Is the Future Diesel-Free? 7 Hard Questions about Diesel, Biofuels and ICEs

December 02, 2020

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by Samuel Morgan (Neste) The whole transport industry agrees on the need to decarbonize traffic fast. However, there’s confusion on what that means for diesel, renewable diesel and the internal combustion engine. Are their days numbered?

Questions answered:

How long will diesel fleets be allowed?
Are the days of the internal combustion engine numbered?
Aren’t renewable diesel and other biofuels bad for the environment?
What are the benefits of renewable diesel compared to fossil-based diesel?
If renewable diesel can help reduce emissions, why isn’t it more widespread?
Will there be enough sustainable raw materials to produce renewable fuels?
Why invest in diesel vehicles now, if EVs and hydrogen are going to end diesel’s story?

Transport is the fastest-growing source of global greenhouse emissions, but it doesn’t have to remain that way. We already have all the technologies needed to decarbonize traffic, but one question remains a topic of heated debate: which technology will dominate our transport future?

In light of the latest research and regulation, we answer the hard questions about whether diesel, biofuels and internal combustion engines (ICEs) play a role in fueling our future.

1. Dieselgate prompted some cities to implement diesel bans. How long will diesel fleets be allowed?

Short answer: While legislative initiatives around the world suggest that the market-share of the internal combustion engine will be eroded by battery-power and fuel cells, legislation also creates opportunities for manufacturers that stick with the ICE.

The discussion on ‘diesel bans’ has indeed gained popularity since the so-called dieselgate in 2015. After the emissions testing scandal left a stain on diesel vehicles, some cities in Europe have implemented ‘diesel bans’ to address air quality issues.

‘Diesel ban’ is a misnomer

‘Ban’ is a misnomer, though, as the rules only preclude vehicles that do not meet the most recent tailpipe emission standards. The bans are designed to root out older, most polluting cars, not all diesel vehicles.

More lately, some countries have also started discussing complete bans of all ICE vehicles to reduce CO2 emissions. However, as these nation-wide ICE bans are expected to only affect light- and medium-duty vehicles first, investing in a heavy-duty diesel fleet should remain quite a safe bet – especially as the supply of biofuels to fuel them more sustainably continues to increase.

It remains to be seen how more widespread, nation-wide bans of new diesel or all ICE cars would affect biofuels, such as renewable diesel. However, as biofuels are a key part of the solution to decarbonize traffic fast enough to meet the emissions reductions goals of the Paris Climate Agreement according to sources such as the Internal Renewable Energy Agency (IRENA), it’s fair to argue that biofuels needs to stay exempt from any bans.

2. In the wake of newer transport technologies, are the days of the internal combustion engine numbered?

Short answer: There is huge potential left in the internal combustion engine

The debate about what to do with the internal combustion engine (ICE) risks throwing out the baby with the bathwater.

There is widespread consensus that internal combustion technology has not reached its full potential yet, in terms of efficiency or lower carbon impact. And when it comes to local air pollutions, studies have found that the newest internal combustion engines are reaching pollutant levels so low that they are hard to measure, with most particulate matter emissions actually being produced from the brakes and tires – not the tailpipe, as one might think.

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There’s another big, future-oriented reason that should motivate legislators and car manufacturers to keep internal combustion engines in the game: power-to-x. It’s an advanced technology through which synthetic, zero-emissions fuels can be produced using only renewable energy and CO2. Although expensive and currently at a fledgling stage of development, demand for power-to-x could be stimulated by other sectors, most notably aviation, which is seeking to drastically reduce its carbon footprint and costs, especially in the wake of the coronavirus outbreak.

3. Aren’t renewable diesel and other biofuels bad for the environment?

Short answer: Regulators and lawmakers are imposing rules that mean these fuels have to be sustainable in order to be used on the market.

There’s a lot of confusion around the differences between different biofuel raw materials.

Some raw materials for biofuel production indeed come with a string of sustainability questions, given that to grow the crops needed to produce them land must be allocated. This could, unless strictly regulated, fuel deforestation or lead to unsustainable agricultural practises. These unsustainable practices have rightfully fallen foul of climate activists and, increasingly, the general public. Legislation has been put in place to ensure that only sustainable biofuels are brought to market.

In addition to sustainably produced crops, biofuel production is increasingly using different kinds of waste and residues. Many companies are also developing new technologies that could expand the feedstock pool to agricultural and forestry residues, algae and other feedstocks that can’t be used at the moment.

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4. What are the benefits of renewable diesel compared to fossil-based diesel?

Short answer: Renewable diesels can save up to 90 percent of greenhouse gas emissions compared to fossil fuels.

Renewable diesel, which is a different product than ‘biodiesel’, is produced by using 100 percent renewable raw materials, primarily waste and residues. According to the calculation methodologies of the EU’s Renewable Energy Directive and the Low-Carbon Fuel Standard (LCFS), Neste MY Renewable Diesel can reduce greenhouse gas emissions by up to 90 percent compared to regular diesel when the full lifecycle is analyzed according to methods set by regulators.

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As many drivers are still choosing fossil-based fuels over other alternatives, refiners are also looking for ways to produce fossil-based diesel more sustainably. Neste, among other companies, is looking into so called co-processing technology.

Co-processing refers to simultaneously refining raw materials from fossil and renewable sources, with the aim to create an end-product that’s more sustainable than traditionally refined diesel, explains Neste’s Markku Honkanen. Some technical challenges still need to be overcome to increase the share of renewable feed but the idea already promises to make diesel and petrol more climate-friendly.

5. If renewable diesel can help reduce emissions, why isn’t it more widespread?

Short answer: New rules and methodologies are creating a framework under which supply and demand are set to be boosted.

According to IEA, transport’s global biofuels use needs to increase from just 3 percent in 2018 to at least 9 percent in 2030 in order for climate goals to remain in reach.

To reach that goal, compatibility with existing technology is not a problem. In fact, renewable diesel is chemically similar to fossil diesel, and works in all modern engines. If anything, compatibility is increasing day by day as manufacturers churn out more advanced engines that can burn higher blends of fuel.

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6. Will there be enough sustainable raw materials, such as waste and residues, to produce renewable fuels?

Short answer: There is enough waste and residues to go round. Once demand is boosted sufficiently, supply will follow suit.

To meet the goals of the Paris Climate Agreement, we need to increasingly tap into all available solutions for cutting CO2 emissions, including biofuels. And when it comes to increasing biofuel supply sufficiently, there is enough waste and residues in the world to use as raw materials. What still needs work is efficiently collecting the waste.

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More and more people are in favor of the ‘well-to-wheel’ approach

When it comes to planning future legislation, more and more people in the transport industry are of the opinion that policies should be based on a ‘well-to-wheel’ approach.’’

Well-to-wheel means that all direct and indirect emissions resulting from a fuel’s supply chain are taken into account, rather than simply measuring tail-pipe output as that is considered an artificial boost to electric-battery vehicles. “You can’t describe that regulation as technology-neutral,” said the CEO of FuelsEurope, John Cooper. “If emissions of the vehicle are elsewhere, in the production or the energy of the vehicle, they are not regulated.”

EVs may be cleaner on the road depending on the energy mix used to recharge them but also create an often sizeable carbon footprint during the manufacturing process. Scania’s Henrik Dahlsson agrees: “A well-to-wheel approach is needed, not just tail-pipe emissions. Consensus in Sweden is now in favor of well-to-wheel.”

7. Why invest in diesel vehicles now, if EVs and hydrogen are going to end diesel’s story?

Short answer: All clean mobility options are needed for us to hit our climate and air quality goals.

Electric cars are increasing in popularity and in some countries, like Norway, even outstripping sales of ICE cars. Driven by falling lithium-ion battery costs, which Bloomberg New Energy Finance predicts will hit $134 per kilowatt-hour this year, passenger EVs are indeed starting to approach price parity with ICEs.

However, electrification is only as clean as the power behind the plug – which in much of the world is still generated by burning coal and gas. It is also a challenge to pair it with heavy transport, where the large power requirements, long-range journeys and higher sunk costs make battery power a difficult prospect in the short- and medium-term.

Hydrogen promises to solve the power and range issues, but few manufacturers are currently selling fuel cell vehicles that compete on price with ICEs. Although investment in infrastructure is starting to materialize, the sector still needs to scale up substantially before it can play a significant role, according to the IEA. READ MORE

Five Reasons Why Internal Combustion Engines Are Here to Stay (Real Clear Energy)

Panel Discusses What’s Ahead for Greener Diesel (Transport Topics)

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diesel internal combustion engine (ICE) Fleets energy policy environmental policy Transportation Fuels Policy Transportation Fuels Policy--Municipal Transportation Fuels Policy--State Transportation Policy GHG (Greenhouse Gas Emissions) markets/sales market forces particulates power-to-x/gas/liquid Battery Electric Vehicles (BEV) Electric Car/Electric Vehicle (EV) buses trucks heavy duty vehicles (HDV) 4th generation fuels Sustainability Feedstocks Agricultural waste/residue forest residue/waste MSW (Municipal Solid Waste) biodiesel European Union (EU) Renewable Energy Directive (RED/RED II/RED III) LCFS (Low Carbon Fuel Standard) co-processing Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel Sweden Norway Hydrogen/Renewable Hydrogen fuel cells electrofuels (e-fuels) Carbon Dioxide (CO2) Investing Finland

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