Alternative fuelled ICEVs

ICEVs can be operated using fuels other than the conventional petrol or diesel.

These vehicles can be operated as fully dedicated AFVs, dual-fuelled (switching from alternative fuel to conventional), or flexi-fuels (using a mixture of both).

Alternative fuels that have been used or proposed for use in ICEVs are compressed natural gas (CNG), liquefied petroleum gas (LPG), and various biofuels, primarily methanol, ethanol, and methyl and ethyl esters (biodiesel). ICEVs can also be operated by combusting hydrogen (Kowalewicz and Wojtyniak, 2005).

Natural gas and liquefied petroleum gas

CNG and LPG LPVs are not a new technology. Fully dedicated and dual fuelled CNG and LPG vehicles have been used in New Zealand since the 1970s. By the late 1980s, New Zealand had approximately 100,000 CNG vehicles, largely through the use of conversion kits, and 50,000 LPG vehicles.

However, the use of these fuels declined as the price of petrol decreased and the Government removed subsidies and imposed excise duties in 1987 (Denne and Colegrave, 2005). By 2011, there were 1,484 registered CNG vehicles and 2,815 LPG vehicles (Ministry of Transport, 2012b). With the decline in numbers of CNG

vehicles, the CNG vehicle refuelling infrastructure was also allowed to decline.

Unless there is a substantial investment in the distribution network, the potential

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for CNG is limited. The LPG distribution network has also declined, but to a lesser extent because it also used to supply the home barbecue and heating appliance markets (de Pont, 2009).

The GHG emissions from CNG and LPG vehicles are estimated to be up to 13%

lower than diesel and up to 16% lower than petrol vehicles (Denne and Colegrave, 2005). These estimates do not take into account the impact of fugitive methane emissions from the refuelling network (Wright and Baines, 1990).

The lack of availability of the CNG and LPG refuelling infrastructure is one of the main barriers cited to the uptake of these vehicles. Other barriers are the limited availability of CNG and LPG vehicles for sale, and the higher purchase price (Werpy et al., 2009). In New Zealand, Ford and Holden offer new LPG-fuelled vehicles, but these vehicles cost between NZ$400–$1500 more than the equivalent petrol vehicles (de Pont, 2009).

Biofuels

Biofuel and petroleum fuel blends are already available in New Zealand. Although there are no biofuel mandates or targets in New Zealand, many jurisdictions have either biofuel blending targets or mandates (International Energy Agency, 2011). In 2010, 100 billion litres (volumetric) of biofuels were produced globally or about 3%

of the total global road transport fuel demand (International Energy Agency, 2011).

The development of biofuels, as a major source of transport fuel and means of reducing GHG emissions, faces a number of uncertainties. The biofuels currently being used are known as first generation biofuels, which use natural oils, fruits, and sugars. The main feedstock for first generation biofuels are rapeseed, soybeans, and palm oil for biodiesel; and sugar beets, wheat, corn, and sugarcane for ethanol (Bandivadekar et al., 2008). The feedstock accounts for 45% to 70% of total

production costs, which means that the price of these biofuels tends to be closely linked to changes in food prices (International Energy Agency, 2011).

First generation biofuels have been criticised for having an adverse impact on food supply and prices through the displacement of these crops from food production to

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biofuels. However, the evidence supporting this argument is mixed (Mitchell, 2008).

Some studies indicate that there has been a significant effect on food prices

(Collins, 2008; Baier et al., 2009). Other studies indicate that: (1) any impact on food prices was limited to the period between 2004 and 2008; and (2) other factors, including weather and recovering economic growth, have had a greater impact (Trostle et al., 2011; Ajanovic, 2011). Some studies indicate that the impact on food security is context specific, dependent on the crop that is used, how it is grown; the inputs used for the type of land, and the alternative uses of that land, if any

(Norgrove, 2010).

It is also uncertain whether the use of biofuels will result in reductions in GHG emissions. A review by Davis et al. (2008) of GHG emissions life cycle analyses of biofuels found that the amount of GHG emissions, when compared to conventional fuels, depending on the feed stock and refining process can vary from -114%²⁷ to +93%. The authors acknowledge that this variation is, in part, due to inconsistencies in the assumptions used in the reviewed studies. A study by Scharlemann and Laurance (2008) found that, when factors such as natural resource depletion, damage to human health and ecosystems were included, as well as reductions of GHG emissions, United States corn ethanol, Brazilian sugarcane ethanol, soy diesel, and Malaysian palm-oil diesel have greater environmental costs than petroleum.

Biofuels with the lowest environmental costs were derived from residual products, such as bio-waste, recycled cooking oil, and ethanol from grass or wood. Despite the limitations of life-cycle assessment studies, which have been criticised for inconsistent analytical metrics and difficulties in setting of the study boundaries (Davis et al., 2008), there is a general consensus that first generation biofuels need to be replaced by second generation biofuels that will use feedstock sourced from bio-wastes, fast-growing crops grown on marginal land, or the non-edible part of the plant. It is expected that these biofuels will result in greater reductions of GHG emissions and will result in less environmental damage (Committee on Climate Change, 2008; International Energy Agency, 2011).

27 This result implies that all of the fossil fuel emissions would be displaced by the use of biofuels plus an additional 14% that would be sequestered by the biofuel crop.

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The proposed second generation biofuels include lignocellulosic ethanol, biodiesel using gasification and the Fischer-Tropsch process, biodiesel from algae, and biofuels produced using pyrolysis (Naik et al., 2010). The production of these forms of biofuels present technical and economic challenges that, despite significant research efforts, still prevent the transfer of these technologies from the

demonstration stage to full commercialisation, which means that the production of these biofuels remains very small (International Energy Agency, 2011; Sims et al., 2010).

Biofuel ethanol can be used in most unmodified vehicles up to blends of 3%, and many models can safely operate on blends of up to 10%. To use higher blends, modifications to the fuel system and engine are required. Specially designed vehicles known as flexible fuelled, or flexfuel, vehicles can operate using blends of up to 85% (de Pont, 2006).

Biodiesel blends of up to 5% can be used in unmodified LPVs if they comply with the European standard. Higher blends require modified engines and are only

recommended for use by operators of vehicle fleets who have special vehicle management qualifications (Campbell, 2010). In New Zealand, Holden provides two flexfuel models that can operate on up to 85% ethanol (Sloane, 2012). At this time, biofuel blends of E3 and E10 can be bought from Mobil and Gull stations, and biodiesel can be bought from a small number of specialised local suppliers (Liquid Biofuels Interest Group, 2012).

Hydrogen

The combustion of hydrogen to drive a vehicle can be traced back to the very start of the 19^th century when Francois de Rivaz experimented with an open cylinder engine (Eckermann, 2001, p. 18). The hydrogen internal combustion engine vehicle (HICEV) is being developed in conjunction with the HFCV and is seen as an

intermediate step towards full deployment of HFCVs. While there is scope for further development of this technology, the main constraints to the deployment of this technology are the same as for HFCVs in that satisfactory systems of on-board hydrogen storage need to be developed, as well as a hydrogen refuelling

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infrastructure, and the means of producing the hydrogen fuel (Verhelst and Wallner, 2009).

4.3.3 HFCVs

Before HFCVs become competitive with ICEVs and EVs, a number of technological challenges must be overcome and system costs reduced. Technical issues comprise increased endurance of the proton exchange membrane materials in the fuel stack, greater power performance, better systems management to control fuel-cell operating conditions, and improved on-board hydrogen storage that provides adequate vehicle range (U.S. Department of Energy, 2009).

The United States Department of Energy has specified that, by the year 2015, fuel cells should be 60% efficient (they are currently about 55% efficient), cost

US$30/kW (they currently cost US$49/kW), and have a useable lifetime of at least 5000 hours, equivalent to 240,000 km at 50 km/h (currently, their average

durability is estimated to be 1,700 hours) (U.S. Department of Energy, 2011a; U.S.

Department of Energy, 2011b).

There are three generic methods of on-board storage: (1) high pressure

compression; (2) cryogenic liquefaction; and (3) materials storage, which involve storing the hydrogen in a chemical form such as a metal hydride. The United States Department of Energy, as part of the FreedomCar programme, estimates that, for a HFCV to travel 500 km, it would be necessary to store 5-13 kg of hydrogen on board the vehicle (U.S. Department of Energy, 2009). To practically store this amount of hydrogen on board a vehicle would require a storage vessel to achieve a gravimetric density of at least 7.5 wt.% hydrogen and a volumetric density of 70 grams

hydrogen/L. Current storage system technologies achieve, on average, gravimetric densities of 5.0 wt.% hydrogen and volumetric densities of 25 grams hydrogen/L.

Progress towards these targets has been slow and as a result, in 2009, the 2015 progress targets were revised downward from 9% wt to 5.5% wt, and from 81 grams hydrogen/L to 40 grams hydrogen/L (U.S. Department of Energy, 2010).

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The production and transport of hydrogen for use in LPV fleets is considered even more challenging than the technological barriers facing HFCVs (Bandivadekar et al., 2008). Hydrogen can be produced by electrolysis using electricity generated from renewable or non-renewable sources, the reformation of natural gas or biomass derived methanol, and the gasification of coal or biomass (Kruger et al., 2003; Smit and Campbell, 2007). Different fuel pathways result in different well-to-wheels GHG emissions, which are discussed further in section 4.6.2.

The development of the refuelling infrastructure is complicated by the need to align its development with the uptake of HFCVs into LPV fleets. Modelling in the United States concluded that a low market penetration of HICEVs and HFCVs would probably result in the development of refuelling stations using on-site steam methane (natural gas) reformers because there would not be enough demand for centrally produced and distributed hydrogen. This modelling concluded that the use of electrolysis or the gasification of biomass as a source of hydrogen, while

technically feasible, would be too expensive in the near-term (Ogden and Yang, 2009). The study concluded that the most cost-effective option in the United States would be centralised natural gas reformation.

Smit and Campbell (2007) concluded that, in New Zealand, the production of hydrogen via electrolysis would be the most expensive of the options analysed.

However, they concluded that centralised coal gasification would be slightly more cost-effective in New Zealand than natural gas reformation. This result was found to hold even when the additional costs of carbon capture and storage technology were included, which the authors assumed will be technically feasible.

As of 2012, HFCVs had yet to enter global vehicle markets except as part of

demonstration projects, at present EVs have an advantage in the market (Eberle et al., 2012). This technology has considerable potential, but significant vehicle technology and refuelling infrastructure challenges remain before these vehicles are ready to enter global markets (Wipke et al., 2012).

The GHG emissions benefits from HFCVs in New Zealand are likely to be less than those from EVs as refuelling of these vehicles is likely to initially occur through the

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use of distributed reformation of natural gas, without carbon sequestration. This configuration would result in more GHG emissions than EVs being recharged from the predominantly renewable New Zealand electricity grid (see section 4.6.2).