ESG & Industry Updates

IMO Part Deux: International Maritime Emissions in Focus in Brussels

Posted by Kelly Burke on Mar 18, 2024 11:44:47 AM

The International Maritime Organization (IMO) is meeting in Brussels this month, and one of the main topics of discussion is a proposed charge on the international shipping sector’s greenhouse gas emissions. Backers of the proposed carbon levy include the European Union, Japan, Canada, and multiple Pacific Island nations who are low lying and especially vulnerable to climate impacts.

One of the goals of the proposed levy on carbon being discussed is pushing investment into lower carbon intensity vessels and shipping systems to combat the sectors emissions overall. International groups see such a levy as well as an additional adopted fuel standard as the only meaningful ways to guarantee progress going forward. They also see it as the best way to avoid piecemeal National fuel & emissions standards on ports within different nations across international routes.

On the opposing side are the United Arab Emirates, China, Brazil, and several additional South American countries who cite potentially negative GDP impacts of a carbon levy as a disincentive for developing nations. According to Reuters, the University of Sao Paulo found that African and South American countries would be hardest hit by a levy and see an 0.13% negative impact on their GDP. In response to this concern, Brazil, along with the UAE, China, and Norway have instead proposed a “global fuel intensity limit” with financial penalties for breaches of the agreement in lieu of the $150 per ton carbon levy proposal.

As we have discussed previously, the international shipping sector is notoriously difficult to address from an emissions standpoint, as obviously the involvement of many sovereign nations at many different socioeconomic levels complicates the adaptation of rules, and even in the event of regulatory adoption, the question of enforcement and fine collection becomes difficult at best. We saw this with the rollout of IMO 2020 regulations, when the IMO capped sulfur content in marine fuels and questions were raised about supply and phase in options versus “switch flipping” because of the difficulty of enforcing regulations across multinational supply points/ports. (You can get a refresher on IMO 2020 here: IMO Raises Questions on Markets, Supply Impacts ).

However, the headache involved with international rules and enforcement would seem to pale in comparison to the prospect of no agreed upon international standard, as in the absence of an agreement the expected outcome is that different countries develop their own standards on a national level. National standards can vary widely across countries, obviously, and it can quickly become a logistical nightmare for global companies to ensure they are complying across multiple ports. This became glaringly apparent in the US, as the Biden Administration outlined an approach for Decarbonizing Transportation that included Maritime Vessels, and quickly ran into issues with guaranteeing that lower/zero emission fuels would be available at ports to ensure emissions stayed on target for US flagged vessels. It became immediately clear that addressing climate concerns across the segment would absolutely require international coooperation. (We went through some of those concerns when discussing the Decarbonization plan for the United States, you can read that here: "Transportation Decarbonization: Maritime Vessels” )

We will have to wait and see on the ruling out of Brussels. The meeting slated for September is the final deadline for the IMO to make a ruling on both a fuel standard and an emissions "price". The target emissions reduction for the segment is 20% by 2030 and net zero by 2050, which obviously will weigh heavily on the ultimate decision. The EU position is that both the fuel standard and the carbon levy are required to hit the previously agreed upon target emissions numbers, but the word on the street is we are most likely looking at an agreement in September on the fuel standard, and a postponement on carbon pricing. Stay tuned! 

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Topics: Carbon Emissions, IMO 2020, decarbonization

COP28: Takeaways from Dubai

Posted by Kelly Burke on Feb 2, 2024 7:00:00 AM

The UN’s Climate Change Conference, or “COP28” Summit was held from November 30 through December 13th in Dubai, UAE. The Conference consisted of 150 heads of State and Government and 85,000 participants representing countries, organizations, etc. This year’s summit focused on where the world is in relation to the goals initially outlined in the Paris Agreement (forget what that is? Refresher here: LINK). Spoiler alert – the world is nowhere near achieving the goals outlined, and the focus became how the countries involved can speed up their action on climate change mitigation through multiple avenues.

For the first time, notably, this conference dealt with if there would be:

  • An agreement to end fossil fuel use (they ended up with a loophole heavy statement on a goal to “transition away”, more on that below)
  • An inclusion for the first time of agricultural emissions in countries calculations and mitigation plans
  • A focus on funding for smaller and poorer nations to begin their transitions to renewables.
  • An agreement to triple renewables, and double the rate of energy efficiency advancements.

The sections below give a little more context and detail of the major event items, if you are curious:

“Transitioning Away from Fossil Fuels”

Much of the news from the summit centers around the “historic deal” to “transition away” from fossil fuels, after a contentious battle over whether the specific language should remain in the final agreement. This inclusion was hailed by many as a huge victory and step towards serious climate change mitigation. However, the final agreement also includes language on Carbon Capture and Utilization and Storage (CCUS), Transitional Fuels, and Carbon markets, which is seen by some as a glaring loophole that would implicitly allow continued fossil fuel use on the premise that when the technology can scale (it currently cannot) those emissions would then be able to be captured, sold, offset, etc.

As a refresher, CCUS captures carbon emissions from large scale sources like refineries, power plants, etc, compresses them, and injects them into reservoirs underground to mitigate the carbon’s impact on the atmosphere). The IEA projects that even at a best-case scenario level of scale through 2030, CCUS technology will simply not be able to capture more than a third of the emissions it would need to in order to reach net-zero emissions.

Methane Emissions: Agriculture in Focus

Highlighted at the summit was agreement on the need to significantly curb methane emissions, with a goal of reaching net-zero methane emissions by 2050. For the first time officially, the organization took a good hard look at agriculture. Agriculture is responsible for 30% of global emissions.

If you’re a Netflix afficionado, you may remember the charts and footage from “What the Health” or “Cowspiracy” that illustrate just how massive the climate impact is from Industrial Agriculture. Much like the protagonist in those documentaries, many wonder why emissions discussions, particularly regarding methane emissions, don’t often include (or center on) Agriculture. The COP28 summit did in fact involve discussion of its impact and resulted in the “Emirates Declaration on Sustainable Agriculture” which, among other things, commits consenting nations to include emissions from agriculture and farming in their national climate action plans for the first time.

Climate Change Loss & Damage Fund and Green Climate Fund

The last COP summit (COP27) set up (on paper) a loss and damage fund to help mitigate financial impacts to poorer nations from Climate related impacts. During the COP28 summit, a focus was put on filling the established fund. The last summit set the fund up, but without being fully funded it was argued that the fund was essentially a meaningless gesture on the part of wealthier nations. Over the course of the two weeks of talks the fund went up to $790 million – that sounds like a lot of money to us, but the estimates on what is needed runs from $100-400 Billion, so at the end of the day, it’s still at less than 1% of target funding.

During the summit, US Vice President Kamala Harris announced the US would pledge $3 billion to the Green Climate Fund, another established fund to help offset the cost to transition to green energy sources in developing nations. It is the understanding of the organization that poorer countries will need financial input from richer nations to facilitate their transition to green energy sources, and this fund is designed to be a source of funding for that.

Renewable Energy Capacity Tripling

The final deal struck at COP28 seeks for countries to triple their renewable energy capacity by 2030. A point of major contention at the summit (and in general) has been the category of so called “transition fuels” and what counts for them. Natural gas is the main sticking point on this – many member countries say natural gas should not count as a transitionary fuel because of its emissions, it’s a fossil fuel, etc – however, for poorer developing nations it is hard to argue that fuels like natural gas are not a huge step forward from existing systems, and it is also a lot more financially in reach than options like wind and solar, not to mention infinitely more scalable.

So?

Ultimately, the view of the summit’s conclusions among members, climate activist groups, and international groups is that the summit was successful and the language included is a step forward but does not go fast enough or far enough for their liking. As an editorial aside, it is difficult to imagine an agreement that did go far or fast enough for some of the groups, so given the disparate goals of all the member nations, coming away with any remotely firm statement on transition should be seen as a positive by most of the involved participants.

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Topics: methane, Climate Change, Carbon Emissions, renewable energy, paris accord

Transportation DeCarbonization Blueprint: Pipelines

Posted by Kelly Burke on Dec 1, 2023 7:45:00 AM

As we have been discussing, the US National Blueprint for Transportation Decarbonization breaks the Transportation sector into seven categories, each of which has its own targets for emission reduction/elimination, and strategies for how those declines in emissions will be achieved. The next category addressed in the Blueprint is pipelines.

We don’t generally think of pipelines as “freight” (versus items carried by truck, etc.) but actually, pipelines were responsible for 18% of all freight by tonnage in the US in 2015. In the US, pipelines for petroleum and natural gas span over 3 million miles across the country, and the fuels they carry cover close to 70% of energy use in the country currently. Although pipelines transport fossil fuels, the pipelines themselves are remarkably efficient. The major focus of the blueprint when it comes to pipelines is developing enhanced safety controls to avoid unintentional releases that can cause extreme environmental damage, and development of enhanced leak detection and repair. When pipelines have leaks, the main concern is the released methane, which as we know, has an even greater impact environmentally than carbon itself (more on that here: 2021: Methane Regulations on the Agenda)

Outside of those two major points, there are emissions gains to be realized by moving to more efficient systems for pumps, compressor systems, and other ancillary equipment used to keep fuels moving through the pipelines.

Keep in mind, the steps outlined for pipelines are in theory transitional, as the ultimate goal would be pipeline systems designed to transport sustainable/alternative fuels and carbon, versus fossil fuels. As it stands currently, there are substantial challenges and safety questions regarding pipeline transport of current alternative fuels based on variances in their chemical makeup like solvent properties, flammability, pressure issues, etc.

The steps outlined are:

  • Policy & Regulation: The Safety Act of 2020 has a substantial focus on minimizing methane emissions. This is done under the DOT’s PHSMA (Pipeline and Hazardous Materials Safety Administration). PHSMA has issued multiple regulations on pipeline safety & leak regulation – these regulations target the main two issues around pipeline transport: accidental releases, and methane leaks. (The regulations are included under the US Methane Emissions Reduction Action Plan, if you would like more detail on their specifics)
  • Infrastructure Planning & Investment: Part of the Infrastructure Bill passed in 2021 provides for funding to upgrade the pipeline infrastructure via the “Natural Gas Distribution Infrastructure Safety & Modernization” grant program. This grant exists to fund repairs/replacement of portions of pipelines or their operating systems that are outdated, faulty, or prone to failure. The repairs done through this grant will automatically have a positive impact on reducing methane leaks in the existing system, which, as mentioned, is a major goal of this segment’s planning.
  • Research & Innovation: continuous development of monitoring and reporting technology for methane is the major focus of technological advancements & research for this segment. Enhanced leak detection, and enhanced fire prevention at risky sites (like LNG terminals) are the main focus for existing infrastructure, while research into the risks and requirements for safe pipeline transport of alternative fuels is the focus for the new infrastructure we would need to see in order to transition the system to non-fossil fuels, ultimately/

The main takeaway for this segment's goals is methane leak detection and prevention is of paramount importance. We don't necessarily think of small inadvertent leaks being controlled as being a major "thing" in the way we would think about switching to an EV vehicle, or a similar "large" move. However, the EPA estimates that methane leaks in 2019 were an estimated 57 MMT of CO2 equivalent emissions - more than that generated by the more visible parts of pipeline transport like compressor stations.  Natural Gas & Methane leaks have an enormous environmental impact, and an enormous financial one as well (for a quick refresher, take a look at this throwback article from 2015: Harvard Finds Boston is Leaking $90 Million of Natural Gas Annually )  Stopping leaks and spills as an interim step to control pipeline segment emissions is critically important to the overall plan for carbon emission reduction in the United States.  

 

 

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Topics: methane, Carbon Emissions, Biden Administration, decarbonization, pipeline

Solar & Wind Production Ramps up Over 2022

Posted by Kelly Burke on May 3, 2023 12:43:00 PM

Independent research organization Climate Central published a report recently that showed how the national capacity for solar and wind generated power shot up in 2022. The report comes just as the Biden Administration begins rolling out billions of dollars to renewable energy projects as part of its commitment to decarbonizing the grid completely by 2030 and getting the US to net zero emission by 2050.

Here are some of the key points from the report:

  • The US generated over 680K of electricity from solar & wind (combined) in 2022, which equates out to about $82 billion of revenue generation. 
  • Solar & Wind capacity increased by 16% year over year from 2021 - that's enough of an increase to cover the electricity generation needs of approximately 64 million American homes. 
  • Texas, Oklahoma, and Iowa let the nation in wind production
  • A myriad of State incentives helped encourage different states to up production, including a California's mandate on solar panels for new buildings, Iowa's tax credits for wind generation, etc. 
  • Larger States had more impressive gains than smaller, more densely populated ones. Smaller, more dense areas are less able to take advantage of space for larger scale generation projects - a good example of this is the growth we see in Texas or Iowa versus New England States, which haven't made similar gains despite also having incentives. 

We wrote an article for Oil & Energy Magazine that goes further into the points, the holdups to progress on renewables, and what the future looks like it might hold. If you are interested, you can read that article in its entirety here: Solar and Wind Growth Soars in 2022

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Topics: Solar, Carbon Emissions, renewable energy, Biden Administration, offshore wind, decarbonization

Transportation DeCarbonization: Rail Transport

Posted by Kelly Burke on Apr 3, 2023 10:50:32 AM

 

In recent political cycles, we’ve heard a lot of talk about Rail transport in the United States. Most of that talk has been in the context of the US needing more rail accessibility, so it may surprise some to discover that the United States actually has the largest rail network in the world. The catch is, this network is used primarily for freight, not passenger transport, and generally when we speak about rail (at least in politics and on the news), we mean for passengers. Freight made up 91% of all rail-use energy in 2019, so we almost exclusively use it for freight transport, in fact.

Rail accounts for 28% of freight transport by ton-miles, but only resulted in 2% of total transportation emissions. So, given that rail is astonishingly more efficient than both trucking and single vehicle passenger transport (cars), part of the focus on rail is an effort to expand its accessibility, particularly on the passenger side. This would have a two-fold impact on emissions because we would see both an increase in utilization of a lower emission intensive mode of transport, and a simultaneous impact on decreasing traffic related emissions from more intensive transport methods.

Freight rail transport in the US uses diesel locomotive engines almost exclusively, where passenger rail has a mix of diesel and electric. Most intercity transport is diesel, where some light rail and streetcar transport is electrified (think Commuter Rail versus Green Line MBTA lines). Full electrification looks like a near impossible hurdle for US freight transport, because of both the long distances and low traffic levels on most rail lines. Additionally, the current electrification modes in use like overhead lines, or third rails are obviously not at all conducive to long rail lines – emission reductions in this segment would most likely have to come from renewable fuels, hybridization, or new technologies. However, electrification of commuter lines may offer an avenue for further sector emission reductions.

The goals and steps outlined by the Federal Government in the Transportation Blueprint for rail include:

  • Infrastructure Investment: electric locomotives and electrification corridors investment, as well as investment in facilitating the availability of clean/renewable fuels.
  • Multi-stakeholder Collaboration: enhanced partnerships amongst those in government and industry with a vested interest, in order to accelerate the pace of technology development, adaptation, and accessibility.
  • Research & Innovation: investment in research to determine the best and most viable strategies for decarbonization of the sector, particularly through the use of pilot programs to optimize the gathering of real-world data and allow accurate analysis of all the vehicle and environment factors involved to accelerate development in the best clean technologies.

Again, as with the other segments being discussed, a successful pivot away from primarily diesel based rail transport in the United States would have longer term impacts on the market in terms of supply & delivery demands for diesel fuel and associated lubricants.

Something to keep in mind, and that we will keep an eye on as the process continues.

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Topics: EPA, Carbon Emissions, railcar regulations, renewable energy, Biden Administration, decarbonization

Transportation Decarbonization: Off-Road Vehicles and Mobile Equipment

Posted by Kelly Burke on Feb 6, 2023 12:48:53 PM

As we have been discussing, the US National Blueprint for Transportation Decarbonization breaks the Transportation sector into seven categories, each of which has its own targets for emission reduction/elimination, and strategies for how those declines in emissions will be achieved. The next category addressed in the Blueprint by emissions % is Off-Road Vehicles and Mobile Equipment.

The Off-Road Vehicles and Mobil Equipment segment includes a LOT, from heavy mine drilling equipment and excavators to dirt bikes and lawn mowers. The off-road segment is accountable for approximately 10% of emissions, but where 79% of the segment uses diesel, the changes that would be applicable to the medium and heavy duty (on road) sector would carry over fairly cleanly to the off-road sector, which is why they make sense to address in tandem. We saw a similar approach to this with the transition to ultra low sulfur diesel – the initial priority was on road vehicles, as they are more uniform in fuel technology requirements and also contribute more on emissions. Once the tech is there for on-road, its fairly simple to adopt it down into the off-road sector for diesel fueled equipment.

However, the caveat to the “ease” of transferring the technology is that unlike on road equipment, most off road equipment is multi functional – i.e. a combine harvester both needs to be propelled forward, and work at threshing or harvesting the area it works through simultaneously. That is a lot more difficult equation to account for in terms of optimizing power in a sustainable way than say accounting for a simple weight times distance on-road vehicle requirement. It is likely that the solution on heavier off-road equipment will involve some hybridization to offset emissions, more so than other segments will ultimately see in the final picture.

There is however, a lot of variance within the off road segment and some portions of the market will be a lot less demanding in terms of ability to pivot toward more renewable power. The segment breaks out as follows in order of energy use:

  • Construction & Mining Equipment – 36%
  • Industrial Equipment – 23%
  • Agricultural Equipment – 21%
  • Lawn & Garden Equipment – 15%
  • Recreational Vehicles – 4%

The smallest two segments (lawn & garden equipment, and recreational vehicles) should be the easiest to pivot, at least in theory, as they are more easily moved to EV power. We are already seeing this in the consumer level equipment for lawn care, etc. The hurdles for larger scale adoption on landscaping equipment is mainly power and length of run issues with electric power. Equipment needs to be reliable through the entire job. The hurdle on the recreational vehicle segment is largely performance and preference related. Like it or not, an electric dirt bike isn’t very appealing, and an electric snow mobile seems like a non starter given both the conditions the battery would be anticipated to perform in, as well as the potential for being stranded in the event of a drained battery.

The stated goals of the Blueprint on this segment are:

“Increase Targeted research and innovation efforts” – this involves both understanding the depth and breadth of off road equipment and its functional goals, and developing targets for battery and fuel cell technology based on understanding more about the performance levels required.

“Implement Policy and Regulations” – as mentioned earlier, off-road regulations and standards generally seem to mirror the standards on on-road vehicles to a large degree. It’s likely safe to assume that what we start to see come out regarding trucks and busses will eventually be applicable to your off road equipment in terms of fuel and emissions requirements.

“Invest in strategic demonstration” for this segment, this portion of the plan is essentially a doubling down on the focus in the on road vehicle portion, which is to say it focuses heavily on infrastructure for EV charging and availability of technology to coincide with regulatory requirements. It goes without saying that clearly the infrastructure for on road EV would be essentially useless for most off-road applications, given sheer geographic factors. Clearly then, they are also looking at options outside what we typically picture as the EV charging network options, but it isn’t clear yet what that might look like. There is an acknowledgement in the blueprint that hydrogen fuel and renewable diesel options may be necessary for the foreseeable future because of the logistical difficulties with both continuously operational off road equipment, and the tendency of much of the sector to be remote, rural, and/or difficult to access.

There is less clarity in this section of the blueprint, as it hasn’t been a major focus of the push to EV and renewable energy as much in recent years as have on road vehicles. We will have to keep watch on this in terms of presumably forthcoming EPA guidance and proposed regulations on the off road equipment markets.

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Topics: EPA, Carbon Emissions, Biden Administration, decarbonization

Transportation Decarbonization: Medium & Heavy Duty Vehicles

Posted by Kelly Burke on Jan 30, 2023 1:07:12 PM

As we have been discussing, the US National Blueprint for Transportation Decarbonization breaks the Transportation sector into seven categories, each of which has its own targets for emission reduction/elimination, and strategies for how those declines in emissions will be achieved. The second segment by emission % is Medium- and Heavy-Duty Vehicles.

For the purposes of the Decarbonization Blueprint, “Medium and Heavy Duty On-Road Trucks and Buses” includes everything from heavy-duty pickup trucks to long haul semi’s (and everything in between). MHDV make up approximately 5% of vehicles, but they are responsible for 21% of transportation emissions. A further 50% of those emissions are from heavy duty trucks that make up about 10% of the total MHDV category. So when we are talking about this category’s emissions, most of the effective action that can be taken should be focused on a small segment of the total. The other simultaneous focus for MHDV category is the social and environmental justice issue. Where the emissions from light duty vehicles are more ubiquitous, the emissions from MHDV are often concentrated in major urban areas and along disadvantaged corridors within the country.

In terms of the numbers, 81% of the MHDV segment is diesel powered, and unlike light duty vehicles, there is not really a clear ability to easily pivot to EV or hydrogen options (outside of potentially in some of the lighter vehicles that run smaller ranges without heavy freight – like postal trucks). So the suite of zero emission options for the MHDV segment will necessarily be more varied than LDV or other segments where there is less variation in use and function for the vehicles in question. That means a LOT of research & development. Additionally, turnover and replacement timelines for heavy duty vehicles are substantially longer than those for light vehicles, so all the proposed new changes would end up slow rolling out on newer vehicles over time. This is where renewable diesel options will likely become a key factor in pushing MHDV toward hitting emissions goals.

In November of 2022, the US joined the “Global Memorandum of Understanding on Zero Emission Medium- and Heavy-Duty Vehicles” introduced at COP26 which agrees that we will be on a path to 100% new zero-emission MHDV by 2040 at the latest, with a target of 30% by 2030. In January 2023, the EPA announced their “Final Rule and Related Materials for Control of Air Pollution from New Motor Vehicles: Heavy Duty Engine and Vehicle Standards” that sets new emission standards for HD vehicles in line with the Decarbonization plan (you can read that EPA rule here: Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards )

All of this to say that despite the lack of current technology with which to make the changes required to hit emissions targets, it appears all the rules and regulations coming out across Federal Agencies are intending to follow through on the goals set. This portion of the policy obviously carries serious implications for trucking and transportation companies across the board in terms of their equipment purchasing, maintenance of current options, etc. This is definitely a portion of the plan that is still very much unsettled in terms of immediate and longer range impacts. We will keep a close eye on developments and continue to keep you informed of major changes that impact the industry.

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Topics: EPA, Carbon Emissions, Emissions, Biden Administration, paris accord, decarbonization

Transportation DeCarbonization Blueprint: Light Duty Vehicles

Posted by Kelly Burke on Jan 20, 2023 10:41:32 AM

The US National Blueprint for Transportation Decarbonization splits the Transportation sector into seven categories of focus: Light-Duty Vehicles, Medium- and Heavy-Duty Vehicles, Off-Road, Rail, Maritime, Aviation, and Pipelines. We will discuss the major items involved in each of these, from largest % of carbon share to least, starting with Light Duty Vehicles.

Light-Duty Vehicles produce 49% of current transportation emissions (of note, for the purposes of the Blueprint “current” refers to 2019 levels due to the pandemic and related shutdowns making 2020 & 2021 data unreliable/useless).

The United States has over 280 million light duty vehicles on the road and these vehicles:

  • Account for 75% of passenger transport miles,
  • Account for 50% of total transportation energy use and emissions
  • Consume over 120 billion gallons of gasoline annually
  • Emit over 1,000 MMT CO2 annually

As we are all aware, Light Duty Vehicles (LDV) in the US have been subject to increasingly strict emissions requirements over the past few decades, and we have seen a massive increase in the availability of electric vehicles (EV) as well. To put specific numbers on it, in the past 15 years, LDVs have seen a 30% improvement in fuel economy (some of the ultimate impact of this however was mitigated by the trend toward larger, more fuel intensive passenger vehicles during that time period). EV have seen an explosion in popularity, it used to be you’d see a Prius or Volt here or there, now you would be hard pressed to drive to Boston without getting stuck behind a Tesla or two. Again, in terms of specific numbers, EV sales reached over half a million vehicles sold, bringing the total to 4.5% of market share in 2021 (18% in California!).

One of the major focuses of the blueprint in the LDV sector is the promotion of EV and zero emission vehicles, with an obvious preference for EV adoption. In tandem with EV adoption, there is a necessary push for charging infrastructure to make them a more feasible option for consumers. The goal is to have 50% new light duty EV sales by 2030, which would be a major step down the road to the ultimate goal of 100% EV adoption.

There is also an included focus on “Funding Research and Innovation” in this section of the Blueprint, which largely functions as an acknowledgement that we aren’t quite there on battery life and battery cost. Part of the legislative language in the Bipartisan Infrastructure Bill (BIL) and Inflation Reduction Act (IRA) included large investments toward the development of a reliable EV manufacturing supply chain. The legislation also references research and development aimed at achieving price parity between EV and traditional combustion engine vehicles to make them more accessible to the average consumer in terms of price, practicality, and maintenance costs over time. Studies indicate that battery cost has dropped 90% from 2010 to 2020, and projections indicate that when the price reaches $100/kwh the MSRP on EV will hit parity with combustion engine vehicles. The legislation mentioned above intends to fund the research on battery technology to make those price levels reality.

So that is the overview, the major takeaways being that the major goals for this section are:

  • “Achieve 50% of new vehicle sales being zero-emission by 2030, supporting a pathway for full adoption, and ensure that new internal combustion engines are as efficient as possible.”
  • “Deploy 500,000 EV chargers by 2030”
  • “Ensure 100% of Federal Fleet procurement be zero-emission by 2027”

Obviously, for the purposes of energy suppliers, particularly at the consumer level, the growth of EV adoption implies a longer-term shift in the mix of gasoline demand and delivery, especially to stations and municipalities. Actual changes in market share of EV and zero-emission vehicles is something to watch.

Next up, medium- and heavy-duty trucks and buses.

Stay Tuned!

 

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Topics: EV Charger, EPA, Carbon Emissions, Emissions, Biden Administration, ev, DOT, decarbonization

Biden Admin Releases US Blueprint for Transportation Decarbonization

Posted by Kelly Burke on Jan 13, 2023 8:09:33 AM

January 10th, 2023 the Biden Administration released the US National Blueprint for Transportation Decarbonization.

The Blueprint is an interagency developed framework of strategies and actions to take carbon emissions out of the Transportation sector by 2050, developed by the Department of Energy (DOE), the Department of Transportation (DOT), Housing and Urban Development (HUD), and the Environmental Protection Agency (EPA). It’s the conclusion essentially of the memorandum of understanding (MOU) between those departments that they would develop the outline to drive policy decisions and regulatory updates focused on the goal of decarbonization in the sector through 2050 in a cooperative manner between federal agencies.

Another way to think about it is the blueprint is basically what the plan is for implementing actions for the investments created by the Bipartisan Infrastructure Law (BIL) from November 2022, and the Inflation Reduction Act (IRA) from August 2022. These bills established billions in funding for infrastructure and outlined aggressive action on climate change (respectively). The blueprint developed is part of the process for allocating where investment and change happens to push the country toward the enormous mitigations in emissions that the BIL and IRA legislation attempted to make possible.

As we’ve discussed previously, the Transportation sector is the nations largest source of greenhouse gas, and accounts for a third of all domestic GHG emissions, so emissions mitigation/elimination across this sector is obviously a goal in the context of Climate Change. The blueprint additionally sought to develop action plans for the sector with environmental justice in mind – the concentration of emissions and negative impacts from the transportation sector have historically been concentrated in low income, urban, and minority areas of the country and that is an additional factor that needs to be addressed.

The strategies in the blueprint are aimed at ensuring the US hits both the President’s stated commitments on emissions reduction, and the US Nationally Determined Contribution under the Paris Agreement. In order to hit both 2030 targets and 2050 goals, there is a mix of short- and long-term recommendations.

The report specifically seeks to

  1. “Increase convenience by Implementing System Level and Design Solutions”
  2. “Improve Efficiency through mode shift and More Efficient Vehicles”
  3. “Transition to Clean Options by Deploying Zero-Emission Vehicles and Fuels”

The method for doing so is split into strategies, goals, and action plans by transportation subset (or mode). They are:

  1. Light-Duty Vehicles (49% of current emissions)
  2. Medium- and Heavy-Duty On-Road Trucks and Buses (21% of current emissions)
  3. Off-Road Vehicles and Mobile Equipment (10% of current emissions)
  4. Rail (2% of current emissions)
  5. Maritime Vessels (3% of current emissions)
  6. Aviation (11% of current emissions)
  7. Pipelines (4% of current emissions)

We will go through each mode individually, and highlight what we think the important takeaways are for each in terms of what things may impact energy suppliers either directly or via end users (customers) over the upcoming weeks.

Definitely a topic to keep an eye on, because if the U.S. intends to hit the lofty goals on emissions reduction it set itself, there will likely need to be some big big changes out there in the market.

Stay tuned!

 

 

 

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Topics: EPA, Climate Change, Carbon Emissions, DOT, decarbonization

Banned In Boston? City Seeks to Stop New Fossil Fuel Infrastructure

Posted by Kelly Burke on Oct 4, 2022 1:23:09 PM

In August of this year, Massachusetts Governor Charlie Baker signed into law House Bill 5060 “An Act Driving Clean Energy and Offshore Wind” into law

A controversial part of the bill was a provision allowing for a pilot program of 10 cities and towns to require all new building projects to be electric (with the exception of hospitals and labs). The Boston City Council in September voted to become one of those cities, after the proposal was introduced by Mayor Wu.

How the provision works is it would allow individual cities to develop local ordinances preventing new building projects (or large scale renovation/rehab projects) from using fossil fuels and enforce those ordinances by denying permits. (As an aside, you may remember that Brookline MA, one of the ten pilot cities, one night at a town meeting voted to ban oil and gas infrastructure in town in 2019 – a provision that was ultimately struck down. Essentially, the policy Brookline attempted to enact in 2019 is in some ways the blueprint for how the ordinances in the new pilot program work.)

It's unclear whether Boston will be allowed to join the program, as there are already 10 slated participants (Acton, Aquinnah, Arlington, Brookline, Cambridge, Concord, Lexington, Lincoln, Newton and West Tisbury). Conceptually, cities and towns that are not the size and population of Boston would seem to be a better fit for a pilot program of any kind – it is possible they will get approved however, because a requirement of participation is that the town meet the States 10% affordable housing target, and West Tisbury looks like it will fall short.

Speaking of affordable housing, one of the main concerns around the pilot program is that it would drive up costs for construction and extend timelines for building (particularly as multifamily dwellings are non exempt from the ordinances) which could further exacerbate Boston’s existing housing crisis, as well as continue to push lower SES community members out of the City, something that has already picked up steam post pandemic. The other half of that coin is serious reservations about the impact to union jobs in the program cities, particularly for pipefitters. 

On the other hand, 70% of Boston’s carbon emissions are from buildings, according to the City’s latest Climate Action Report, so in that sense going right to the source makes sense on some level.

I wrote an article for Oil & Energy Magazine that goes into more detail on the bill and its support/objections. You can read that article in its entirety here: Boston Seeks to Ban Fossil Fuels in New Buildings

 

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Topics: Mass DOER, Massachusetts, Climate Change, Carbon Emissions, boston

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