European Commission Joint Research Centre and Institute for Prospective Technological Studies. May 2003
The objective of the study was to review the past trends and anticipate future developments in vehicle and fuel technologies, in relation mainly to passenger transport. The study provides an overview of the trends in the main families of conventional and alternative technologies and fuels, covering the evolution of their main technical characteristics, fuel economy, user costs (variable and fixed) and environmental impacts. As regards the anticipation of future developments, the main research issues were identified and projections of the possible development of the above variables were made, based on the results of ongoing research activities world-wide.
Baseline scenario
The baseline scenario is used as the reference case. It corresponds to the outlook for each technology if the current trends in demand are sustained, if fuel and vehicle prices and fuel economy follow the path predicted by current surveys of trends in vehicle technologies, and if no significant policy measure is implemented. According to the baseline scenario, no clear winner among the non-conventional technologies is identified. Fuel cells are expected to become an option only at the end of the 2010’s, while electric vehicles seem capable of securing a niche. Hybrids may play an interim role in the transition between ICEs to fuel cells. Total demand in the passenger car sector (expressed in total number of vehicle kms) is expected to rise (though slower than GDP growth). CO2 emissions from passenger cars are expected to show a slight increase by 2010 (3%) and a reduction of 13% by 2020. This is the combined result of the improvement of conventional technologies, the gradual removal of older cars from the fleet, and the introduction of alternative technologies.
High Oil Scenario
In the high oil scenario an increase of the price of oil is assumed. The increase is applied to the fuel prices predicted by the POLES model during the whole period of the simulation. As a reference, the price increase is considered to be equal to 28% (that would correspond to an increase from 25 to 32 US$ per barrel). Such an increase would have a minimal impact in the medium term (up to 2010), since the alternative technologies would not be mature enough (i.e. have competing costs) by then to benefit and increase their share. In the longer term, an increase in the price of oil would benefit the alternative technologies, since their difference from the conventional technologies in terms of variable cost would become smaller. As regards the conventional technologies, higher oil prices would reinforce the shift from gasoline to diesel, as fuel economy becomes a decisive factor. A higher oil price would also slow down growth in transport demand. The slower growth in demand, combined with the shift towards alternatives and more efficient vehicles, would also lead to further reductions in CO2 emissions. The high oil scenario is also equivalent to a fuel tax scenario, i.e. the same results would appear if fuel taxes were raised by 28%.
Low Oil Scenario
The low oil scenario corresponds to the opposite case of the high oil scenario. A decrease of the price of oil by 28% is assumed (e.g. from 25 to 18 US$ per barrel). The results have in general the opposite direction of those for high oil: the introduction of alternative technologies is delayed and gasoline remains the most attractive option. Transport demand would increase, though still slower than GDP growth (saturation levels are reached). CO2 emissions would increase significantly by 2010 and in the long term brought down to the levels of 2000 as a result of improved technology.
Carbon Tax 50 Scenario
In the carbon tax 50 scenario, carbon content related tax equivalent to 50 euros per ton of CO2 is imposed. The difference from the high oil price scenario (that also corresponds to imposing a fuel tax) is that it affects gasoline and diesel in a different manner. Diesel has higher carbon content and is cheaper than gasoline. So while this carbon tax would mean an increase of gasoline prices by 12%, it would mean double the increase for diesel prices. As a result, although the results have the same direction as the results in the high oil scenario as regards the penetration of alternative technologies, they strongly favour gasoline as compared to diesel.
Carbon Tax 100 Scenario
The carbon tax 100 scenario assumes a carbon content tax equivalent to 100 euros per ton of CO2. At that level of carbon tax the results would be comparable to that of the high oil price scenario, with the exception that gasoline has an advantage over both diesel and fuel cells. The other two alternative options, electric and –mainly hybrid- would also benefit.
Subsidy for electric, hybrid and fuel cells scenario
The three scenarios on subsidy for electric, hybrid and fuel cells correspond to a decrease of the purchase cost of each alternative technology by 2000 euros. This would decrease the price differential of these technologies compared to conventional technologies and accelerate their introduction. For electric, although its share is increased, this is not enough for the difference in costs to be covered. For hybrid and fuel cells, penetration is accelerated and each of the two can become an important technology by 2020. Subsidies would not have any significant impact on total transport demand, but would further marginally reduce CO2 emissions (except in the case of fuel cells).
Zero Emissions Scenario
The zero emissions scenario assumes the prohibition of conventional technologies in urban areas. This would favour hybrid vehicles in the medium term and all alternative technologies, in a proportional way, in the longer term. The main losers would be the light gasoline (and in the longer term, the light diesel) cars, since their predominantly urban role would be played by alternative technologies. This scenario also leads to a reduction in CO2 emissions, though lower than in the case of high oil or carbon tax 100, where restrictions are applied to the whole fleet.
