A mixture of carbon pricing, biofuels, vehicle electrification and other initiatives will be needed to effectively decarbonize the transportation industry, according to Fuels Institute Executive Director John Eichberger.
The Fuels Institute released a report entitled “Impact of Transportation-Related Environmental Initiatives” in October that objectively compared the effectiveness and cost of different environmental initiatives and the impacts they have on energy consumers. Eichberger made his remarks Tuesday during a webinar with the Consumer Energy Alliance.
Carbon pricing
Eichberger said several experts favor carbon pricing because it is transparent and delivers benefits proportionate to the costs. While carbon pricing does not put a direct limit on emissions, it does provide an economic incentive for companies to choose less carbon-intensive options.
According to the Union of Concerned Scientists, revenues raised by carbon pricing are typically used to invest in renewable energy, build a more climate-resilient infrastructure or encourage conservation through funding environmental projects. Eichberger said that the majority of carbon pricing funds are used on subsidies and rebates for low-income families to help mitigate possible negative impacts of the regressive tax it places on low-income consumers.
“We all want to reduce emissions, but we can’t do it by bankrupting families and businesses. We have to do it responsibly, and having an objective approach to these types of policy discussions is the best way to do it,” Eichberger said.
Phasing in carbon pricing would be the best way to reduce a shock to the economy, he said. According to previous research, Eichberger said that consumers get used to the price they are paying for gasoline as long as the changes in price are gradual.
Biofuels
According to Eichberger, it will be decades before electric and other zero-emission vehicles (ZEV) will represent half of the market. Because of that, he said the transportation industry needs to think about the liquid fuels that current and future internal combustion engine (ICE) vehicles consume.
“The role and importance of biofuels cannot be overstated. It is a critical ingredient to reduce the carbon intensity of the fuel market,” Eichberger said. However, he said there are limitations as the costs of biofuels can outweigh the benefits depending on the market, regulations and compliance.
Eichberger said if the biofuel pathway approval and registration processes were streamlined, additional opportunities and innovative solutions could benefit the market more efficiently.
A U.S. Department of Energy fact sheet stated that biofuels result in fewer greenhouse gas emissions. The sheet also explored a few common debates and myths around biofuels, including the food versus fuel trade-off.
Vehicle electrification
Charging infrastructure, subsidies and incentives, and ZEV mandates are all things to consider regarding the shift to electric vehicles (EV). The report noted that vehicle electrification has a high cost but also a high level of effectiveness.
Eichberger said that by 2030, about 70% of EVs will be light trucks and utility vehicles. While more cradle-to-grave analyses are needed to compare ICE vehicles and EVs, he said that lifecycle emissions are at least slightly lower for EVs. As the grid gets cleaner, the emissions for EVs should go down even more.
“Left to its own devices, the market moves slowly,” Eichberger said. Thus, ZEV mandates might be needed if the goal is to speed up the transition to EVs.
While some large companies have the ability to look past higher upfront costs for EVs and consider the total lifecycle costs, low-income consumers do not have that flexibility. Federal and state subsidies and incentives are helping more consumers get past the upfront cost.
“It might be a kitchen sink of different things,” Eichberger said, “but if they’re put together in a way that works, that could be very effective,” considering the complexity of combining several decarbonization strategies for the transportation sector.
He said he hopes that officials will use the objective, fact-based research and analyses to make better informed decisions.
Click here for more FreightWaves articles by Alyssa Sporrer.
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