just boosting domestic oil production temporarily. This happened during the western embargo against Iran in 1953, the Suez Crisis in 1956, and the Arab embargo in 1967. Globally, fuel economy became a major concern for the first time during the Arab oil embargo in 1973, when six oil producing countries decided to raise oil prices by 70 %. Protesting against the backing of US and some other countries for Israel in the Yom Kippur War, they stopped oil shipments to the USA and some other countries. The most effected country was the USA, where consumers preferred high performance, big gas-guzzling vehicles. Oil prices had reached four times of the pre-crisis price by the time the embargo was lifted in March 1974. The Arab oil embargo prompted the US Government to initiate measures towards energy efficiency across the economy, particularly in the transportation sector. The Department of Energy was created in 1977, and the National Energy Act was enacted in 1978. Corporate Average Fuel Economy (CAFE) standards were enacted as part of the Energy Policy and Conservation Act of 1975 to improve the average fuel economy of cars and light trucks. Other countries in the world too, brought in changes in their energy policies, largely concerned by anticipated depletion of global oil and gas reserves. Enhancement of energy efficiency and search for alternative sources of energy received priority. Subsequently, oil prices went down again in 1986. Although oil prices have been fluctuating since then, we haven t seen a crisis like during the time of embargo again. On the other hand, the issue of climate change has gained more and more focus. The Inter Governmental Panel on Climate Change (IPCC) was formed in 1988, and since then the various assessment reports of IPCC has depicted scenarios with impacts of Green House Gas (GHG) emissions on the climate and possible consequences. This concern over climate change has become a major factor for the fuel economy initiatives globally. GLOBAL TRENDS IN FUEL ECONOMY The average fuel economy of the US vehicle fleet improved rapidly since 1978 till the early 1990s. But after the concerns of oil embargo were over and petroleum prices came down, the US fuel economy standard stagnated for nearly two decades. However, in 2004 California adopted the first regulatory GHG standards for light-duty vehicles that apply to new vehicles produced during 2009-2016. Fuel economy started improving from 2003-04. The same pattern is observed for other Organisation for Economic Co-operation and Development (OECD) countries as well. Even for Chinese new car fleet, the pattern is somewhat similar [2]. Application of advanced engine and transmissions technologies, such as boosted gasoline direct injection, variable valve timing, and high gear-count transmissions, have gained momentum in recent years. In 2011, China adopted Phase 3 of fuel economy standards, along with incentive policies for small engine and efficient vehicle models. In Europe, the fleet average CO 2 emissions were reduced by more than 20 % during the last 15 years. Such improvements were possible primarily because of the use of diesel engines as well as progressive introduction of advanced powertrain technologies for emissions, and fuel consumption reduction technologies. 24 www.autotechreview.com

➌ GFEI has set a target of reducing fuel consumption by 50 % for all new cars by 2030 A study by the Global Fuel Economy Initiative (GFEI) [3] found that the global average new vehicle fuel economy in 2005 was about 8 l/ 100 km. The study also observed that in developed countries, the available technologies for optimised fuel economy has not been fully exploited, mainly due to consumer focus on other attributes. There existed large differences in average fuel economy values between countries at the starting points in 2005. This is believed to be mainly due to variations in the average size, weight and power of cars, and in technology on cars COUNTRY/ ORGANISATION THE USA [2,4] FUEL ECONOMY TARGET ➍ Different markets have set their own fuel economy targets autotechreview January 2014 Volume 3 Issue 1 of a similar size and weight. Policies, incomes, geography and culture of the respective countries are the reasons behind such variations. Whereas bigger cars are preferred in North America, in Europe many people buy small cars to improve their chances of parking on urban streets. PROJECTIONS OF FUTURE FUEL ECONOMY As per the standards released by NHTSA and EPA in August 2012, the fuel economy of cars and light duty trucks should be 54.5 mpg by 2025. This means the average fuel economy of these vehicles will be double that of the value for similar new vehicles of today. It is estimated that this will result into oil saving of 12 bn barrels. By 2035, the average motor vehicle is projected to get over 22 mpg, up sharply from about 17 mpg today. CHINA [2] The first phase of plan aims to achieve a fleet average target of 6.9 l/ 100 km by 2015, while the second phase aims at 5 l/ 100 km by 2020. GFEI [3] The GFEI target is to halve new car fuel consumption between 2005 and 2030. This target has been set considering the 2 C Scenario (2DS) described in ETP 2012 (IEA, 2012b), whereby energy-related CO 2 emissions are halved by 2050, helping to limit the global average temperature rise to 2 C. EUROPE [5] As per the legislation adopted in 2007, fuel economy of new car fleet should be 130 gco 2 / km by 2015 and 95 gco 2 / km by 2020. The 2015 target is equivalent to 5.6 l/ 100 km for gasoline vehicles and 4.9 l/ 100 km for diesel. Similarly, the 2020 target translates to 4.1 l/ 100 km for gasoline and 3.6 l/ 100 km for diesel. For vans, the targets for 2017 and 2020 are 175 gco 2 / km (7.5 l/ 100 km for gasoline and 6.6 l/ 100 km for diesel) and 147 gco 2 / km (6.3 l/100 km for gasoline and 5.5 l/ 100 km for diesel) respectively. Unless there are breakthrough technologies offering dramatic improvements in fuel economy at affordable cost, the fuel economy of future vehicles will largely be determined by the fuel economy standards in force. These standards are generally set after considering various aspects like need for GHG reductions, availability of technologies, costs associated, and net benefits, etc. It may even be possible that such breakthrough technological improvements are used to meet power, performance or comfort demand of the consumers, rather than providing additional fuel economy benefits. Hence, it is relevant in this context to have a look at the global initiation on fuel economy standards of future vehicles. Most of the initiatives of fuel economy standards are inspired by the need for reduction of GHG emissions. GFEI has set a target of reducing fuel consumption by 50 % for all new cars by 2030, with 2005 as the reference year, when global average fuel economy was about 8 l/ 100 km, ➌. Accordingly, the target for 2030 is 4 l/ 100 km for passenger vehicles. This would require a fuel economy improvement of 2.17 % per year. However, during the period 2005-2013, the average improvement has been 1.3 % per year. The future fuel economy targets in various countries are presented in, ➍. TECHNOLOGY PERSPECTIVES Thermodynamically, compression ignition engines offer higher efficiency as compared to spark ignition Otto Cycle engines. However, modern gasoline engines too are competitive with diesel and natural gas (CNG) engines, with technologies like electronic valve control, downsizing, direct fuel injection and turbo-charging ensuring efficient performance. Hybrid and electric vehicles improve fuel economy drastically. For instance, the 10 most fuel-efficient vehicles in the US are all either battery electric vehicles or plug-in hybrids, ➎. Even the next 10 best vehicles are hybrids. However, most roadmaps and studies highlight that targeted fuel economies can also be achieved through improvements of IC engine technologies. It is believed that reaching a fuel economy level of 95 gco 2 / km should be possible with existing IC engine technologies. 25

TECHNOLOGY FORESIGHT FUEL ➎ The 10 most fuel-efficient vehicles in the US are all either battery electric vehicles or plug-in hybrids ➏ Transmission technologies in the 2017 and 2025 horizon But going beyond 70-80 gco 2 / km will require lightweighting and/ or hybrid electric technology. A study by the US National Research Council in 2009 projected that by 2020, conventional gasoline engine vehicles could be 15 % more efficient, diesels 28 % more efficient and full-hybrid vehicles 44 % more efficient. By 2035, the same study predicts significantly greater improvements with turbocharged gasoline and diesel engine vehicles, both reaching nearly 50 % improvements over today s vehicles. Hybrids by then would reach 65 % lower fuel use per km. The projections of fuel economy improvement are based on available technology and with respect to their status in 2006. The IEA study of 2009 also finds that improvement of about 25 % compared with average performance in 2005, could be achieved with technologies already commercially available. The GFEI targets 50 % reduction in new LDV energy consumption (in l/ 100 km) by ➐ Technologies considered by EPA for hybrid vehicles 2030 and feels that these are feasible with existing technologies. In the USA, The Environmental Protection Agency (EPA) and NHTSA considered in detailed several battery electric vehicle technology as a possible pathway to meet the 2025 standards, but both agencies concluded that these technologies are not necessary to meet the standards. The EPA projected that the 2025 standards can be met primarily by major across the board improvements for gasoline vehicles. These could include over 90 % downsized turbocharged direct injection engines, about 90 % right-speed transmission, mass reduction by an average of eight per cent for cars and light trucks, better tyres, aerodynamics and more efficient accessories, etc. A moderate increase in hybrids (mainly mild hybrids and a smaller share of strong hybrids), and only a tiny marketshare for plug-in hybrid and battery electric vehicles (up to one per cent and two per cent of new vehicle sales for both types of vehicles in 2021 and 2025, respectively) can help improve gasoline vehicles. However, most of the fuel efficient technologies can be used either to improve the fuel economy of the vehicle, or to make larger, heavier or more powerful vehicles keeping the fuel economy constant. These technologies are also associated with various levels of incremental costs. According to the EPA estimates, an average year 2025 car will cost about $ 1,700 more than a year 2016 car, and about $ 2,600 more than (or less than 10 26 www.autotechreview.com

% price increase from) a 2012 model car, after complying with the new standards. But it is estimated that due to the fuel savings from much improved fuel economy of the car, the incremental cost will be off-set in about three years. The technologies considered in the final rule by EPA and associated costs for 2017 and 2025 cars are presented in ➏, ➐ and ➑. INDIAN SCENARIO ➑ Weight reduction as envisaged by EPA The growing vehicle population in India has met with concerns on both energy security and environmental aspects. As per an internal estimate by Maruti Suzuki India, transport related emissions in India may increase by 134 % in 2020 with respect to 2007 values [6]. It must be noted that the Society of Indian Automobile Manufacturers (SIAM) had launched its first voluntary fuel efficiency labelling in September 2008, and in 2010, a comparative labelling was also introduced to enable the consumer make a more informed choice in buying the more fuel efficient vehicle from a class of vehicles. Mandatory fuel economy standards, prepared by the Bureau of Energy Efficiency (BEE), are likely to be announced this year. This would push the deadline for implementation of these fuel economy standards by three years, to 2017. As per the proposal, the government wants to make it mandatory for carmakers to improve fuel efficiency by at least 20 % per km by 2022, from the current average of 16.6 km/l. The efficiency norms will be put in place in two phases in the first phase to 18.1 km/l by reducing CO 2 emissions to 129 gco 2 / km and in the second to 20.79 km/l by reducing CO 2 emissions to 113 gco 2 / km. The first phase was to be launched from 2015 and the second from 2020, but owing to the delay in notifying the standards, these deadlines have now been moved to 2017 and 2022 respectively. A fixed formula would decide the fuel efficiency target for each company based on the average weight of its entire fleet. There have been some concerns from the vehicle manufacturers regarding enforcement of high fuel economy standards. It has been felt that due to nonavailability of high quality fuel, OEMs cannot develop high compression ratio engine. It was also felt that Indian road conditions are a challenge for getting fuel economy. High cost is another challenge. Globally, the fuel economy standards are mainly driven by environmental concerns, although energy security aspects are also present. As per recent news, crude oil production in the US exceeded imports in October 2013, for the first time since February 1995. Horizontal drilling and hydraulic fracturing or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states. Crude oil production from shale oil has been steadily growing over the last few years and it is expected to grow. For the year, production will reach 7.49 mn barrels a day, which is 20,000 barrels lower than imports, as forecasted by the US Energy Information Administration (EIA). Output will reach 8.49 mn in 2014 as imports drop to 6.54 mn. However, in case of India there is a huge gap between domestic production of crude oil and imports. It is clear that the concern for energy security will be much more in case of India than in many other advanced countries. So, even though fuel economy standards of India may be comparable with others, Technology Information, Forecasting and Assessment Council (TIFAC) is an autonomous organisation set up in 1988 under the Department of Science & Technology to look ahead in technologies, assess the technology trajectories, and support technology innovation by network actions in select technology areas of national importance. Send in your feedback to technologyforesight@autotechreview.com there should be specific thrust on the promotion of alternative fuel vehicles. Electric and hybrid electric vehicles are much more relevant for India than any other countries. Diversifying of energy mix for the transportation sector is essential for India. REFERENCES [1] Ministry of Petroleum and Natural Gas; Indian Petroleum and Natural Gas Statistics 2011-12 [2] Hui He, Anup Bandivadekar; Passenger Car Fuel Efficiency 2020-25: Comparing Stringency and Technology Feasibility of the Chinese and US Standards; Working Paper 2013-3, ICCT; August 2013 [3] International Energy Agency; Technology Roadmap: Fuel Economy of Road Vehicles; 2012 [4] Environmental Protection Agency and Department of Transportation, USA; Federal Register Vol 77, No. 199; October 15, 2012 [5] Climate Action, European Commission; Road Transport: Reducing CO2 Emission from Vehicles; http://ec.europa.eu/clima/policies/transport/vehicles/index_en.htm [6] IV Rao; Car Fuel Economy Automobile Industry Perspective; Presentation in the Workshop Series on Transport and Climate; New Delhi, 24 July 2013 Read this article on www.autotechreview.com autotechreview January 2014 Volume 3 Issue 1 27