SUSTAINABLE MOBILITY IN THE EUROPEAN UNION. ALTERNATIVE FUELS FOR PASSENGER TRANSPORT.

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1 SUSTAINABLE MOBILITY IN THE EUROPEAN UNION. ALTERNATIVE FUELS FOR. Eloy Álvarez Pelegry Director Energy Chair of Orkestra Washington D.C., 20 th July

2 INDEX 1. WHY TRANSPORT? 2. SUSTAINABLE MOBILITY IN THE EUROPEAN UNION 3. ELECTRIC VEHICLES IN SOME EUROPEAN COUNTRIES 4. NATURAL GAS VEHICLES DEVELOPMENT IN EUROPE 5. ALTERNATIVE FUELS FOR : ENVIRONMENTAL BENEFITS AND COSTS. 6. THE CASE OF A EUROPEAN REGION 7. CONCLUSIONS By alternative fuel we refer hererinafter to energy sources used to power alternative fuel vehicles considering the following: LPG, NG, Biomethane, Hybrids, Pure electric, Hydrogen, E85, Biodiesel, Bi-fuel, as stated by the European Commission (European Environmental Agency) [ 2

3 1. WHY TRANSPORT? Transport transformation is a must Efficiency management Demand management Impact management Transport automation Some alternative fuels 3

4 2. SUSTAINABLE MOBILITY IN THE EUROPEAN UNION GRAPH 1. Evolution of transport in the UE-28 (Relative values with respect to 1995) Paralell growth of transport and economy in the EU Transport accounts for 96% of petroleumderived fuel consumption in the EU. Source: prepared by the author based on (European Commission, 2016). 4

5 2. SUSTAINABLE MOBILITY IN THE EUROPEAN UNION GRAPH 2. Modal mix of passengers in 2011 and 2012 (Pas-km, %) in Spain and the EU Relevance of road transport in Europe Plane Train Bus Car Key role of cars in Europe Buses have a higher share in Spain than in Europe Source: prepared by the author based on (Fundación Repsol, 2014). 5

6 2. SUSTAINABLE MOBILITY IN THE EUROPEAN UNION GRAPH 3. Evolution of alternative fuel vehicles registration in the EU (thousands of vehicles). Important legislation and documents about transport and energy (binding and indicative), about air quality (2008), promotion of renewables (2009), and implementation of alternative fuels infrastructure (2014). As a result, GHG, CO, NO x, HC and particle emissions have reduced. Source: (EEA, 2015). 6

7 2. SUSTAINABLE MOBILITY IN THE EUROPEAN UNION FIGURE 1. European transport corridors 1.Baltic-Adriatic Corridor 2. North Sea-Baltic Corridor 3. Mediterranean 4. Orient/East-Med Corridor 5. Scandinavian- Mediterranean Corridor 6. Rhine-Alpine Corridor 7. Atlantic Corridor 8. North Sea- Mediterranean Corridor 9. Rhine-Danube Corridor The European Union promotes the development of new strategic infrastructures Infrastructure cost may set barriers to development Source: (MINETUR, 2015c). 7

8 3. ELECTRIC VEHICLES IN SOME EUROPEAN COUNTRIES France FIGURE 2. Indicative location of electric charge stations open to the public, per influence area In France electric mobility is notably boosted in the National Action Framework and the Energy Transition Law. In October 2016 Ségolène Royal advised that the car stock in France amounted to over units. The evolution of the electric vehicle charging infrastructure in France is unequal and concentrated over recent years. Notably low CO 2 emissions mix, exceeded only by Norway and Sweden. Source: (French Government, 2017) 8

9 3. ELECTRIC VEHICLES IN SOME EUROPEAN COUNTRIES Other Germany Netherlands Norway Sweden Large-scale deployment of infrastructures; however, among the cons, they have an unfavourable electric mix as far as emissions are concerned, which sets the electric vehicle in a bad position regarding STW emissions. Direct incentives. Long term goal on electricity rather than on natural gas for light duty vehicles. Tax incentives. Most successful country with a sustainable incentive system starting in the 90s and ongoing and stable political support. Tax incentives. Sweden has proved that the support reduction to gasfueled vehicles based on emissions has caused that sales of EV fell. Direct incentives. Note: the maps show the number of electric charging points. Source: prepared by the author. 9

10 EV Sales SUSTAINABLE MOBILITY IN THE EUROPEAN UNION. ALTERNATIVE FUELS FOR 3. ELECTRIC VEHICLES IN SOME EUROPEAN COUNTRIES Other GRAPH 4. Comparison of the purchase rate per GDP per capita in Neth'15 Nor '16 Ger '15 Fra '16 Ger '16 Nor '15 Fra '15 Neth '16 Swe '16 Spa '16 Spa '15 Swe ' GDP per cápita ( ) It is important to characterize each country to understand their circumstances Source: prepared by the author based on (IEA, 2016) and (World Bank, 2017). 10

11 3. ELECTRIC VEHICLES IN SOME EUROPEAN COUNTRIES Other TABLE 1. Main incentives by countries Each country takes a different path and there are no identical strategies. Nota: The aids for the purchase show the max, financing cases, i.e. for alternative fuel vehicle (AFV). In France there can be a maximum for an AFV and a maximum for that purchase and the delivery of a diesel car. Source: prepared by the author based on (EAFO, 2017), (ACEA, 2016) and (ACEA, 2017). 11

12 4. NATURAL GAS VEHICLES DEVELOPMENT IN EUROPE GRAPH 5. Evolution of natural gas transport consumption in the EU larger consuming countries. Source: prepared by the author based on (Eurostat, 2015). The number of vehicles worldwide has grown at an average annual rate of 20% over the last 10 years. The gas prices differential across Europe has not only widened in 2016 with respect to diesel prices but they are currently lower than lowsulphur fuel oil. Italy stands out in the analysis of natural gas use in transport in Europe. The final price is the result of the international price plus the supply and distribution cost, to which taxes are added. 12

13 4. NATURAL GAS VEHICLES DEVELOPMENT IN EUROPE Italy FIGURE 3. Distribution of CNG filling stations in Italy. GRAPH 6. Evolution of natural gas consumption and number of gas fueled vehicles in Italy Source: prepared by the author based on (Eurostat, 2015) and (ANFIA, 2015). Source: (Storchi, 2016). The Blue Corridors can facilitate the development of the gas infrastructures, not only for freight transport. Important number of actors in the market Leadership in regulation Natural gas industry and industry for convertion of vehicles 13 to gas.

14 4. NATURAL GAS VEHICLES DEVELOPMENT IN EUROPE Other Netherlands Germany Sweden Clear example of a longterm goal on electricity rather than on natural gas in light duty transport and, in the case of the natural gas, clear orientation to biogas. Germany is the second leading country in the EU regarding natural gas refuelling infrastructures, but the number of vehicles per station lays below other European countries with lesser infrastructure. Clear goal on transport emissions reduction. They encourage the use of biogas, which has increased to a large extent its weight on the natural gas vehicle (NGV). 14

15 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Economic aspects TABLE 2. Summary of the main assumptions relating to economic aspects. Fuel prices, vehicles and charging/ refuelling points assumptions are considered.. Basic sensitivity analyses on fuel and electric vehicle prices, inter alia, are performed. Source: prepared by the author Wide range of charging/refuelling points price. 15

16 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Economic aspects GRAPH 7. Comparison of the analysed TCO ( /km) TCO: Calculations show equalization with conventional vehicles 2025 Hipotheses on TCO are key issues. Source: prepared by the author 16

17 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Environmental aspects FIGURE 4. Comparison TTW, STW and WTW The analysis considers TTW and WTW. Furthermore, STW emissions have been calculated/estimated For GHG, NO x and particles Source: prepared by the author 17

18 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Environmental aspects TABLE 3. Summary of the main assumptions relating to emissions Global GHG emissions. WTW. Zonal emissions. TTW. Source: prepared by the author 18

19 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Environmental aspects GRAPH 8. CO2eq TTW, STW and WTW emissions per type of vehicle Different TTW-to- WTW ramps. Source: prepared by the author Note: For the sake of clarity, diesel, gasoline and AFV emissions are stated hereunder. Diesel (gco 2eq /km): TTW 114, STW 129, WTW 132. Gasoline (gco 2eq /km): TTW 144, STW 159, WTW 165. BEV (gco 2eq /km): STW 24, WTW

20 5. ALTERNATIVE FUELS FOR : BENEFITS AND COSTS Environmental aspects GRAPH 9. Polluting emissions per type of vehicle (TTW and STW) Polluting emissions Substantial reductions of NO x in the electric system for the years to come. Source: prepared by the author based on (Edwards et al., 2014b), (MAGRAMA, 2014), (Werpy et al., 2010) y (REE, 2016). Note: The particle emissions derived from electricity consumption are PM10. 20

21 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY TABLE 4. Selection of cases The study considers 72% of the total journeys in the Basque Country. Kilometres travelled by car calculated based on journeys and distance of routes. Source: prepared by the author based on (Gobierno Vasco, 2011) and (Google Maps, 2016) Mpaskm/year 21

22 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY SINGLE-ENERGY CAR STOCKS Hipothesis of 100% replacement of conventional cars by one single type/technology of alternative fuel vehicles. Results: The overcost of the electric vehicles is around M. CO 2 emissions reduction lays between 1,5 and 1,8 MtCO 2eq /year (WTW and TTW), in perpetuity. NO x and particles reduction of 741 t/year and 76 t/year (TTW), respectively. 22

23 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY SINGLE-ENERGY CAR STOCKS TABLE 5. Order of alternatives as per criteria and scenarios Source: prepared by the author Relative diversity of results. No unanimous outcome. In general, electric and hybrid vehicles present good positions for most of the criteria and scenarios. The basic sensitivity analyses show no significant changes. Robust results. 23

24 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY PROGRESSIVE PENETRATION Incorporation mix of different technologies. Different technologies penetration scenarios have been created based on analyses detailed in the report. Gradual reduction, more or less pronounced, of conventional vehicles and increase of alternative electric vehicles. Results: The cumulated overcost by 2035 would lay between 700 M to aprox M. The investment in infrastructures, from 80 to 150 M. Fuel savings, from 770 to M. Cumulated CO 2 emissions reductions by 2035, from 2 to 5 MtCO 2eq ; No x emissions, from 850 to ton. and particles emissions, from 78 to 180 ton. 24

25 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY PROGRESSIVE PENETRATION GRAPH 9. Progressive introduction of alternative fuel vehicles until 2035 in the Basque Country, in number of vehicles in all the scenarios for the different fuel technologies grouped into conventional and alternative. A number of scenarios have been created based on different assumptions Conventional vehicles are gradually replaced The result is a mixed car stock where alternative fuel vehicles coexist with conventional vehicles. Source: prepared by the author Scenario I includes more electric vehicles than conventional ones by the end of the period. 25

26 6. THE CASE OF ONE EUROPEAN REGION: THE BASQUE COUNTRY PROGRESSIVE PENETRATION TABLE 6. Order of scenarios as per criteria A higher penetration of battery electric cars and hybrids provides better results. Source: prepared by the author 26

27 6. CONCLUSIONS Sustainable mobility rests on three pillars: social, economic and environmental. The measures can be grouped into: efficiency management, demand management and impact management. Importance of automation. Different alternative fuels contribute to the development of sustainable mobility in different ways. The most significant cases in the EU for the promotion of alternative fuels are Italy for natural gas and France for the electric vehicle. There is a need to address on an ongoing basis the alternative fuel vehicles penetration issue. There is a dual pressure top-down and bottom-up. The Administrations play a clear role in the development of alternative fuels vehicles through incentives for the purchase of alternative fuel vehicles and the promotion and the deployment of charging and refuelling infrastructures. 27

28 6. CONCLUSIONS The penetrations will be progressive and gradual. Although the initial effort is relevant, it will dwindle over time. It would be wise to allocate budget lines to provide infrastructures and incentives. Beside the economic and environmental aspects, a number of different actors must be taken into consideration (clients, operators, Administrations, cars and components manufacturers and others). The great challenge is to tackle the transformation of the transport sector. It requires willingness to change and implemention of policies and resources. 28

29 THANK YOU! 29