Carbon Order

road

 Figures 1: 2010 Transport energy by source and by mode; Figure 2: Global Transport final energy use by mode


Figure 1: 2010 Transport energy by source and by mode and Global Transport final energy use by mode

SOURCE: WEF Repowering Transport 2011 Based on International Energy Agency and US Energy Information Administration Data

 


 Figure 3: Global transport final energy use by mode


Figure 2: Global transport final energy use by mode

SOURCE: IEA Energy Energy Technology Perspectives 2010




 Figure 4: Projected world population, in millions

Figure 3: Projected world population, in millions

SOURCE: Global Population set to hit 9.7billion by 2050. The Guardian 29.07.15

 

 

 Figure 5: Fastest growing populations (source: The Guardian)


Figure 4: Fastest growing populations

SOURCE: Global Population set to hit 9.7billion by 2050. The Guardian 29.07.15

 

 

 


Figure 5:  Population by major region

 


 Figure 9: World GDP Volumes

Figure 6: World GDP Volumes




 Figure 10: GDP volumes in OECD, the emerging economies and the rest of the world


Figure 7: GDP volumes in OECD, the emerging economies and the rest of the world (2010=100)




 Figure 11: Share of world GDP volumes generated in OECD, emerging economies and rest of the world

Figure 8: Share of world GDP volumes generated in OECD, emerging economies and rest of the world




 Figure 12: Passenter-kilometres by private car

Figure 9: Passenter-kilometres by private car




 Figure 13: Motorised passenger travel by mode in 2007

Figure 10: Motorised passenger travel by mode in 2007




 Figure 14: Overview of various powertrain technologies

Figure 11: Overview of various powertrain technologies




 Figure 15: Global EV sales through 2014

Figure 12: Global EV sales through 2014




 Figure 16: Planned emission standards in select regions

Figure 13: Planned emission standards in select regions
 Source: Liberato




 Figure 17: CO2 emissions of selected OEMs and brands 2012 in Europe vs 2020 targets

Figure 14: CO2 emissions of selected OEMs and brands 2012 in Europe vs 2020 targets
 SOURCE: McKinsey Evolution: Electric vehicles in Europe gearing up for a new phase? April 2014)




 Figure 18: Energy density of battery and fuel-cell technologies

Figure 15: Energy density of battery and fuel-cell technologies




 Figure 19: Cost estimates and future projections for electrical vehicle battery packs

Figure 16: Cost estimates and future projections for electrical vehicle battery packs




 Figure 21:  National purchasing subsidies (EV compared to ICE car)

Figure 17:  National purchasing subsidies (EV compared to ICE car)
 
 SOURCE: McKinsey Evolution: Electric vehicles in Europe gearing up for a new phase? April 2014)





 Figure 22: Interaction of battery cost, fuel prices and EV competitiveness

Figure 18: Interaction of battery cost, fuel prices and EV competitiveness




 Figure 24

Figure 19

 


 Figure 27: Forecasted number of EV fast-charging stations worldwide

Figure 20: Forecasted number of EV fast-charging stations worldwide




 Figure 28: Compilation of EV sales as a 9% of total light vehicle sales by various institutions

Figure 21: Compilation of EV sales as a 9% of total light vehicle sales by various institutions




 Figure 29: Navigant EV sales forecast (2014)

Figure 22: Navigant EV sales forecast (2014)




 Figure 30: IEA EV sales forecasts

Figure 23: IEA EV sales forecasts




 Figure 31: Total cumulative global EV sales and distribution by region by 2020

Figure 24: Total cumulative global EV sales and distribution by region by 2020
 



 Figure 32:  EV sales in the EU as a percentage of car sales and overall car fleet

Figure 25:  EV sales in the EU as a percentage of car sales and overall car fleet 




 Figure 33: European EV sales distribution by powertrain type

Figure 26: European EV sales distribution by powertrain type




 Figure 34: EV + Solar + Battery combination economics (pay-off years and ROI) & detailed pay-off/cash flow projection by 2020 for a German household

Figure 27: EV + Solar + Battery combination economics (pay-off years and ROI) & detailed pay-off/cash flow projection by 2020 for a German household


 

 Figure 39:  Relationship between urban, non-urban and national vehicle ownership

Figure 28:  Relationship between urban, non-urban and national vehicle ownership
 
 
 
  Light duty EV sales by scenario_ world markets 2014-2022
 
 Figure 29:  Light duty EV Sales by Scenario, World Markets 2014-2022

INTRODUCTION

Road transport has always dominated the transport sector and currently accounts for the bulk - around 76% - of transportation energy consumption, including more than 60% of global oil consumption at around 51m bbls/day.  Light duty vehicles (LDVs), including light trucks, light commercial vehicles, and minibuses, account for about 52%, whilst trucks are responsible for about 17%. Full-size buses (4%) and two-wheeled vehicles (3%) account for the remainder (1) (see figures 1 & 2).


Road transport demand depends on a multiplicity of factors including population demographics, urbanization, economic and technological development, and government policies.

 

POPULATION DEMOGRAPHICS

By 2050, the world population is expected to increase by 2.1bn to reach 9.7bn (2). Population growth will continue to slow from 1.7% a year from 1980-1990, to 1.3% a year from 1990-2008, 1.1% a year from 2008-2020 and finally less than 1% annually from 2020-2035. This growth will take place overwhelmingly in non-OECD countries, mostly in Africa, China, India and parts of Latin America. The non-OECD population is expected to grow from 5.5bn in 2008 to 7.2bn in 2035, with Africa overtaking China during this period to become the world’s most populous region.  Most of the increase in OECD nations is in North America (see figures 3-5).   


By 2100, the world population is expected to reach between 11bn and 12.5bn, with 44% in Asia and 39% in Africa (3). Populations are also ageing: for the first time in recorded human history, elders outnumber the young, with over 65s projected to triple from 525m today to 1.5bn by 2050 (4). Over the same timeframe, the number of countries with contracting populations will grow from 18 to 44, the vast majority in Europe (5).

 

URBANISATION

Most population growth will occur in urban areas, with more than two-thirds living in cities by 2050 compared to about half today -- raising urban populations from 3.3bn in 2008 to 5.2bn in 2035, with most of this increase in non-OECD countries.  The number of megacities will increase from twenty-two to potentially a hundred, mostly in Asia, Africa and Latin America, generating high levels of traffic congestion, pollution and noise, amplified by a projected 2-3bn cars and trucks, and a doubling of travel and road freight compared to today (6).


ECONOMIC GROWTH

Global GDP is projected to grow nearly fourfold by 2015 (see figures 6-8).  Historically, there is a close statistical correlation between the growth of GDP and growth in transport, both passenger and freight. Demand for commuting is less sensitive to short term fluctuations in GDP, and demand for public transport therefore less elastic than other modes. Growth in per capita income levels has a positive effect on ownership and use of private vehicles, with elasticity following an S-shaped curve. Surface freight volumes correlate strongly with GDP (7) (remainder of this section to Technological Development also drawn from this source).However, in the highest income countries there is evidence that some forms of mobility, particularly car use, are growing less strongly than GDP and, over the last 10-15 years, growth in passenger vehicle travel volumes has decelerated, and even turned negative in some instances (see figure 9). Slowing population growth, ageing and urbanization are the main causes, but unfavourable economic conditions for young adults coupled to changing socio-economic patterns are also factors. Freight tonne-kilometres decrease with rising per capita incomes as a result of dematerialisation, growth in service sector share and trade in lighter weight goods as economies advance.


Over the last 25 years, shifts in transport energy use have reflected economic change in OECD and non-OECD countries. Currently, OECD countries rely on passenger LDVs much more than non-OECD countries, which show higher dependence on buses, rail and two/three wheelers. OECD countries also undertake more air travel per capita. Unsurprisingly, as economic power migrates to major emerging markets, particularly in Asia, transport modes evolve toward OECD patterns with much higher levels of car and air travel (see also in sections Carbon Offsets and Aviation) (figure 10). IEA projections for world economic growth assume 3.2% a year for the period 2008-2035, similar to that for 1980-2008, with OECD countries contributing 1.8%/year, and non-OECD countries 4.6%. The resulting demographic changes in household size, composition, age and spending power, will have profound implications for transport growth, options and policies:

 

  • countries experiencing high population growth tend to exhibit low levels of economic development and motorisation
  • urbanization, especially the growth of megacities, will exert an increasing influence on transport use, both through associated economic performance and socio-economic impacts  
  • OECD nations and China will age, whilst other non-OECD countries will shift to a younger demographic


INNOVATION

The automotive sector is a globally competitive and integrated industry with high potential for market responsiveness, rapid innovation and generational change in the face of strong market and regulatory signals. Projections for the rate of technological development and substitution do not always foresee or capture this potential, however, with the result that future scenarios can underperform real-world outcomes. This has particularly been the case with fuel economy, where massive gains are now possible, albeit often compromised by manufacturers’ obsession with other (mostly academic) measures of increased performance. Given this potential, it is worth reviewing current technological development in some detail.


ELECTRIC/HYBRID VEHICLES

Electric vehicles (EVs) are propelled by a battery-powered motor charged via the grid, either at home or at charging stations. They do not use an internal combustion engine (ICE), and therefore are not dependent on hydrocarbon fuels. Hybrid electric vehicles (HEVs) combine an ICE and electric powertrain, with battery-charging through regenerative braking or the ICE. Unlike EVs and PHEVs (plug-in electric vehicles), HEVs cannot be charged through the grid, but the dual propulsion extends the range, enabling long distance driving (figure 11).


The global market for all-electric and hybrid vehicles is growing rapidly. Cumulative sales of EVs and PHEVs increased from 100,000 in 2012 to 320,000 units in 2014, and will easily exceed 500,000 in 2015. Cumulative sales reached 740,000 vehicles by the end of 2014, will top 1 million by the middle of 2015 and are on target for 1% of global car sales in 2016 (8). HEVs total six million globally (9) (figure 12).


A July 2015 report (10) forecasts sales of conventional internal combustion engine (ICE) light duty (ie passenger) vehicles to decline at a CAGR (compound annual growth rate) of -6.6% to 2035, reducing market share from 91% currently to 40%. Start-stop vehicles (SSVs) will grow from 4% to 49%, hybrids will account for 3% while PHEVs, BEVs (battery electric vehilcles), NGVs (natural gas vehicles), PAGVs (propane autogas vehicles) and FCVs (fuel-cell vehicles) are expected to account for 9% by 2035.


A March 2015 study by Cambridge Econometrics showed that, with an accelerated roll-out of infrastructure, deployment of electric vehicles in the UK could reach 6m by 2030 and 23m by 2050 (11).


The major factors driving this growth are threefold: regulatory, technological and economic. Progressively stringent emissions standards are creating the need, technological innovation the means and low mileage and maintenance costs – assisted by government subsidies -- the incentives. Figure 13 illustrates the COtargets to which global car makers have to comply, and Figure 14 shows the impact on individual OEMs.

 

EV TechnologICAL DEVELOPMENT

The technological catalyst for this projected growth is improving battery power. Today’s prevailing battery technology for EVs is Lithium-ion - some 2.5 times the energy capacity and a tenth the cost of its equivalent in 1991, but still too energy-diffuse and expensive for mainstream adoption. Figure 15 compares the energy density of various battery technologies and fuel cells.


Industry-wide cost estimates for electric vehicle battery packs have declined by 14% per annum from 2007—2014, from $1,000/kwh to $410/kwh (4). Battery pack costs for leading BEVs are even lower at $300/kwh, and economies of scale will bring further cost reductions to $200/kwh in the near term. Bosch GmbH expects 15% of all new cars built worldwide to have at least a hybrid powertrain by 2025, and that by 2020 batteries will deliver twice as much energy for half the cost (12). Reducing costs from $250-300/kwh today to $100 would enable EVs to compete with internal combustion engines without subsidy and is targeted by the industry within ten years (figure 16) (see also Economics below).


In the meantime, lithium-ion batteries are likely to peak at 400 watt-hours/gram or less, compared to 250 currently, whilst next-generation technologies such as lithium-air (also known as lithium-oxygen) have the potential for a tenfold increase in energy density. Other possibilities include lithium sulphur, magnesium-ion, graphene and solid state technologies.


A parallel strategy with less diminishing returns achieves the same objectives of increased range and reduced costs by focusing on making cars lighter. Despite an R&D spend a hundredth that on batteries, weight reduction yields the same result with less cost, time and risk (14). This is already taking place in the remainder of the car market, driven by fuel economy standards now in place for 80% of the world’s passenger vehicle market (15). A 50% reduction in emissions from passenger vehicles is projected between 2000 and 2025.


Ford recently announced a switch to aluminium for its F-150 truck range, citing weight savings of 15% (700 lbs) and fuel savings of 20%. Carbon fibre is 30% lighter than aluminium but also stronger, enabling substantial weight savings without compromising on safety: the new BMW i3, for instance, weighs 25% less than a typical compact. The first mass production vehicle to use mostly carbon fibre for its body, it has already achieved sales of over 50,000 (July 2016 statistic) since launch in late 2013, well above the Prius plug-in hybrid.


Improving fuel efficiency is leading to forecasts for reduced demand growth for oil, with the IEA lowering its projections for 2040 to 104 million barrels a day – more than the current 91mbbls/day, but significantly less than previous estimates (16). As technology improves, fuel economy standards will continue to tighten beyond programmed regulations such as the US CAFÉ standard for 2025 of 52.5 miles per gallon.


The commercial sector will also see strong growth. A report released in January 2015 (17) forecasts that global sales of electric drive and electric-assisted medium- and heavy-duty commercial vehicles (MHDV Classes 3-8) will grow from less than 16,000 in 2014 to nearly 160,000 in 2023, representing a compound annual growth rate (CAGR) of 29.3%. Powertrain types included are hybrid-electric, plug-in hybrid-electric and battery-electric.


EV ECONOMIC Value

The economic attractions of EVs are several. First, mileage costs are much lower than ICEs, even at today’s low oil price: $0.04/mile, compared to $0.11/mile for conventional gasoline (18). Secondly, because electric engines are mechanically simple, maintenance costs are lower. Finally, tax credits and other tax incentives subsidise purchase and running costs such as congestion charges (figure 17).


Batteries represent a significant proportion of purchase costs, so the potential of EVs depends on battery cost reduction. Figure 18, prepared by McKinsey in 2012 (19) charts the relationship between battery prices, fuel prices and the relative competitiveness of EV and ICE vehicles.


As at 24.07.15, average gasoline prices in the US were $2.76/gallon. With battery costs projected soon below $200/kwh, EVs become competitive with ICEs even without subsidies. A study by the University of California collating EV battery price forecasts from leading industry sources projected such cost parity by 2020 (20)


One factor which will continue to drive down costs is manufacturing efficiency, in part through economies of scale. Tesla’s Gigafactory is expected to produce cost reductions of 30% by 2017 from an already low $275/kwh. Projections by UBS and chemical company Umicore are more conservative, but still anticipate declines to $100/kwh by 2025 (21) (figure 19).


Despite this potential, consumer attitudes will continue to resist large-scale uptake until battery cost and performance meet the required market criteria. A December 2014 poll of 16,000 UK drivers by the Automobile Association (22) found that 71% expected to change their car in the next five years. One third expected to opt for a petrol-fueled vehicle, one quarter for diesel, 5% a hybrid and just 1% an electric car. Fuel economy and low emissions were cited as factors influencing their choice by 84% and 55% respectively.


The major concern with EVs remains range limitations. Critical to resolving this will be the provision of comprehensive charging infrastructure. EV charging times of 4-12 hours can now be reduced to 40 minutes through fast charging, and the number of fast charging stations worldwide is expected to grow nearly tenfold by 2020 (figure 20).


Conclusions

In summary, global EV sales will be determined by the following factors:

 

  • Technological: battery power density and range
  • Regulatory: carbon emission targets
  • Economics & convenience: relative fuel and electricity prices, government subsidies and charging infrastructure provision


With the level of investment now committed to R & D in battery improvement, it is likely that power and cost reductions will improve at least fourfold by 2020. At the same time, progress on climate policy in support of and beyond the COP 21 Paris agreement will only be effective if commitments are actually translated into action. In this context, it is difficult to imagine a policy environment that is not highly conducive to the EV market. And, although oil prices are likely to stay depressed in the short term, underlying trends such as industry investment cutbacks and post-peak declines in conventional production are storing up momentum for continuing volatility and, potentially, a more permanent price escalation. Given these market signals, it is also probable that investment in EV charging infrastructure will continue to grow rapidly.


Even relatively recent projections are therefore likely to underestimate future EV growth. Figure 21, a compilation of projections prepared by Ricardo AEA in 2012 (23) illustrates this point.


Subsequent forecasts, notably from Navigant and IEA – both of which predict total EV (HEV plus PEV) sales of around 6m by 2020 – are more bullish (figures 22 & 23).


UBS is more conservative, citing disparities in the ‘headline’ and ‘real world’ CO2 emissions standards which allow manufacturers to produce a lower volume of EVs whilst still adhering to regulatory guidelines – potentially reducing projected sales by 2021 from 8.7m units to 3.5m. Nonetheless, this still results in an impressive compounded annual growth rate of 40%, and a tenfold increase in EU EV sales from 2014 to 2020. According to UBS, the EU will represent around 4% of global car sales by 2020, and the number of EVs on the road will be 1% of the total car fleet. By 2025, these figures are expected to increase to 10% and 3.5% (figures 24 & 25).


More optimistically, Citigroup expects EV sales to account for 9.75% of the EU market by 2021, with a very sharp rise in sales of ‘mild hybrid’ vehicle sales in 2019 (figure 26).


The declining costs of solar energy generation – already at grid parity in many regions of the world -- are also likely to impact on EV sales, most particularly after 2020 when they are projected to reach 2-3c/kwh. In a separate study (24), UBS analysed the outlook for EVs, solar power, and stationary batteries and concluded that synergy between the three in combination would significantly accelerate their rate of market penetration. Focusing on the German market, the study showed that consumers would see an 8-year payback on their investment, with free electricity for their EVs over the following 12 years (figure 27).

 

All of the projections have already been superceded by actual sales, with the global EV fleet exceeding 1.2m by 2015 (see figure 30), and the EV120 by 20 target now clling for an electric car fleet of 20m by 2020.  This acceleration in growth and market projections has been driven by continuing reductions in battery costs - which have been cut by a factor of four since 2008 - and increasing power density, enabling EV ranges soon to exceed 300km (see figures 31 & 32).


oecd itf scenario projections to 2050

Few global projection studies are sufficiently recent to incorporate these latest developments in future scenario modeling. The OECD ITF (International Transport Forum) Outlook 2015 (25) presents long-run scenarios to 2050 for global passenger mobility and freight volumes, using updated models and assumptions mostly from OECD/IEA sources (see note in side panel for details).

 

GLOBAL SURFACE TRANSPORT CO2 EMISSIONS TO 2050

Overall transport volumes and emissions from both passenger and freight transport increase strongly between 2010 and 2050, this being most pronounced in non-OECD economies.  Growth in car ownership correlates with growth (figure 28) in per capita income in an S-shaped curve . CO2 emissions grow more slowly than transport volumes due to efficiency improvements which are generally more powerful than modal shift policies (figure 29).


For the three scenarios (BAU, high and low) passenger vehicle-kilometres grow between 117% and 233% by 2050, with larger growth outside of the OECD, reflecting faster GDP and transport expansion. Within the OECD, vehicle-kilometres grow by 57% in the baseline scenario, with small differences in the highest and lowest scenarios. Outside of the OECD, vehicle-kilometres grow 3.5 to 5.5 times, depending on oil prices and transport policies (figure 30). Applying the IEA New Policies Scenario for the evolution of vehicle technology leads to increases in passenger transport emissions of between 34% and 106%, with a central projection of 63% growth. In non-OECD economies, the range is between 162% and 314%. In the OECD, emissions range from static (at 2010 levels) to a 31% decrease (figures 31 & 32).


The scenarios also highlight the rising share of surface freight transport emissions, growing from 42% of total emissions in 2010 to 60% in 2050 (OECD from 33% to 45%; non-OECD from 54% to 65%).  Growth in surface freight volumes (329% to 629%) and emissions (239% to 608%) will be driven by non-OECD economies, the wide range being due to uncertainties relating to production composition and modal share (figures 33-38).


Transportation represents around 23% of global CO2 emissions of 32.3 GtCO2 (2014 figure) ie approximately 7.43 GtCO2, of which road transportation represents around 17%, or 5.5GtCO2. The relative contributions of passenger and freight transport are not available for many countries; however, the ITF quotes a range of 35-40% for freight for many OECD countries and a current estimated global average of 42% rising to 60% (referred to above). CO2 emissions growth for passenger and freight transport to 2050 are set out in table 1 opposite.


The median of the CO2 emissions projected for 2050 is 9.13 Gt CO2, representing a 63% increase on 2014 emissions of 5.5 Gt CO2. The theoretical market potential for DAC in this sector is, over the period 2020 to 2050, around 0.3 Gt CO2/year – requiring a ramp up of some 300 1m tonne plants per annum (in fact the potential is larger than this because the 9.13 Gt figure allows for reduction in carbon intensity through continuing technological improvement and fuel substitution, to which DAC synthetic fuels could be a major contributor).  It is also the median of a range the outcome of which could be 25% higher.


The recent revelations concerning the use of ‘defeat devices’ by the VW group to manipulate performance in emissions testing, and the now-revealed massive discrepancy between regulatory test and real-world emissions in diesel models from a host of other car producers, places a very large question mark on the ability of diesel engines to meet ever-tightening emissions standards. Given the size of the market-share represented by this class of vehicle, it is likely that this will result in a rapid acceleration in petrol-hybrid and electric vehicle development and production to fill the market space currently occupied by diesel.


This presents an opportunity for DAC in the provision of ultra-low carbon synthetic fuels, low-carbon EOR-derived fuels, and virtual zero-carbon fuels through offset accounting.



As recently as the 1980s, few private cars were found on China’s streets. By 2002, there were 10 million private cars. In 2009, for the first time, more cars were sold in China than the United States and, by 2015, there are over 150 million. If China were to reach the U.S. ownership rate of three cars for every four people, it would have over a billion cars.

Statistics sourced from: Plan B 2.0: Rescuing a Planet Under Stress and a Civilisation in Trouble. Lester R Brown 2006. China Soon to Have Almost as Many Drivers as U.S. Has People. The Wall Street Journal 28.11.14. World on the Edge: How to Prevent Environmental and Economic Collapse. Lester R. Brown, Earth Policy Institute 2011.
 

In China, CO2 emissions from transportation are expected to increase nearly six-fold from 190 megatons annually to more than 1,100 megatons, due in large part to the explosive growth of China’s urban areas, the growing wealth of Chinese consumers, and their dependence on automobiles…. In India, CO2 emissions are projected to leap from about 70 megatons today to 540 megatons by 2050, also because of growing wealth and urban populations.


New report shows how to reduce vehicle pollution, create financial savings on a global scale. Natural Resources Defence Council Staff Blog, 30.09.14

'The number of cars in use in the world could more than quadruple by 2050 and these would need to have clean engines. By 2050, I think there will be 2.9 billion cars in the world and at least two billion of that will be in countries where there are hardly any cars at the moment.’

Carlos Ghosn, Chief Executive of Renault Nissan, 30.05.15
 

‘Urban Transport Gains Could Save $70 trillion Globally by 2050’

IEA policy proposals for densification, anti-congestion measures, and multi-modal cities, reported in Greentech Media 23.07.13


 
 

'More than $100 trillion in public and private spending could be saved between now and 2050 if the world were to expand public transportation, walking and bicycling in cities'


'New report shows how to reduce vehicle pollution, create financial savings on a global scale'. Natural Resources Defence Council Staff Blog 30.09.14, referring to A Global High Shift Scenario, a report released in September 2014 by the Institute for Transportation and Development Policy and the University of California, Davis.

 

‘Transport is set to become the world’s biggest source of CO2 emissions unless lawmakers take strong action now…..The transport sector accounted for 27% of final energy use and 6.7 GtCO2 direct emissions in 2010, with baseline CO2 emissions projected to approximately double by 2050…..Without aggressive and sustained policies (to cut CO2 from cars and trucks), transport emissions could increase at a faster rate than emissions from any other sector.’

Climate Change 2014: Mitigation of Climate Change, Working Group iii, Intergovernmental Panel on Climate Change, April 2014


'Emissions from freight are set to increase so fast the logistics industry will pump out more CO2 than passenger traffic by 2050…..freight transport emissions will grow 286 per cent on average by the middle of the century as changing trade patterns ensure larger volumes of goods travel even longer distances. The sharp increase in emissions dwarfs the predicted 30 to 110 per cent increase in surface passenger transport emissions’.

ITF Transport Outlook 2015, International Transport Forum, OECD, 27.01.15.



PROJECTION ASSUMPTIONS

The latest growth estimates from the UN (4) shown in figures 3 and 4 opposite represent a substantial increase on the earlier UN projections used in the studies referred to below. The World Energy Council, for instance, assumes a population of 9.2bn by 2050, representing an increase of 26% from the present 7.3bn. The new figure of 9.7bn raises growth to 37% -- a 42% upward adjustment. The OECD ITF study adopts 8.8bn as the 2050 population outcome, representing a 20.5% increase over the current 7.3bn, against which the increase to 9.7bn represents an upward revision of a massive 80%.

 

ITF MODELLING TOOLS & ASSUMPTIONS 

The OECD ITF Outlook 2015 is based on ITF modeling tools drawing on the IEA’s 2014 Mobility Model. Population scenarios are based on UN projections; GDP scenarios on those developed by the OECD Environment Directorate (specifically the ENV-Growth model); and projections for international freight by the OECD Economics Directorate. The ENV-Growth model projects GDP and per capita income levels for all major economies (more than 190 countries), and assumes that income levels in developing economies will gradually converge to those of the most developed economies. Long-term projections are made for five key drivers of per capita economic growth: physical capital; employment; labour efficiency; energy demand and efficiency, and natural resource extraction patterns; and total factor productivity (TFP).

Freight traditionally correlates strongly with GDP especially during the early stages of economic development, and is assumed to weaken as GDP rises. Two scenarios are considered: ‘business as usual’ and one in which dematerialisation of the economy proceeds as incomes increase.

Population growth, urbanization and rising per capita income levels all generate increasing transport demand and reliance on private vehicles, with elasticity of private ownership following an S-shaped curve

World economy, passenger and freight transport projections are presented for 2010-2050 using two different regional aggregations: three major groupings (OECD, emerging markets and the rest of the world) and nine geographical groups (Africa, Asia, China + India, EEA + Turkey, Latin America, Middle East, North America OECD Pacific and the Transition Economies). Transport scenarios are translated into emissions projections by applying transport technology paths taken from the IEA MoMo model and Energy Technologies Perspectives under the New Policies Scenario (four degree scenario, 4DS, in which broad already announced national policy commitments and plans are implemented, fuel economy standards are tightened and there is a progressive, moderate uptake of advanced vehicle technologies. The result is a slow but sustained decrease in fuel intensity of travel and carbon intensity of fuel for all vehicles, generally higher within the OECD region.

Key underlying population, GDP and oil price assumptions are: (i) a world population of 8.8bn by 2050, of which 66% will be urban with 94% of the projected growth being in developing countries (ii) world GDP will grow at an average annual rate of 3.3% from 2010 to 2050. Figures are presented in Purchasing Power Parity terms and 2005 US dollars.


Oil price scenarios are updated using IEA and US Energy Information Administration (EIA) sources. The reference price scenario corresponds to the New Policy Scenario of the IEA World Energy Outlook 2014. The high and low scenarios are based on the continuation to 2050 of projections presented in the 2014 Annual Energy Outlook of the EIA. The high and low scenarios represent strong deviations from the reference case, as illustrated in figure 38.  In the reference case, the oil price reaches $125 per bbl by 2050, compared to $212 in the high case ($132 by 2020) and $60 by 2025 in the low scenario, slowly rising to 2040.



 Figure 45: Growth in surface freight tonne-kilometres by world region, 2050​

Figure 33: Growth in surface freight tonne-kilometres by world region, 2050




 Figure 46:  Share of surface freight tonne-kilometres by world region​

Figure 34:  Share of surface freight tonne-kilometres by world region


 

 Figure 44:  OECD and non-OECD share of surface freight transport, 2010 and 2050​

Figure 35:  OECD and non-OECD share of surface freight transport, 2010 and 2050




 Figure 47: Surface freight CO2 emissions by world region, 2050​

Figure 36: Surface freight CO2 emissions by world region, 2050



 Figure 43: CO2 emissions from surface freight transport, 2050

Figure 37: COemissions from surface freight transport, 2050

 

  Figure 37: World oil price: High, reference and low scenarios

Figure 38: World oil price: High, reference and low scenarios

 

Industries court peril when they throw their capital and energies into also-ran technologies. The US camera maker, Kodak, foundered after failing to keep up as its rivals digitised.  Europe’s carmakers could be similarly outmanoeuvred by the Japanese-led move into petrol-hybrid vehicles. At no greater cost, these do not have the pollution downside of diesel. The fuel economy they offer is superior.  Europe’s obsession with diesel may have driven its car industry up a technological dead end.

Race to diesel backfires for Europe’s carmakers’ Financial Times, 27.09.15
 

VIRTUAL ZERO-CARBON FUELS

Sequestering CO2 generates carbon negative offset potential which can be used to render conventional fuels carbon-neutral - creating in effect 'virtual' zero carbon fuels.

The LCA well-to-pump GHG emissions for petrol are 11.8KG/Gallon.  At $120/tonne CO2 zero-carbon designation would add £1.13 per gallon to UK pump prices - a  premium of just 22%.

Such a premium is immaterial in the context of existing and impending efficiency improvements in vehicular transport.  Audi's dual-mode hybrid powered range,  for instance, achieves 45GM CO2/KM for their TTQ compact suV, or 150MPG. Assuming an annual mileage of 12,000, 100% carbon neutrality adds a mere £93 per annum - less per week than the price of an espresso.

 

 

2014

2050

Passenger
%
GTCO2


58      
3.2



40    
3.74
2.95-4.53)

Freight
%
GTCO2



42
2.3
 



60
5.61
4.42-6.79)

Total
GTCO2

5.5


9.35
(7.37-11.33)

Table 1: Passenger and Freight Emissions 2014 & 2050 (projected)