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9. Sustainable Transport

Summary of actions

• We will develop an understanding of the contribution of alternative technologies such as electric or hydrogen vehicles in meeting our renewable targets, taking account of the potential impact on electricity demand, and the potential for vehicle-to-grid technologies to help smooth electricity demand.
• We will continue to monitor the emerging evidence on biofuels - it is essential that our biofuel use is sustainable.

Introduction

9.1.1. The Scottish Government is developing and delivering more sustainable transport through activity across a number of areas to improve efficiency and reduce transport emissions in the longer term. This is in the context of the Government's Economic Strategy and the National Transport Strategy. In addition, transport is heavily dependent on petroleum fuels. Reliance on these fuels has potential consequences for the security of our energy supply.

9.1.2. Achieving more sustainable transport relies on a range of activities - not just the use of renewable fuels. In parallel with the UK Government's role, the Scottish Government is supporting a range of measures to promote more sustainable transport measures, including significant investment in public transport: travel, car purchase and eco-driving information; behavioural change programmes; active travel measures; supporting investment in automotive technologies that increase efficiency; and taking action to reduce emissions in the public sector fleet . To maximise effectiveness, these measures are normally packaged together in themes to address particular issues.

9.1.3. The proposed Renewable Energy Directive ²¹ sets a 10% target for renewables from transport (restricted to those modes that currently use either petrol or diesel) by 2020 as part of the 20% renewables target. This effectively excludes aviation and shipping, although renewable energy used in these sectors would count towards the target, as would electrified railways. The proposed Directive also provides for sustainability criteria for biofuels. The two main transport issues to consider in terms of renewables here, therefore, are biofuels and alternative technologies such as electric or hydrogen cars. The Scottish Government, working with the UK Government, needs to consider how best to work towards the transport target in a cost effective and sustainable way. The current expectation is that the Directive could be agreed in the Spring of 2009 although it could be sooner.

9.1.4. Reaching the transport target will be challenging, particularly given the findings of the Gallagher Review ²² (see below). However there may be more sustainable opportunities through the development of second and third generation biofuels. Biofuels are the only renewable transport fuel commercially available on a significant scale at present. However, in the longer term, alternatives such as electric and hydrogen powered vehicles are likely to be of greater significance.

Figure 9.1: Estimated Energy Consumption by Transport Mode - 2005 (including international aviation and shipping)

Source: Scottish Government (2006) Scottish Energy Study - Volume 1

What are biofuels?

Biofuels are fossil fuel substitutes that can be made from a range of organic materials including oilseeds, wheat and sugar, and are typically blended with conventional petrol and diesel. Biofuels offer the potential to reduce GHG emissions from road transport. Such a technology is important for global efforts to tackle climate change as car and vehicle use grows rapidly across the globe in the next few decades. At present the two main types of biofuel are biodiesel and bioethanol. Biodiesel, a diesel substitute, is generally produced from oily crops (or feedstocks) such as rapeseed, sunflower or palm oil, or recovered cooking oil. Bioethanol, a petrol substitute, is generally produced from starchy feedstocks, such as wheat, sugar beet or sugar cane, - although it can be produced from any organic substance (such as municipal solid waste). Other forms of biofuels include biomethane, which is a gas produced by the biological breakdown of organic matter and can be used as a renewable alternative to natural gas, either as a transport fuel or for electricity generation and heating.

Biofuels are less energy efficient than fossil fuels. For a given volume, bioethanol has around two-thirds the energy content of petrol and current forms of biodiesel have about nine-tenths of the energy content of fossil diesel. To achieve a 10% biofuels share by energy would therefore require a target of 11-15% by volume, depending on the relative market shares for petrol and diesel.

Biofuels and sustainability

The Scottish Government is committed to sustainability requirements for biofuels. Sustainability means that the biofuels are produced in ways which do not damage the environment or create social conflict. For example, it would be unacceptable to clear rainforest to grow feedstock for biofuels, as apart for the loss of biodiversity, there would be a net increase in carbon emissions. Conversion of other biodiverse ecosystems would be equally unacceptable. Other concerns include the indirect effects of biofuels, such as where biofuel feedstocks displace other crops which are then grown on previously forested land that is cleared for this purpose. such effects can mean than some biofuels would produce an overall increase in greenhouse gas emissions. There is also evidence (see Gallagher Review ²³ below), that some biofuels are contributing to rising food prices and therefore food insecurity. It will be important to look at more sustainable alternatives such as tallow.

Biofuels have different impacts on CO2 savings. Biofuels release CO2 when burnt in a vehicle engine but the plants from which they are gown absorb an equivalent amount of CO2 from the atmosphere. Potentially they are carbon neutral over their lifecycle, although this is normally not the practice because energy from fossil fuels may be required to process and transport them, and the cultivation of crops results in nitrous oxide emissions from the soil. If produced appropriately the GHG savings can be significant compared with fossil fuels.

Table 6.1: Types of biofuels and greenhouse gas savings ²⁴

Currently, only a limited amount of biofuels can be used in most engines, but more is possible. Most biofuels on the market at present can be used in unmodified vehicles and are sold in blends of up to 5% biofuel and the remainder consisting of fossil fuels. Some petrol vehicles, known as 'flex-fuel' vehicles, can operate on a range of mixtures of fossil fuel petrol and bioethanol (usually up to 85% ethanol by volume), commonly referred as E85 fuel), with the engine being adjusted automatically according to the fuel mix. Higher biofuel blends would be possible either by adapting vehicle engines or by using biofuels such as biobutinal that are more compatible with existing engines

To use more biofuels in Scotland and the UK - more investment would be required in infrastructure. There is only limited infrastructure for production, refining and supply of biodiesel, and an even more limited infrastructure for bioethanol. In the next decade, a greater number and volume of biofuels are likely to be available in the UK, with some of the more common biofuels coming from Brazilian sugarcane, European sunflower oil and wheat and palm oil. Aside from sustainability and infrastructure constraints, here are also further regulatory constraints to increasing the use of biofuels ( i.e. Fuel Quality Directive), and vehicle and fuel distribution technical constraints. For example, by 2020 the majority of diesel vehicles should be able to run on a 10% biodiesel blend and petrol vehicles on a 10% bioethanol blend, but even if all road vehicles used a 10% blend, this would only achieve 8% of renewable energy because of the lower energy content of biofuels. A solution to this issue would involve mandatory compatibility standards for new vehicles at the European level at least

Biofuels

9.2.1. UK Biofuel targets are currently set out in the Renewable Transport Fuel Obligation ( RTFO), made under the Energy Act 2004, which transposed the Biofuels directive (2003/30/EC). The RTFO is therefore reserved to the UK Government. The target for 2008/9 is 2.5% by volume. Under the RTFO, fuel suppliers are awarded certificates for each litre of biofuel, and these can be traded. Suppliers can also buy themselves out of the obligation, at a price set by the UK Government at a level intended to be higher that then additional cost of supplying biofuel (over and above the fossil based alternative). The UK Government originally encouraged the use of biofuels through a duty differential for biodiesel and bioethanol of 20 pence per litre below regular fuel. The combination of duty incentive and the buy out price paid by fuel suppliers who fail to meet their RTFO obligation is guaranteed at 35 pence per litre until 2010-11, when the duty differential will cease and the RTFO buy-out price will change to 30 pence per litre.

9.2.2. The RTFO lays down a set of sustainability (environmental and social) principles:

• Biomass production will not destroy or damage large above or below ground carbon stocks
• Biomass production will not lead to the destruction or damage to high biodiversity areas
• Biomass production does not lead to soil degradation
• Biomass production does not lead to the contamination or depletion of water sources
• Biomass production does not lead to air pollution
• Biomass production does not adversely affect workers' rights and working relationships

9.2.3. In February 2008, the UK Department for Transport asked Professor Ed Gallagher, Chair of the Renewable Fuels Agency, to consider the indirect effects of biofuel production (globally) - namely the extent to which production of biofuel feedstocks leads to land use change; and GHG emissions arising from changes in land use change and cultivation practices. The Gallagher Review ²⁵ concluded that:

• there is a future for a sustainable biofuels industry;
• biofuels can contribute to GHG savings from transport - but only where significant emissions from land use change are avoided and appropriate production technologies are employed;
• demand for food, animal feed and bioenergy is rising and creating additional pressure on land. Current policies do not ensure that additional production moves to suitable areas;
• there is significant risk that current biofuel policies will lead to a net increase in GHG emissions as a result of the displacement of existing agricultural production;
• the introduction of biofuels should be significantly slowed until adequate controls to address displacement effects are implemented and demonstrated to be effective;
• in the UK, the rate of increase in the UK's RTFO (Renewable Transport Fuel Obligation) should be slowed to 0.5% per annum so that the RTFO reaches 5% in 2013/14 rather than 2010/11 as currently planned;
• at an EU level it is not appropriate at this stage to set a binding 10% by 2020 target for biofuels;
• in the meantime a more appropriate range for the 2020 biofuel target would be around 4.5 - 8% energy;
• this target should include a separate obligation to force the development of advance biofuel technologies, commencing in 2015;
• if sufficient controls are enforced globally and new evidence provides further confidence, a higher aspirational trajectory starting in 2016 and rising to 10% by energy in 2020 could be possible.

9.2.4. The UK Government has welcomed the Gallagher review and accepted its main findings. The UK Government agrees that biofuels have the potential to deliver GHG benefits but that a more cautious approach is required. It will consult later in 2008 on slowing down the rate of increase in the UK's RTFO taking the level to 5%, as Gallagher recommends, by 2013/14 but with a review in 2011/12. At EU level, it will argue that the proposed 10% by 2020 renewable transport fuel target can remain as an overall objective, subject to clear conditions: firstly that the sustainability criteria must address indirect as well as direct effects on land use and secondly, that the target must be subject to rigorous review in the light of emerging evidence, so that an informed decision can be made at EU level in 2013-14 about whether the target should be mandatory.

9.2.5. The Scottish Government agrees with the UK Government response to the Gallagher Review which takes full account of the available evidence, and is precautionary, while still encouraging the further research and development required for a sustainable biofuels industry. Given the reserved nature of the RTFO, it is not appropriate for the Scottish Government to consult on this issue at this time. However, the Scottish Government is committed to ensuring the sustainability of biofuels - and is working with the UK Government on this issue.

Case Studies - Biofuels

9.2.6. There are incidences of a range of small scale innovative developments in the use of biofuels in Scotland. These include the Forestry Commission which has a fleet of biofuel vehicles, the increasing interest of some bus operators who make use of used vegetable oil for transport fuel and small projects such as that on Westray in Orkney, where biogas is produced from animal slurry and can be (and is) used to power a vehicle.

9.2.7. Stagecoach West has converted eight vehicles to run on biofuel. As part of this initiative Stagecoach is encouraging its customers to recycle their cooking oil to help fuel the bus. All households on the Service 1 route from Stewarton to the centre of Kilmarnock were given a container to collect their used oil and are being asked to take it to the recycling plant at Western Road. Anyone who recycles their oil will be given a voucher for money off their bus travel.

9.2.8. On a larger scale, Regional Selective Assistance has been granted to two biodiesel facilities here in Scotland, one of which, Argent Energy, produces biodiesel from animal tallow and used vegetable oil.

9.2.9. Scottish Development International is involved in two key areas for transport. One is biofuels, and particularly the future development of "second generation" biofuels, and the other is in relation to developing a Scottish market and manufacturing base for sustainable transport technologies e.g. electric vehicles, the batteries they use, and hydrogen fuel cells.

Alternative road transport technologies

9.3.1. Increased use of non fossil fuel based technologies can help efforts to meet the EU 2020 renewable energy target. Aside from biofuels, there is a range of potential technological options for road transport which offers alternatives to the combustion of fossil fuels. These include 'plug - in' hybrids (which use batteries charged from the electricity grid, as well as a standard combustion engine); and fully electric vehicles. Future technologies could also include hydrogen-fuelled vehicles, powered either by an internal combustion engine or a fuel cell. Electric and hydrogen vehicles have potential for the energy they consume to be sourced from renewable energy, particularly as the proportion of renewable energy in the electricity grid increases. Recent research for the UK Government (E4Tech 2007 - http://www.dft.gov.uk/pgr/scienceresearch/technology/lctis/e4techlcpdf ) concluded that as the transport sector is the most CO2 intensive sector per KWh of energy delivered, using renewable energy in battery electric vehicles could save more CO2 than using it in the electricity generation or heat sectors.

9.3.2. Part 2 of the King Review of Low Carbon Cars http://www.hm-treasury.gov.uk/independent_reviews/king_review/king_review_index.cfm), concluded that almost complete de-carbonisation of road transport could be possible by 2050. This would, however, require major technological improvements as well as substantial de-carbonisation of the power system. The King Review makes a series of recommendations aimed at bringing existing low carbon transport technologies forward as soon as possible: ensuring a market for these vehicles; moving the focus from biofuels to automotive technology; ensuring effective sustainability criteria for biofuels; and sending the right signals to the automotive industry. The Review concludes that substantial progress on battery and/or fuel cell issues and cleaner electricity will be needed in order to deliver decarbonised transport by 2050. Advanced second generation biofuels will also have a part to play.

Potential impact of vehicles powered through the electricity grid

9.3.3. Widespread emergence of electric vehicle options could potentially contribute to long term carbon reduction and renewable energy targets in a number of ways:

• Even with today's electricity mix, a switch to vehicles powered through the electricity grid would be likely to offer a carbon reduction benefit relative to typical conventional petrol of diesel cars. For example, all-electric vehicle CO2 emissions have been estimated at around 77gCO2/km based on recharging from today's grid mix (compared to a 2007 new car CO2 average of 167g/CO2/km). Local air quality would also benefit as there are no tailpipe emissions when vehicles operate in electric mode;
• Electric vehicles are generally considered to be more energy efficient over the full life cycle compared to conventional petrol or diesel vehicles so that could potentially reduce the overall amount of energy used by transport, despite the increase in electricity demand - making renewable energy and carbon reduction targets easier to achieve;
• Greater use of vehicles powered through the electricity grid could potentially improve the efficiency of the operation of the electricity grid by smoothing power demand between day and night (assuming vehicles were principally charged at night);
• Grid powered vehicles could provide distributed energy storage capacity via on-board batteries, potentially helping mitigate some of the issues of intermittency of renewable electricity and allowing a greater proportion of intermittent renewables to be accommodated within the overall grid mix. Using vehicle to grid V2G technology, electric vehicles could be charged and discharged at times of low or peak demand;
• Vehicles powered through the electricity grid could potentially contribute to the 10% renewable transport target if the proportion of renewable electricity used to provide energy to the vehicles could be counted towards the transport target (rather than towards the renewable electricity target). This would be subject to negotiations by the UK with the EU Making any significant contribution would require a steep growth in a short space of time from a low base. There could also be significant attribution problems.

9.3.4. Realising the potential benefits of electric vehicles for long-term carbon reduction, renewable energy and efficient grid operation is dependent on significant market penetration of vehicles powered through the electricity grid. Currently these kinds of vehicles are not widely available mass market options for the majority of consumers, although extensive development work by major automotive companies is ongoing. Many companies have plans to introduce all-electric or plug-in hybrid or hydrogen vehicles for potential mass market commercialisation in the next decade and beyond. Sustained higher oil prices, improvements in battery technology cost and performance, and the emergence of new technologies and or business models which allow hydrogen refuelling or rapid battery re-charging or replacement are some of the key factors which could address existing barriers to market penetration of vehicles powered through the electricity grid. The Scottish Government will be considering the role the public sector might take in the procurement of these kinds of vehicles and whether and how that might stimulate the market.

9.3.5. A further key consideration will be the response of the market and consumer demand. Existing vehicles delivery very high stands of quality, performance and utility. Consumers will demand and expect better or equivalent performance at an affordable price.

9.3.6. Even if viable vehicle options emerge in the next decade, there is uncertainty about the potential for large scale impacts on renewable energy or carbon targets, power demand or grid operation from electric vehicles prior to 2020. A major constraint would be the time taken for new vehicle technologies and supporting infrastructure to penetrate the total Scottish and the rest of the UK's fleets.

9.3.7. In the longer term, widespread adoption of electric vehicles could significantly increase demand for electricity. To illustrate the implications, we can consider a scenario where biofuels contribute to half of the 10% transport target ( i.e. a 5% saving, in line with the latest RTFO recommendation for 2013/14), and the remaining 5% is met with electric vehicles. It is estimated that this would require either 27% of total car travel to be electric-powered, or just over half to be by electric-hybrids (or some combination of both). An estimated 1.5 TWh of additional electricity demand would be required to achieve this, which is equivalent to approximately a 4% increase across Scotland.

9.3.8. Were biofuels to contribute 8% to the 10% transport target, then approximately 12% of car travel would need to be electric-powered, requiring 0.6 TWh of additional electricity. However, a number of caveats should be placed on these figures (based on BERR's UK Renewable Energy Strategy - Consultation Document). They are based only on one type of technology, whereas a mix of technologies might be deployed and new solutions could emerge. The figures assume that distance travelled remains static at 2004 levels. There are other assumptions around technical performance, vehicle efficiency etc. There are thus considerable uncertainties around the potential impact of transport on electricity demand.

9.3.9. It is however clear that electricity demand for transport could have a significant impact on overall Scottish and UK energy demand. Whilst it would reduce overall energy demand due to the greater energy efficiency of electric cars, electricity demand would inevitably increase. However, this may not require a proportional increase in electricity generating capacity, as recharging of electric vehicles or plug-in hybrids, or production of hydrogen by electrolysis, might take principally at night when demand is lowest. The benefits in terms of renewable energy and carbon targets will therefore depend on the extent to which the electricity demanded is produced from renewable and other low carbon sources, and the amount of energy (including renewable energy) used by electric vehicles compared to the vehicles they would displace.

9.3.10. The UK Government is exploring the scale and viability of potential future market penetration of vehicles powered through the electricity grid. This work will examine the factors affecting the current and likely future economics of these options; the wider environmental impact; the potential impacts on and benefits to UK grid operation; and the case for further government measures to help accelerate the development and introduction of vehicles powered through the electricity grid and associate supporting re-charging infrastructure. It will also examine how the UK and automotive and other industries could benefit from expansion into these new markets. The Scottish Government will assess this work in terms of its full implications for Scotland: in terms of reducing Transport GHG emissions and contributing to our renewables targets; and where our industries might benefit.

Other forms of Transport

Aviation

9.4.1. This document does not suggest any proposals for the aviation sector as there are not expected to be safe, commercially viable options for renewable energy in aviation by 2020.

Rail

9.4.2. The carbon dioxide emission of a typical passenger rail journey is about half that of an equivalent car journey and about one-quarter of an equivalent journey by air. Rail freight emissions per tonne km are about one fifth of the carbon dioxide emissions of equivalent road freight. Emissions are even lower for those rail journeys undertaken with electric powered engines. The high cost and long life of railway assets means that future technological changes need to be made some decades in advance of any long term carbon reduction goals, for example, any significant investment made now will take us to 2050.

9.4.3. Transport Scotland is working to implement the Scottish Government's rolling programme of electrification of the Scottish rail network. This will provide quicker, more reliable rail services with reduced emissions. The electrification programme will also allow the Government to benefit from any long-term improvements in the Scottish energy mix. New electrification work has already started in Edinburgh, and the new railway from Edinburgh to Glasgow linking Airdrie and Bathgate will be electrified from its opening. Other busy routes will follow. This will build on the 23 per cent of the network that is already electrified and will allow for a reduced reliance on diesel engines. All of this will ensure that rail remains an attractive and sustainable alternative means of transport.

Buses

9.4.4. The Scottish Government is reviewing the Scottish Bus Service Operators Grant with a view of making it more environmentally focussed. We estimate that average emissions could be reduced by more than a third by 2015 if funding was focussed on Euro III vehicles or better.

Ferries

9.4.5. The Scottish Government provides subsidies to NorthLink Ferries Ltd and CalMac Ferries Ltd to operate essential passenger and freight services to Orkney and Shetland and throughout the Clyde and Hebrides. A number of local authorities also support internal lifeline ferry services. Under the terms of the contracts with NorthLink and CalMac, the Scottish Government works closely with both operators to identify and implement fuel efficiency measures (especially relevant, given the high costs of fuel at this time) and to ensure that the companies are developing positive environmental practices and meeting emissions targets. While we would support further measures to reduce any harmful affects ferry services have on the environment, any measures, such as requiring modifications to vessels and/or engines, or the introduction of a carbon trading scheme, must be proportionate, incremental and affordable.

Questions for debate

• How can we best incentivise renewable and low carbon transport in a sustainable and cost effective way in Scotland?
• What potential is there for the introduction of vehicles powered through the electricity grid in Scotland? What impact would the widespread introduction of these kinds of vehicles have on:
  • Energy demand and carbon emissions
  • Providing distributed storage capacity
  • Smoothing levels of electricity demand on the grid?
• What factors might affect the scale and timing of these impacts?
• Over what timescales do you think electric vehicles could contribute to our renewable energy and carbon reduction targets and what could the Scottish Government do to accelerate the introduction of these vehicles in Scotland in a cost effective way?

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