Why You Should Care about Low Carbon Fuels and Vehicle Initiatives

By Tammy Klein, The Energy Collective.

When I talk about “low carbon fuels and vehicles” (LCFV) initiatives what am I really talking about and why should it matter to you? If you’re a first-gen biofuels, advanced biofuels or advanced alternative fuels producer, why should you care about fuel economy or electric vehicles? If you’re an electric vehicle producer or infrastructure company, why should you care about biofuels? If you’re a refiner or in upstream E&P, why should you care about air pollution, car bans or connected, autonomous driving? If you’re an automaker, why should you care about any of the above? Let me back up and explain, drawing from my November report to my clients, because it’s critical for all these stakeholders

Despite a prolonged period of low crude oil prices, citizens and policymakers in many countries have never been more serious or committed to combating climate change in all sectors, including transport. We know this. The Paris Agreement entered into force in what seemed like a record time – less than a year after it was negotiated. Transport currently contributes 23% of energy-related greenhouse gas (GHG) emissions and 20% of energy use and is expected to double by 2030, according to IEA. Passenger transport accounts for nearly 60% of total transport energy demand, and 60% of this is in OECD member countries right now.

Decarbonizing transport is a major challenge with some strong and powerful advocates calling for a single one-shot solution (electrification). That’s something that needs to be watched closely by all the stakeholders. The reality is that multiple strategies will be required to achieve decarbonization with the understanding that fossil fuel demand will remain in place for some time, especially in emerging economies, and that it could get “cleaner.”