The Top 5: Record Fuel Economy in 2017 as Pickups & SUVs Now 63% of U.S. Sales

Happy New Year friends! After a little holiday hiatus, I’m back in gear with the first Top 5 post of 2018. Here’s my take on the five most interesting developments in future fuels and vehicles trends in January. Items I selected this month include fuel economy, revisions to the Renewable Energy Directive (REDII), the future of the internal combustion engine vehicle (ICEV), synthetic fuels and legislation that would ban ICEVs in California by 2040.

1.Wall Street Journal: Auto Makers Miss U.S. Emissions Target Despite Record Fuel Economy (Subscription Required) — The Wall Street Journal reports that U.S. automakers missed hitting 2016 emissions targets for the first time, while they still achieved record fuel economy. Tailpipe emissions from passenger cars, pickup trucks and sport-utility vehicles during the 2016 model year were 9 grams a mile higher than allowed under federal regulations, but automakers managed to avoid violating the standards, in part by using regulatory credits earned in previous years for exceeding targets. The expiration of the flex-fuel vehicles (FFVs) contributed to the industry’s initial miss, according to EPA.

Meantime, vehicles averaged a record-high 24.7 miles a gallon, though consumers continue to prefer large pickups and SUVs, representing 63.2% of sales, instead of smaller and more-efficient passenger cars. More fuel for the regulatory debate continuing to play out in Washington as the April deadline on the re-opened mid-term review of the standards looms. (For more background, see posts Mar. 16, 2017; Mar. 29, 2017; Apr. 11, 2017 and see podcast with David Rapson of UC Davis, who has a lot to say about whether our fuel economy policies as structured are effective.)

2. Bloomberg News: Mazda Says Improved Gasoline Cars Cut Need for Electric Vehicles — Going against the grain on BEVs, Mazda’s Managing Executive Office Mitsuo Hitomi, said earlier this month that rapid improvements in ICEV technology means non-gasoline cars won’t be needed on a mass scale to solve pollution woes. Moreover, BEVs may be more polluting than ICEVs if the electric power isn’t from a clean source, among other issues the company has raised. Mazda estimates the level of CO2 emitted by a gasoline-engine Mazda2 at about 9% less than the 162 grams-per-kilometer attributed to an electric version of the car whose power comes from a coal-fired plant.

“As long as conventional vehicles truly comply with regulations, electric cars won’t be needed to solve environmental issues,” he said. Sharing this view is Saudi Aramco, which told the Financial Times that it made more sense to tackle climate change by further improving the ICEV, than to wait for BEVs to capture significant market share. “The internal combustion engine is here to stay,” Ahmad Al Khowaiter the company’s technology chief.

3. GreenCar Congress: European Parliament Endorses Proposal for 12% Share of Energy from Renewable Energy in Transport by 2030; 10% Advanced Biofuels — This is a comprehensive, yet brief summary of the Parliament’s vote last week to approve revisions to the Renewable Energy Directive (REDII). But to summarize even further the high points are:

• An overall transport target of 12%, containing a 10% blending mandate for “advanced” fuels, including electricity, waste-based biofuels and recycled carbon fuels was approved. This was an increase over the Commission’s original proposal.
• The Parliament voted that “biomass fuels consumed in transport, if produced from food or feed crops, shall be no more than the contribution from those to the gross final consumption of energy from renewable energy sources in 2017 in that Member State, with a maximum of 7% of gross final consumption in road and rail transport.” This is an increase from the 3.8% cap established by the Commission’s proposal.
• The Parliament voted to remove biodiesel made from palm oil from its list of biofuels that can count toward the EU’s renewables target from 2021.

The Parliament vote will act as the basis for negotiations with the European Council, which represents the governments of EU member states. The Commission will be part of that as well. The legislation should be finalized some time later this year. (See also post Aug. 31, 2017)

4. Euractiv: Synthetic Fossil Fuels: A Dieselgate 2.0 in the Making? — Jonas Helseth of the environmental NGO Bellona in Europe makes the case in this op-ed that synthetic fuels actually aren’t that carbon friendly. In fact, Helseth calls the effort to promote them “an unprecedented CO2 greenwashing scheme.” Among other points, he says that, “[s]ubsidising the capture of industrial CO2 would effectively remove the CO2 liability from exposed industries, and using that CO2 for producing synthetic fuels while discounting its fossil origin would enable car makers to merchandise such fuels as ‘low-carbon’.”

5. Transport Topics News: California Bill Seeks Ban on Fossil-Fueled Vehicles by 2040 — You can’t say you’re surprised, can you, given what has occurred in other countries last year with ICEV bans? (see posts Sept. 28, 2017; Aug. 24, 2017) California would ban the sale of new cars and trucks powered by fossil fuels in 2040 under legislation introduced Jan. 3 in the state legislature.

“We’re at an inflection point: we’ve got to address the harmful emissions that cause climate change,” Democratic Assembly member Phil Ting, the bill’s author, said in a statement. If the measure becomes law, by Jan. 1, 2040, all new passenger vehicles sold in California would have to be ZEVs such as battery-electric or hydrogen fuel cell cars. More cars are sold each year in California than in any other state — and more than in some countries. I’ll be following the progress of this legislation this year.

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.