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Presentation & Recording Available: Future Fuel Trendlines – First Quarter Review

The recording and presentation from the second quarterly webinar for clients on future fuel trends and issues are now available:

I’m continuing to follow the six key topics for this year which includes air pollution, climate change, biofuels, the continuing fallout from Dieselgate, fuel economy and zero emission vehicles trends, issues and developments.  To recap for clients, I’m following such questions as:

  • Air Pollution
    • Significant air pollution studies that relate to transport.
    • Social movements and advocacy on air pollution that could impact transport.
  • Climate Change
    • What will a Trump Administration do on the Paris Agreement and climate change generally and how could that affect future fuels and vehicles?
    • Other significant actions related to Paris Agreement implementation and climate change mitigation from transport, including the COP-23 meeting in Fiji later this year.
  • Biofuels
    • Decreasing carbon intensities of 1G biofuels facilities and what it means for advanced biofuels.
    • Any actions that Trump may take on the RFS program.
    • The Winter Climate and Energy Package as it moves toward final approval in Europe.
  • Dieselgate Fallout
    • Further fall out from Dieselgate and potential impacts to the European and other markets, including whether there are opportunities for gasoline and electric vehicles.
    • Implementation of the RDE program in Europe (and the push to implement it elsewhere).
    • Movements to ban diesel cars or the sale of diesel, which has been happening in a number of cities.
  • Fuel Economy
    • Whether the Trump Administration will provide relief to the auto industry on the fuel economy standards or otherwise challenge them, and/or whether the auto industry will find a way to challenge the standards in court.
  • ZEVs
    • ZEV policies, including incentives and mandates, sales and technological developments.
    • Ride sharing, connectivity and autonomous driving developments, especially as they intersect with ZEVs.
    • The Trump Administration response to ZEV developments and whether President Obama’s electrification policy will be dismantled.

Some brief highlights for each topic follow below.

Air Pollution

  • New studies linking health & environmental impacts of air pollution to transport: The State of Global Air is the latest study to make these links, listing particulate matter, mainly from transport as the number five killer risk factor for total deaths, just behind smoking and high blood pressure. 92% of citizens live in areas that exceed (and in many cases, far exceed) World Health Organization (WHO) guidelines.
  • This is galvanizing cities, especially on diesel: More and more cities are galvanizing against cars, fuels and especially diesel as the chart below shows.

Climate Change

  • Only a few countries have submitted plans. Not impressive.: It will be important to continue watching the gap between aspiration and implementation when it comes to the Paris Agreement. So far it has not been that impressive. Only five countries have submitted plans, but that could change as COP-23 comes closer at the end of the year. There is certainly a gap between the actors that are pushing countries hard on various transport initiatives and solutions
  • Decarbonizing some sectors in transport sector difficult and hardly focused upon until now: It may be “easy” to try and electrify the passenger car fleet as a decarbonization solution, but it is not possible to do that for aviation, marine and heavy -duty trucking. The decarbonization challenge there is enormous with no easy solutions. IEA and the International Renewable Energy Agency (IRENA) are suggesting that to get to 2C, a massive increase in electricity and bioenergy will be needed.


  • Icahn may not succeed on point of obligation issue: The decks are too stacked against him with key Senators and the industry (e.g. oil, biofuels, rail, trucking, fuel retailers) in favor of leaving the point of obligation where it is.

  • Declining CI for ethanol a game changer for advanced biofuels and oxygenates: There is much more detail about this in the March report, but this is a critical issue. If the ethanol industry succeeds in getting CIs around or below 20, that would almost obviate the need for cellulosic ethanol and maybe other bio-based gasoline substitutes as well EXCEPT for purposes of compliance with the RFS under its current structure. The California LCFS would no longer serve as an incentive for these advanced biofuels.
  • The Commission’s goal to provide certainty in biofuels policy will probably do the opposite: Insiders have told me that the timelines and the caps established in the original proposal are most certain to change.

Fuel Economy

  • Reopening the mid-term review may be great for ethanol: Could it be another pathway toward increasing blend rates in the gasoline pool?
  • Early guess: U.S. standards delayed until 2030: The mid-term review has been reopened and will conclude next year. The Administration wants to cut a deal with the auto industry and California, but that will not be easy as California is determined to stay the course. An early guess is that the standards could be delayed for a few years (sources have told me 2030) but the industry and the Trump Administration may have to “give something” on ZEVs.


  • Not much movement on ZEV policy globally (but the year is young): However, there is still a lot of discussion about electrification as the preferred route (and maybe only route for some) to the decarbonization of the passenger fleet. But what would that take? IEA and IRENA looked at this. The chart below shows that to achieve 66% of 2°C under the Paris Agreement by 2050, 75% of the global passenger car fleet would have to be electrified; for trucks, about 45% and motorbikes, near 80%. That’s a tall order. That may be reachable from a battery pricing standpoint since they are becoming cheaper and cheaper, thus pushing down the price of EVs. And, consumer interest is growing. However, putting the infrastructure in place globally is going to be challenging and expensive as is managing and preparing for the expanded power demand.

  • Federal tax credit expiration may hurt EV market outside of California (unless states step in): And so far, there are more states that are interested in requiring registration and other fees from ZEVs, the same as internal combustion engines, than there are special exemptions or incentives for ZEVs.

If you have any questions, or even want to discuss further, please email me at tammy@futurefuelstrategies or call me at +1.239.970.2231.

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