In 2012, EPA will release window stickers for cars to mitigate consumer confusion about fuel economy ratings. This push is due to the increasing supply and demand of electric cars, whether they are plug-in hybrids or all-electric. Automakers have actually supported this plan because of the marketing and increased awareness of electric and hybrid cars, so EPA has churned out two possible sticker designs (click on the images to get a thorough explanation of each sticker).
Label Option 1
The primary tool in this design is the use of letter grades, which are determined based on general classification:
A: Plug-in hybrids
A-: Gas-electric hybrids
B+, B: Fuel-efficient gasoline
B-: Average fuel-efficiency
C+, C: Below-average fuel-efficiency/Pickup trucks
D: Very fuel-inefficient (SUVs)
The sticker also shows the consumer how much money they will save on five years of fuel, based on an average fuel cost of $2,000 a year. The remainder of the statistics, like non-GHG air pollution and carbon emission per mile, are relatively small and are placed at the bottom of the sticker.
Label Option 2
The primary tools here are combined MPG and annual fuel costs. The slider designs are more prominent, and 5-year fuel costs are removed.
For electric cars, both labels mention the range and electricity used per mile. This kind of information is necessary for consumers and has been shown to be some of the biggest obstacles for EV adoption.
Since the letter grades merely represent either the vehicle type or above/below-average fuel economy, the combined mpg and slider should suffice. The five-year savings number seems arbitrary, so we prefer the one-year fuel costs since they are more relatable. The sliding scale graphics give consumers a better idea of what the numbers mean, so we also like that they have more space devoted to them. Overall, we prefer the second design option, but you can let EPA know what you think on their design site.
According to the EPA’s latest report, carbon emissions for 2009 cars have dropped about 6% when compared to the 2008 models. Fuel efficiency has also jumped around 7% from two years ago.
This improvement, from 424 to 397 grams of CO2 per mile, is quite significant. CO2 emissions, in the form of grams per mile driven, haven’t dropped this much in one year since 1981. Since CO2 emissions are effectively controlled by fuel efficiency, mpg is also important to examine. Last year also saw the largest annual gain in fuel economy, going up from 2008’s 21.0 mpg to 22.4 mpg. This kind of increase has not happened since 1980.
Historically, the 1987 fleet had some of the best mileage, but that achievement eroded over the course of 20 years. 2005 began a recent five-year trend of shrinking emissions (see graphs below), and 2009 marks the first year that carbon emissions per mile were lower than the 1987 levels.
The actual size of the fleet does not directly impact these ratings, but this year’s production is the lowest since 1975, with 9.2 million units. When you combine this low value with a one-year spike in the makeup of hybrids (2.3% to 4.3% of total fleet), the impressive 2010 fuel economies make a little more sense. When you take into account the rising prominence of all-electric vehicles, emissions will only be dropping in the coming years.
Pike Research has done a lot of electric vehicle (EV) market research and consumer surveys that range from expected unit demand in the coming years to consumer interest. Their latest estimates predict the overall global market for plug-in electric (PEV or BEV), plug-in hybrid (PHEV) and hybrid (HEV) vehicles. Pike estimates that by 2015, 53% of the aggregate market for EV will come from the US and China (in about equal parts). The chart below shows the gradual increase in the estimated units sold, totaling to a little over 3.2 million vehicles in five years.
While global demand for EV is on the rise, American demand for PEV is waning. Last year, Pike showed that about 48% of respondents were positively interested (“extremely” or “very interested”) in purchasing an EV, but this year the figure has dropped to 43%. The other interesting difference between 2009 and 2010 opinions is the acceptable price increase for an EV: 2009 respondents said a 12% premium is most acceptable, but this year the number is 18.75%.
To help jumpstart this trend and to cut operational costs of their vehicle fleet, GE is planning on purchasing 25,000 EV by 2015. Half of these vehicles, which will most likely be GM’s Chevrolet Volt, will be purchased next year. This will not only boost public perception of EV but also help ease the pinch of building up the vehicle charging infrastructure.
Click image to enlarge
Click image to enlarge
According to a Life-Cycle Assessment by WorldAutoSteel, the automotive wing of the World Steel Association, cellulosic ethanol has the smallest carbon footprint of most vehicle fuel types, with gasoline, diesel, and E85 from corn as the biggest emitters. They also determined steel as the least energy-intensive vehicle material.
The group examined raw material use, fuel consumption, and end-of-life energy requirements, but there are potentially major issues with the model. First is that the indirect emissions of land use change were not taken into account, so biofuels are depicted as cleaner than they actually are. This is particularly significant for the US if the country imported the fuel. In addition, only virgin materials were considered in the materials analysis, so aluminum was portrayed as much dirtier than steel.
There is an obvious conflict of interest in this LCA, but WorldAutoSteel was transparent enough to release their model to the public, which can be found here.
The purpose of the study was to show automakers that while using lighter materials may decrease fuel use, overall GHG emissions may increase because of the impact of mining and refining the raw materials. Because of the issues described above, the actual lesson from this study is that the fine print is critically important in determining the true emissions from a particular product, even with an intensive project like an LCA. It also demonstrates the importance of third parties conducting an LCA, especially if you are using one to make a statement rather than find problem areas of your product or process.
EPA and DOT have called for the first national standards on GHG emissions and fuel efficiency for heavy-duty trucks and buses. The new regulations, which will take effect on vehicles sold in 2014, range from 7-20% reductions in fuel use and CO2 emissions, and current emissions of N2O (nitrous oxide) and CH4 (methane) would be capped forever. HFC (hydrofluorocarbon) leakage from A/C units is also capped at 1.5% of total refrigerant leaked per year. This will ensure the use of low-leakage parts in A/C systems, further reducing GHG emissions.
There are also several credit options that manufacturers can pursue. Anyone may use CO2 credits to offset their excess CH4 or N2O emissions, and there are ways to earn more credits, including exceeding the reduction standards for emissions or pursuing advanced vehicle technologies, like hybrid drivetrains, fuel cells, electric vehicles.
Concerning upfront costs, the truck itself can pay for the average technology upgrade within one year of use. The overall savings in the first five years would include 250 million tons of GHG emissions and roughly half a billion barrels of oil. This, plus the societal benefits of reducing GHG emissions, equals about $41 billion in benefits to truckers (societal benefits include reduced time refueling and energy security). Just like the defense of the financial benefits of the Clean Air Act, this new regulation looks like it will save the country billions of dollars while cleaning the air and increasing energy security.
Environmental concerns aside, increasing efficiency to save energy saves money and makes solid business sense. Energy is work and economically speaking, money drives action. The more energy a company needs to buy from the utility the more their products cost. The less energy they use to do the same work, the more money they make on each product. Some companies are saving millions, while taking even relatively simple steps to prepare for an unpredictable energy future.
Many companies are identifying their highest energy sinks, and then prioritizing those areas for efficiency improvements. For any company that maintains a fleet, an obvious step toward significantly reducing energy cost and costly emissions is to move in the direction of electric or electric-hybrid vehicles. Though the technology is only as green as the electric grid it plugs into, going electric avoids both fuel and emission costs while preparing to plug into a greener grid, once it s available.
Parcel services in the U.S. are helping to pioneer cleaner fleet technologies and management practices—and demonstrating a deeper commitment to growing the clean energy market overall. They are piloting the use of electric or hybrid-electric vehicles and other emission reducing technologies, and helping to build the pool of knowledge around the use of these technologies in the field. FedEx is testing emerging technologies for generating clean energy. UPS, in addition to piloting new technologies, has an offset program so their customers can choose to help fund a green energy future. The U.S. postal service is the first federal agency to publicly report GHG emissions and they are involved in testing various alternative fuel and vehicle technologies.
FedEx employs more than 1,800 alternative-energy vehicles worldwide and is aiming to be the first parcel service to implement a fully electric truck in the United States by launching four fully electric parcel trucks in the Los Angeles area in June of this year. Though the technology is new, the company already has has 10 electric vans in London and five on order for Paris. Mitch Jackson, VP of environmental affairs and sustainability for FedEx outlined a realistic approach, “…we’ll be giving these trucks a real workout, helping the manufacturers refine their future offerings. Down the road, we see the possibility of charging electric vehicle fleets with low- or zero-emission electricity generated on site by such innovations as solar electric arrays, like those at FedEx locations in California, New Jersey and Germany, or the Bloom Energy Server, another new technology we’re helping to pioneer through evaluating it at our solar-powered hub in Oakland.”
UPS has adopted several new fleet technologies—choosing each deployment location strategically in order to take full advantage of the technology. Bob Stoffel, UPS’s head of Sustainability stated it well, “A more efficient technology not being used efficiently is a waste of time and money for your business, and it doesn’t make stockholders happy either.” UPS has also re-vamped their system for small and medium-sized business parcel pick-up. The “Smart Pickup” system essentially involves better communication technology and route planning. They expect the more informed approach to save up to 793,000 gallons of fuel and 8 million driver miles, as well as eliminate 7,800 MT of emissions annually.
The USPS, seeks to reduce emissions 30% by 2015. In a new vision of sustainability, they are implementing efficiency upgrades at all levels. From energy technology, to building efficiency, to scheduling, even determining walking routes—they have a focus on increasing efficiency as well as reducing emissions. Recently, anticipating a significant drop in the volume of parcels they will deliver in 2010, USPS is looking at cutting Saturday service; a side effect will be decreased emissions.
It is compelling to see businesses that create the most CO2 reacting to reduce it. How can lesser emitters not do the same?
EPA Administrator Lisa Jackson has repeatedly emphasized that Congress should move forward on developing acceptable climate legislation. Due to the necessity of immediate action, however, the EPA is looking at using the existing Clean Air Act to develop a carbon trading scheme that will serve to provide a national framework for clean energy innovation and adoption. The US EPA has outlined several methods, like phasing in proposed regulations or excluding small business and certain industries for a time that will help businesses move into a future of mandated carbon monitoring and accounting.
There has been strong resistance—much of it centered around the EPA endangerment finding that CO2 is a public health hazard and motions to regulate it. Certain states have complained that the EPA relied too heavily on reports by the U.N.’s climate science panel which included a few potential exaggerations. However, the debunking of climate science that has arisen in response to possible scientific reporting errors around the research has since been shown to be unfounded. EPA spokeswoman Adora Andy affirms that the science behind the endangerment finding “came from an array of highly respected, peer-reviewed sources from both within the United States and across the globe, and took into consideration hundreds of thousands of comments from members of the public, which were addressed in the finding.”
On April 1st, the agency took the first step by finalizing its first rules on automobile GHG emissions. The agency also raised fuel efficiency standards for the fist time since the 70’s. This motion is supported by a strong push among those in the auto industry to set a national standard from which they can build. About the same number of states support the EPA as are against EPA regulation of carbon emissions. It would be interesting to see which of the same entities would resist if Congress could manage to pass something. Texas for instance, with its high number of oil refining and other industries, will be heavily impacted by mandatory emissions reductions—no matter where they originate.
Yesterday, we participated in a discussion with Jill Dugan. Ms. Dugan is a Senior Visiting Fellow on International Carbon Markets at the British Embassy. She managed the UK’s pilot emissions trading scheme from 2003-2005 and was the UK’s cross Government lead for the 2008-2012 phase of the EU Emissions Trading Scheme.
She pointed out that with certainty businesses can make economic decisions on carbon reduction strategies. How can a company determine whether to change to biodiesel and potentially lower MPG without knowing the cost of carbon emissions? How can an electric utility decide whether to build a biomass plant without knowing the cost of carbon emissions?
Well, this concept was reiterated on Monday, when the United Auto Workers legislative director Alan Reuther submitted a letter to congress calling efforts to dismiss the EPA endangerment finding misguided. He urged them to allow the EPA to move forward to institute a national fuel economy and GHG emission standard. Reuther warned in the letter that “California and other states have agreed to forgo state-level regulation of tailpipe emissions and abide by the new national standard that will be created by these NHTSA and EPA rules.” He emphasized that if a national standard is not set automakers will be burdened with navigating a maze of federal and state standards.
Further, he mentions that blocking the EPA and NHTSA rule-making efforts could also hinder domestic innovation and technological advances. Reuther wrote “we believe such legislation can help to provide significant investment in domestic production of advanced technology vehicles and their key components, as well as other energy saving technologies. But such progress will be undermined if a disapproval resolution or rider were to overturn EPA’s endangerment finding.”
Throughout the letter, he emphasized the historic impact of developing a national standard and urged congress to find solutions that consider the necessity of moving forward to control emissions, rather than seeking to shut down the rule-making process. “The best way to address these concerns is for Congress to move forward with comprehensive climate change legislation that properly balances concerns of various regions and sectors, and establishes a new coherent national program to combat climate change.”
We need certainty to move forward - right now we are stuck in neutral.
A Focus on sustainability equals successful business. The Ford Motor Company is the only car company that is a member of the Chicago Climate Exchange, their Fusion hybrid is selling well and was named 2010 car of the year, and they have turned around falling profits. Shifting gears to handle a new era of business, they have out-distanced their competitors.
They are anticipating the 2010 Focus will be Ford’s first global car, and an indicator of Ford’s transformation from an American-centered manufacturer of heavy trucks to a global producer of smaller and more environmentally friendly cars. Through the Ford Fusion Hybrid they are introducing leadership among U.S. car-makers in developing hybrid-electric technology and they plan to build an electric version of the Focus, starting in 2011.
Despite economic difficulties, they have also revived their River Rouge Plant into an example of an environmentally responsible manufacturing complex. They partnered with William McDonough, who co-authored Cradle to Cradle: Remaking the Way We Make Things, to redevelop the plant, which now includes a 10-acre vegetative roof among many other eco and worker friendly adaptations.
This statement by Executive Chairman William C. Ford Jr. shows that Ford has both hands on the wheel and is ready to both analyze and meet challenges. “We don’t know what the market is going to be for electric vehicles…but we will be ready for the demand whatever it is, whether it becomes 10 percent of the market or 90 percent.”<–>
For the past 80 years or so we have been living in a world where miles per gallon and horsepower have been the standards by which we measure the performance of our cars and trucks. Welcome to the world where CO2 per mile becomes the new measuring stick.
Earlier this year, President Obama announced an increase in the Corporate Average Fuel Economy (CAFE), which would bring the fleet average up to 35.5 miles per gallon (42 mpg for cars and 27 mpg for trucks) or 250 grams of CO2 per mile, by 2016. Current CAFE standards require an automaker’s fleet of cars to average 27.5 mpg and trucks must get 24 mpg.
Normally, domestic automakers would be screaming at this kind of announcement, claiming that they would be put out of business. But, so far, the opposite has been true.
According the EPA, the increase in CAFE standards will reduce CO2 by 950 million metric tons over the next 5 years. If you do the math, that equals gasoline 107 billion gallons of gasoline. The United States consumes roughly 378 million gallons of gasoline a day, which equates to about 3.4 million metric tons of CO2. Yearly totals are about 137.9 billion gallon or 1.2 billion metric tons of CO2.
There’s a lot of good that will come out of these new standards: lowered dependence on oil, reduced greenhouse gases and a lower relative price of gas. The problem is that no one will be forced to buy these more fuel-efficient vehicles as has been proved in the past. Americans will buy the biggest and most powerful vehicles they can afford. The only thing that restricts us is the price of gas. Ironically, it’s possible that if the new CAFE standards have the desired effect they may actually drive more demand for gas guzzlers. Then we get stuck on the rollercoaster.
Higher CAFE standards combined with cap-and-trade legislation is the magic combination that will drive demand to more efficient transportation. CAFE will help the auto manufacturers to plan out to 2016 (and beyond) and cap and trade will assure the plan doesn’t get altered by fickle U.S. consumers who are easily distracted by gas prices. CO2 per mile, here we come.