Switching from diesel fuel to natural gas may hold advantages for the U.S. heavy-duty trucking fleet, and California’s high volume I-5 truck corridor would be a commercially optimum location to launch first investments, according to “Exploring the Role of Natural Gas in U.S. Trucking,” the new white paper released today from the UC Davis Institute of Transportation Studies and Rice University.

Such a network could help the state enable a faster transition to renewable natural gas, biogas and waste-to-energy pathways. But it would require significant policy intervention to reap climate change advantages, our research found.

California, the Great Lakes and Mid-Atlantic areas are well-positioned to launch small, initial natural gas transportation networks for heavy trucking due to their proximity to high-volume travel corridors, our optimization modeling shows. In California, we calculate that a profitable liquefied natural gas (LNG) fueling network could be launched for less than $100 million. These findings demonstrate a possible profitable avenue for integrated oil companies with natural gas businesses to comply with California’s Low Carbon Fuel Standard and remain inside their core businesses. According to the California Air Resources Board Transportation Fuels Branch chief Sam Wade, a $25 credit price could be expected to lower the production cost of renewable natural gas by over 20 cent per-gallon equivalent. A $100 credit price would provide roughly a 90-cent per-gallon equivalent cost reduction for renewable natural gas. Biogas from agricultural waste is widely used in Europe for trucks and vehicles.

Moving natural gas into the freight sector is one way to protect U.S. domestic natural gas producers from the negative commercial impacts of a price war now brewing in international oil and gas markets as a result of the Organization of Petroleum Exporting Countries’ (OPEC) decision to favor a market share approach rather than defend prices. Oil and natural gas prices have plummeted since July, causing a drop in drilling activity in the United States and layoffs in the oil and gas sector. Our research shows that utilizing natural gas for heavy trucking would boost energy security and resilience to weather-related events by diversifying the geographic fuel supply, and potentially improve U.S. economic competitiveness by lowering costs along national freight supply chains.

But our findings reveal that stronger regulations of methane leakage along the natural gas supply chain and stricter efficiency standards for natural gas heavy-duty truck engines are needed for natural gas to advance low carbon fuel goals. The U.S. Environmental Protection Agency (EPA) is moving forward with stricter limitations on methane leakage from wellhead operations in the U.S. oil patch, and is considering new regulations for distribution systems.  Greater deployment of the High Pressure Direct Injection (HPDI) engines, rather than cost-effective but less fuel-efficient spark-ignition (SI) natural gas engine technology, would be required in order for LNG trucking to achieve climate benefits, our life cycle analysis shows.

With these stronger regulatory frameworks, LNG fuel could offer carbon reductions for heavy-duty vehicles that compare favorably with those provided by advanced technology, efficient diesel fuel engines, our new research shows.

Read the research behind the blog in the full white paper.

Read the UC Davis press release.

Listen to the webinar.

Oil prices have hit their cheapest level since the height of the 2009 recession, and U.S. oil imports are at a 16-year low. As a result, policymakers across the country will be rethinking energy strategies, including the new U.S. Congress and California Governor Jerry Brown. Governor Brown suggested in his inaugural speech on January 5 that California should try to reduce current petroleum use in cars and trucks by up to 50 percent by 2030 as part of the state’s climate action plan, with the Air Resources Board outlining California’s policies to meet this target. President Barack Obama is also expected early this year to announce a set of additional climate policies.

To assist policymakers in thinking through the options for U.S. energy policy, a newly published Special Issue on “U.S. Energy Independence: Present and Emerging Issues,” which I organized for the journal Energy Strategy Reviews, offers scholarly research insights on the important role played by three decades of policies, designed to curb oil demand by stifling growth in transportation fuel use.

As U.S. Energy Information Administration (EIA) analysts Shirley Neff and Margaret Coleman show in the lead analysis article for the Special Issue, demand-side management policies are finally paying off, with U.S. oil consumption falling almost 10 percent between 2005 and 2013 and expected to find deeper reductions in the coming decades. U.S. oil demand is expected to decline by more than 20 to 30 percent in the next twenty years, Neff and Coleman argue, demonstrating the importance of well-designed transportation policies.

There is no question that technological innovation and new investment strategies by U.S. independent oil companies are bringing about a renaissance in U.S. domestic oil and gas production, creating a prolific U.S. energy supply outlook. But without government intervention to curb our appetite for oil, this rising production might have done little more than meet increases in incremental demand—putting us back in the deep dependency of prior decades and with OPEC and Russia in the driver’s seat.

ITS-Davis Director Daniel Sperling and UC Davis Policy Institute Director Anthony Eggert provide the Special Issue with a case study on the leadership role played by California. California has created a set of integrated energy and climate policies and regulations that are unique in the world and include a wide array of policy instruments that target specific vehicle, fuel, and mobility activities. While most provisions are regulatory, they are largely performance-based, and many have a market or pricing component to them, such as the credit trading provisions of the Low Carbon Fuel Standard (LCFS) and Zero Emission Vehicle program. As Sperling and Eggert note, the California initiative has survived numerous political and legal challenges, including a 2010 state-wide vote to suspend implementation of the AB 32 climate policy law (by a margin of 61 to 38 percent, the widest margin of any issue on the ballot), and numerous state and federal lawsuits.

Moving forward, California holds lessons for the wider U.S., including concerns that the focus on regulations, with only modest reliance on market instruments, has the potential to create inefficiencies and increase the costs of compliance. For transportation, the authors suggest, there is still a need to provide stronger market signals to vehicle consumers. They offer the idea to impose a system of revenue-neutral “feebates”, whereby car buyers pay an additional fee for vehicles that consume more oil and produce more greenhouse gases, and receive a rebate for those that consume and emit less. Feebates have been adopted in France (known as “bonus-malus”) and in more limited ways in other European countries.

The California case study investigates the key question of whether state policy is having an impact. So far, in terms of actual GHG reductions, California’s success has been limited. Still the authors argue that California’s policies serve as a starting point for demonstrating viable, market responsive climate policy approaches, by stimulating innovations and investments in low-carbon technologies and behaviors. The authors find that California policy has stimulated investments in and sales of plug-in electric vehicles (PEV) and low-carbon biofuels. To date, over a third of U.S. PEV sales are in California, even though the state accounts for only 12 percent of the population.

The implementation of California’s LCFS has contributed to lowering the carbon intensity of biofuels by encouraging the use of waste materials and other low-carbon materials. In another Special Issue article, authors Morrison, Parker, Witcover, Fulton and Pei weigh the potential contribution of U.S. biofuels policy to U.S. energy independence, concluding that bioenergy across the country can provide the equivalent of 8 percent of U.S. transportation energy by 2030—helping the diversification away from oil.

The Special Issue notes that the dramatic rise in U.S. energy production comes in the form of both oil and gas and renewable energy. In effect, the country has hit the jackpot on both fossil fuels and clean technology simultaneously, leaving us in an enviable position where cheap and ample energy supply is driving economic growth and wealth creation. The U.S. has added more than 500,000 jobs in the oil, gas and clean tech sectors in the past five years, contributing to a boom often likened to a second industrial revolution. Renewable energy production in the United States has been steadily on the rise, with over 17,000 megawatts (MW) of solar, wind and geothermal capacity currently under construction. The U.S. Energy Information Administration estimates that renewable energy will represent one-third of all new electricity generation added to the national grid over the next three years. Installed U.S. solar energy capacity increased 418 percent between 2010 and 2014 to 12,057 MW.

As Congress convenes and debates the recent and historic gains in our national energy security, it’s important to recognize: Many components came together to create the perfect storm of positive trends and favorable policies of today’s U.S. energy landscape.

While there is much reason for optimism, the trick now, as suggested by California’s governor, is to take this momentum and build on it. And to do so by overcoming political challenges and balancing energy security and climate benefits.

Energy Strategy Reviews’ Special Issue on “U.S. Energy Independence: Present and Emerging Issues” presents an array of policy analysis across a range of strategies—including the U.S. oil and gas shale boom, the Strategic Petroleum Reserve, renewable portfolio standards, biofuels, transportation, and advanced automotive technologies.

Amy Myers Jaffe is the Executive Director for Energy and Sustainability at UC Davis, with a joint appointment to the Graduate School of Management and the Institute of Transportation Studies.

Photo courtesy of: ClipperCreek – Amanda Lance

Part 1 of this series examined recent ITS study findings in which plug-in electric vehicle (PEV) buyers rated dealers much lower in satisfaction with the purchase experience than buyers of conventional gas-powered vehicles. In Part 2, we consider how current laws intended to protect dealers and consumers may have the unintended effect of stymieing the retail innovation needed to sell more PEVs.

A key policy component is the lowering of barriers that make it difficult for key players to try new approaches for attracting and supporting customers ready to make the jump to these path-breaking new vehicles. For example, customers need help learning how to use unfamiliar charging equipment, help arranging installation of a home charger, or assistance figuring out which public incentives they qualify for and how to get them. Many dealers are ill-prepared to offer these services in the face of uncertain profits.

For technologies as different as PEVs, a deliberate retail strategy can be just as important to success as sound product design. Manufacturers like Apple perhaps best exemplify the concept of “whole product” design that reaches beyond the production line to the places in which its devices are sold. It wasn’t always that way. Only after years of watching many of its groundbreaking, but much higher-priced, products languish on the shelves of independent retailers did the company switch to a direct-sales approach featuring its now iconic factory stores. The move afforded Apple full control over the customer experience, ensuring customers were adequately supported to reap the benefits of switching from rival platforms. As Seizing the White Space author Mark Johnson explains, “Apple did something far smarter than wrap a good technology in a snazzy design; it wrapped a good technology in a great business model.”

But laws that govern the sales of automobiles may not be well-suited for introducing radically different technologies to customers. Automakers with established dealer networks, for example, are bound by franchise laws to sell all new cars through licensed, fully independent dealers who make their own decisions about which cars they sell and how they are sold. Even if automakers and dealers devised an ideal retail experience for PEV shoppers, these laws would bar them from implementing it across the entirety of the retail network.

For example, Sonic, one of the nation’s largest dealer groups, has introduced an entirely new buying experience that features no-haggle pricing and leverages technology to dramatically streamline the car buying experience in ways that could benefit PEV buyers even more, namely by giving sales people the tools needed to support PEV customers. But Sonic sells only a small fraction of the new cars sold nationwide, and automakers cannot dictate that others implement similar practices.

 As a start-up with no dealer network to speak of, Tesla Motors did something established automakers could not: It borrowed a page from Apple’s playbook and chose a direct-sales model in which its vehicles are sold at set prices online or through factory-owned stores and service centers. With set prices, sales people can focus efforts on product knowledge and customer support; customers can explore and learn in a pressure-free environment with no fear of the “hard sell” from sales people. Tesla even went so far as to hire a former Apple executive to run its sales network and aggressively deployed its own charging infrastructure. Both are a testament to its commitment to the “whole product” experience.  As reported in the ITS-Davis study, Tesla’s industry-high satisfaction ratings demonstrate that a much better buying experience for plug-in customers is achievable.

Tesla, however, cannot discuss price or offer test drives at factory-owned retail stores in states that have adopted California’s Zero Emission Vehicle (ZEV) program. Even in California, where Tesla’s direct sales approach is legal, dealers have moved to stop Tesla from including a host of potential “external savings” such as public incentives, gas savings, and tax savings into online monthly payment estimates. Their claim is that Tesla’s total cost of ownership pricing approach violates several sections of Federal Regulation Z, the California Vehicle Code, and the California Civil Code, to name but a few.

Yet these restrictions are entirely at odds with the ZEV program’s objectives, since it is exactly these savings that make PEVs a compelling option for new car buyers. And while franchised dealers can be an invaluable source of innovation for growing PEV sales, this may be of little consequence if automakers have no effective way to get more dealers to embrace them.

Legislators could ease these constraints by granting manufacturers a special exemption from overly restrictive rules and regulations, capped at some set number of PEVs sold. This could give automakers the degree of control needed to work out kinks with early customers, develop scalable processes for supporting PEVs, and ensure that effective dealer performance standards are in place before handing the reins over to wholly independent retailers. Several states, however, are moving in the other direction, erecting greater – rather than lesser – barriers to direct-car sales by automakers, with Michigan the latest to do so. Speaking at the Detroit Economic Club last Thursday, Mike Jackson, CEO of AutoNation, the country’s largest dealer group, called the move “unnecessary protectionism” by dealer lobbyists. Jackson added that while direct sales is the right move for Tesla, at least initially, he will be ready to sell the start-up’s PEVs when they are ready to reach more customers.

How PEVs are sold can be just as important as how well they are designed. Policymakers must acknowledge the incongruity between the pioneering innovation called for by the ZEV program and the outmoded rules that tie the hands of innovators. Only the collective efforts of car dealers, automakers and policymakers can break the retail PEV bottleneck—putting more advanced clean cars on the road and in the fast lane toward wider commercialization to meet the goals of reducing oil use, air pollution and greenhouse gas emissions.

Eric Cahill is an auto industry consultant and Ph.D. candidate in Transportation Technology and Policy at UC Davis. Tom Turrentine is the Director of the UC Davis Plug-in Hybrid & Electric Vehicle Research Center.

The ITS-Davis study, “New Car Dealers and Retail Innovation in California’s Plug-in Electric Vehicle Market,” links:

• Working Paper
• Policy Brief
• News Highlight

 

 

California’s Zero Emission Vehicle (ZEV) Program requires automakers to sell increasing numbers of advanced clean vehicle technologies, including battery electric, plug-in hybrid and fuel cell electric vehicles.  To bolster the rapid expansion in sales of these innovative new vehicles, the state offers rebates to buyers.

But the policy focus on manufacturers and consumers is only half the battle, new research shows. Still missing are policies directed at fully independent car dealers, who may hold the key to increased electric vehicle sales.

A recently released ITS-Davis study suggests many dealers are less than enthusiastic about plug-in vehicles, despite evidence that plug-ins can be just as profitable for dealers as conventional gas-powered cars. The study also found that buyers of plug-in electric vehicles (PEVs) were far less satisfied with the dealers they bought (or leased) from than buyers of conventional gasoline and gasoline-hybrid vehicles.

These findings are troubling. Innovative new products, especially those in which customers interact with a product in a different way, or that involve new or very different supporting infrastructure, often call for novel approaches to market and sell them. Such new products demand a focus on trial and error to better understand which customers will value the product, how they will use it, and how to reach them most effectively. Retail strategy plays a key role in these efforts and could make or break the success of California’s efforts.

Radical innovation often isn’t the strong suit of large firms in mature markets, however. For these companies, innovative efforts have long been focused on reducing production costs and on gradual improvements in product performance, not the great leaps envisioned by entrepreneurs like Elon Musk, CEO of Tesla Motors, Inc. Typically, incumbent companies direct the energies of sales staff toward reaching a larger share of core customers by competing on well-established performance attributes. For leading firms, redirecting resources to tackle something new and ill-defined, especially where profits are uncertain and inconsequential compared to conventional product lines, is just not a compelling business proposition.

We’ve long known that for radically new technologies, good experiences by early customers promote adoption while bad experiences delay it. In the case of advanced vehicles, retailers are central to ensuring that buyers, especially ones switching to a new ways of doing things, have the information and support they need to unlock the full benefits of making the jump.

Although halfhearted dealer attitudes can hinder early adoption of PEVs, the ITS-Davis study also showcased a small but influential minority of dealers who have introduced new approaches to better meet the needs of plug-in customers. Examples include marketing carpool-lane stickers, enrolling buyers in charging networks, and preparing incentive paperwork for customers. Some dealers assign seasoned salespeople as plug-in experts, many of whom drive plug-ins themselves—to learn the ins and outs of the technology and relate the car’s benefits to potential buyers.

But such dealers are few and far between, and profits on PEVs – as for many new vehicles – are not compelling enough to drive other dealers to copy them. Automakers no doubt wish to ensure that their billion dollar investments in new technologies deliver. Yet they need to reach more dealers to achieve the scale needed to drive down the initial high cost of these cleaner alternatives. So how should automakers spread these and other lessons to less motivated dealers?

Automakers have proved they can design and engineer award-winning plug-in vehicles. But they could do much more to support dealers selling PEVs. First, manufacturers could introduce PEVs as premium models targeted at luxury buyers, at least initially. The prestige marketing performed by automakers for luxury vehicles may better attract early buyers. Also, the smaller number of dealers serving these customers, and higher level of customer support they deliver, would better ensure that dealers are equipped to attend to the distinct needs of PEV customers. BMW, for example, has introduced a new sub-brand expressly for this purpose. The move raises the profile of these new technologies, casts a halo of technology leadership across its product line, and leads mass-market customers to aspire to have the technology for themselves.

To close the yawning gap in product knowledge that so alienates PEV customers, automakers could enlist trusted vendors to develop tools that would furnish both customers and dealers with one-stop, online access to localized, customer-specific information on PEV incentives and benefits. Tesla’s website, for example, which is available online and at factory stores, allows customers and salespeople alike to intuitively learn what the car can do in real-world driving conditions. It can also help them locate charging stations along popularly traveled routes, or find out how public incentives and avoided trips to the gas station save money and reduce monthly household bills.

Government could also better aid dealers as well by bringing sales transactions and information sharing into the 21^st Century. Currently, customers must wait weeks or even months to receive the state’s PEV rebate. Pulling these and other benefits to the point of purchase, as was done with the decals that permit single-occupant access to carpool lanes, would enable dealers to market them confidently without fear of unwanted liability. Furthermore, government could pool incentive information into a single central database that could be tapped by online apps for PEV retailers.

Government could also facilitate electronic document processing to encourage online sales. These steps would enable dealers to substitute activities that add less value to the plug-in car-buying experience—such as painful in-person price negotiations, excessive paperwork and time wasted at the showroom—for higher value activities such as truly responsive customer Q&A, test drives with a PEV-knowledgeable dealer, and informed, helpful delivery of products and services.

Selling PEVs does involve extra legwork for dealers, at least initially. But for those that adopt effective practices, governments should allocate a modest portion of plug-in vehicle rebates ($300-$500) to dealer salespeople to reward their efforts and motivate additional PEV sales.

As the Tesla experience has shown, new, bold and effective steps by dealers, automakers, and policymakers are needed to reach a wider market. Automakers and government should work together now to tackle the challenges of marketing and selling these advanced vehicles—to reduce oil use, air pollution, and greenhouse gas emissions.

Eric Cahill is an auto industry consultant and Ph.D. candidate in Transportation Technology & Policy at UC Davis. Dan Sperling is the Founding Director of the UC Davis Institute of Transportation Studies.

Note: Part 2 of “The Future of Electric Vehicles” will focus on reforming laws and regulations that govern EV sales.

The ITS-Davis study, “New Car Dealers and Retail Innovation in California’s Plug-in Electric Vehicle Market,” links:

• Working Paper
• Policy Brief

As the saying goes, “Put your money where your mouth is.”

Well, California is doing just that. Thanks to the Cap-and-Trade Program, the state has $832 million to spend in fiscal year 2014-15 on projects that will help chip away at the ambitious target of reducing greenhouse gas (GHG) emissions—and even more is expected in future years. A portion of these funds ($130 million) will be passed along to California communities, in part to support projects that help people replace car trips with low-carbon transportation options (e.g., walking, bicycling, and transit) and in part to preserve agricultural lands.

This opportunity has fueled extensive conversations about the best ways to reduce GHG emissions while addressing other important social, environmental, and economic priorities in regions across California. Many people are asking: Which strategies will provide the greatest GHG bang for the buck? In answering this question, looking to the research is a good place to start.

With funding from the California Air Resources Board (ARB) and a directive to make sense of the existing research, Dr. Marlon Boarnet of the University of Southern California and I worked with a team of graduate students and post-doctoral researchers.  We completed an extensive review of the available evidence on 23 strategies for cutting GHG emissions through reduced driving or improved fuel efficiency. We looked at a range of strategies — from car sharing and telecommuting to residential density and network connectivity. We identified relevant studies for each strategy, screened them for quality and relevance to California, and summarized the “effect size” – the percentage reduction in vehicle miles of travel that a given amount of a strategy can produce.

Our review is summarized in short, easy-to-read policy briefs, thus making the research accessible to those who most need to use it. I will be talking more about these strategies on October 7^th at an ARB research seminar.

One of the most popular – and widely studied – strategies is densification.  Especially in the major metropolitan areas of the state, local governments are enabling and encouraging higher densities in targeted areas, such as those with good transit access.  Studies show that higher densities do make a difference: an area with twice the density of another may have 5 percent to 12 percent less driving in vehicle miles traveled (VMT).   Regional accessibility, the proximity of a residence to jobs, shopping, and other activities within the region, is also associated with lower VMT, as is land-use mix, the degree to which housing, shopping, and other activities are found together within a small area.

For some of the other new strategies that communities are considering, the evidence is promising. For example, studies of car-sharing services suggest that the average user of the service drives 25 percent to 33 percent less than they would otherwise. Only three studies passed our screening, however, so these estimates are less robust.

We also looked at the evidence on the traditional approach to fixing transportation problems: widening roads. Studies show this strategy tends to increase driving, thereby offsetting some of the expected reductions in congestion and maybe even wiping them out in the long run. Conversely, we found some evidence that decreasing capacity – by removing or closing roads – does not worsen congestion and may even decrease driving, particularly if road space is given over to other modes. These findings were noted in a draft discussion document released recently by the Governor’s Office of Planning and Research that outlines recommended changes to the way transportation impacts are analyzed under the California Environmental Quality Act.

Overall, the evidence is pretty convincing that the transportation and land-use related strategies we examined can be effective in reducing driving and therefore GHG emissions.

That being said, questions remain.  First, it is hard to say exactly how much impact a given strategy will have in any particular place. We simply don’t have enough studies from enough different places to understand how the impact of the strategy might vary. Second, the study participants who were exposed to these strategies are often people who wanted to drive less to begin with – they are, to some degree, “self-selected.” We can’t be sure that the average person would respond to the strategy to the same degree as the study participants.

So what specific steps can a community take to reduce GHG emissions? The evidence is clear on at least one point: No magic bullet exists. Instead, communities must adopt combinations of multiple land-use and transportation strategies if we are to reach state goals of reduced greenhouse gas emissions and more livable communities.

But if we truly want to know what strategies are most effective, we need more research. For this reason, UC Davis is excited to be leading the newly established National Center for Sustainable Transportation, a consortium of leading universities committed to advancing an environmentally sustainable transportation system through cutting-edge research, direct policy engagement, and education of our future leaders. Our university team includes many of the most accomplished researchers in the world in sustainable transportation, with strong expertise in a range of environmental issues, especially GHG mitigation. Our research will focus on three main areas: low-impact travel and supportive land use, low carbon infrastructure and efficient system operations, and zero-emission fuel and vehicle technology. We will be looking at all modes, for both people and goods, from urban to rural settings. Across all our research we will be identifying and evaluating best practices for institutional change . We are committed to achieving meaningful progress, putting research into action by engaging key decision makers at the federal, state, and local level.  Advising us on research priorities and project design is our Leadership Council, comprised of national, state, and regional transportation leaders—all dedicated to the mission of the National Center.

Exciting new developments are occurring in sustainable transportation. Stay tuned and stay connected as we continue to dive deeper into evidence-based strategies for cutting GHG emissions from the transportation sector. To receive updates on our progress and research, be sure to sign up for the National Center’s email list.

Susan Handy is the Director of the National Center for Sustainable Transportation; Associate Director of Education of the UC Davis Institute of Transportation Studies; and Professor and Chair, UC Davis Department of Environmental Science and Policy.

We at ITS-Davis put a fair bit of effort into studying the transition to new types of fuels and vehicles. A shift to low-carbon fuels such as electricity, hydrogen and biofuels will be necessary to decarbonize transportation over the next several decades. However there is another important near-term strategy that can also produce enormous benefits: improving conventional vehicle fuel economy.

On September 23 the United Nations (UN) will hold a Climate Summit in New York City; this gathering is an excellent opportunity to embrace fuel economy policies and fast-track fuel efficiency as a key strategy during climate negotiations that will culminate in the Conference of the Parties meeting in Paris in December 2015.

The Obama administration has set in place a powerful U.S. policy to double the fuel economy of cars and SUVs between 2016 and 2025. Average new light-duty vehicle fuel economy is now on track to achieve nearly 50 miles per gallon in that year (about 4.7 L/100km). Meanwhile, although the European Union, China, Japan and a few other countries also have fuel economy standards in place, along with labelling systems and fiscal measures to encourage purchases of fuel-efficient vehicles, many more countries around the world currently have no fuel economy policy of any kind.

The Global Fuel Economy Initiative (GFEI), a partnership of six organizations including ITS-Davis, has worked steadily on this issue over the past few years. GFEI hosted a conference in Paris last week inviting countries and other stakeholders including major automotive firms from around the world to talk about this issue and explore a broader global program to realize rapid efficiency gains. The meeting achieved a broad consensus; there was not a single negative voice among the 70 representatives of countries and of companies such as Renault and BMW. Importantly, a diverse range of countries from Chile to Kenya to Vietnam expressed their commitment to adopt an array of new fuel economy policies. The GFEI global target—50 percent reduction in L/100km (and in g/km of CO2 emissions) for new cars between 2005 and 2030, with each country setting its own targets under this broad guideline—also was broadly supported, with no significant challenges during the discussions.

The success of the GFEI conference sends a powerful message to the upcoming UN gathering in NYC: let’s clinch this one. The UN meetings on climate need to embrace commitments across all member countries to adopt fuel economy policies within the next one to two years. By my estimates, this will cut CO₂ between 2015 and 2050 by more than 60 cumulative gigatonnes, at a net savings to consumers on the order of $15 trillion—since the value of fuel savings over this period will far exceed the additional cost of producing more fuel-efficient vehicles.

The technologies and strategies to make today’s vehicles more efficient are well known, including but not limited to hybridization, lightweighting, air conditioning improvements and low-rolling resistance tires. All the technologies needed to double the fuel economy of vehicles worldwide exist and are readily available in the marketplace. Eventually, electric vehicles and other alternatives will likely become dominant. But even with increasing clean energy vehicle sales, their numbers—as a percent of sales and as a percent of cars on the road—will pale in comparison to conventional vehicles for at least  another decade or two. Thus, fuel economy improvement will have by far the largest potential to provide CO₂ emissions reductions between now and 2030.

So my message to the UN is this: We have the technology, now help us achieve the policy.

The signing this week of a landmark Memorandum of Understanding (MOU) between UC Davis and the China Automotive Technology and Research Center (CATARC) on clean vehicle adoption comes at an opportune time.  China is experiencing explosive expansion in its vehicles market. At the same time, China’s leaders are eager to play a global role in sustainable transport and are looking for partners. China’s choice of UC Davis and California state agency representatives as partners in its “new energy” vehicles initiative represents a milestone in global transportation policy. Urban congestion contributes significantly to hazardous smog in major cities. And the issues are global: we are entering a critical stage in worldwide efforts to reduce greenhouse gas and other mobile source emissions.

Five years ago, I co-authored a book about our world’s untenable future, hurtling toward two billion cars. I wrote: “From Paris to Fresno, and Deli to Shanghai, conventional motorization, conventional vehicles and conventional fuels are choking cities, literally and figuratively.” That book was a call to action for collaborative efforts to “reinvent vehicles, fuels and mobility.”*

This week’s announcement provides an important answer to that call. The new China–U.S. ZEV Policy Lab MOU focuses on joint research and cooperatiofn between UC Davis and CATARC, the administrative body that oversees and regulates many activities of the auto industry in China. It represents a unique partnership between our institutions, each a leader in technology and policies on zero-emission vehicles (ZEVs) – or new energy vehicles, as they’re called in China.  The accord reflects the history and ongoing cooperation and information exchange between leaders of the CATARC and UC Davis transportation and energy programs. The primary partners to the MOU are the Institute of Transportation Studies (ITS-Davis), the UC Davis Policy Institute for Energy, Environment and the Economy, and CATARC. Two ITS-Davis centers—the China Center for Energy and Transportation (C-CET) and the Plug-in Hybrid & Electric Vehicle (PH&EV) Research Center— will play integral roles. Led by Director Yunshi Wang, who attended the MOU’s signing in China, C-CET is the only China-focused research center on transportation and energy in North America. The policy lab’s advisory board will be co-chaired by representatives of the California Air Resources Board, the world’s leader on clean vehicle policies, and the National Development and Reform Commission, a major Chinese government agency.

The collaboration will help expand the global market for ZEVs by providing intellectual support for the design of ZEV policies and the analysis of consumer markets, including demand for charging stations, different types of ZEV technologies, and effectiveness of incentives.

In the early stages of developing the China-U.S. ZEV Policy Lab, the partners discussed California’s groundbreaking ZEV regulation and the lessons learned from almost 25 years of implementation. Governor Jerry Brown’s comprehensive ZEV Action Plan was studied but discussions covered the full suite of vehicle and fuel policies that are shaping California’s clean transportation future and policies that have been implemented to date in China.

From these first meetings and subsequent dialogue, four specific activities of the ZEV Policy Lab will be pursued in collaboration:

1. Conduct joint policy research, share best practices and explore potential ZEV policy collaboration and implementation.

2. Conduct consumer behavior studies. UC Davis is a leader in consumer response to electric and other alternative fuel vehicles. This collaboration will result in the first major studies of Chinese consumer response to advanced energy vehicles.

3. Train advanced vehicle researchers and leaders in California and China.

4. Inform Chinese regional and central government officials on California’s ZEV and related vehicle policies, and exchange information between California and China regarding lessons learned.

China’s vehicle population is expanding rapidly, which presents both opportunities and challenges for the country and the world. In a 2011 paper, Yunshi and I, with graduate student researcher Jacob Teeter, forecasted vehicle population rates to grow by 13-17 percent per year, roughly double the rate for China forecasted by others.

China is now the world’s largest auto market. In 2013, its vehicle sales approached 22 million, topping U.S. 2013 light-duty vehicle sales of 15.6 million.

In the past year, China’s leadership has already proposed increasingly stringent fuel economy and emissions standards and actively promoted electric vehicles (EVs).  In January, the government outlined its latest fuel economy proposal, Phase 4, for reductions in fleet average fuel consumption for new cars sold in China 2016-2020. And in February, it announced plans to extend electric vehicle incentives.

Then in July, China set a goal for 30 percent of all government fleet vehicle purchases to be EVs by 2016. It also announced new financial incentives for installation of EV charging.

In a new working paper “China’s Electric Car Frustrations” Yunshi and I with Zheng “Marco” Wan offer some analysis on reasons the central government’s laudable ambitions to build a large EV industry and market are not being realized as fast as hoped: local protectionism, shifting vehicle technology strategies, limited charging infrastructure, and cautious behavior of battery and automotive manufacturers. Both California and China will need a broader set of policies, incentives and strategies to overcome consumer and industry resistance and the lack of a critically needed widespread charging infrastructure. California has made progress in the past year or two, and this initial success will give the policy lab a good launching point.

The policy lab will facilitate continued discussion on complex topics such as these. It will also serve as a formal structure for visiting researchers here at UC Davis, and vice versa. This year, we’ve been lucky to have the insights of a distinguished visiting scholar from China:  Dr. Yaodong Shi, Deputy Director-General in the Department of Industrial Economics’ Development Research Center for the State Council, a prominent Chinese government think tank. Dr. Shi is currently working on two research topics: challenges and options associated with natural gas transportation in China, and what China can learn about EV development from California.

The policy lab is an important milestone in the global effort to accelerate clean vehicle development. The CATARC-UC Davis collaboration will help spur efforts in California, the United States and China to promote best practices and policy initiatives.  We are excited to join with our partners in this major effort to bring about a more sustainable transportation system that provides clean, affordable mobility to the world.

Key UC Davis documents:

Read the UC Davis September 8, 2014 press release announcing the accord, and the MOU.

Top press coverage:

ClimateWire, Sacramento Bee, KGO Bay Area AM 810 News Radio

Additional Reading:

In the spirit of continued cooperation, another of my ITS-Davis colleagues, Lew Fulton, recently returned from another meeting in China sponsored by Global Fuel Economy Initiative (GFEI), the International Council on Clean Transportation and China’s CATARC.  Fulton spoke about GFEI’s goal of doubling fuel economy of new passenger vehicles by 2030.

“Fuel Economy State of the World 2014: The World is Shifting into Gear on Fuel Economy,” FIA Foundation report edited by Lew Fulton and Sheila Watson (FIA Foundation) with various contributors.

*Two Billion Cars: Driving Toward Sustainability, Daniel Sperling and Deborah Gordon, Oxford University Press, 2009.

Zero Emission Market Acceleration Partnerships (MAP) is a new initiative to make available UC Davis’ 25 years of interdisciplinary expertise and research in vehicles, fuels and market response to cities and states to help them meet their sustainable transportation goals. It brings together local and state governmental, nongovernmental and research institutions from around the nation to integrate best practices and tackle challenges. For more information about the Zero Emission MAP partnership click here.

Photo:

Yunshi Wang, Director of the China Center for Energy and Transportation at UC Davis, and Zhixin Wu, Deputy Director of the China Automotive Technology and Research Center shake hands in Tianjin, China as Alberto Ayala (far left), Deputy Executive Officer of the California Air Resources Board, and Gang Li (far right), Department Chief of the Industry Coordination Bureau of the National Development and Reform Commission look on during a signing ceremony Sept. 6. Credit: China Automotive Technology and Research Center/photo

Everyone loves a good comeback story. Could hydrogen fuel cell vehicles be one?

Are hydrogen powered fuel cell vehicles (FCVs) ready for the big stage?

We seem to be tantalizingly close to the beginning of a hydrogen transition. Of course, energy decision-makers have heard this before. What’s different this time around?

In our latest white paper, “The Hydrogen Transition,” my ITS-Davis colleagues Christopher Yang, Michael Nicholas, Lew Fulton and I analyze challenges surrounding transitioning to mainstream adoption of hydrogen. We identify important factors that are bringing hydrogen and fuel cell technologies back to the verge of commercialization. These include:

• Rapid progress toward technical and cost goals
• Sophisticated new infrastructure strategies coupled with public-private partnerships for FCV rollout
• Upward trends in public support for hydrogen and fuel cells
• Policies that support FCVs and hydrogen in response to climate change concerns
• Hydrogen’s potential for storing renewable electricity

Vehicle technology and cost: Fuel cell vehicle technology is ready for a public rollout. In many respects, hydrogen fuel cell cars offer consumer value similar or superior to today’s gasoline cars. The technology readily enables large vehicle size, a driving range of 300-400 miles, and a fast refueling time of three to five minutes. Hydrogen fuel cell vehicles could be a key part of the portfolio of technologies that help us achieve a low carbon future–and do it without compromising consumer expectations.  Along with plug-in electric and efficient internal combustion engine vehicles, hydrogen is an important part of a portfolio approach to sustainable transportation. Moreover, major automakers are showing a continuing commitment to FCVs. Sustained automaker development of FCVs is not only producing better performing and more durable cars, it’s resulting in lower component and vehicle costs. Six major automakers have announced that they will introduce fuel cell cars in the 2014-2019 timeframe.

According to the latest U.S. Department of Energy analysis, fuel cell system cost is on track to meet the $40/kW goal in 2020. Moreover, there appears to be a path for FCVs to meet the ultimate target of $30/kW so they can be cost competitive with incumbent gasoline vehicles.

New thinking on how to build a hydrogen infrastructure:  Having sufficient hydrogen fueling locations has been a major challenge. It’s a “chicken or egg” dilemma where automakers are reluctant to market cars without infrastructure, and station providers are reluctant to build stations without cars. Recently, however, regional public-private partnerships are developing smart, focused, build-out strategies in different locations around the globe. The current preferred approach is to cluster stations in defined regions that stakeholders have identified as early FCV markets. This “cluster strategy” enables more efficient fueling networks, saves millions of dollars compared to earlier designs, and holds the promise of providing hydrogen conveniently and affordably.

The perennial stalling point is funding. The investment required to launch hydrogen infrastructure is more than the usual amount for research and development projects, although vastly less than for current expenditures on the energy system. Still, given the so-called “valley of death”—the market entry cost barrier facing new technologies that must scale up production in order to compete economically—it’s been tougher to get private investment.

The good news is that it might not take that much investment to build up infrastructure to the point where new investments are profitable and less risky for infrastructure providers. In our study, we calculated that a targeted regional investment of $100-$200 million in support of 100 stations for about 50,000 FCVs could be enough to make hydrogen cost-competitive with gasoline on a cost-per-mile basis. This level of investment is poised to happen in at least three places in the world: California, Germany and Japan.

For example, in California, the state recently awarded $46 million to build 28 hydrogen fuel stations and has committed to a $20 million annual investment in stations over the next seven years. Hyundai is leasing its Tucson FCVs to select consumers, while several other car makers—Honda, Toyota, BMW, Nissan, and Daimler—are expecting to have production vehicles on the road in the next few years. Toyota, whose fuel cell vehicles are set to hit the market next year, is also investing in hydrogen fueling infrastructure in the state.

Upward trend in global public support for hydrogen and fuel cells: Global public funding for hydrogen and fuel cells is currently about $1 billion per year, supporting research, development, and deployment of power and transportation applications.  This public investment leverages many times that amount of private investment. (According to the U.S. Department of Energy, its public investments have spurred 6-9 times more in private investment. And automakers have spent more than $9 billion on fuel cell development.)

Low-cost natural gas: The near term availability of plentiful, low-cost hydrogen is good. The boom in low cost shale gas has improved the prospects for natural gas-derived hydrogen, especially in the United States, where it is a major force in the resurgence of federal interest in hydrogen energy. And while natural gas-derived hydrogen does produce greenhouse gas emissions, these emissions are less than half compared to a conventional gasoline vehicle due to the greater efficiency of the fuel cell.

Policies support hydrogen and FCVs around the world: These policies target different stakeholders and include direct subsidies for purchasing vehicles and fuel infrastructure, tax exemptions, zero emission vehicle regulations, and low carbon and renewable fuel standards. “Perks” for hydrogen vehicle owners such as HOV lane access, free parking and free fueling exist in a few places.

Hydrogen is seen as key technology to address climate change: Hydrogen policies are driven by deepening concern about climate change and the growing realization that hydrogen FCVs could be a critical technology enabler to a low carbon transportation future.  Recent studies of low carbon futures suggest that a variety of electric drive vehicles will play a major role in the future light-duty vehicle/passenger car fleet. In the International Energy Agency’s “2 degree scenarios” (corresponding to 80 percent greenhouse gas emissions cuts by 2050), hydrogen FCVs and plug-in electric vehicles account for more than half of on-road passenger cars by 2050, with each representing approximately equal shares.

A recent study by the National Research Council suggests that the long-term environmental, economic and societal benefits of hydrogen FCVs are significant. Fuel cost savings for customers and the reduced costs of air pollution, oil dependence and climate change outweigh transition costs by 10-1.

Hydrogen for storing renewable electricity: Increasing numbers of fuel cell power plants are being installed for secure and reliable distributed power and central power plant applications around the world. Residential fuel cell combined heat and power systems are thriving in Japan and Europe, with tens of thousands of units installed in Japan and thousands planned in Europe.

Taken together, these positive trends suggest that we may be seeing the beginning of a hydrogen transition. But this is still uncertain. Hydrogen faces a range of challenges, from economic to societal, before it can be implemented as a large scale transportation fuel. The question isn’t whether fuel cell vehicles are technically ready: They are. But how do you build confidence in hydrogen’s future for investors, fuel suppliers, automakers—and, of course, for consumers? Early and durable public policies are key to help launch hydrogen infrastructure and provide consumer incentives for purchasing hydrogen fuel cell vehicles.

Still, the trends are encouraging and the hydrogen enterprise has never been more serious and focused. The next three to four years will be critical for determining whether hydrogen vehicles are just a few years behind electric vehicles, rather than decades.

“The Hydrogen Transition” links:

• White paper
• Executive Summary
• Press Release
• Webinar

Ladies and gentlemen: Start your chargers!

Wondering whether a plug-in electric vehicle (PEV) could save you money? Check out the UC Davis EV  Explorer, a cutting edge web-based tool that helps consumers see if a plug-in electric vehicle is right for them.

Designed by the team at Plug-in Hybrid and Electric Vehicle Research Center (PH&EV) of the Institute of Transportation Studies at the University of California Davis (ITS-Davis), EV Explorer allows consumers to compare simultaneously up to four different vehicles on an energy cost basis. Just enter your start and finish commute locations and frequency of travel, and the yearly energy costs for the four vehicles will instantly appear side-by-side. You can even specify the location of a public charging station you use and its charging price to get an accurate cost for public charger use.

Moreover, the user-friendly EV Explorer also works with all types of vehicles—PEVs, hybrids, and traditional gasoline vehicles. With the tool, you can calculate the annual gasoline and electricity fuel costs of your commute or other travel in an easy-to-use chart that you can share with your friends.

To date, most products developed by the PH&EV Research Center have been for use by researchers and in scientific applications. But here at ITS-Davis we’ve enjoyed creating a tool that’s useful for everyone, and even learned a few truths about plug-ins ourselves. For example, the exact distance at which my older model hybrid Honda Insight actually beats a PEV is useful for examining my own vehicle needs. Since my commute was so short, I wanted to look at longer trips, a very easy process in the EV Explorer. I just dragged the blue marker to a new destination and changed the frequency.

EV Explorer inputs are endlessly customizable, designed to fit your charging and driving profile. You can personalize your inputs by:

• Selecting the vehicles you would like to compare from any of the more than 34,000 available in the fueleconomy.gov database
• Changing the frequency of travel
• Dragging the destination marker to a new location
• Adding charging at your destination
• Changing the duration of charging
• Changing the level of charging power
• Changing the price of charging at your destination
• Changing the miles per gallon (MPG) of your cars to match your own estimates
• Changing electricity price at home
• Changing the price of gasoline
• Changing the time to fully charge (for example, you must do this for the Nissan LEAF if you have the charger upgrade package to 6.6kW)

EV Explorer is part of a California Energy Commission project designed to give tools to Metropolitan Planning Organizations (MPOs) for electric vehicles. MPOs are responsible for transportation planning in the nation’s metropolitan areas. When we interviewed MPO representatives, we discovered that they sought not only their own planning tools but also an easy-to-use tool for their constituents to make informed vehicle decisions in the context of their travel.

We invite you to visit the EV Explorer project home page for additional information to get the most out of EV Explorer. In order to optimize speed and usability, the product incorporates certain assumptions and limitations. So make sure that if you use the tool as part of your car-buying research, you check the inputs carefully and read the FAQ.

Even though it was designed for California and the United States, it can work anywhere in the world, by finding a close fuel economy match to any of the more than 34,000 vehicles in the fueleconomy.gov database and, of course, by converting to metric.

If you have any comments, feel free to leave them in the form found in the instructions. And enjoy using and getting the most out of the UC Davis EV Explorer!

Project Team:

Michael Nicholas, Gil Tal, Justin Woodjack,

Programming Team:

Daniel Scrivano, Sonali Dujari, Colin Cameron

Acknowledgements:

We’d like to acknowledge different groups which helped make this tool possible.

• California Energy Commission PIER program for funding this research
• Research Partners at the California Center for Sustainable Communities under which this project is organized
• Fueleconomy.gov for providing access to their fuel economy data for most every vehicle made
• Google Maps whose free maps power the mapping functionality

The Obama administration is thinking creatively about how to address the 2015 requirement for renewable fuels. In doing so, it needs to consider the efficiency and process improvements that are taking place at existing U.S. biorefineries.

In a new white paper released this week by the Institute of Transportation Studies at UC Davis (ITS-Davis), we measure the incremental changes that are occurring in the U.S. biofuels industry and discuss their relevance in advancing domestic environmental goals.

Our research shows that a variety of biofuel innovations are doing more today to reduce greenhouse gas emissions (GHG) emissions than the long-sought advanced biofuels and could help speed deployment of those biofuels. The study, “Three Routes Forward for Biofuels: Incremental, Transitional, and Leapfrog,” was authored by a team of researchers at ITS-Davis’ Sustainable Transportation Energy Pathways Program (NextSTEPS).

The U.S. Environmental Protection Agency (EPA) has been criticized in the past for its year-by-year easing of the federal Renewable Fuel Standard (RFS) targets, which proponents say are important to achieve continued GHG reductions. EPA’s prior leniency on cellulosic biofuels requirements stems from disappointing progress in the development of these biofuels. By contrast, partly due to its use of smaller “bins,” the California Low Carbon Fuel Standard (LCFS) has helped encourage a series of incremental changes in the way current biofuels are being produced that provide immediate benefits and could help pave the way to the EPA’s and country’s long-term goals.

In the ITS-NextSTEPS study, we identify three routes forward for biofuels: (1) an Incremental route in which small improvements are made at existing biorefineries, (2) a Transitional route in which cellulosic “bolt-on” production and other innovations leverage existing biorefinery investments and build know-how with cellulosic materials and processes; and (3) a Leapfrog route that focuses on major technological breakthroughs in cellulosic and algae-based pathways at new, stand-alone biorefineries.

From this perspective, the study looks at an emerging trade-off between investment risk today and carbon emissions reductions in the future. Incremental improvements occurring at many biorefineries today (such as process efficiency) could result in reductions in GHG emissions per unit fuel, and in many cases have a payback period of less than two years for the fuel producer. The nation’s small and medium-sized biorefineries are generally willing to take this risk. Given the large volumes of conventional biofuels in the U.S. (about 15 billion gallons in 2013), these incremental improvements at corn ethanol and biodiesel plants add up to significant overall carbon dioxide (CO2) reductions. By 2030, the improvements will translate into annual reductions of 20-30 million metric tons in the rated GHG emissions of these biofuels. That is equivalent to removing 750,000 to 1.5 million “light duty vehicles” (i.e. passenger cars) from U.S. roads.

The Leapfrog route to large scale, advanced facilities (such as cellulosic) requires more risky investments with longer payback periods. But this route has the potential for much greater GHG reductions once the technology matures and many plants are in operation. But neither the LCFS nor RFS incentives, nor the roughly $8 billion in public and private investments over the past five years, has succeeded in making much progress.

Finally, a Transitional route may offer a key bridge between these two worlds. This route leverages existing biorefineries to produce small quantities of cellulosic fuel. These medium- risk, medium-reward technologies may be just what the advanced biofuel industry needs to pave the way to large-scale cellulosic production. The study notes, however, that, to date, the majority of the transitional technologies in the U.S. have focused on cellulosic ethanol, rather than “drop-ins” that do not have a “blend wall” problem and can be used in ships and aircraft. Efforts to encourage small transitional investments in drop-in biofuels are also needed.

Together these three routes suggest a new way to think about the U.S. biofuels future, and a strategy to help achieve California’s 2020 LCFS targets as well as national ones. To the extent that RFS revisions recognize these routes and encourage Incremental GHG reductions at existing biorefineries while leveraging Transitional investments to speed development of Leapfrog technologies, the faster that the entire U.S. biofuels system can deliver on their promised environmental performance.

Links to the “Three Routes Forward for Biofuels”

• White paper, with abstract and executive summary
• Industry Brief