The Top 5 Issues in Global Low Carbon Fuels & Vehicles This Week: The First Edition!

I’ve been a consultant on global fuels issues (e.g. fuel quality, biofuels, alternative fuels, low carbon fuels and vehicles) for more than 20 years now and am continuously watching the space evolve. It’s my job to keep on top of developments and trends, each tiny tea leaf at a time, then put them together to help clients make sound decisions for their businesses, people and the environment. That used to be quite a task when the Internet was nascent. Finding and verifying information and data was a giant task.

For example, I remember trying to call the ministry of energies in Latin American countries in the 1990s to obtain or verify fuel specifications for gasoline and diesel in very embarrassing and broken Spanish! I was analyzing trends in the region and the project took months to complete. Information just wasn’t easy to find and verify for accuracy. Even tracking down legislation and regulations in the U.S. (both federal and state) was no easy task. I spent so much time at the U.S. EPA docket when it was in Southeast Washington, D.C. in the 1990s that I actually got to know some of the folks working there!

But now we have the opposite problem ― there is information absolutely everywhere, all day 24/7, and it’s simply impossible to keep up with it all. I spend at least 25% of my work day right now just reading and digesting, and it’s probably not enough. Since my website is not up (yet, coming soon!) and we’re all drowning in information, my thought was to put a regular post together here of the top stories and developments of the week from where I sit with a little analysis behind it. I hope it’s useful to you all!

1.         REN21 – Renewables 2016 Global Status Report

With so much great data and insightful analysis coming out of international organizations, I kind of wonder what the future of large consultancies are, and this report is a perfect example. In any event, with contributions and input from 180 experts around the world, the annual report provides the state of play in the renewables space, covering the power, heating and cooling and transport sectors as well as energy efficiency, investment flows and the global policy landscape. With respect to the transport space, the report notes the following:

• Global consumption of energy in transport has increased by an average of 2% annually since 2000 and accounts for about 28% of overall energy consumption. Most of the total transport energy demand (around 60%) is for passenger transport, a majority of which is for passenger cars.
• Renewable energy accounted for an estimated 4% of global fuel for road transport in 2015. Liquid biofuels continued to represent the vast majority of the renewable energy contribution to the transport sector with 130.7 billion liters in production in 2015, dominated by first-generation ethanol production (in the U.S. and Brazil, unsurprisingly).
• Biofuel mandates were in place in 66 countries at the national or state/provincial level. Support has shifted increasingly towards the promotion of advanced biofuels in new policy development, although, globally, most policies adopted to date focus on first-generation biofuels. I think the only thing that can meaningfully tip the balance here is to set policies that require and serve to incentivize the lowest carbon intensity fuels (and higher intensity fuels to reduce them).
• Policy support for renewable energy in the transport sector continues to lag behind such support in the power sector, and electric vehicles were specifically highlighted.

2. CEM7 – Seventh Clean Energy Ministerial Meeting

Launched in 2010 following the “gloomy” conclusion of the 2009 Copenhagen climate conference, the Clean Energy Ministerial provided a forum where countries unable to work together effectively under the UN Framework Convention on Climate Change (UNFCCC) could join forces on topics of shared interest in the clean energy space. And it has been a change driver for increasing country and corporate clean energy commitments, with more than $1.5 billion committed during this week’s meeting alone.

However, the interesting thing is that the focus has mainly been on energy efficiency and renewables (in fact, REN 21 launched its annual report during the meetings). Its transport-related initiatives focus only on electric vehicles, and there was a call for focusing on autonomous driving by one of the individuals behind the creation of CEM. No other strategies such as biofuels or fuel efficiency have been publicly noted, but I bet this will change over time.

3.        below50 Initiative

Another global initiative announced during CEM7 this week was the below50 initiative, a partnership of companies (e.g. LanzaTech, DuPont, Novozymes, Audi, Joule and others), the World Business Council on Sustainable Development, Roundtable for Sustainable Biomaterials (RSB) and Sustainable Energy for All (SE4ALL). below50 is designed to grow a global corporate market for the best-of-breed sustainable low-carbon fuels, and any company who produces, uses and/or invests in fuels that are at least 50% less carbon intensive than conventional fossil fuels can join below50.

Companies must publicly commit to the campaign, show evidence that supports their claim, and disclose their progress towards achieving this goal. I think it could be an important pathway toward publicly demonstrating the potential and capability, especially for advanced biofuels and can only help in scale up efforts.

The initiative is an outgrowth of the Low Carbon Technology Partnerships initiative (LCTPi) of which one of the working groups focused on low carbon transport fuels. The working group produced a report last year which among other findings, highlighted that the “inconsistency and lack of policies are barriers for further deployment of emerging and existing technologies” which was noted by the REN 21 annual report as well.

The bottom line is in the coming years there will be much more focus on the challenge of bringing clean energies and technologies into the transport space and developing a convergence of strategies that best fit different global rural, urban and suburban locales.

4.         Fast Company: Why Did The U.S. Let Highways Ruin Its Cities, And How Can We Fix It?

Admittedly, I don’t know a thing about urban planning but I do know that to really combat climate change and get that 2°C reduction agreed to at the COP21 talks in Paris, cities are going to have to be totally rethought. And this article highlights the challenges of this especially since infrastructure is in such bad shape in the U.S. Think about what this means for the world’s megacities! The article also highlights the potential benefits, which include better social inclusion and cohesion.

Some jurisdictions are already struggling with this question as it pertains to transport and making cities more livable, banning cars on certain days, or banning older vehicles, or proposing permanent bans altogether. Others are banning or limiting certain types of vehicles. Others are working on improved public transport and bike paths. The IEA this week published a study on the issue, Energy Technology Perspectives 2016: Towards Sustainable Urban Energy Systems, noting that the deployment of clean energy technologies and changing citizen behavior will be two key strategies to help solve the issue.

5.         UC Davis: Status Review of California’s Low Carbon Fuel Standard, 2011–2015

The U.C. Davis Institute for Transportation Studies (ITS) has been monitoring and analyzing the low carbon fuels standard (LCFS) since its inception, and has been putting these great summaries together for several years now. Highlights from the recent report include the following:

• From 2011–2015, the average fuel carbon intensity (AFCI) of all alternative fuels reported to the program declined 21 percent, from near 86 grams carbon dioxide equivalent per mega-joule of fuel energy (gCO2e/MJ) to just over 68 gCO2e/MJ.
• Alternative fuels contributed 6.2 percent of California’s transportation fuels by energy content in 2011 and 2012, and reached 8.1 percent in 2015. Fuels other than liquid biofuels comprised 10.9 percent of alternative fuel transport energy in 2014 and 2015.
• Increases in alternative fuel use came primarily from biodiesel, renewable diesel, biogas and electricity. Use of ethanol, the largest renewable fuel by volume, remained close to a “blendwall” of 10 percent blended with gasoline, the maximum allowed without alternative infrastructure. (What I do think is interesting is how the LCFS has driven a significant reduction in carbon intensity for first-generation ethanol, which I’m sure will continue as firms look to stay competitive and in the market.)