How long can diesel locomotives be used? From the U.S. Energy Administration's projections that internal combustion engines will still account for 70% of vehicles in 2050, there is still a long way to go. Coupled with the United Nations' forecast that the world's population will increase from 8 billion to 13 billion, it also shows that carbon neutrality is not an easy task. At present, the main development markets of new energy vehicles are in China, the United States and Europe. Let's take a look at the transition period around electric vehicles and internal combustion engine vehicles, the situation in these three regions.
【Europe's 2035 ban on diesel locomotives and the future of e Fuel】
The European Union, which has long been committed to reducing carbon dioxide emissions, voted on March 28, 2023 to ban the sale of vehicles with internal combustion engines from 2035.
It is worth noting here that the exception to e Fuel proposed by German Transport Minister Paul Köbirchen accepts the compromise proposed by the European Commission. That is, diesel locomotives fueled by the E Fuel can continue to be sold.
eFuel is dominated by Audi and Porsche of the Volkswagen Group. Audi began development of the eFuel in 2017, claiming the same traits as existing gasoline or diesel, so it can be used directly in internal combustion engines. Not only Toyota, Honda, Nissan, but also energy-related companies such as ENEOS are also promoting development. This also has the potential to affect the sustainability of hybrid electric vehicles.
There are also opinions that E Fuel may extend the life of internal combustion engines in the short term, but lead to the expansion of the hydrogen ecosystem in the medium and long term.
One thing hydrogen fuel and e fuel have in common is that both hydrogen fuel and e fuel are based on chemical ESS (energy storage device) hydrogen, which chemically stores electrical energy. The second is an operational advantage, which is much lighter than a battery. The disadvantage of the e Fuel is that it still uses the engine and still needs maintenance. Hydrogen fuel cells, on the other hand, are motor-driven. Still, hydrogen and e-fuel compete with each other and coexist to compensate for the carbon-neutral problem of electrification that batteries and motors cannot.
However, the sales price of synthetic fuels made from renewable energy is 6~10 times that of gasoline, so it is difficult to promote at present. As a result, governments and companies are looking for ways to reduce costs.
In addition, the EU is promoting the development of plug-in hybrid and hybrid electric vehicles to increase the driving range in EV mode and improve the combustion efficiency of internal combustion engines.
【The United States will use 60% of new cars as electric vehicles by 2030! 】
The U.S. Environmental Protection Agency (EPA) has issued strict regulations requiring electric vehicles to account for 60 percent of new vehicles sold in the United States by 2030. It will be implemented in a six-year phase, reducing pollutants by an average of 13% per year until 2032, and reducing pollutant emissions by 56% from 2032 vehicles compared to 2026 models. The CO2 emissions of the 2027 model year should be 12% lower than the 2026 model year, and the 2032 model year should be 52% less than the 2026 model year.
At the same time, the Environmental Protection Agency also decided to introduce battery minimum performance standards, requiring electric vehicles to maintain battery performance above 80% of their initial performance until the initial 5 years or 62,000 miles of operation, and more than 70% after 8 years or 100,000 miles of operation.
This is challenging considering that battery electric vehicles will have a 5.8% share of the U.S. new car market in 2022.
In addition, the American Automotive Innovation Institute (AAI) asked the government to relax this rule in response to the new exhaust emission limit issued by the US government. He warned that in order to fulfill the EPA's proposal, prices for all cars must be raised, consumer choice would be narrowed, and many regions and people in the United States would be adversely affected.
In the United States, California dominates environmental policy. California is asking the federal government to approve plans to ban gasoline vehicles completely by 2035. The California Air Resources Board (CARB) approved new rules for all electric vehicles (EVs) or plug-in hybrids in August last year and in 2035. CARB asked the U.S. Environmental Protection Agency (EPA) to approve exemptions from the Air Purification Act and allow the federal government to impose stricter rules.
However, President Biden has consistently refused to approve the establishment of a date for the abolition of gasoline vehicles.
[China's restrictions on internal combustion engine vehicles are strengthened, and the purchase tax exemption for electric vehicles is extended]
As the world's largest market, China, from the end of 2022, subsidies were eliminated, and purchase tax exemptions were extended until 2027. Restrictions on internal combustion engines have also been further strengthened.
In December 2016, China released a new standard, the China VI Emissions Standard, that combines best practices in European and US regulatory requirements. The China 6A standard has taken effect on June 1, 2020, and the China 6B standard has taken effect on July 1, 2023.
Compared with China 6a, China 6b standard is stricter in terms of emission standards and test standards, especially in the new RDE test to detect the actual driving exhaust of the car. As a result, there are still some older models on the market that do not comply with China's 6B emission regulations, and the destocking of these models may affect the production, sales and prices of the automotive industry.
For reference, China implemented new tailpipe emission limits one year earlier than originally planned, starting on July 1, 2019. Referring to European standards, the Chinese government has implemented tailpipe emission limits since 2001. To achieve this limit, it is impossible to rely on hybrid electric vehicles or plug-in hybrid electric vehicles alone. This restriction is enforced not only in Europe and China, but also globally, and from this point of view, car companies need a fundamental shift in powertrains, so most global players are investing heavily in battery electric vehicles.
China is advancing the transition to electric vehicles at the national level. Believing that it could not dominate internal combustion engines, it focused on the strategy of electric vehicles, and now some Chinese brands have also made their mark internationally. But from the point of view of market characteristics, banning the sale of diesel locomotives is not an easy task.