The World Economic Forum (WEF)’s article is a snapshot, at this conjecture, of the current vital decarbonisation awareness process throughout the world. In it, Ekaterina Miroshnik and Adam Sieminski ask How can we get hydrocarbon-rich nations to board the EV wagon? So here are the authors’ answers.
How can we get hydrocarbon-rich nations to board the EV wagon?
As the fourth largest source of carbon emissions, global transport must decarbonize.
Near-term reductions are most feasible in the light-duty vehicle sector.
Supply-side policies could be more effective in encouraging hydrocarbon-rich states to participate.
Hydrocarbon fuels account for more than 80% of commercially traded energy consumption. The abundance, convenience and affordability of fossil fuels have generated economic growth and made life better for billions of people. But the emissions and climate challenges associated with combustion are significant, and policy-makers around the world must limit the rise in global temperatures caused by greenhouse gas (GHG) emissions.
Global transport is the fourth largest source of GHGs, producing about 23% of global energy-related CO2 emissions. About 73% of transport emissions come from road vehicles including cars and trucks, 22% from planes and ships, and 1% from trains. GHG emissions reduction in transport is expected to significantly contribute to meeting the Paris Agreement goals.
GHG emission reduction from long-range heavy-duty transportation (trucks, trains, ships, planes) will likely require substantial R&D breakthroughs and policy interventions, because green technologies for these vehicle segments are not yet commercial. The majority of near-term GHG emission reductions in the transport sector are projected to come from electrification of light-duty vehicles (LDVs) as well as buses, where such technology is already commercial.
Governments globally have adopted various policies to support LDV electrification. Tax and other incentives to reduce the upfront price of electric cars are among the most commonly used policy levers. Using such a model, Norway, a hydrocarbon-rich economy, achieved the highest penetration of EVs in Europe. However, such measures can be expensive. The cost of reducing tailpipe CO2 through subsidies to EV alternatives can be as high as $1,000 per ton, significantly higher than other approaches to reducing carbon.
Demand-side measures can incentivize consumers, but also act to spur the automotive industry by helping the automakers recover their R&D investments on EVs and by allowing them to charge relatively higher prices for EVs. These incentives are part of governmental energy and environment policy, and industrial policies, designed to support local innovation and manufacturing.
Incentivizing the fossil fuel hubs
Demand-side policies are difficult to justify in countries without a local EV manufacturing industry, as is currently the case with countries in the Middle East and North Africa (MENA) region. Additionally, market barriers to EVs in the MENA region and in Eurasia are exacerbated by the policies that tend to favour hydrocarbon fuels use, reducing consumer incentives to adopt electric vehicles by lowering their operational cost advantage. Though government support for fossil fuels is phasing out over time in most MENA countries, economies in Eurasia have been taking very slow steps in this area.
An alternative approach for the regions with an abundance of fossil fuels, especially if the goal is long-term GHG emissions reduction that is also highly cost-effective, is to emphasize technology-neutral supply-side policies, such as fuel economy standards. Such policies are based on a combination of more stringent technology-neutral performance standards with credit-based mechanisms to incentivize the uptake of lower emission vehicles. Such technology-neutral standards offer the possibility of utilizing high-efficiency gasoline-electric hybrids or high-compression internal combustion engine vehicles as affordable interim solutions. In the longer term, there is the possibility of utilizing alternative technologies once they become available, including mobile carbon-capture technology.
Saudi Arabia, led by the Saudi Energy Efficiency Center, is among the first MENA countries to have adopted fuel economy standards. Outside the region, another example includes the recent revision in the European Union’s CO2 emission standards for LDVs. In such a case, the speed and extent of GHG emissions reduction depends on how stringent the implemented standards prove to be.
While an EV is emission-free on the road, it is useful to calculate the net carbon emissions associated with using one by considering the energy mix that provides the electricity to charge it. Ideally, the energy used to charge EVs should be generated from low-carbon or carbon-neutral sources, so that EV deployment results in overall net emissions lower than levels generated by internal combustion (ICE) engine vehicles.
Countries possessing significant shares of renewable energy like hydro, solar and wind in their energy mix are better suited for EV deployment. For example, countries such as Georgia and Tajikistan (both have a substantial share of hydropower) have increased investments in electric urban transport recently.
This does not mean that countries with inexpensive and abundant fossil fuels cannot still adopt EVs and reduce emissions. Hydrocarbon-rich nations can shift their generation from marginal sources toward lower-emission alternatives. For example, Saudi Arabia has announced an ambitious target aiming to generate 50% of its power needs using renewable energy by 2030, with the remainder provided by natural gas. Renewable electricity costs as well as battery costs for EVs, have been falling sharply. If the trend continues, EVs may eventually be suitable for general use in emerging markets, including in the MENA and Eurasia regions.
However, a rapid increase in demand for the core battery materials (e.g. cobalt, lithium), combined with constrained supply, may lead to significant increases in the cost of raw materials. Such increases could increase battery prices and ultimately electric vehicles prices, which could act as a barrier to EV adoption in the short term.
Another barrier is the lack of widespread EV charging infrastructure. Going forward, it we must build roads with an eye to a future where a significant proportion of vehicles could be EVs. This means that at the planning and design phase, road corridors need to be equipped with high-capacity EV chargers within existing fueling stations. To do so, in many cases it might be important to upgrade the local electrical grids and substations to handle these fast chargers, which consume significant energy.
Challenges like air pollution in cities continue to worsen, which should lead electorates exercising more pressure on local authorities to advance green policies. Cities are likely to become the e-mobility change champions in Eurasia (e.g., in Kazakhstan, Uzbekistan, Azerbaijan) with many embracing green development concepts and preparing green city action plans (GCAPs). GCAPs will focus on developing e-mobility strategies and prioritizing investments in electric transport (buses, trolleybuses, taxis, metro and light rail transport systems). The bottom-up pressure will encourage mayors and city councils to speed up electrification of transport, while greening electricity supply.
With the right policy mix and synergy between the power and transportation sectors, as well as supportive investment by multilateral development banks to eco-responsible governments, all countries – including those who most rely on fossil fuels – have an opportunity to reduce their transportation-based GHG emissions.
Ekaterina Miroshnik, Director; Head, Infrastructure, Eurasia, Sustainable Infrastructure Group, European Bank for Reconstruction and Development (EBRD) and Adam Sieminski, President, King Abdullah Petroleum Studies and Research Center (KAPSARC)
Reuters’ Factbox: Fossil fuel-based vehicle bans across the world is a snapshot of what will happen in the major economies of the world by the near future. Could the same be decided upon in the MENA region countries, hence the feature picture above, that is of typical daily road congestion in Cairo. It is for illustrative purposes.
Britain last year became the first G7 country to set in law a net-zero emission target by 2050, which will require wholesale changes in the way Britons travel, use energy and eat.
Other countries or regions that have pitched the idea of banning fossil-fuel based vehicles include:
California will ban the sale of new gasoline-powered passenger cars and trucks starting in 2035, Governor Gavin Newsom said in September.
The Canadian province of Quebec said this week it would ban the sale of new gasoline-powered passenger cars from 2035.
EU environment ministers struck a deal on Oct 23 to make the bloc’s 2050 net zero emissions target legally binding, but left a decision on a 2030 emissions-cutting target for leaders to discuss in December.
German cities started to introduce bans on older diesel vehicles that emit higher amounts of pollutants than from late 2018. (reut.rs/38UFw6L)
Norway, which relies heavily on oil and gas revenues, aims to become the world’s first country to end the sale of fossil fuel-powered cars, setting a 2025 deadline. Fully electric vehicles now make up about 60% of monthly sales in Norway.
In 2017 China begun studying when to ban the production and sale of cars using traditional fuels but did not specify when it might be introduced.
Sales of new energy vehicles (NEV) will make up 50% of overall new car sales in China, the world’s biggest auto market, by 2035, an industry official said last month.
Last year, India’s central think-tank asked scooter and motorbike manufacturers to draw up a plan to switch to electric vehicles. The think-tank also recommended that only electric models of scooters and motorbikes with engine capacity of more than 150cc must be sold from 2025, sources told Reuters.
Reporting by Aakash Jagadeesh Babu and Samantha Machado in Bengaluru; Editing by Gareth Jones
We asked our 2020 intake of Technology Pioneers for their views on how technology will change the world in the next five years.
From quantum computers and 5G in action to managing cancer chronically, here are their predictions for our near-term future.
1. AI-optimized manufacturing
Paper and pencil tracking, luck, significant global travel and opaque supply chains are part of today’s status quo, resulting in large amounts of wasted energy, materials and time. Accelerated in part by the long-term shutdown of international and regional travel by COVID-19, companies that design and build products will rapidly adopt cloud-based technologies to aggregate, intelligently transform, and contextually present product and process data from manufacturing lines throughout their supply chains. By 2025, this ubiquitous stream of data and the intelligent algorithms crunching it will enable manufacturing lines to continuously optimize towards higher levels of output and product quality – reducing overall waste in manufacturing by up to 50%. As a result, we will enjoy higher quality products, produced faster, at lower cost to our pocketbooks and the environment.
In 2025, carbon footprints will be viewed as socially unacceptable, much like drink driving is today. The COVID-19 pandemic will have focused the public’s attention on the need to take action to deal with threats to our way of life, our health and our future. Public attention will drive government policy and behavioural changes, with carbon footprints becoming a subject of worldwide scrutiny. Individuals, companies and countries will seek the quickest and most affordable ways to achieve net-zero – the elimination of their carbon footprint. The creation of a sustainable, net-zero future will be built through a far-reaching energy transformation that significantly reduces the world’s carbon emissions, and through the emergence of a massive carbon management industry that captures, utilizes and eliminates carbon dioxide. We’ll see a diversity of new technologies aimed at both reducing and removing the world’s emissions – unleashing a wave of innovation to compare with the industrial and digital Revolutions of the past.
By 2025, quantum computing will have outgrown its infancy, and a first generation of commercial devices will be able tackle meaningful, real-world problems. One major application of this new kind of computer will be the simulation of complex chemical reactions, a powerful tool that opens up new avenues in drug development. Quantum chemistry calculations will also aid the design of novel materials with desired properties, for instance better catalysts for the automotive industry that curb emissions and help fight climate change. Right now, the development of pharmaceuticals and performance materials relies massively on trial and error, which means it is an iterative, time-consuming and terribly expensive process. Quantum computers may soon be able to change this. They will significantly shorten product development cycles and reduce the costs for R&D.
4. Healthcare paradigm shift to prevention through diet
By 2025, healthcare systems will adopt more preventative health approaches based on the developing science behind the health benefits of plant-rich, nutrient-dense diets. This trend will be enabled by AI-powered and systems biology-based technology that exponentially grows our knowledge of the role of specific dietary phytonutrients in specific human health and functional outcomes. After the pandemic of 2020, consumers will be more aware of the importance of their underlying health and will increasingly demand healthier food to help support their natural defences. Armed with a much deeper understanding of nutrition, the global food industry can respond by offering a broader range of product options to support optimal health outcomes. The healthcare industry can respond by promoting earth’s plant intelligence for more resilient lives and to incentivize people to take care of themselves in an effort to reduce unsustainable costs.
5. 5G will enhance the global economy and save lives
Overnight, we’ve experienced a sharp increase in delivery services with a need for “day-of” goods from providers like Amazon and Instacart – but it has been limited. With 5G networks in place, tied directly into autonomous bots, goods would be delivered safely within hours.
Wifi can’t scale to meet higher capacity demands. Sheltering-in-place has moved businesses and classrooms to video conferencing, highlighting poor-quality networks. Low latency 5G networks would resolve this lack of network reliability and even allow for more high-capacity services like telehealth, telesurgery and ER services. Businesses can offset the high cost of mobility with economy-boosting activities including smart factories, real-time monitoring, and content-intensive, real-time edge-compute services. 5G private networks make this possible and changes the mobile services economy.
The roll-out of 5G creates markets that we only imagine – like self-driving bots, along with a mobility-as-a-service economy – and others we can’t imagine, enabling next generations to invent thriving markets and prosperous causes.
Technology drives data, data catalyzes knowledge, and knowledge enables empowerment. In tomorrow’s world, cancer will be managed like any chronic health condition —we will be able to precisely identify what we may be facing and be empowered to overcome it.
In other words, a new normal will emerge in how we can manage cancer. We will see more early and proactive screening with improved diagnostics innovation, such as in better genome sequencing technology or in liquid biopsy, that promises higher ease of testing, higher accuracy and ideally at an affordable cost. Early detection and intervention in common cancer types will not only save lives but reduce the financial and emotional burden of late discovery.
We will also see a revolution in treatment propelled by technology. Gene editing and immunotherapy that bring fewer side effects will have made greater headway. With advances in early screening and treatment going hand in hand, cancer will no longer be the cursed ‘C’ word that inspires such fear among people.
Historically, robotics has turned around many industries, while a few select sectors – such as grocery retail – have remained largely untouched . With the use of a new robotics application called ‘microfulfillment’, Grocery retailing will no longer look the same. The use of robotics downstream at a ‘hyper local’ level (as opposed to the traditional upstream application in the supply chain) will disrupt this 100-year-old, $5 trillion industry and all its stakeholders will experience significant change. Retailers will operate at a higher order of magnitude on productivity, which will in turn result in positive and enticing returns in the online grocery business (unheard of at the moment). This technology also unlocks broader access to food and a better customer proposition to consumers at large: speed, product availability and cost. Microfulfillment centers are located in existing (and typically less productive) real estate at the store level and can operate 5-10% more cheaply than a brick and mortar store. We predict that value will be equally captured by retailers and consumers as online.
One thing the current pandemic has shown us is how important technology is for maintaining and facilitating communication – not simply for work purposes, but for building real emotional connections. In the next few years we can expect to see this progress accelerate, with AI technology built to connect people at a human level and drive them closer to each other, even when physically they’re apart. The line between physical space and virtual will forever be blurred. We’ll start to see capabilities for global events – from SXSW to the Glastonbury Festival – to provide fully digitalized alternatives, beyond simple live streaming into full experiences. However, it’s not as simple as just providing these services – data privacy will have to be prioritised in order to create confidence among consumers. At the beginning of the COVID-19 pandemic we saw a lot in the news about concerns over the security of video conferencing companies. These concerns aren’t going anywhere and as digital connectivity increases, brands simply can’t afford to give users anything less than full transparency and control over their data.
9. Putting individuals – not institutions – at the heart of healthcare
By 2025, the lines separating culture, information technology and health will be blurred. Engineering biology, machine learning and the sharing economy will establish a framework for decentralising the healthcare continuum, moving it from institutions to the individual. Propelling this forward are advances in artificial intelligence and new supply chain delivery mechanisms, which require the real-time biological data that engineering biology will deliver as simple, low-cost diagnostic tests to individuals in every corner of the globe. As a result, morbidity, mortality and costs will decrease in acute conditions, such as infectious diseases, because only the most severe cases will need additional care. Fewer infected people will leave their homes, dramatically altering disease epidemiology while decreasing the burden on healthcare systems. A corresponding decrease in costs and increase in the quality of care follows, as inexpensive diagnostics move expenses and power to the individual, simultaneously increasing the cost-efficiency of care. Inextricable links between health, socio-economic status and quality of life will begin to loosen, and tensions that exist by equating health with access to healthcare institutions will dissipate. From daily care to pandemics, these converging technologies will alter economic and social factors to relieve many pressures on the global human condition.
Construction will become a synchronized sequence of manufacturing processes, delivering control, change and production at scale. It will be a safer, faster and more cost-effective way to build the homes, offices, factories and other structures we need to thrive in cities and beyond. As rich datasets are created across the construction industry through the internet of things, AI and image capture, to name a few, this vision is already coming to life. Using data to deeply understand industry processes is profoundly enhancing the ability of field professionals to trust their instincts in real-time decision making, enabling learning and progress while gaining trust and adoption.
Actionable data sheds light where we could not see before, empowering leaders to manage projects proactively rather than reactively. Precision in planning and execution enables construction professionals to control the environment, instead of it controlling them, and creates repeatable processes that are easier to control, automate, and teach.
That’s the future of construction. And it’s already begun.
11. Gigaton-scale CO2 removal will help to reverse climate change
A scale up of negative emission technologies, such as carbon dioxide removal, will remove climate-relevant amounts of CO2 from the air. This will be necessary in order to limit global warming to 1.5°C. While humanity will do everything possible to stop emitting more carbon into the atmosphere, it will also do everything it can in order to remove historic CO2 from the air permanently. By becoming widely accessible, the demand for CO2 removal will increase and costs will fall. CO2 removal will be scaled up to the gigaton-level, and will become the responsible option for removing unavoidable emissions from the air. It will empower individuals to have a direct and climate-positive impact on the level of CO2 in the atmosphere. It will ultimately help to prevent global warming from reaching dangerous levels and give humanity the potential to reverse climate change.
Jan Wurzbacher, Co-Founder and co-CEO of Climeworks
12. A new era in medicine
Medicine has always been on a quest to gather more knowledge and understanding of human biology for better clinical decision-making. AI is that new tool that will enable us to extract more insights at an unprecedented level from all the medical ‘big data’ that has never really been fully taken advantage of in the past. It will shift the world of medicine and how it is practiced.
Improvements in AI will finally put access to wealth creation within reach of the masses. Financial advisors, who are knowledge workers, have been the mainstay of wealth management: using customized strategies to grow a small nest egg into a larger one. Since knowledge workers are expensive, access to wealth management has often meant you already need to be wealthy to preserve and grow your wealth. As a result, historically, wealth management has been out of reach of those who needed it most. Artificial intelligence is improving at such a speed that the strategies employed by these financial advisors will be accessible via technology, and therefore affordable for the masses. Just like you don’t need to know how near-field communication works to use ApplePay, tens of millions of people won’t have to know modern portfolio theory to be able to have their money work for them.
14. A clean energy revolution supported by digital twins
Over the next five years, the energy transition will reach a tipping point. The cost of new-build renewable energy will be lower than the marginal cost of fossil fuels. A global innovation ecosystem will have provided an environment in which problems can be addressed collectively, and allowed for the deployment of innovation to be scaled rapidly. As a result, we will have seen an astounding increase in offshore wind capacity. We will have achieved this through an unwavering commitment to digitalization, which will have gathered a pace that aligns with Moore’s law to mirror solar’s innovation curve. The rapid development of digital twins – virtual replicas of physical devices – will support a systems-level transformation of the energy sector. The scientific machine learning that combines physics-based models with big data will lead to leaner designs, lower operating costs and ultimately clean, affordable energy for all. The ability to monitor structural health in real-time and fix things before they break will result in safer, more resilient infrastructure and everything from wind farms to bridges and unmanned aerial vehicles being protected by a real-time digital twin.
15. Understanding the microscopic secrets hidden on surfaces
Every surface on Earth carries hidden information that will prove essential for avoiding pandemic-related crises, both now and in the future. The built environment, where humans spend 90% of their lives, is laden with naturally occurring microbiomes comprised of bacterial, fungal and viral ecosystems. Technology that accelerates our ability to rapidly sample, digitalize and interpret microbiome data will transform our understanding of how pathogens spread. Exposing this invisible microbiome data layer will identify genetic signatures that can predict when and where people and groups are shedding pathogens, which surfaces and environments present the highest transmission risk, and how these risks are impacted by our actions and change over time. We are just scratching the surface of what microbiome data insights offer and will see this accelerate over the next five years. These insights will not only help us avoid and respond to pandemics, but will influence how we design, operate and clean environments like buildings, cars, subways and planes, in addition to how we support economic activity without sacrificing public health.
16. Machine learning and AI expedite decarbonization in carbon-heavy industries
Over the next five years, carbon-heavy industries will use machine learning and AI technology to dramatically reduce their carbon footprint. Traditionally, industries like manufacturing and oil and gas have been slow to implement decarbonization efforts as they struggle to maintain productivity and profitability while doing so. However, climate change, as well as regulatory pressure and market volatility, are pushing these industries to adjust. For example, oil and gas and industrial manufacturing organizations are feeling the pinch of regulators, who want them to significantly reduce CO2 emissions within the next few years. Technology-enabled initiatives were vital to boosting decarbonizing efforts in sectors like transportation and buildings – and heavy industries will follow a similar approach. Indeed, as a result of increasing digital transformation, carbon-heavy sectors will be able to utilize advanced technologies, like AI and machine learning, using real-time, high-fidelity data from billions of connected devices to efficiently and proactively reduce harmful emissions and decrease carbon footprints.
Despite the accelerating regulatory environments we’ve seen surface in recent years, we are now just seeing the tip of the privacy iceberg, both from a regulatory and consumer standpoint. Five years from now, privacy and data-centric security will have reached commodity status – and the ability for consumers to protect and control sensitive data assets will be viewed as the rule rather than the exception. As awareness and understanding continue to build, so will the prevalence of privacy preserving and enhancing capabilities, namely privacy-enhancing technologies (PET). By 2025, PET as a technology category will become mainstream. They will be a foundational element of enterprise privacy and security strategies rather than an added-on component integrated only meet a minimum compliance threshold. While the world will still lack a global privacy standard, organizations will embrace a data-centric approach to security that provides the flexibility necessary to adapt to regional regulations and consumer expectations. These efforts will be led by cross-functional teams representing the data, privacy and security interests within an organization.
How will technology change the world in the next five years?
It is very exciting to see the pace and transformative potential of today’s innovative technologies being applied to solve the world’s most pressing problems, such as feeding a global and growing population; improving access to and quality of healthcare; and significantly reducing carbon emissions to arrest the negative effects of climate change. The next five years will see profound improvements in addressing these challenges as entrepreneurs, the investment community and the world’s largest enterprise R&D organizations focus on developing and deploying solutions that will deliver tangible results.
While the COVID-19 pandemic has provided a difficult lesson in just how susceptible our world is today to human and economic turmoil, it has also – perhaps for the first time in history – necessitated global collaboration, data transparency and speed at the highest levels of government in order to minimize an immediate threat to human life. History will be our judge, but despite the heroic resolve and resiliency on a country by country basis, as a world we have underperformed. As a global community and through platforms like the World Economic Forum, we must continue to bring visibility to these issues while recognizing and supporting the opportunities for technology and innovation that can best and most rapidly address them.
While it has some infrastructure and regulatory obstacles to overcome, the automotive industry in the Middle East and Africa (MENA) region is developing fast, driven by investment and innovation, as delegates heard at the ALMENA conference in Dubai last week.
Despite a sustained period of decline over the last few years affected by a fall in oil prices and geopolitical strife, the Middle East and Africa is fast becoming a region of automotive and supply chain opportunity. Carmakers such as VW, Toyota, GM, Groupe PSA and Mercedes-Benz are investing in local assembly, ranging from North African countries including Morocco, Algeria and Egypt, to sub-Saharan markets such as Rwanda, Ethiopia, Kenya and Ghana. There are also some notable logistics developments there and in the Middle East.
According to figures from IHS Markit, light vehicle sales in the Middle East and Africa are to increase by 6% in 2020 to around 3.5m, supported by ongoing recovery in Saudi Arabia and Gulf countries. That is still below 4.65m units sold in 2015 but at that point Middle East sales were helped by increases in Saudi Arabia and Iran, the latter of which was seeing an (albeit brief) resurgence after sanctions were temporarily lifted. That said, by 2025 annual new light vehicle sales across the region are set to hit more than 5.3m, according to IHS projections.
Saudi Arabia already accounts for about 40% of total vehicles sold in the Middle East and IHS Markit forecasts annual sales could reach over 800,000 beyond units by 2030. Contributing factors including the recovery in price per barrel of oil and to a lesser extent the lifting of the ban on female drivers suggest sustained growth is expected to start in the next two years.
Countries within the Gulf Corporation Council (GCC) have established a national employment challenge to employ more local workers, the so-called ‘Gulfization’ policy, which is increasing labour opportunities in the area, something also fuelled by the exodus of foreign workers and the need for investment in local skills and talent.
An interesting interval notably for all those industries already devoting billions of Dollars to building these E-cars, thus affecting not only the whole world’s manufacturing and energy generation industries alike but also the planet’s climate. But this obviously not happening overnight, is somehow phased as described in this article.
Electric cars are often seen as one of the great hopes for tackling climate change. With new models arriving in showrooms, major carmakers retooling for an electric future, and a small but growing number of consumers eager to convert from gas guzzlers, EVs appear to offer a way for us to decarbonise with little change to our way of life.
Yet there is a danger that fixating on electric cars leaves a large blind spot. Electrification would be very expensive for the lumbering lorries that haul goods across continents or is currently technically prohibitive for long-distance air travel.
Beyond all the enthusiasm surrounding electrification, currently light-duty passenger vehicles only comprise 50% of total global demand for energy in the transportation sector compared to 28% for heavy road vehicles, 10% for air, 9% for sea and 2% for rail.
Put simply, the current focus on electrifying passenger vehicles – though welcome – represents only part of the answer. For most other segments, fuels will be needed for the foreseeable future. And even for cars, electric vehicles are not a cure-all.
The unfortunate truth is that, on their own, battery electric vehicles (BEVs) cannot solve what we call the “100 EJ problem”. Demand for transport services are expected to rise dramatically in the coming decades. So the International Energy Agency (IEA) projects that we need to significantly reduce the amount of energy each vehicle uses just to keep total global energy demand in the transport sector roughly flat at current levels of 100 exajoules (EJ) by 2050. More than half of that 100 EJ is still expected to come from petroleum products and, by then, the share of light-duty vehicles in transport sector energy demand is expected to decline from 50% to 34%.
The vast majority of existing passenger trips can be accommodated by existing battery electric vehicles so, for many consumers, buying one will be an easy decision (as costs come down). But for those who frequently take very long journeys, the focus also needs to be on lower-carbon fuels.
Petroleum substitutes could extend sustainable transport to heavier vehicles and those seeking longer range, while using the existing refuelling infrastructure and vehicle fleet. Whereas battery electric vehicles will impose wider system costs (for example, the charging infrastructure needed to connect millions of new electric vehicles to the grid), all the transition costs of sustainable fuel substitutes are in the fuels themselves.
Our recent study is part of a renewed focus on synthetic fuels or synfuels (fuels converted from feedstocks other than petroleum). Synfuels were first made on an industrial scale in the 1920s by turning coal into liquid hydrocarbons using the so-called Fischer-Tropsch synthesis, named after its original German inventors. But using coal as a feedstock produces far dirtier fuel than even conventional petroleum-based fuels.
One possible route to carbon-neutral synthetic fuels would be to use woody residues and wastes as feedstock to create synthetic biofuels with less impact on the environment and food production than crop-based biofuels. Another option would be to produce synfuels from CO₂ and water using low-carbon electricity. But producing such “electrofuels” would need either a power system that is very low cost and ultra-low-carbon (such as those of Iceland or Quebec) or require dedicated sources of zero-carbon electricity that have high availability throughout the year.
Synthetic biofuels and electrofuels both have the potential to deliver sustainable fuels at scale, but these efforts are still at the demonstration stage. Audi opened a €20M e-gas (electro fuel) plant in 2013 that produces 3.2 MW of synthetic methane from 6 MW of electricity. The €150M Swedish GoBiGas plant was commissioned in 2014 and produced synthetic biomethane at a scale of 20 MW using 30 MW of biomass.
Despite the many virtues of carbon-neutral synthetic fuels though, most commercial-scale projects are currently on hold. This is due to the high investment cost of pioneer process plants combined with a lack of sufficiently strong government policies to make them economically viable and share the risk of scale-up.
Government and industry attempts to encourage people to buy electric vehicles aren’t a problem in themselves. Our concern is that an exclusive focus on electrification may make solving the 100 EJ problem impossible. It is too early to tell which, if any, sustainable fuels will emerge successful and so the most pressing need is to scale up production from the current demonstration stage. If not, when our attention finally turns away from glossy electric car advertisements in a few years, we will find ourselves at a standing start in addressing the rest of the problem.
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