Green motoring

Alternative sources of fuel are becoming available, but few present an immediate low-cost solution to cutting carbon emissions.

by Helen Dunne, World Business
Last Updated: 23 Jul 2013

Heads turn when Jon Spallino drives the 16 miles from his home in Redondo Beach, California, to his office at Southland Industries, an engineering and construction company based in Long Beach. His wife Sandy is also used to being stared at when she parks the two-year-old car at the local supermarket. It is not that the car is particularly attractive; indeed, it is bulky and functional. With no boot, luggage has to be stored in the hatchback's cargo area, and it has only three doors. But the Spallino family car, a Honda FCX, is special. It is powered by a fuel cell that uses compressed hydrogen gas, and is the only such car in the world to be driven by an ordinary family.

The hydrogen car is, for many automobile experts, the inevitable solution to the problem of dwindling oil supplies and global warming. "Hydrogen has the potential of completely eliminating oil use and drastically reducing greenhouse gases," says Daniel Sperling, director of the Institute of Transportation Studies at the University of California. It is hardly surprising that with such promise, hydrogen cars have won the endorsement of both President George W Bush and California governor Arnold Schwarzenegger. The US currently consumes 21 million barrels of oil every day, of which roughly 70% is imported; that same percentage is guzzled every day by cars, trucks, trains, planes and other vehicles. With oil testing the $70 a barrel mark, that implies that more than $1 billion a day is spent powering the American transport system.

But the hydrogen car is not a panacea for the world's energy problem. Tim Shallcross, head of technical policy and advice for the IAM Motoring Trust, says: "There are two camps when it comes to hydrogen cars. There is the camp that says hydrogen is the fuel of tomorrow; then there is the camp that says it is the fuel of tomorrow, and it is staying at tomorrow."

Honda is one of the car manufacturers pinning its hopes on tomorrow actually arriving. Although the Japanese company believes that the hybrid car is the energy-saving solution for today, it predicts that ultimately hydrogen cars will be the future. "We were the first manufacturer of hybrid cars in Europe back in 1999," says John Kingston, environmental manager at Honda UK. "The technology works and it has real benefits, and we are starting to see a fairly significant increase in demand. We anticipate selling four to five times as many hybrids this year in the UK as last year, when we sold 1,000."

There are currently 21 FCX cars in use in the US and Japan. Although Kingston points out that the inevitable R&D costs will diminish as a result of mass-market production, it is widely accepted that each prototype cost at least $1 million to produce. The next generation FCX, which will be launched next year, is believed to cost $5 million per car. "We are not at a level where we can release these cars to the mass market," admits Kingston, despite a declaration from Honda boss Takeo Fukui that he wants the FCX concept widely available from 2008.

Similarly, General Motors boss Rick Wagoner has said he wants a fuel-cell car on sale in 2010, but pessimists point out that DaimlerChrysler confidently predicted its hydrogen car would be on the forecourts from 2004. It wasn't, and still isn't. Toyota, the world's second largest carmaker, does not expect to have them in its showrooms until at least 2015. The California Fuel Cell Partnership hopes to get the hydrogen car into the hands of consumers within 10 to 20 years, but even that prediction might be overly optimistic.

John Hollis, government and industrial affairs spokesman for BMW UK, which recently took delivery of eight BMW Hydrogen 7 Series cars, the world's first hydrogen saloon car, says: "When you look at the pure time it takes to develop new technology and introduce it over a product range, you are probably talking at least a decade. I think 25 years is normal for technology to be accepted and recognised as the industry standard." In fact, BMW built its first hydrogen car in 1978.

But there is also a political dimension, says Hollis. "The technology represents such a dramatic change in the fuel requirements of a country that it will require a lot of political courage to back the vehicles. We have gone as far as we can down the route of production. The current Hydrogen 7 Series, of which 100 have been produced, meets EU requirements. It's as near perfect as we can get, but we are not producing it to sell because there is no market for it." This despite the fact that the Hydrogen 7 has a dual-power engine that can switch from hydrogen (it gets 125 miles to the tank) to petrol.

Indeed, Hollis cannot envisage mass-market demand for hydrogen cars for "at least 20 to 30 years, and maybe even 50". This is partly due to problems with the technology: the Honda FCX, for example, is one of the few hydrogen cars that can start in freezing weather, and for every kilogramme of hydrogen used, the car produces nine litres of water - a potential ice hazard on roads. Hydrogen is also highly flammable, which makes many drivers nervous about carrying the gas cylinders.

But the biggest problem that hydrogen cars face is storage of the fuel. Spallino, who leases his Honda FCX for $500 a month, estimates he can drive it for 160 miles (less than Honda's claims of 190 miles) before it needs recharging. Honda collects Spallino's car every week and returns it charged-up. But there are also four hydrogen filling stations between Spallino's family home and his office; indeed, there are currently 24 hydrogen filling stations in California, and Schwarzenegger has pledged that by 2010 every Californian will have access to hydrogen fuel along the state's highways - some 200 stations.

There are also stations in Berlin, Munich, Singapore and Japan. A BP-owned hydrogen station in Essex, UK, which was built to fuel three prototype hydrogen buses, has closed after the scheme finished. "It's a chicken-and-egg situation," says Katsuhiko Hirose, head of fuel system development at Toyota. "No one wants to invest in hydrogen filling stations because there are no cars around to use them. But no one is going to buy a hydrogen car if they cannot refuel it easily."

Toyota calculates that adding a hydrogen dispenser to a garage forecourt would cost about $140,000, but General Motors says 10,000 outlets would be needed in Germany alone. BP estimates the cost to be even higher, judging that it would need to spend $400,000 per station - or a staggering $7 billion - to convert its American network. Honda is looking at home energy stations that will be "a box the size of a kitchen table", according to Kingston. "They sit outside the house and are powered by natural gas, which would then produce the energy to generate compressed hydrogen."

Kingston is aware of the irony of using fossil fuels to produce hydrogen, but says that in the long run there will be dramatic emission savings. "We are looking at ways to facilitate the ways and means of producing and transporting hydrogen. We are also looking at solar panelled refuelling stations, but these are all at least 10 years away."

All these factors mean that for many industry experts, biofuels represent the most immediate solution to reducing real-world carbon dioxide emissions. "Biofuels offer the potential to reduce a vehicle's well-to-wheel emissions by up to 80%," says Christopher MacGowan, chief executive of the UK's Society of Motor Manufacturers and Traders (SMMT). "The carbon savings and costs can vary significantly between different fuel options, depending on feedstock, the production and conversion process and use efficiency. Conventional biofuels, such as ethanol from wheat, are currently capable of reducing well-to-wheel emissions between seven and 77%."

The immediate advantage of biofuels is that the existing infrastructure is capable of supplying variations of the energy source. Most petrol pumps, for example, could supply fuel that is mixed with 5% biofuel with relative ease, and most cars are capable of running on 5% biofuel. It is for this reason that the UK's government's mandate that by 2010, 5% of all the road transport fuels sold in the UK must be biofuel has been accepted and welcomed by the motor industry.

But above a mixture of 5%, difficulties arise. Rubber seals and aluminium parts would need to be replaced with materials not eroded by the biofuel. Many car manufacturers are looking at producing cars with hardened engine components, zero rubber and wider fuel lines, which can run on a mixture of 85% biofuel and 15% petrol. Ford has produced the Ford Focus E85, while Saab claims its E85-enabled 9-5 Biopower has the potential to reduce carbon dioxide emissions by 70%.

A local police force in south-west England is currently road-testing 40 Ford Focus E85s, while half a dozen forecourts in supermarket-owned petrol stations supply the E85 biofuel. Once again, however, it is the infrastructure that is causing the biggest problem. The six petrol stations in Somerset are the only ones in the UK to supply E85 biofuel, and only after significant incentives were offered. Graham Hilton, chief executive of Green Spirit Fuels, which intends to convert 340,000 tonnes of wheat into 131 million litres of bioethanol, says: "We'll pay for the pumps to be put in, we'll pay a forecourt rental and we'll rent an underground tank from them."

Bioethanol distribution is also expensive. Stainless steel tankers cost £120,000 each, while the fuel currently costs 35p per litre to produce. Government incentives and tax boosts will be needed before biofuel can compete with petrol. Indeed, some experts believe it will require a government mandate before the oil companies move en masse towards biofuels. In Sweden, Ford's flex-fuel models, which were launched in 1996 and are the market leader in cars that can run on either petrol or E85, outsell its petrol and diesel cars. But Sweden ensures there is no duty on the fuel, and E85-enabled cars can park for free in Gothenburg and other municipalities.

Yet Shallcross points out that in many ways biofuels such as E85 can cause as many environmental problems as they solve. "A 1600cc petrol car might get 40 miles to the gallon, while an E85 model would get only 33 miles to the gallon. The driver needs to use 25% more fuel just to run it," he says. Carbon dioxide is also produced by the manure used to feed the food crops, the tractors to plough the fields and the process of converting the crops into biofuel.

Hybrid technology, which allows a car to be powered by battery or petrol, has also made huge advances in recent years. A recent survey of German customers by automotive supplier Continental found that 30.7% of motorists said their next car would "certainly" or "most likely" be a hybrid vehicle. Last autumn, the figure was just under 25%. Renate Kunast, Germany's former environmental minister, recently infuriated the country's car industry when she said: "I expect the German industry to produce modern cars, and if they can't do that people must buy a Toyota Prius."

But, despite the hype, hybrids accounted for barely 3.5% of Toyota's total sales last year. Currently, they can cost as much as 30% more than a regular car, while the Lexus RX 400H, the world's first luxury hybrid, costs about $170,000. Costs will come down as other manufacturers enter the marketplace. Boston-based research firm Global Insight estimates that in the next 18 months, at least 30 new hybrid models will hit the US market, taking the total number to more than 40 models.

But most analysts believe that there will be little change in price until the battery technology is resolved. Both General Motors and Toyota are considering producing plug-in hybrids, which can be partially charged at home and can double fuel efficiency. A small group of enthusiasts have paid as much as $10,000 to upgrade their hybrids with plug-in systems, but unless the price drops, this will not be a mainstream offering.

Some analysts now believe that diesel offers a cleaner fuel alternative than biofuels and hybrid cars. Volkswagen, Mercedes Benz and Chrysler are among the manufacturers that produce diesel cars that emit less carbon dioxide than hybrids. Indeed, German car manufacturers have pointed out that their newest diesel cars are among the world's most environmentally friendly cars.

Max Warburton, automotive sector analyst with UBS, believes that sales of both diesel and hybrid cars will grow in the US, but that diesel "will prevail by 2012". Less than 1% of American motorists drive diesel cars, but the US Department of Energy estimates that if the number rose to 20% in 15 years, almost 350,000 barrels of oil a day would be saved. Warburton estimates that 1.5 million diesel cars could be sold in the US in the next five years, making Germany's three largest car makers the biggest beneficiaries.

Shallcross is amused when asked whether green cars will ever become a mass market. In his eyes, they already are. "Last year was the 30th anniversary of the Ford Fiesta," he explains. "A Ford Fiesta manufactured in 1976 produced the same emissions as 50 Ford Fiestas manufactured last year." Indeed, it has been said that even while parked a 1970s car produced more emissions than today's models.

"Manufacturers will make whatever people will buy. It is estimated that over the past 10 years, the carbon dioxide emissions from cars have fallen 25%. But because customers want air bags, air conditioning and other extras, 10% of that has been lost. Still, that shows there has been an improvement of 15%. The only way to dramatically improve emissions of cars is to strip away all the extras, and what do you have then? A Formula 1 racing car that is very light and efficient, but you wouldn't want to drive that every day, would you?"

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