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New US light-duty vehicle fleet emissions data show the
challenge the country faces in changing course for the sector of
the economy that contributed the largest share of greenhouse gas
(GHG) emissions in 2019.
The US Environmental Protection Agency (EPA) in January released
its estimate of real-world carbon
dioxide (CO2) emissions for the US light-duty vehicle model
year, finding that CO2 emissions for the 2019 fleet increased by
nearly 1% compared with 2018. Estimated real-world CO2 emissions
increased by 3 grams/mile to 356 g/mi in model year 2019.
Transportation accounted for an estimated 28% of US GHG
emissions in 2019, slightly ahead of electricity at 27%, as
electric power sector emissions fell in the last 15 years due to
the closure of coal-fired plants and replacement with renewable and
natural gas-fired generation.
EPA also reported that fleet fuel economy, which is closely
linked to emissions, decreased by 0.2 mpg to 24.9 mpg from 2018 to
2019.
Source: US EPA
"The fleet improvements year over year are definitely stalling,"
said David Cooke, senior vehicles analyst, Union of Concerned
Scientists, which has filed one of two federal lawsuits seeking to
push the US towards tougher vehicle emissions and efficiency
standards.
"I'm certainly not surprised at where the fleet average is
landing," said IHS Markit Principal Analyst for North America
Powertrains Devin Lindsay. "The more fuel-efficient vehicles out
there are still struggling at this point, and electric vehicles
(EVs) are not out in large volumes except for Tesla."
Automakers have taken the fuel efficiency of the internal
combustion engine fleet about as far as they can with existing
technology, Lindsay said, and the way to improve efficiency and
reduce emissions is through electrification, either via
all-electric or hybrid vehicles.
EPA's report
EPA's annual report emerged as the administration of President
Joe Biden is expected to ramp up attention on reducing vehicle
emissions as a critical element of reaching US net-zero carbon
emissions. He has already announced a plan to turn over the entire
US fleet, approximately 645,000 vehicles (224,000 light-duty
vehicles and 412,000 trucks), to EVs.
The Trump administration chose not to target autos for
aggressive decarbonization. It issued the Safer Affordable Fuel
Efficient Vehicles Act (SAFER Act) in January 2020, which
downgraded the required year-by-year GHG reductions set by the
Obama EPA from 5% per year to 1.5% annually instead. The Union of
Concerned Scientists has filed one of two federal lawsuits against
the SAFER Act.
In his first week in office, Biden issued an executive order to direct EPA
and the Department of Transportation to review the SAFER Act as
part of a broad look at which rules and regulations address
"national interests" in minimizing climate change.
Biden also said that he will not challenge an agreement between
the California Air Resources Board and five automakers that they
will reduce GHG emissions by 3.7% per year for model years
201-2026. The Trump administration tried to block that agreement in court.
Emissions trends
EPA's report shows that the long-term emissions trend has been
positive, despite the static 2019 results. "Since 2004, CO2
emissions have decreased 23%, or 105 g/mi, and fuel economy has
increased 29%, or 5.6 mpg," the agency said.
EPA says that preliminary data show the model year 2020 fleet's
average estimated real-world CO2 emissions falling by 12 g/mi to
344 g/mi, and fuel economy improving by 0.8 mpg to 25.7 mpg.
But at the current rate of change, the fleet average will fall
far short of the plan marked out by the Obama administration of 163
g/mi of CO2 for the model year 2025 and an average fuel efficiency
of 54.5 mpg.
CO2 emissions vs. GHG compliance
EPA measures both real-world carbon emissions and GHG
compliance. Though they are based on the same EPA-mandated
two-cycle engine tests, the components in each tell a slightly
different story, according to EPA spokesperson Aaron Hula.
Carbon emissions can be thought of as direct "tailpipe
emissions" from federal test procedures, Hula said. GHG emissions
estimates start with those tailpipe emissions, but then add other
sources of emissions, such as from air conditioner leakage, and
then give "credits" for inclusion of numerous types of technology
to improve fuel economy. This takes into account the limitations of
the two-cycle engine test, which does not replicate all aspects of
driving under varied conditions.
For the purposes of compliance, EPA calculates GHG emissions.
For model year 2019, EPA's mandate for each large manufacturer was
246 g/mi, but they registered emissions, on average, of 253 g/mi.
That 7 g/mi gap was filled by using emissions credits earned by
over-compliance in prior years, Hula said.
In 2019, 24 teragrams (24 trillion grams) of credits were used,
or about 9% of the existing pool, according to EPA.
"Three manufacturers-Tesla, Honda, and Subaru-achieved
compliance with the greenhouse gas standard for model year 2019
through the performance of their fleets and thus generated excess
credits that can be used in subsequent years," EPA stated in its
report.
But the credit system as it is currently operating is a problem,
said Cooke. He said it was one of the two main reasons-along with a
changing mix of vehicles purchased-that CO2 emissions from the
fleet are not falling.
GHG emissions are closely correlated with fuel economy, and when
the GHG regulations went into effect in 2012, automakers were
concerned they would not be able to meet the standards as they were
reduced each year. EPA granted a series of "allowances" for
installation of technology that improved fuel economy, such as
low-resistance tires. Credits also are granted for EVs and hybrids
to incentivize their sales.
Through aggressive installation of those technologies, car
companies banked trillions of credits, which Cooke said they are
now using instead of maximizing improvements in fuel economy of
their new cars. "Because many credits have expiration dates in the
next couple of years, automakers have no incentive to improve their
vehicles until the credits expire," he said. "They can kind of
coast along through the model year 2021, when the original bank of
credits expires."
Source: US EPA
Every manufacturer ended the model year 2019 with "banked"
credits that can be used in subsequent years (see graph), with Fiat
Chrysler, Honda, and Toyota atop the list.
Source: US EPA
Starting with model year 2022, much of this excess should have
been withdrawn, and the impact of the Obama EPA's 5% annual GHG
reductions and fuel economy increases would start to drive
technology implementation again, said Cooke. But the Trump EPA's
rollback of that rule "keeps the gravy train going through 2026,"
he said. The Trump EPA's 1.5% GHG reduction per year is
approximately the industry's average for the last 30 years anyway,
Cooke said.
IHS Markit's Lindsay agrees. "When Trump came in and lowered the
requirement, there was a big sigh of relief, and it bought them a
little more time for what will probably coming from the Biden
administration in the next four to five years," he said.
The federal lawsuits seek to overturn the Trump SAFER Act, but
as of now, the 1.5% annual reductions are "locked in through model
year 2026," Lindsay said.
But Biden does have some tools at his disposal, said Cooke.
"Biden has ordered EPA and [the National Highway Transportation
Safety Administration] to review the standards; we see this as a
very positive step," he said. "We've said from the get-go that even
the Obama rules were weaker than they needed to be [to clean up
vehicle emissions]."
A possible first step by Biden could be to support California's
agreement with Ford, BMW, Honda, Volvo, and the Volkswagen Group on
a 3.7% annual GHG reduction. Given California's high demand for new
vehicles, the agreement could drive technology nationally on new
cars. "It's got to be seen as a floor," Cooke said.
Fleet mix
EPA's report highlighted one other aspect of the current
light-duty fleet that is proving to be a challenge for reducing
emissions: the rise in demand for larger vehicles.
EPA divides light-duty vehicles into five categories:
sedan/wagon, car SUV, truck SUV, minivan/van, and pickups. The
market share of sedan/wagon vehicles-the most fuel efficient-fell
to 33% in model year 2019 from 50% in 2013, while truck SUVs
reached a record 37% market share and car SUVs reached a record 12%
market share in 2019.
"The fleet mix is changing, and it's overwhelming the gains in
each category in fuel efficiency," Cooke said.
Where is the industry headed? Lindsay said that forecasting 10
years into the future is a challenge, especially with lawsuits,
potential new EPA regulations, and California and Massachusetts
setting 2035 as the end of internal combustion engine new vehicle
sales in those states. "If we look at EVs, the first car was the
Nissan Leaf in 2009. At the time, everyone would have expected
adoption of electric vehicles to come much earlier than it has,
partly because gasoline prices were higher at the time," he
explained.
Instead, adoption has been slower than anticipated, despite the
success of Tesla. "Because you are asking people to change how they
interact with their vehicle [electric charging vs. gasoline or
diesel], it is taking a while," Lindsay said.
Posted 27 January 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit