Low Carbon Fuel Is the Key to Cutting GHGs

Real Clear Energy

If you are driving a gasoline or diesel fueled light-duty vehicle (LDV) today, it turns out you have a lot of company. Recent research suggests that’s not going to change anytime soon. A study by “S&P Global Mobility1” reports that in July 2021 there were 282 million light-duty internal combustion engine vehicles (ICEVs) traveling the roads in the U.S. The study also forecasts that by 2030, ICEVs will actually grow to 290 million. So, with all its attendant fanfare, what’s up with light-duty electric vehicle (EV) sales? The news here is electrifying, so to speak, but maybe not in the ways you’d expect.

By 2030, according to the same research, annual EV sales will hit 2.8 million units. However, forecasts suggest consumers would still be purchasing nearly 14 million new ICEVs. Keep in mind an average ICEV is expected to be in use for at least fifteen years and based on recent data from the Oak Ridge National Laboratory, 20% of today’s ICEVs will still be on the road in 20 years or more.

In the U.S., transportation accounts for close to 30% of U.S. greenhouse gas (GHG) emissions. So, if we’re going to achieve our carbon reduction targets, addressing and solving the problems associated with transportation sector-based carbon emissions is imperative. President Biden recently issued an executive order setting a goal that by 2030, 50% of all LDVs sold in the U.S. will be zero tailpipe emission vehicles (ZEVs). The administration further upped aspirations in the form of recently proposed EPA tailpipe standards and just followed with a new Transportation Department rule which would raise corporate average fuel economy standards effectively requiring all new cars to be EVs by 2032.

But U.S. automakers are urging caution, suggesting such ambitious timeframes may not be achievable. Critical battery mineral supply concerns, substantial increases in the cost of vehicles, reduced consumer choice, and disadvantages to major portions of the U.S. population are all factors automakers must consider. Thus, as pathways toward electrification take time to mature and uncertainty persists as to the rate of consumer adoption, these concerns only underscore the urgency to look at other ways to reduce transportation-sector emissions. The key should be to look beyond the vehicle and consider more comprehensive policies that treat transportation as a system.

Forecasts for long term ICEV point to the importance of exploring alternatives that aim to improve the performance of ICEV fleets and which lower the lifecycle carbon intensity of the fuels those fleets will continue to rely upon. Lifecycle carbon analysis is a critical measurement concept that offers a much needed level of transparency, since zero tailpipe emission measurements fail to account for the fact that ZEVs are also responsible for carbon emissions such as those generated from battery and electricity production. Instead of measurements aimed only at the tailpipe, a better, more holistic approach would establish a national low-carbon fuels standard in conjunction with lifecycle-based standards to encourage the production of new low-carbon fuels. Together these would work in tandem to attain GHG reduction targets faster, at a lower cost, and in a technology-neutral way.

Understanding the need to address the complexities associated with achieving GHG reductions, the Transportation Energy Institute recently published a study conducted by Stillwater Associates, entitled: “Decarbonizing Combustion Vehicles – A Portfolio Approach to GHG Reductions.”

The study evaluates the viability and emissions reduction potential of a portfolio of technology and fueling options. It notes that given the objective to reduce carbon emissions from the transportation sector, waiting for the market to transition to ZEVs, without seeking concurrent solutions directed at the nearly 300 million ICEV powertrains that will continue to operate in the U.S. in the years ahead, ignores the substantial ICEV GHG reductions which can be achieved. Therefore, embracing the aforementioned strategies to achieve low carbon emissions is the quickest way to reach our transportation energy GHG reduction targets.

Michael J. Roman is a Senior Fellow at the American Council for Capital Formation.