Canadian Transportation Council |  Medium-Heavy Duty Vehicle Committee | Electric Vehicle Council

Achieving Carbon Reductions Strategically

John Eichberger |
April 2023

Another day, another policy announcement. Without doubt, the pursuit of carbon reductions has not lost any momentum.  As I draft this, Washington, DC, is all abuzz about a new federal regulation that will tighten down emission standards on light duty vehicles to such an extent that some are considering it a de facto mandate to convert more than 60% of new vehicle sales to zero emissions vehicles (ZEV) by 2032. And last month, the European Union adopted a policy to ban sales of internal combustion engine vehicles (ICEV) by 2035 (except those operating on zero carbon fuels). Yes, the motivation behind these policies is to dramatically reduce carbon emissions from transportation in order to mitigate the effects of climate change, but are these the most effective policies? Perhaps we should recognize that there are limitations to how quickly these efforts will reduce carbon emissions and begin to consider a more strategic approach that matches vehicle technologies with their energy sources. Could such a plan yield greater carbon reductions faster and at less cost? I think that is a conversation we need to have.


Why are policymakers proceeding with bans and mandates designed to promote the technology of ZEVs, typically defined as battery electric vehicles (BEV) and fuel cell electric vehicles, with BEVs expected to dominate in the light duty vehicle sector during the timelines included in these policies? There are a variety of reasons.  First of all, transportation is responsible for up to one-third of carbon emissions in the U.S. and such policies take a direct approach at this leading source of emissions. Second, because the tailpipe on a vehicle is a tangible source of emissions with which everyone can relate. Third, because it comes across as definitive and actionable, demonstrating that leaders have identified the problem and are assertively pursuing a solution. But there is more involved in reducing carbon emissions than the optics of a policy.

How fast?

Sales of BEVs in the U.S. may lag behind other countries, but they have shown great momentum and through first quarter of 2023 represented 6.9% of all light duty vehicle sales, with approximately 50 different models available for purchase. And with the majority of vehicle manufacturers investing heavily in their BEV production capacity, these numbers are almost certainly going to increase.


Policies seeking to accelerate the transition of the transportation fleet to a new technology hope to capitalize on the lower emissions profile of these vehicles and ween the market off vehicles that rely mostly on fossil fuels for energy. However, these proposals seem to be ignoring the intrenched size of the legacy market. In the U.S. alone, there are nearly 300 million ICEVs in operation and throughout the world the number is closer to 1.5 billion. A new vehicle technology will do nothing to mitigate emissions from these vehicles; only by addressing the carbon intensity of the fuel can we mitigate emissions from the existing ICEV fleet.

And even if the new policy were successful in converting 67% of new vehicle sales to BEV by 2032, that would leave more than 90% of the vehicles in operation still operating on liquid fuel. What will we do about those vehicles? An unfortunate consequence of policies that seek to eliminate specific technologies is that they send a signal to the market to stop working on those technologies, and without innovation in low carbon fuel production to support ICEVs, efforts to mitigate carbon emissions will be significantly impeded. There must be a way to encourage new technology while supporting innovation in legacy systems that will remain in operation for decades.


But also…

ZEVs are not zero emissions. The absence of a tailpipe does not mean that there are no emissions associated with the vehicle. Yes, on average BEVs do emit less carbon over their lifetime than ICEVs – but manufacture of both vehicles and batteries plus the generation of electricity result in carbon emissions. Our life cycle analysis report last year demonstrated that 72% of the life cycle emissions of a BEV come from the generation of electricity and this fluctuates depending on how that electricity is generated, so where BEVs are operated makes a difference. This fact is often glossed over in the promotion of these proposals because few constituents can personally relate to emissions from power plants, so calling the vehicles without tailpipes “zero emissions” is a message that resonates. Yet life cycle emissions must be a critical component of the discussion and must be included in a strategic approach to carbon reductions. In the U.S., electricity generation is responsible for 25% of carbon emissions, so shifting emissions from the tailpipe to the generating facility is not solving the overall carbon situation.


That said, there are some regions of the country that produce electricity with much less carbon than the national average. What if we were to develop a policy to encourage the distribution of BEVs to those markets where the carbon benefits would be greatest?  In the map below, the lighter the color, the less carbon emitted by the associated electricity generation system. The chart that follows shows the impact of lower carbon intense grids on the life cycle emissions of a BEV verse an ICEV. It makes sense to rely on BEVs where they will yield the greatest benefit and a strategic policy could provide incentives to encourage the distribution of BEVs to these regions.



Any policies under consideration must think about affordability, accessibility, and reliability. Sounds like a broken record, but if new vehicles or energy options are not affordable, accessible and reliable, the end user will reject them and we will never achieve the lofty ambitions with which these policies are introduced and supported. In general, consumers are responding favorably to EVs. In a recent Transportation Energy Institute survey (results to be released soon), 49% of Americans said they had a somewhat or very positive opinion about BEVs and 34% of those who might purchase a vehicle within two years would consider a BEV.

But we cannot underestimate the importance of affordability. To affect significant change long term, we need to turn the fleet over to lower emitting vehicles. Yet, the price of a new vehicle will largely determine our ability to do that and, recently, new vehicles are becoming less and less affordable with the average price of a new vehicle surpassing $48,000 this year. Add to this the impact of inflation on financing costs (the way in which most Americans buy a vehicle) and rapid fleet turnover is becoming less attainable.  Look at the following charts – as the average price for a new vehicle has increased, sales of new vehicles have decreased. This is not a coincidence and will slow down the rate of fleet turnover and, consequently, the pace at which we reduce carbon emissions.


A more strategic approach…

I understand the attraction of simplicity. It is easier to understand, it is easier to explain, it is easier to say, “Job done.” But the transportation sector is complex and if our goal is to reduce and eventually eliminate carbon emissions, we need to take a more strategic approach and may have to shift our definition of “business as usual” as we tackle this issue. A couple of ideas we have kicked around internally include the following:

  • Adopt a life cycle approach to carbon reductions and encourage reductions anywhere in the production and use process for vehicles and their associated energy.
  • Encourage utilities to adopt lower carbon generation technologies, smart grid management, and a portfolio of options that preserve the reliability and affordability of power.
  • Incent fuel producers (petroleum and biofuel) to invest in low carbon production strategies, such as carbon capture, low carbon farming practices and conversion to renewable energy resources for their operational energy needs.
  • Incent vehicle manufacturers to deploy BEVs to low-carbon electricity markets and deploy high efficiency ICEVs and hybrid electric vehicles to higher-carbon electricity markets. Overtime, as the grid becomes less carbon intense, these deployment strategies can evolve to take advantage of carbon reduction opportunities.
  • Revise the pathway approval process for new liquid fuels and/or renewable fuel feedstocks to increase the low carbon options available for ICEVs.
  • Accelerate fleet turnover by incenting consumers to trade in older, less efficient vehicles for newer, more efficient vehicles (this is contingent on affordability of new vehicles).
  • Support expanded development of renewable fuel options, such as renewable natural gas, and the concurrent deployment of vehicles capable of operating on such fuels, especially for medium and heavy-duty vehicles.
  • Support investments in research and development for emerging fuels and technologies, including but not limited to:
    • Hydrogen for fuel cells and ICEVs
    • E-fuels produced from renewable resources
    • Energy-dedicated crops for advanced biofuel production
    • Low carbon drop-in fuel products

These are just some ideas – the devil is always in the details. But to successfully reduce carbon emissions, without imposing unacceptable financial harm on vehicle owners and operators, we must take a more holistic approach and implement strategies that fit the conditions and needs of the market being served. We can strategically deploy solutions at acceptable costs, but we cannot do so if we continue to rely upon simple solutions that play well in a sound bite but do not effectively achieve our objectives.

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