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BEV-first approach may do more harm than good

BEV models could significantly cut transport emissions, but policymakers would do well not to neglect other decarbonisation avenues. By Nick Molden

What we can be certain of is that, in many developed countries, the latest penetration of battery electric vehicles (BEVs) in new car sales is above 10% and, in some cases, well above. What we cannot be certain of is whether this will lead to significantly reduced CO2 emissions in the long term. While the market and policymakers focus on headline market shares, an assessment of risk is being neglected. Risk encompasses many ideas, including a range of ways in which BEVs are not as low-emission as they appear, and ways that alternatives to BEVs, such as synthetic fuels, arrive sooner and with greater effect than expected. Equally, BEVs may turn out to be even better than billed, and the other options fall away. What are the most likely outcomes?

Tech neutrality

Special report: Light vehicle powertrain mix

There is consensus in the reality of climate change: ‘net zero’ is the goal, and BEVs are the most market-ready of the alternatives to combustion engines. As a result, the policy position in most developed countries is to convert the light-duty fleet to battery electrification, and to spur this on by a combination of positive subsidies, avoiding introducing taxation that would mimic the taxes on liquid fuels at the pump, and exhorting the public to switch to BEVs.

Such governmental incentives are generally not being applied, or not to the same extent, to non-BEV alternatives to traditional combustion powertrains. A technology-neutral strategy is not being taken. As the Stellantis’ Chief Executive, Carlos Tavares, recently said, BEVs are products being forced by governments, not the car industry or consumers. Arguments used in support of this ‘picking winners’ approach is the urgency of the global warming situation. To justify subverting the usual market mechanism, and the taxpayer investment, the likelihood of success must be high.

 In the short run, the lowest CO2 strategy for the car parc is to remain entirely with ICE vehicles, especially diesels

What are the main criteria that will govern whether BEVs will deliver part of the solution to global warming? There is little doubt that, if governments push and legislate hard enough, an almost complete transition to BEVs can be achieved, even if the cost is high. Therefore, the question is not whether that will be achieved here, rather whether a migrated light-duty parc will indeed have lower CO2 emissions over the lifecycle of the vehicles.

According to modelling conducted by Emissions Analytics, the two major swing factors are the extent of decarbonising the electricity grid, and the longevity and durability of batteries. It has been well documented elsewhere that if charged up in Poland, with a high proportion of lignite coal used for its grid electricity, the in-use CO2 emissions of a BEV are similar to a standard internal combustion engine (ICE) vehicle. In contrast, a grid with entirely renewable or nuclear sources would give near-zero in-use emissions.

With battery durability, a typical manufacturer warranty is eight years. If the batteries last this long, the advantage that BEVs have over full hybrids (FHEVs), such as the Toyota Prius, is modest. However, if the battery lasts the lifetime of the vehicle, typically 14 years, BEVs double the CO2 reduction of FHEVs. Therefore, government policy should focus more sharply on grid decarbonisation and battery quality, rather than a singular push for high BEV sales penetration.

Enhanced battery life may lead to further benefits in the second or third life of the cells as grid-balancing storage. Governments are showing awareness of these issues, for example with the Faraday Battery Challenge in the UK, which employs 56 PhDs and 470 researchers.

Dieselgate continues to harm diesel’s image, even despite its better emissions performance versus gasoline

Electrification is speculative in a further important way. In the short run, the lowest CO2 strategy for the car parc is to remain entirely with ICE vehicles, especially diesels. All forms of electrification require crystallising upfront the extra CO2 emissions from making batteries, which more than offsets the reductions from fewer components in constructing BEVs. With diesels, a CO2 advantage of around 12% is enjoyed over gasoline ICE vehicles today, with only marginal extra construction emissions. Therefore, by foregoing diesels to switch to BEVs or FHEVs, or plug-in hybrid vehicles, the industry is ‘investing’ this extra CO2 now on the expectation of significantly lower in-use emissions in the future.

The much-vaunted switch from diesels for air quality reasons in the aftermath of Dieselgate has primarily been to gasoline ICE vehicles, which has served to increase CO2 emissions significantly. Furthermore, with average NOX emissions from new diesel vehicles in Europe being around 40 mg/km in real-world driving—50% below the legal limit—there reason for abandoning new diesels for gasoline might now seem an error. The confusion is understandable, in that few would realise that a diesel from around 2018 with the ‘Euro 6d-temp’ designation is often fundamentally different from an early-generation Euro 6 diesel averaging over 400 mg/km. One can only hope that the current widespread trumpeting of ‘zero emission’ EVs is not a repeat of the pattern of Euro 6 diesels when figures taken on trust by the market turn out to be hugely misleading and then situation is fixed too late.

Holistic outlook

So far, these messages are about as cheery as the most popular car colour last year: grey. Where is the hope? Where is the shiny metallic red car approaching on the horizon to delivery us from climate change? There is, in fact, significant cause for hope, if policies are finessed in the right way. What must be avoided, in summary, is a blind move towards BEVs, without any critical appraisal on the real, lifecycle emissions. They have an important role, but will only deliver if operating in the right market and legislative context.

In the short run, a car buyer can advantage the environment by buying a modern diesel, so long as they are prepared to take the residual value risk. Already 25% more efficient that gasoline, with mild hybridisation, heat management, in-engine optimisation and a range of other initiatives, efficiency could be improved by at least another 20%. With investment being switched away from ICE development by many manufacturers, this prospect is uncertain.

For city drivers, a FHEV is the optimal selection now, delivering around 30% reduction in CO2 and similar efficiency advantage compared to a standard gasoline. The benefits are immediate, the price premium slight, and range anxiety non-existent.

For those living in countries with already relatively decarbonised grids, BEVs make a good option, and can deliver low in-use emissions. However, even though they may be powered by nuclear- or wind-derived electricity, the vehicles may be made in countries with dirtier energy infrastructures, which must be accounted for.

From a policy perspective, decarbonising the grid to support the role of BEV is undoubtedly a priority. Every ounce of decarbonisation will pay good returns as it will benefit all BEVs on the road, not just new ones sold. But as the grid decarbonises, it also potentially advantages the ICE via synthetic or e-fuels, if their energy-hungry production can become less carbon intensive. Biofuels can also be advantageous especially in the short term, although great care needs to be made to verify that the ‘bio’ components from truly renewable sources.

There is concern that existing accreditation schemes are administrative exercises that take too much on trust from the suppliers, rather than genuinely verifying provenance. There is also the issue of scalability and whether these fuels will be devoted more to other modes of transport that are harder to convert away from liquid fuels, such as aviation.

One can only hope that the current widespread trumpeting of ‘zero emission’ EVs is not a repeat of the pattern of Euro 6 diesels when figures taken on trust by the market turn out to be hugely misleading and then situation is fixed too late

Even with grid decarbonisation, there will still be the temptation to devote that ‘clean’ electricity to BEVs, due to the relatively low transmission losses, perhaps around 10%, compared to the lower thermal efficiency of burning liquid fuels. What this misses is that most renewal electricity sources—wind, sun—are intermittent. In the absence of more nuclear energy, renewables will have to be scaled up significantly so that, even at trough production, there is sufficient electricity. The consequence of this will be significant peaks at other times, which will need to be stored or wasted. Using this surplus to create synthetic liquid fuels is an obvious option.

A major benefit of e-fuels and biofuels is that they are generally a ‘drop-in’ to existing engines, allowing instant CO2 reduction across the parc, which helps offset the downsides of the energy required in their production. Hydrogen for light-duty vehicles is likely to struggle in that it requires specialist engines or fuel cells, and almost is as energy-intensive to produce. Possibly a small fraction of hydrogen could be blended into existing fuel to give some benefit.

Road ahead

Taking this all together, what is the optimal way forward? Rather than incentivising BEVs so strongly, it would be better to remove these incentives and let the existing fleet CO2 targets and direct vehicle taxes to bring out the natural advantages of diesels and FHEVs. The public money saved should be devoted to decarbonising electricity grids and establishing a regulatory framework that focuses on the provenance of new fuels and battery materials, and the product quality of battery packs, to a high degree of assurance. From there, the market should then bring about a competitive mix of powertrain types—whether using batteries or liquid fuels—and consumers will have an expanded and free choice of vehicles that only they can best match to their individual use cases.

Freedom and the power of the market, suitably framed to climate change policy goals, may be a more robust, lower risk approach than a singular, dirigiste approach that has the beguiling attraction of simplicity of communication.

About the author: Nick Molden is founder and Chief Executive at Emissions Analytics

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