Top 5: Higher Biofuels Blends=A Pathway to Decarbonization

Hello friends! Here’s my monthly take on the five most interesting developments in future fuels and vehicles trends. Items I selected include:

• REN21, IRENA and the IEA in a first joint report, outlined the options available to policymakers to support the development of renewables, including for the transport sector. One option? Higher biofuels blends. It’s the third such global policy recommendation I’ve seen in the last couple of months. A separate report from IRENA notes the pace of the energy transition needs to be “substantially accelerated” to meet decarbonization and sustainable development objectives.
• At the end of May, Washington state’s EV tax incentive will expire. How will the market handle it? A barometer to watch.
• IMO has adopted an ambitious plan to reduce GHGs from shipping.
• Citizens in some U.S. cities are up in arms about the loss of parking and traffic lanes to accommodate cyclists. What does that say about other future initiatives to restrict cars in cities?
• Hamburg is the latest German city to ban diesel vehicles in some areas of the city. But not everyone is happy about it.

1. REN21, IRENA, IEA: Renewable Energy Policies in a Time of Transition ― In this first joint report from REN21, the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA), the three organizations outlined the options available to policymakers to support the development of renewables. The organizations provide an updated policy classification and terminology providing a global reference for policy instruments and in the last chapter proposing a holistic approach for policymaking. One of those options for transport? Higher biofuels blends. A separate report from IRENA notes the pace of the energy transition needs to be “substantially accelerated” to meet decarbonization and sustainable development objectives. Read more about it here.

2. Automotive News: Washington State Tax Incentive for EVs to Expire ― The sales tax exemption for electric vehicles and other “clean-energy vehicles” in Washington state will expire at the May 31, earlier than expected, because essentially the target of 7,500 eligible vehicles from news sales was met as of April 4. A bill to extend the program failed in the legislature. It will be interesting to see what happens with sales, because my guess is that they will decline. At this stage of market development, EVs need this kind of support. When the state of Georgia’s tax credit expired, EV sales there nosedived. A similar situation occurred in Denmark.

3. IMO: UN Body Adopts Climate Change Strategy For Shipping ―The big news over the last week is the IMO adopted an “initial strategy” on the reduction of GHGs emissions from ships. The strategy calls for a 50% total annual GHG emissions reduction by 2050 compared to 2008 while pursuing efforts toward phasing out these emissions entirely. It was also agreed to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008. Future Fuel Outlook members can look for a much more in-depth analysis in the coming weeks.

4. Wall Street Journal: Creating Bike Lanes Isn’t Easy. Just Ask Baltimore. Or Boulder. Or Seattle. (Subscription Required) ― A key air pollution and GHG emissions reduction policy supported by bodies of the UN, NGOs, academics and other advocates is to increase not just public transport, but active transport, such as walking and cycling. According to the Journal, cycling commuters increased 40% in the U.S. between 2006-2016 as dozens of cities around the U.S. have rolled out bike-share and other programs.

Cities continue to increase cycling while reducing car-bike accidents by designing dedicated lanes/paths that require the removal of parking spaces and traffic lanes. Hence, the outcry from large swaths of the citizenry in the above-mentioned cities. Bottom line: These people aren’t having it. At all. Want to get a sense of just how people feel about issues like reduced driving, reduced parking spaces, eliminated traffic lanes and other kinds of measures that stop short of an all-out car ban but nevertheless seek to restrict cars? Want to get a “colorful” sense of how any car ban proposal might go down here? Scroll through the comments to this story and be entertained.

5. NPR: Hamburg To Ban Diesel Vehicles ― And so it goes for another German city, this time in Hamburg, where city officials have now imposed a ban on diesel vehicles in certain areas of and streets in the city. You can both read and listen to this story, which includes pro and con comments from the locals. This now makes 20 cities and 5 countries that have or will ban ICEVs, with most of the focus on diesel vehicles.

Honorable Mentions

• Electric Vehicles: An Airbnb-type set up to share home EV charging with other potential users? Yes, and blockchain might be the way to do it where owners and users can share and rate each other. A friend in the oil industry and I joked about this recently ― that we are moving into a time where everyone can rate everyone else for just about anything, even in transport. Meantime, according to a new University of Michigan analysis, plug-in electric vehicles (PEVs) lose resale value faster than comparable ICEVs. But, when accounting  for  the  federal  tax  rebate  incentives  for  PEVs  and  the  resulting  effective  reduction in purchase price, both tended to retain their relative resale value substantially better than without such an incentive, with PHEVs retaining resale value as well as their ICEV counterparts.

• Demographics: Those millennials in the U.S. that are poorer and less educated drive more than their richer, urban and more educated counterparts do.

• Air Pollution: The state of global air still isn’t that great, according to researchers, with 95% of the population living in areas that exceed World Health Organization guidelines (see also post Feb. 16, 2017). Another study has shown that even the briefest increase in airborne PM2.5 is associated with the development of acute lower respiratory infection in young children. And, did you catch the two recent studies showing an improvement in air quality with higher ethanol blends?

Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.