Deriving Least-Cost Policy Strategies for Meeting CO 2 -Reduction Targets in Passenger Car Transport in the EU-15 Amela Ajanovic Energy Economics Group Vienna University of technology CEEM, Sydney, 22 nd Juni 2012
ALTER-MOTIVE Coordinator: EEG, Vienna University of Technology Partners: Energy research Centere of the Netherlands, ECN, The Netherlands Eni Corporate University S.P.A., Italy IREES, Germany Wuppertal Institut für Klima, Umwelt, Energie GmbH, Germany AEOLIKI Ltd, Cyprus Black Sea Energy Center, Bulgaria Association Rhônalpénergie-Environnement, France Centre for Renewable Energy Sources, Greece Stowarzyszenie The Kraków Institute for Sustainable Energy, Poland Chalmers Tekniska Högskola Aktiebolag, Sweden Forschungsgesellschaft Mobilität-Austrian Mobility Research, Austria Sociedade Por Quotas CEEETA-ECO, Portugal Det Økologisk Råd (EcoCouncil), Denmark
Content 1. Introduction European policy targets 2. Recent developments in passenger road transport 3. CO 2 emissions in passenger car transport 4. Scenarios 5. Action plan 6. Conclusions
1990=1 Introduction GREENHOUSE GAS EMISSION TRENDS IN EU-27 BY SECTOR 1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 1990 1995 2000 2005 Total Energy sector Industry Transport Total Service Residential Other Passenger cars
Introduction GREENHOUSE GAS EMISSIONS EU-27 Industry 16% Service 4% Residential 11% Others 4% Civic Aviation 1% Transport 25% Road transport 23% Energy sector 40% TOTAL ENERGY 2007: 4000 Mio tons CO2_equ Railways 0% Ships 1% Other 0%
Introduction Mitigate global warming Improve air quality Car passenger transport Reduce energy consumption Effective policies and measures The challenges for EU climate and energy policies
Introduction The car industry s voluntary commitments Community strategy Consumer information The promotion of fuel efficient cars via fiscal measures The three pillars of the Community strategy
Introduction 140 gco 2 /km Evolution of CO2 emissions from new passenger cars by the European (ACEA), Japanese (JAMA) and Korean (KAMA) car manufacturer associations
Recent developments in passenger road transport Energy consumption (PJ) 7000 6000 5000 4000 3000 2000 1000 0 1980 1985 1990 1995 2000 2005 Gasoline Diesel Alternative fuels Energy consumption in car passenger transport in EU-15 by fuel, 1980 2007
Biofuels production (Ml/yr) Biofuels production 14000 12000 10000 8000 6000 4000 2000 0 1992 1995 1998 2001 2004 2007 Biodiesel Bioethanol Recent trends in biofuels production in EU-27 (Data source: EBTP, 2011)
Biofuels production UK SK SI SE RO PT PL NL MT LV LU LT IT IE HU FR FI ES EL EE DK DE CZ CY BG BE AT Biodiesel Bioethanol 0 500 1000 1500 2000 2500 3000 3500 4000 Biofuels production (Ml/yr) Comparison of biofuel production in 2009 in EU-27 countries (Data source: EBTP, 2011)
Weighted fuel price (EUR/litre) Development of fuel prices DEVELOPMENT OF FUEL PRICES (OF 2010) 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1980 1985 1990 1995 2000 2005 2010 BG CZ DK DE EL ES FR IT CY LU HU NL AT PL PT RO SL SK FI SE UK Weighted fuel prices (including all taxes) for EU countries 1980 2010 (in prices of 2010, numbers for 2010 preliminary) (Source: EEP; IEA, 2010)
Development of fuel prices UK SE ES RO SKSI PT PL NL MT LU LV LT HU IR IT GR DE FR DK EEFI BG CY CZ BE AT 0 0.5 1 1.5 2 Price excl. VAT & Excise tax Excise tax VAT Price structure of gasoline in EU-27 (data source: EEP, 2011 - effective March 2, 2011)
Development of fuel prices UK SE ES RO SKSI PT PL NL MT LU LV LT HU IR IT GR DE FR DK EEFI BG CY CZ BE AT 0 0.5 1 1.5 2 Price excl. VAT & Excise tax Excise tax VAT Diesel prices in 2011 for EU-27 (data source: EEP, 2011 - effective March 2, 2011)
Number of cars per 1000 inhabitants Development of car stock CAR OWNERSHIP PER 1000 CAPITA 700 600 500 400 300 200 100 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK Car ownership per 1000 capita in EU-27 countries 1970 2009 (Source: EUROSTAT; ALTER-MOTIVE database)
Share of diesel (%) Development of car stock 60 1998 2008 50 40 30 20 10 0 AT BE FR DE IT ES SE UK EU Share of the stock of diesel cars in total fossil fuel consumption, selected EU countries 1998 vs 2008 (data source: ODYSSEE database; ALTER-MOTIVE database)
gco2/km Performance of new registered cars 180 CO2 EMISSIONS OF NEW CARS IN THE EU 170 160 150 140 130 120 AT BEBG CY CZDK EE FIFR DE GRHU IR ITLV LT LUMT NL PLPT RO SKSI ES SEUK CO2 emissions of new cars in EU-countries in 2009 (data source: DB, 2009)
CO2 emissions (gco2/km) Performance of new registered cars 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 All fuels Gasoline Diesel AFV Development of average CO2 emissions from new passenger cars by fuel in EU-27 countries from 2000 to 2009 (data source: EC, 2010)
Rebound-effect 2 2 th 2 pr 1 1 S 2 =vkm 2 E REB E pr save S 1 =vkm 1 E th 2 E pr 2 E 1 E E th save The rebound effect
Energy consumption (PJ), vkm (10^9 vkm) Fuel intensity (litre/100 km) Rebound due km driven 7000 6000 5000 4000 3000 2000 1000 vkm (10^9 km) E (PJ) FI-Stock (l/100km) E FI vkm 10 9 8 7 6 5 4 3 2 1 0 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Development of vehicle km driven (vkm), energy consumption and the fuel intensity of the stock of vehicles in EU-15 from 1990 to 2010
Average car power (kw) Rebound due car size 110 100 90 80 70 60 50 40 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 AUSTRIA BELGIUM DENMARK FRANCE GERMANY IRELAND ITALY NETHERLANDS PORTUGAL SPAIN SWEDEN UK Average developments of car power (kw) in various EU-15 countries from 1990 to 2010
Fuel intensity Power Rebound due car size 14 12 kw 100 90 80 10 8 FIP 70 60 50 6 4 2 FIP FI kw FIP_New (l/km kw) FI_New (l/100km) Power_New (kw) 0 0 1990 1995 2000 2005 2010 FI 40 30 20 10 Development of fuel intensity, power-specific fuel intensity and power (kw) of new vehicles in EU-15 from 1990 to 2009
Fuel intensity, power-specific FI, power- (1990=1) Rebound due car size 1.6 1.4 1.2 1 0.8 0.6 0.4 1990=1 FI FIP 0.2 FIP_New Power_New FI_New 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Normalised development (1990=1) of fuel intensity, power-specific fuel intensity and power (kw) of new vehicles in EU-15 from 1990 to 2009
Energy consumption (PJ) Rebound-effect 1500 1000 500 Additional Rebound due to higher kw Rebound due to better FI 0 1990 1995 2000 2005 Actual 2010 savings -500-1000 Theoretical savings due to better FI -1500 Hypothetical savings due to better FIP (without increases in kw) -2000 de S dfi α S dfi α S dfip S dfip The impact of better FI and switch to larger cars on total passenger car energy consumption
CO 2 emissions in passenger car transport CO 2 emissions Energy x = x CO 2 emissions coefficient = On-road power-specific x Total vkm fuel efficiency driven = Test-cycle fuel x Driving coefficient intensity behaviour x Power (capacity) of car to be reduced e.g. by kw-specific registration tax lower coefficient for biofuels or electricity to be improved by automobile manufacture to be reduced by eco-driving to be influenced by fuel taxes or fuel intensity improvements Standards Education Fuel tax Registration tax Subsidies, quotas Policy instruments Impact factors on CO2 emissions in the car passenger transport sector
CO 2 emissions So we can reduce CO 2 emissions by influencing : vkm (by increasing the price by taxes) or FI (by introducing various measures for technical efficiency improvement) or f CO2 (by using fuels with less carbon, e.g. biofuels, or electricity).
CO 2 emissions The method of approach is finally based on calculation of total costs for society and resulting CO 2 reductions: For taxes these costs are the welfare losses for society; For the technologies we consider the additional investment costs of the technology and the energy cost reduction respectively the increased producer surplus if the technology is produced in the region; For alternative fuels we have to consider the additional production costs minus the increased producer surplus if the technology is produced in the region. For the last two categories it is furthermore important to consider the technological learning effect.
CO 2 emissions Policy measures implemented in transport sector could be put in three main categories: Switch from fossil fuels to alternative fuels, in the first line to biofuels; Improve efficiency of cars including switch to alternative and more efficient powertrains; Reduce energy consumption with taxes and standards.
Switch Energy chain WTW WTT TTW E prim E fuel S mobility E car f conv FI WTT and TTW - conversion in the energy service providing chain
Switch - Biofuels WTT-, TTW- AND WTW-NET EMISSIONS 2010 BE-2 BD-2 BM BD-1 BE-1 CNG Diesel Gasoline -80-60 -40-20 0 20 40 60 80 100 gco2_equ/mj WTT-Fuel Net TTW-Fuel WTW-Fuel WTT-, TTW- and WTW net CO2 emissions of fossil fuels vs biofuels in 2010 for the average of EU-countries on a WTW basis
gco2_equ/mj Switch - Biofuels 100 W T W - NET EMISSIONS 2010 VS. 2020 90 80 70 2010 2020 60 50 40 30 20 10 0 Gasoline Diesel CNG BE-1 BD-1 BM BD-2 BE-2 CO2 emissions of fossil fuels versus biofuels in 2010 and 2020 for the average of EU countries on a WTW basis
Switch - Biofuels PRODUCTION COSTS FOSSIL VS BIOFUELS 2010 CNG BM Gasoline BE-2 BE-1. Diesel BD-2 BD-1. -5 0 5 10 15 20 cent/kwh fuel Feedstock Capital Other inputs Energy costs Other O&M By-Product Credit Marketing & Distr. Market price Production costs of fossil fuels versus biofuels excl. taxes in 2010 for the average of EU countries (Source: Toro et al, 2010)
cent/kwh Switch - Biofuels 25 COSTS OF FOSSIL & BIOFUELS INCL. AND EXCL. TAXES 2010 VS 2020 20 15 10 5 0 Diesel BD-1 BD-2 Gasoline BE-1 BE-2 CNG BM Diesel BD-1 BD-2 Gasoline BE-1 BE-2 2010 2020 CNG BM Costs 2010 Excise tax 2010 VAT 2010 Costs 2020 CO2-tax 2020 VAT 2020 Cost of fossil fuels vs. biofuels incl. and excl. taxes in 2010 vs 2020 for the average of EU-countries
EUR/GJ Switch - Biofuels Switch COSTS & CO2 EMISSIONS OF BIOFUELS 2010 VS 2020 60 50 BD-2 BE-2 2010 --> 2020 40 30 20 BM BD-1 BE-1 CNG Gasoline Diesel 10 0 0 20 40 60 80 100 gco2equ/mj Fossil fuels vs. biofuels production costs (exclusive taxes) and WTW CO2 emissions, 2010 and 2020
Improve - Efficiency COMPARISON OF SPECIFIC WTW- CO2 EMISSIONS Diesel-ICE Gasol-ICE Diesel-Hybrid-ICE Gasol-Hybrid-ICE BEV (electr. RES-mix) BEV (electr. new NG) BEV (electr. UCTE Mix) FCV (H2 RES Mix) FCV (H2 NG) 0 50 100 150 200 gco2_equ/km Comparison of specific CO2 emissions of conventional and hybrid gasoline and diesel vehicles with pure BEV based on different electricity generation mixes and FCV with hydrogen
EUR/km Improve - Efficiency Improve CONVENTIONAL VS ALTERNATIVE VEHICLES 2.5 2 FCV (H2 RES Mix) FCV (H2 NG) 1.5 1 BEV (electr. RES Mix) BEV (electr. New NG) BEV (electr. UCTE-Mix) 0.5 Gasol.-Hybrid-ICE Gasol.-ICE 0 Diesel-Hybrid-ICE Diesel-ICE 0 50 100 150 200 gco2/km Comparison of specific CO2 emissions and driving costs
Reduce Standards & taxes Reduce UK SE ES 140 gco 2 /km RO SKSI PT PL NL MT LU LV LT HU IR IT GR DE FR DK EEFI BG CY CZ BE AT 0 0.5 1 1.5 2 Price excl. VAT & Excise tax Excise tax VAT Evolution of CO2 emissions from new passenger cars by manufacturer associations (EC, 2010) Price structure of gasoline in EU-27 (data source: EEP, 2011 - effective March 2, 2011)
Reduce Standards & taxes Ps Ps 0 =Ps 2 1 new efficiency Tax effect 0 old efficiency Efficiency effect Ps 1 E 2 ΔE tax E 1 ΔE η E 0 E How taxes and standards interact and how they can be implemented in a combined optimal way for society
Energy consumption (PJ) Energy consumption (PJ) Scenarios Business as Usual Scenario Ambitious Policy Scenario BAU: Energy consumption Policy scenario: Energy consumption 7000 7000 6000 6000 5000 5000 4000 4000 3000 3000 2000 2000 1000 1000 0 2000 2005 2010 2015 2020 2025 2030 Gasoline Diesel CNG/LPG Bioethanol Biodiesel Biogas Electricity Hydrogen 0 2000 2005 2010 2015 2020 2025 2030 Gasoline Diesel CNG/LPG Bioethanol Biodiesel Biogas Electricity Hydrogen
Scenarios HISTORICAL AND EXPECTED PRICE DEVELOPMENTS 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 Historic Assumptions: Price increase assumptions: Fossil fuels: +3%/yr Feedstocks: +2%/yr Wood products: +1%/yr 0 2000 2005 2010 2015 2020 Gasoline Diesel CNG Feedstock Wood products Crude oil Historical price developments and assumptions for price development in the scenarios up to 2020
EUR/unit Scenarios FUEL PRICES (INCL. CO2 TAXES) 3 2.5 Historical Assumptions 2 1.5 1 0.5 0 2000 2005 2010 2015 2020 Gasoline EUR/l Gasol Diesel EUR/l Diesel CNG EUR/kg CNG Bioethanol EUR/l Gasol Biodiesel EUR/l Diesel Biogas EUR/kg CNG Historical developments of prices incl. and excl. taxes and development in the fiscal policy scenarios up to 2020
The ALTER-MOTIVE model 0. Historical development 1. Assumptions about future development of income and fuel price 2. Energy consumption 3. Travel distance (vkm) 4. Fuel intensity 5. Number of cars (stock) 6. New registered cars (1000/yr) 7. Fuel price (w and w/o tax) 8. Costs of cars (w and w/o tax) - Registration tax - Ownership tax - Procurement of BEV 9. Service price (EUR/km) 10. Size of cars / share of small, medium and large cars
The ALTER-MOTIVE model τ REG vkm vkm t VST t Y PCEt t 1(1 VST VST t 1 Ps_Stock PCEt 1 )(1 PCEt 1new t Pst Ps Ps t 1 t 1 PF τ VST F t VSTt 1 )(1 ) VST t 1 V _new V_Stock vkm f CO2_SP IC_ new Learning size E vkm* FI E CO 2 FI FI SVSTS FI MVSTM FI LVST VST VST VST S M L L Ps_new FI new f ( p F ) FI_stock Standard FI_new
EUR/ton CO2 Which measures contribute to CO2 reduction. and at which costs? 2000 1800 1600 1400 1200 1000 800 600 400 200 0 LEAST-COST CURVE FOR CO2 REDUCTION 0 20 40 60 80 100 CO2 reduction (Mill tons CO2) TAX 1: Fuel tax AF-1: BD-1 AF-2: BE-1 AF 3: BM ETA-4: Conv. ICE impr. TAX 2: Registr. Tax ETA-1: Start-Stop auto ETA-3: Power split ETA-2: Power assistant Least-cost curve for CO 2 reduction in passenger car transport in the EU-15
Priorities of actions today, up to 2020 and beyond Actions that should be implemented immediately are: Introduce a green bonus scheme for CO 2 reduction in passenger transport It is to introduce a green bonus/malus system for every citizen that provides monetary incentives for car sharing, turning-in or not owning a car (incl. scrapping scheme), using low-emission highly efficient vehicles and including (plus and minus) links to an ownership tax and to the use of public transport. This system will work like an annual tax declaration and can be seen as a forerunner for a personal carbon allowances system. Convert fuel taxes to CO 2 based tax and adapt at a 5% higher level per year
Priorities of actions today, up to 2020 and beyond New vehicles: tighten requirements to the car manufacturing industry Standards for the aggregate of all segments of sold vehicles in every country should be enforced by 6% per year. The major effect could mainly come about from a switch to smaller cars. In this context it is important that car producers are further committed to market a higher share of smart cars with less kw and lower CO 2 emissions. Implement a size-dependent registration fee for cars A size-dependent registration fee for cars would provide a monetary incentive for customers to purchase smaller cars. Continue to procure case studies
Priorities of actions today, up to 2020 and beyond Actions that should be implemented up to 2020 are: Develop infrastructure for emission free vehicles Biofuels first generation: tighten standards ensure better ecological performance Actions that focus on the long run, after 2020 are: Emphasize efficient R&D for second generation biofuels and hydrogen
Conclusions Technological solutions alone are a very expensive strategy for reducing CO 2 emissions. Regarding BEV and fuel cell cars up to 2020 no CO 2 savings at reasonable costs for society will be achieved. Short-term: focus on standards and taxes Long-term: only a very broad portfolio of policy instruments and new technologies can reduce energy consumption and Introduce individual bonus/malus Size dependent registration tax E-mobility & Fuel cell cars straightforward CO 2 emissions significantly. Improve biofuels CO 2 standards CO 2 based fuel tax
ajanovic@eeg.tuwien.ac.at