The Top 5 Issues in LCFVs This Week: The Future Looks “Dim” for Diesel in Europe

Happy Thursday friends! Here’s my weekly take on the five most interesting developments in low carbon fuels and vehicles (LCFVs) trends over the last week:

1. Reuters reported this week that Renault is taking a dim view about the future of diesel in Europe with a senior executive musing whether diesel would survive the scandals and controversies that have flared since the VW diesel emissions cheating scandal came to light last year. It’s not just Dieselgate driving the doubts. More importantly, it’s the Euro 6 emission standards and real-world emission testing requirements that are coming in 2019, which is pushing technology costs up at the same time electric vehicle costs are coming down.
2. Uber is the firm to beat in the race to transform the future of personal transport. We’re on the road the “Uberworld”, according to the Economist.
3. Toxic air pollutants derived from vehicles have been found in “abundant” quantities in human brains and linking to the onset of Alzheimer’s disease. Much more research needs to be done, but if the link can be proven, there could be profound consequences for the auto and fuels industries and a hastening toward Uberworld and electrification.
4. Batteries aren’t going to cut it for long-term energy storage, despite Elon Musk’s bold move in this arena. Bloomberg this week highlighted other technologies that just might.
5. The G20 countries met this past week in China, and the NGO Climate Transparency released a report showing the gap between Paris Agreement commitments and what the G20 plan to do meet them are far apart, even with ambitious renewable energy, building efficiency and fuel economy policies that will be implemented. Much more needs to be done, according to the NGO, including abandoning coal, ending fossil fuel subsidies and ramping up climate investment.

1. Reuters: Renault Sees Diesel Disappearing from Most of Its European Cars

In a July internal meeting, Renault executives acknowledged that the diesel investment outlook had “dimmed significantly” with Chief Competitiveness Officer Thierry Bollore

“wondering whether diesel would survive, and that he wouldn’t have voiced such doubts even at the start of this year.”

The acknowledgement follows a similar comment made by VW CEO Matthias Müller in June. Sources told Reuters that it’s the Euro 6 emissions standards and real-world emission testing requirements that the European Commission will implement in 2019 that will increase technology costs to the point where diesel is simply forced out the market. While diesel technology costs are increasing, electric and hybrid vehicle technology is decreasing pushing automakers toward the latter. AlixPartners has projected a sharp decrease in diesel from 52% today to just 9% of the market by 2030, with the decline accelerating in 2020. Yet another sign that diesel may be over in passenger vehicles in Europe, and possibly, elsewhere.

2. The Economist: Uberworld

The Economist has declared Uber “the firm to beat in the race to transform the future of personal transport” and noting that “we are all on the road to Uberworld” whether we like it or not. In Uberworld, autonomous driving will reinvent transport. It will make ride-hailing and ride-sharing cheap and accessible to the public blurring the lines between public and private transport. The article notes that while Uber will not win the race to autonomous, shared driving in its current form as a ride-hailing business depending on human drivers, the firm has a major leg up with its: strong brand and customer base, experience as a service provider, singular focus on transport and knowledge about demand patterns and customer behavior ― unlike its car and tech company competitors.

However, there are risks for Uber (and all players in the space). The business could be less lucrative than expected, it could end up being highly regulated as (and if) it becomes a more integral part of the urban transport landscape, more highly taxed, broken up or all of the above. In a self-driving world, Uber might also have to own and operate its own fleet, undermining its “asset-light” model. The would-be high-margin digital disrupter would then look more like a low-margin airline. These are real risks, but worth it to pursue what amounts to a $10 trillion annual market.

3. The Guardian: Toxic Air Pollution Particles Found in Human Brains

Toxic nanoparticles from air pollution have been discovered in human brains in “abundant” quantities, newly published research in the Proceedings of the National Academy of Sciences reveals. Reported by The Guardian this week, the detection of the particles in brain tissue from 37 people in the UK and Mexico between 3 and 92 years old raises concerns because recent research has suggested links between these particles and Alzheimer’s disease, while air pollution has been shown to significantly increase the risk of the disease.

However, researchers stressed the new research is still a long way from proving that the air pollution particles cause or exacerbate Alzheimer’s. The next step would be to do extensive epidemiology and toxicity testing. The article notes that abnormal accumulation of brain metals is a key feature of Alzheimer’s disease and a recent study showed that magnetite was directly associated with the damage seen in Alzheimer’s brains.

Magnetite particles are known to form biologically in human brains, but these are small and crystal-shaped, unlike the larger, spherical particles that dominated the samples in the new study.  One researcher told The Guardian, “Many of the magnetite particles we have found in the brain are very distinctive. They are very rounded nanospheres, because they were formed as molten droplets of material from combustion sources, such as car exhausts, industrial processes and power stations, anywhere you are burning fuel.”

Other metal-bearing particles were observed in the brain as well, including platinum, cobalt and nickel indicating a vehicle catalytic converter source. Alzheimer’s has a fear factor arguably higher than cancer. For example, a UK poll showed that two-thirds of people over 50 are afraid of developing the disease compared to just 10% fearing cancer. If the link between vehicles, magnetite and Alzheimer’s is proven, it will fundamentally alter the public’s perception and trajectory of the internal combustion engine ― and fuels ― and further propel the electric vehicle market.

4. Bloomberg: These Technologies May Actually Deliver Elon Musk’s Dream of Changing the World

The subhead to this story reads, “Sorry, Elon, batteries alone ain’t gonna do it.” And that’s right. Though lithium-ion batteries are expected to dominate the $44 million market for energy storage by 2024, according to Bloomberg New Energy Finance, they aren’t going to be the solution to all needs (or a permanent, long-term solution) mainly because of the lack of storage and the environmental impact of mining lithium (for more on this, see last week’s post). A number of technologies that may possibly do it were reviewed in this article, including the following:

• Hydropower: Renewable energy’s oldest technology, accounting for 90% of energy storage, according to the U.S. Department of Energy. The article notes that tidal lagoons may also offer energy storage in a similar way by holding water for short periods.
• Rail power: Advanced Rail Energy Storage (ARES) won approval from the Nevada Bureau of Land Management for a $55 million project using rail locomotives. ARES will build a 6-mile uphill rail corridor involving heavily-loaded trains. When power’s cheap, trains will be pushed up a hill; when the power is needed, they’ll be released down, supplying energy back to the grid through an overhead wire. The system costs 60% of a hydropower station and can run for 40 years.
• Air storage: Compressed air storage sequesters a gas underground so it can be released later to drive a generation turbine whenever needed.
• Power-to-gas: Companies such as Audi are developing power-to-gas technology that turns excess energy into hydrogen using electrolysis. The hydrogen can be directly injected into a gas network or upgraded into methane and used as a substitute for natural gas.
• Flywheels: Flywheels are a spinning drum that stores the kinetic energy in a way that can be made into electricity. Power is used to start the wheel turning. Then when electricity is in short supply, the flywheel turns a motor that generates electricity. They can deliver either short bursts or for longer periods.

Storage devices are critical to expanding renewable energy (wind and solar) and consequently the electric vehicle market. If any of these technologies break through on a large, commercial scale, that will just facilitate the renewable energy/electric vehicle transition that much sooner.

5. Climate Transparency: Brown to Green: Assessing the G20 Transition to a Low-Carbon Economy

The G20 met this past week in China, and Paris Agreement and overall climate policy featured on the agenda. Countries could not agree to a key measure to set an actual date to phase out subsidies for fossil fuels, something the Climate Transparency report critiqued. Read more about it here.