TransportTransport

European Strategyon

Alternative Fuels

- Clean Power for Transport Initiative -

Franz Söldner

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Alternative Fuels for Europe

The issue – why substitute oil?

The alternatives – which solution?

Support actions - what has been done?

The Clean Power for Transport initiative - a European alternative fuels strategy

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Slide 3

Energy Consumption in Transport

Mtoe Road Rail Domestic Navigation

Domestic Aviation

International Aviation

TOTAL

Oil Products 287 3 6 8 43 347Electricity 4 4

Biofuels 13 13

Natural Gas 1 1

LPG 5 5

TOTAL Fuels 306 7 6 8 43 370

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Oil price

Speculative bubble 2007-2008: Cost for EU transport = 90 b€ North-Africa unrest 2010-2011: Cost for EU transport =

40 b€

($/bl)

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Issue with Oil

Economics - costCost for oil up to € 1 billion per day for the EU in 2011Trade balance deficit in oil: ~ 2.5 % of GDP

Energy - security of supplyOil counts for 94% of transport fuels, 84% importedAccess to oil vulnerable and prone to interruptions

Environment – climate change, pollutionGreenhouse gas emissions from use of fossil energyAir pollution from combustion of oil in transport

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Slide 6

Alternative FuelsPropulsion with internal combustion engines Biofuels

Wide feedstock range with renewable low-CO2 sources Synthetic fuels

Production from fossil and renewable sources with synthetic technologies Natural gas

Fossil (natural gas) and renewable sources (biomethane; "solar/ wind" gas) LPG

Fossil (oil, natural gas) and renewable sources (bio-refineries)

Propulsion with electric motors Electricity

Stored in batteries on board of vehicles; grid supply or recuperation Hydrogen

Stored in tanks on board of vehicles; electricity production in fuel cells

Both are universal energy carriers using all primary energy sources

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Alternative Fuels - Renewable Energy

ElectricityStorage of electricity from fluctuating production from renewables (solar; wind) in batteries of electric vehicles

Electric grid stabilisation with feed-in from batteries

HydrogenStorage of fluctuating renewable electricity production in hydrogen produced from water through electrolysis

Use of hydrogen in fuel cells for electromobility

Natural gasProduction from biomass: biomethane

Production from hydrogen through methanisation with CO2

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Slide 8

EU Actions on Alternative Fuels Communication on alternative fuels (11/2001)

Biofuels, natural gas, hydrogen

Directive on the market share of biofuels (5/2003)Market share 2% in 2005, rising to 5.75% in 2010

Directive on the taxation of energy products (10/2003)Lower taxation of alternative fuels enabled

Renewable Energy Directive (April 2009)

Binding target: 10% renewable transport fuels by 2020

Technology Platforms, Joint Technology InitiativesHydrogen/fuel cells (TP: 2004; JTI: 2008), Transport (2004), Biofuels (2005)

Green Cars Initiative of European Economic Recovery Plan (2008)Focus on electromobility (EU demonstration project Green eMotion: 2011)

Communication on clean and energy efficient vehicle strategy (4/2010)Focus on improvement of internal combustion engine and electric vehicles

White Paper on common transport policy (3/2011)Announcing comprehensive long-term strategy on alternative fuels for all transport modes

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Slide 9

EU-Support to Hydrogen and Fuel Cells

(M€)

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Financial Incentives for Electric Vehicles

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Slide 11

Alternative Fuel Infrastructure

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Alternative Fuel Market in Europe

Different national technology choices

➜ Isolated national/regional markets

➜ Fragmentation of the internal market for alternative fuels

➜ EU-wide mobility inhibited by technology borders

➜ Deadlock between missing infrastructure and vehicles

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Slide 13

Steps to an Alternative Fuel Strategy

European Expert Group on Future Transport FuelsFuture Transport Fuels Report: 25 January 2011Alternative Fuels Infrastructure Report: December 2011

Joint Expert Group Transport & EnvironmentEuropean Alternative Fuel Strategy Report: May 2011

Conference on Future Transport Fuels13 April 2011 (European Sustainable Energy Week)

Public Consultation11 August – 20 October 2011

Studies, including stakeholder consultationClean Transport Systems study: final report November 2011Implementation study: final report August 2012

Clean Power for Transport packageCommission adoption 23 January 2013

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Slide 14

Energy PathwaysUse

Primary Energy Energy Carrier Use

Renewable

Biomass

Geothermal

Solar

Water

Wind

Fuels Thermal Engine

Electric Motor

Fuel Cell

Battery

Fossil

Crude Oil

Natural Gas

Uranium

Diesel/Gasoline/Cerosine

Gas

Coal

Power Plants

SyntheticFuels

Hydrogen

Vehicle ICE

Jet

Electric Power

Heating

ShipICE

Electric Power

Plastic / ChemistryProduction

Tra

nsport

non

Tra

nsp

ort

UsePrimary Energy Energy Carrier Use

Renewable

Biomass

Geothermal

Solar

Water

Wind

Fuels Thermal Engine

Electric Motor

Fuel Cell

Battery

Fossil

Crude Oil

Natural Gas

Uranium

Diesel/Gasoline/Cerosine

Gas

Coal

Power Plants

SyntheticFuels

Hydrogen

Vehicle ICE

Jet

Electric Power

Heating

ShipICE

Electric Power

Plastic / ChemistryProduction

Tra

nsport

non

Tra

nsp

ort

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Slide 15

Land Efficiency of Biofuels

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Slide 16

Land Efficiency of Biofuels 1 ha:

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Clean Power for Transport Initiative

•Establish a consistent long-term EU alternative fuel strategy

•Build a sustainable and competitive transport system in the EU

•Strengthen the internal market for new technologies in the EU

•Ensure EU-wide infrastructure to close a major market gap

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Clean Power for Transport Package

• European alternative fuels strategy Communication

• Deployment of alternative fuels infrastructure Directive

• Action Plan on LNG for shipping

Staff Working Document

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Communication on a European Alternative Fuel Strategy

• Comprehensive mix of alternative fuels to substitute oil as energy source for all transport modes on the long-term:• LPG• Natural gas (LNG and CNG)• Electricity• Biofuels• Hydrogen

• Priority actions:• EU-wide infrastructure• Common technical standards• Consumer acceptance• Technological development

➜ Framework for investment and technology development

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Alternative Fuels for all Transport

Mode Road Air Rail Water

Range Urban Short Medium Long Short Medium Long InlandShort sea

Maritime

Natural gas

LNG LNG LNG LNG LNG

Electricity

Biofuels

Hydrogen

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Directive on Infrastructure Build-up•National policy frameworks required

•Electrical vehicle charging point targets per Member State and shore-side electricity for ships in ports

•Hydrogen refuelling infrastructure in active Member States

•LNG refuelling points for ships in TEN-T Core ports and for trucks along TENT-Core roads

•Natural gas refuelling points for EU-wide mobility

•Common standards for all alternative fuel infrastructure

•Consumer information on vehicle/fuel compatibility

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Alternative Fuel Market Development

EU-funded Projects

Green Car Initiative

FCH Joint Undertaking

TEN-T projects

SustainableMarket

InfrastructureCommon standards

Regulatory measuresCO2; pollutants

Fuel quality; renewable energy

Green procurement

Market incentives

Subsidies

Fiscal incentives

EIB loans

Missing Link

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Action Plan on LNG for Shipping

•Case for LNG as alternative fuel for shipping

•Economic aspects of LNG for shipping

•State of deployment and main obstacles

•Infrastructure issue

•Financial support

•Actions towards an EU framework for LNG for shipping

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Case for LNG for Shipping

Cleaner fuels needed for most ships in European waters:

Low sulphur (<0.1%) marine fuels required in sulphur emission control areas (SECAs) from 2015

LNG has low pollutant emissions: SOx ~0, PM ~0; NOx 10% less than diesel: meets or exceeds future emission standards

LNG has low CO2 emissions: 25% less than diesel

LNG has low cost: ~ factor 2 cheaper than low-sulphur diesel; prospect of increasing spread between LNG and diesel

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Slide 25

Cost of Fuels

Speculative bubble 2007/8: Cost for EU transport: 90 b€

North-Africa unrest 2010/11: Cost for EU transport: 40 b€

Alternative fuels

Infrastructure costsfor full EU coverage

Electricity20 million charging posts

40 b€

Hydrogen100.000 filling stations

50 b€

Natural gas100.000 filling stations

40 b€

$/bl Oil priceCost

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Cost - Benefits

Cost€ 10 billion total (€ 1.5 billion per year) for alternative fuel infrastructure until 2020

Benefits€ 4.2 billion per year saving on oil bill€ 1 billion per year saving from dampening oil price hikes€ 15.4 billion from environmental gains

(less CO2 emissions, pollutants, noise)Additional employment from infrastructure build-upStrengthening of competitiveness of European industry

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Slide 27

Summary Oil dependence major issue for economy - but transport firstOil supplies 94% of energy to transport; 84% importedCost for oil high and rising; price hikes hit economy

Oil is cause for high CO2 and pollutant emissions from transport

Comprehensive long-term European fuel strategySubstitution of oil for all transport modes Fuel mix: LPG, biofuels, natural gas, electricity, hydrogenEuropean action required to ensure integrity of internal market

Alternative fuel infrastructureEU-wide coverage important for citizens and industryPublic intervention required through action on EU level