The danger of fixating on one thing
Battery electric vehicles are great. There – we said it. In fact, we have been saying it all along. But are they so great that all competition should be banned? Or are they great, but with caveats, such that we should foster choice and spread our decarbonisation bets to ensure the best and most certain reduction in carbon dioxide (CO2) emissions? Banning your competitors can variously be described as state-sponsored monopoly, central planning and rent seeking. Ironically, communist China isn’t banning alternatives to battery electric vehicles (BEVs), yet free-market Europe is. Is there any merit in Europe’s current position, and how can this paradox be explained?
One explanation is how the notion of ‘efficiency’ is being misused. Roughly speaking, diesel engines are 30% efficient in converting chemical energy in the fuel into kinetic energy of the vehicle, while a vehicle battery converts around 90% of the energy stored into motion. Much of the difference is in waste heat. In fact, Carnot’s theorem, based on the second law of thermodynamics, shows that a ‘heat engine’ has a theoretical upper limit of efficiency well below 90%. So, the argument goes, as we are short on low-carbon energy sources, how efficiently we use that energy is vital. And electrical motors powered from a battery at 90% efficiency must easily trump a diesel engine at less than – say – 50% efficiency. Therefore, BEVs are a no-brainer and any resources put into any other technologies must be wasted.
This can be encapsulated in the following syllogism: we need greater energy efficiency in road transport; BEVs are more energy efficient; therefore, we must have them.
There are many flaws in this argument. First, we must step back and remember that the aim is to reduce CO2 emissions. Does greater efficiency always correlate with lower emissions? No-one doubts that efficiency is important, but it is everything? On the first question, this is true in many circumstances. For example, if a diesel car delivering 40 miles per gallon is replaced with a new diesel car at 50 mpg, CO2 emissions will fall in the usage phase. Greater efficiency means lower CO2. In contrast, however, as countries increasingly switch from E5 to E10 gasoline – that is, gasoline containing a maximum 5% and 10% of ethanol respectively – the combustion efficiency falls due to the lower volumetric energy density of the fuel, yet CO2 emissions also fall. In this case, CO2 falls despite worse efficiency. What this shows is that efficiency does correlate with reduced CO2, but only necessarily so when all other things are held the same. In the latter case, the type of fuel has changed. Overall, though, it is clear that efficiency and CO2reduction do not correlate as a general statement.
The second aspect to consider is that greater efficiency may lead to reduced CO2 emissions, but with some other effect. Walking, for example, is highly energy efficient and very low CO2 even when undertaken by carnivores, but it’s not going to get you from New York to Los Angeles very quickly. Equally, walking can be efficient, low CO, quicker cheaper, as seen for many short journeys in congested city centres. What this shows is that efficiency is only one of the relevant variables in the decarbonisation equation.
With Dieselgate in mind, there is some validity in the argument that combusting fuel in urban areas needs to be eliminated, and BEVs are the only scalable option to achieve this. However, this idea neglects the significant differences in pollutant emissions between older and newer vehicles. The latest generation of cars, sold since the introduction of the Real Driving Emissions regulation from 2017, sees the average gasoline vehicle emitting nitrogen oxides (NOx) of 11 mg/km (82% below the regulated limit) and particle number emissions of 0.9 x 1011 #/km (85% below), and the equivalent value for diesels of 43 mg/km (46% below) and 0.1 x 1011 #/km (98% below) respectively – data collected from Emissions Analytics’ EQUA test programme. The proposed introduction of Euro 7 will further tighten the limits and, more importantly, will widen the boundaries of the test and cold-start requirements such that these real-world values will fall further.
As a result, modern ICE cars are not the ones causing urban air pollution problems, but rather the earlier, Euro 5 and 6 vehicles. Euro 5 gasoline vehicles average 39 mg/km of NOx (35% below the limit) while diesels emit 806 mg/km (4.5 times the limit). The priority must be to remove these older diesel cars and, whether they are replaced by new internal combustion engine (ICE) vehicles or BEVs, is largely irrelevant. The Ultra Low Emission Zone in London is a big step in this direction, even though it continues to allow many high-emitting Euro 6 diesels into the city, and does not discriminate on vehicle mass. With typical ICE vehicles emitting 67 mg/km of tyre particles, compared to 81 mg/km for equivalent BEVs, there are some downsides to these heavier vehicles. In short, this shows the logical fixation with ‘combustion’ being inherently bad is also wrong. Of course, this fixation is closely related to the efficiency error.
The logical fallacy against combustion is shown by synthetic ‘e-fuels’, where hydrogen and CO2 are removed from the air using low-carbon electricity and then synthesised into, for example, gasoline in such a way that as much carbon is absorbed during production as is released during subsequent combustion. The combustion itself will still be at low efficiency, but the net CO2 will be close to zero and, due to the purity of the fuel, the pollutant emissions can be very low as well. Low CO2, low pollutants, yet inefficient.
So, why don’t we go straight to e-fuels, and bypass the additional problems of material scarcity and dependence on China that comes with BEVs? The answer is that we do not have sufficient low-carbon electricity to power the process. This is where BEV supporters have a point: green electricity is scarce, so we must use it efficiently. However, what they are proposing is swapping one scarcity for another: scarce green electricity for scarce battery and motor components. Scarcity matters, especially where the scarce goods are disproportionately controlled by a limited number of entities, as it leads to them enjoying excessive ‘economic rent’ through using that market position. Building a diversity of supply is a necessary first step, to accommodate growing demand.
While many BEV proponents complain about excessive profits of fossil fuels companies, their vision would recreate the same issues just with different players. More concerning still is that European’s act of giving BEVs a future powertrain monopoly has given disproportionate market control to China. The US has reacted with a major $369 bn dirigiste policy to break China’s control. The EU is now poised to unveil a ‘Green Deal Industrial Plan’ to match this. The trend of ever-freeing world trade is now well in reverse, as countries take an increasingly protectionist and mercantilist approach designed to maximise exports while minimising imports. Had Europe reacted to the need for decarbonisation by playing to its competitive advantage – especially building low-carbon electricity grids – this value-destroying cycle may never have been triggered.
Such an error by European governments, arguably to assuage Dieselgate, has radically polarised the debate. Anyone who doesn’t ‘get’ the BEV story and its efficiency myth is labelled as a climate change denier. Our aim must be to limit the overall negative effect of climate change in the least damaging way. So, let’s consider an alternative, pragmatic path. It’s simplistic, but balances practicality, cost, geopolitics and – not to be neglected – social welfare.
It should be noted that only in the second phase is efficiency the key dynamic. The attraction of this approach is that it helps manage the significant uncertainties and risks in the effectiveness and timing of the stages of decarbonisation. For example, the BEV-led phase could be accelerated or pushed back depending on technological advancements or setbacks. Looked at another way, these stages are necessary if we are not to blow our carbon budget under the Paris Treaty. All are needed. Hybrids only get you so far, but they are here now. E-fuels are net-zero in principle, but not realistic today. BEVs cannot be scaled today without prohibitive cost.
As a side note, hidden in here is a paradox for the BEV lobby: enough green electricity is needed to allow the manufacture and charging of cars to be low carbon, but too much green electricity would enable competitor fuels and powertrains. We should look out for lobbying focused more on powertrain transition than grid capacity building.
In conclusion, BEVs can be great products and will play a significant role in decarbonisation on almost any scenario. But why ban the competition? The argument that efficiency is so much better that we should gamble all our investment on this horse is ill-conceived, costly and risky. It is perhaps just very clever rent-seeking, supported by parts of an excitable environmental lobby. Once efficiency is seen within the proper context of costs, alternatives and negative side-effects, the merits of a diversified, staged, pragmatic transition to a net-zero world become clear. BEVs then can be best understood as a transitional technology to a fully decarbonised, competitive, welfare-maximising future.