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Volkswagen to promote biofuel-powered cars ahead of electric ones to tackle carbon emissions, new report suggests

Car giant Volkswagen (VW) has published a new study and called for the promotion of biofuel-powered cars over electric ones to help tackle carbon emissions.

The report, entitled Integrated Fuels and Vehicles Roadmap 2030 and Beyond, and was commissioned by automakers and oil companies.

In the report the companies maintain that additional reduction potential through 2030 could be achieved by an adapted policy approach promoting technologies with lowest greenhouse gas emission abatement costs to society and highest customer acceptance.

The European Union (EU) is currently creating new fuel efficiency and emissions’ targets for 2025 and 2030.

The EU has been tipping toward plug-in electrified vehicle technologies on these new standards emanating from the Paris climate summit last year, and the coalition that funded the study would like to see biofuels win out.

Roland Berger, a consulting firm based in Munich, Germany, was commissioned by the EU Auto Fuel Coalition, to conduct the study. The coalition is comprised of BMW, Daimler, Honda, NEOT/St1 (North European Oil Trade), Neste (an oil refining and biofuels company), OMV (an oil and gas company), Shell, Toyota, and Volkswagen.

At a meeting in Brussels last week, executives from VW and Shell made public statements supporting and explaining the study.

Ulrich Eichhorn, VW’s new head of research and development, said that plug-in hybrids and more efficient vehicles were “building blocks” for the future, but that “higher shares” for biofuels would be needed in the meantime.

Post-2020 target

He told a meeting in Brussels: “Modern diesel and natural gas engines will absolutely be required to deliver CO2 targets until 2020 and they will also contribute to further reductions going on from there.”

Both VW and Shell see alternative fuels such as E85 offering an easier, more profitable  path than EVs. Possible solutions for hitting targets include CO2 car labelling, adding more biofuel blends, and the expansion of the EU’s emissions trading system (ETS).

Shell’s Colin Crooks said that liquid fuels will remain essential during the EU’s transition since internal combustion engines are expected to take the lead for years to come.

The study maintained that many customers perceive many hurdles when it comes to acceptance and adoption of electric mobility. These hurdles include higher purchase prices for EVs, perceived risks in using the technologies, range limitations, limited charging infrastructure, and long charging times. As for the technology hurdles, the study identifies burning lithium ion batteries in early EVs and lack of customer experience with battery lifetime reliability.

“The EU's current regulatory framework for road transport decarbonisation needs to be updated for the post-2020 period in order to create certainty for investment in low-carbon vehicles and fuels," explained Thomas Schlick, partner at Roland Berger.

Speaking about the push for biofuel-powered cars, Schlick added: “These technologies are not yet capitalising on their full GHG emission reduction potential in terms of deployment under the current regulatory framework and can come at a cost of below 100 €/tonne CO2 abated.

"The push that these technologies are being given by vehicle manufacturers and fuel producers needs to be complemented by a stronger market pull on the part of customers.”