Paul W. Graham and Luke J. Reedman
EP148256
October 2014
Prepared for the Department of Environment
Citation
Graham, Paul W., and Reedman, Luke J., 2014.Transport Sector Greenhouse Gas Emissions Projections 2014-2050, Report No. EP148256, CSIRO, Australia.
Copyright and disclaimer
© 2014 CSIRO To the extent permitted by law, all rights are reserved and no part of this publication covered by copyright may be reproduced or copied in any form or by any means except with the written permission of CSIRO.
Important disclaimer
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Contents
Contentsi
Figuresv
Tablesviii
Acknowledgmentsix
List of acronyms and abbreviationsx
Glossaryxii
Executive summaryxv
1Introduction12
2Scenario overview13
2.1Introduction to the modelling exercise...... 13
2.2Baseline scenario overview...... 13
2.2.1New South Wales biofuel mandate...... 13
2.2.2Fuel excise...... 14
2.2.3Oil, gas and final product prices...... 15
2.3Sensitivity scenarios, measure estimates and emission range scenarios...... 18
3Modelling methodology22
3.1Road sector modelling...... 22
3.1.1Limitations of ESM...... 22
3.1.2Fuels that were excluded and other knowledge gaps...... 23
3.2Non-road transport modes: projection methodology...... 23
3.2.1Projecting activity demand...... 23
4Key Assumptions25
4.1.1Transport sector demand data...... 25
4.1.2Determinantsof road fuel and vehicle choices...... 28
Economic and other considerations...... 28
Switching costs...... 29
4.1.3fuel efficiency in the road sector...... 31
Light duty vehicles...... 31
Heavy duty vehicles...... 34
4.1.4Fuel mix and fuel efficiency changes in the non-road sector...... 35
Aviation...... 35
Rail and marine transport...... 36
Non-road alternative fuel shares and overall efficiency improvements...... 37
4.1.5Constraints on the deployment of alternative fuel infrastructure...... 38
Liquefied petroleum gas (LPG) and natural gas (LNG/CNG)...... 38
Biofuels...... 39
Synthetic Fuels: gas to liquids (GTL), shale to liquids (STL) andcoal to liquids (CTL)...... 44
Electric and plug-in electric vehicles...... 44
Social constraints...... 44
Infrastructure constraints...... 45
Hydrogen fuel cell vehicles...... 46
Conventional transport fuels...... 47
5Baseline scenario results48
5.1Transport fuel mix...... 48
5.1.1Light duty road...... 48
5.1.2Heavy duty road...... 50
5.1.3All road...... 51
5.1.4Non-road...... 52
5.2Road sector engine mix...... 53
5.3Greenhouse gas emission projections...... 54
6Sensitivity scenario results58
6.1Mandatory emission standards for new light vehicles (Emission standards) scenario...... 58
6.1.1Transport fuel mix...... 59
6.1.2Greenhouse gas emission projections...... 62
6.2High oil price scenario...... 65
6.2.1Transport fuel mix...... 65
Light duty...... 65
Heavy duty...... 66
All road...... 67
Non-road...... 68
6.2.2Road sector engine mix...... 69
6.2.3Greenhouse gas emissions...... 70
6.3Low oil price scenario...... 72
6.3.1Transport fuel mix...... 73
Light duty...... 73
Heavy duty...... 73
Non-road...... 75
6.3.2Road sector engine mix...... 76
6.3.3Greenhouse gas emissions...... 77
6.4Increased supply of second generation biofuels (High biofuels) scenario...... 79
6.4.1Transport fuel mix...... 79
Light duty...... 79
Heavy duty...... 80
Non-road...... 82
6.4.2Greenhouse gas emissions...... 82
6.5Delayed supply of second generation biofuels (Delayed biofuel) scenario...... 84
6.5.1Transport fuel mix...... 84
Light duty...... 84
Heavy duty...... 85
Non-road...... 87
6.5.2Greenhouse gas emissions...... 87
7Measure estimate scenario results91
7.1Estimating the emission impact of the NSW biofuels mandate (No NSW biofuels target scenario).91
7.1.1Transport fuel mix...... 91
7.1.2Greenhouse gas emissions...... 93
7.2Estimating the emissions impact of 2014-15 budget changes to fuel excise arrangements (No excise changes scenario) 94
7.2.1Transport fuel mix...... 95
Light duty...... 95
Heavy duty...... 96
Non-road...... 98
7.2.2Road sector engine mix...... 99
7.2.3Greenhouse gas emissions...... 100
8Emission range scenario results103
8.1High emission scenario...... 103
8.1.1Transport fuel mix...... 103
Light duty...... 103
Heavy duty...... 104
Non-road...... 106
8.1.2Greenhouse gas emissions...... 107
8.2Low emission scenario...... 110
8.2.1Transport fuel mix...... 110
Light duty...... 110
Heavy duty...... 111
Non-road...... 113
8.2.2Road sector engine type...... 113
8.2.3Greenhouse gas emissions...... 114
References117
Appendix A: Additional details of ESM road transport sector modelling and assumptions120
A.1ESM model structure...... 120
A.2ESM model outputs...... 121
A.3Road vehicle type configuration...... 122
A.4Road fuel coverage...... 122
A.5Road engine type configurations...... 124
A.6Road transport costs...... 125
A.7Road fuel efficiency...... 126
Appendix B: Additional detailon non-road transport sector modelling130
B.1 Projecting fuel demand...... 130
B.2 Fuel selection...... 130
B.3 Emissions projection...... 131
Figures
Figure 11: Projected transport sector greenhouse gas emissions under the Baseline and sensitivity scenarios
Figure 21: Baseline scenario oil price assumption
Figure 22: Baseline scenario natural gas price assumption
Figure 23: Baseline scenario retail fuel prices in petrol equivalent terms, road passenger sector
Figure 24: Baseline scenario retail fuel prices in diesel equivalent terms, road freight sector
Figure 25: Assumed oil prices in the Baseline, Low oil price sensitivity and High oil price sensitivity scenarios
Figure 31: Overview of non-road greenhouse gas emission projection process
Figure 41: Road transport demand to 2050 in the Baseline scenario
Figure 42: Assumed growth in demand for aviation passenger kilometresin the Baseline scenario
Figure 43: Assumed growth in demand for rail passenger kilometresin the Baseline scenario
Figure 44: Assumed growth in demand for rail freight tonne kilometresin the Baseline scenario
Figure 45: Assumed growth in demand for marine freight tonne kilometresin the Baseline scenario
Figure 46: Changes in preferences for road vehicle types and sizes
Figure 47: Index of historical and assumed new and fleet average fuel efficiency changes (projections from 2014 include internal combustion engine vehicle improvements only)
Figure 48: Index of historical and assumed new and fleet average fuel efficiency changes (projections from 2014 include internal combustion engine vehicle improvements and vehicle size changes)
Figure 49: Index of historical and assumed new and fleet average fuel efficiency changes (projections from 2014 include internal combustion engine vehicle improvements, vehicle size changes and a previous ESM projection of uptake of vehicle electrification)
Figure 410: Historical domestic marine transport fuel mix
Figure 411: Historical rail transport fuel mix
Figure 412: First generation biodiesel cost-quantity curve
Figure 413: First generation ethanol cost-quantity curve
Figure 414: Historical share of ethanol in NSW petrol sales, image reproduced with permission from original source at:
Figure 415: Historical share of biodiesel in NSW diesel sales, image reproduced with permission from original source at:
Figure 416: Cost curve for advanced generation road biofuels
Figure 417 : Component costs for advanced generation production of ethanol and biodiesel in 2025
Figure 418: Projected global electric vehicle availability
Figure 51: Light duty road transport fuel consumption by fuel under the Baseline scenario
Figure 52: Heavy duty road transport fuel consumption by fuel under the Baseline scenario
Figure 53: Projected total road transport fuel consumption by fuel under the Baseline scenario
Figure 54: Non-road transport fuel consumption by fuel and mode under the Baseline scenario
Figure 55: Engine type in road kilometres travelled, Baseline scenario
Figure 56: Road transport greenhouse gas emissions by mode under the Baseline scenario
Figure 57: Non-road transport greenhouse gas emissions by mode under the Baseline scenario
Figure 58: Transport sector greenhouse gas emissions under the Baseline scenario
Figure 61: Projected light duty road transport fuel consumption by fuel under the Emission standards scenario
Figure 62: Engine type in road kilometres travelled, Emission standards scenario
Figure 63: Projected heavy duty road fuel consumption by fuel under the Emission standards scenario
Figure 64: Projected total road fuel consumption by fuel under the Emission standards scenario
Figure 65: Road transport greenhouse gas emissions by mode under theEmission standards scenario
Figure 66: Light duty road transport sector greenhouse gas emissions under the Baseline and Emission standards scenarios (excluding motorcycles)
Figure 67: Transport sector greenhouse gas emissions under the Baseline and Emission standards scenarios
Figure 68: Light duty road transport fuel consumption by fuel under the High oil price scenario
Figure 69: Heavy duty road transport fuel consumption by fuel under the High oil price scenario
Figure 610: Projected road transport fuel consumption under the High oil price scenario
Figure 611: Projected non-road fuel consumption under the High oil price scenario
Figure 612: Engine type in road kilometres travelled, High oil price scenario
Figure 613: Road transport greenhouse gas emissions by mode under the High oil pricescenario
Figure 614: Non-road transport greenhouse gas emissions by mode under the High oil pricescenario
Figure 615: Transport sector greenhouse gas emissions under the High oil priceand Baseline scenarios
Figure 616: Projected light duty road transport fuel consumption under the Low oil price scenario
Figure 617: Projected heavy duty road transport fuel consumption under the Low oil price scenario
Figure 618: Projected road transport fuel consumption by fuel under the Low oil pricescenario
Figure 619: Non-road transport fuel consumption by fuel and mode under the Low oil pricescenario
Figure 620: Engine type in road kilometres travelled, Low oil price scenario
Figure 621: Road transport greenhouse gas emissions by mode under the Low oil price scenario
Figure 622: Non-road transport greenhouse gas emissions by mode under the Low oil pricescenario
Figure 623: Transport sector greenhouse gas emissions under the Low oil priceand Baseline scenarios
Figure 624: Projected light duty road transport fuel consumption under the High biofuelscenario
Figure 625: Projected heavy duty road transport fuel consumption under the High biofuelscenario
Figure 626: Projected road transport fuel consumption by fuel under the High biofuelscenario
Figure 627: Non-road transport fuel consumption by fuel and mode under the High biofuelscenario
Figure 628: Road transport greenhouse gas emissions by mode under the High biofuelscenario
Figure 629: Non-road transport greenhouse gas emissions by mode under the High biofuelscenario
Figure 630: Transport sector greenhouse gas emissions under the High biofuel and Baseline scenarios
Figure 631: Projected light duty road transport fuel consumption under the Delayed biofuel scenario
Figure 632: Projected heavy duty road transport fuel consumption under the Delayed biofuel scenario
Figure 633: Projected road transport fuel consumption by fuel under the Delayed biofuel scenario
Figure 634: Non-road transport fuel consumption by fuel and mode under the Delayed biofuel scenario
Figure 635: Road transport greenhouse gas emissions by mode under the Delayed biofuel scenario
Figure 636: Non-road transport greenhouse gas emissions by mode under the Delayed biofuel scenario
Figure 637: Transport sector greenhouse gas emissions under the Delayed biofuel and Baseline scenarios
Figure 71: Projected road transport fuel consumption by fuel under the No NSW biofuels target scenario
Figure 72: Comparison of total road transport ethanol and biodiesel consumption with and without the NSW biofuel target
Figure 73: Transport sector greenhouse gas emissions under the No NSW biofuels targetand Baseline scenarios
Figure 74: Projected light duty road transport fuel consumption under the No excise changesscenario
Figure 75: Projected heavy duty road transport fuel consumption under the No excise changesscenario
Figure 76: Projected road transport fuel consumption by fuel under the No excise changesscenario
Figure 77: Non-road transport fuel consumption by fuel and mode under the No excise changesscenario
Figure 78: Projected adoption of alternative drive train in road transport under the No excise changes scenario
Figure 79: Road transport greenhouse gas emissions by mode under the No excise changesscenario
Figure 710: Non-road transport greenhouse gas emissions by mode under the No excise changesscenario
Figure 711: Transport sector greenhouse gas emissions under the No excise changes and Baseline scenarios
Figure 81: Projected light duty road transport fuel consumption under the High emissionscenario
Figure 82: Projected heavy duty road transport fuel consumption under the High emissionscenario
Figure 83: Projected road transport fuel consumption by fuel under the High emissionscenario
Figure 84: Non-road transport fuel consumption by fuel and mode under the High emissionscenario
Figure 85: Road transport greenhouse gas emissions by mode under the High emissionscenario
Figure 86: Non-road transport greenhouse gas emissions by mode under the High emissionscenario
Figure 87: Transport sector greenhouse gas emissions under the High emission and Baseline scenarios
Figure 88: Projected light duty road transport fuel consumption under the Low emission scenario
Figure 89: Projected heavy duty road transport fuel consumption under the Low emission scenario
Figure 810: Projected road transport fuel consumption by fuel under the Low emission scenario
Figure 811: Non-road transport fuel consumption by fuel and mode under the Low emission scenario
Figure 812: Projected uptake of alternative drive train technologies in the road transport sector under the Low emissions scenario
Figure 813: Road transport greenhouse gas emissions by mode under the Low emission scenario
Figure 814: Non-road transport greenhouse gas emissions by mode under the Low emission scenario
Figure 815: Transport sector greenhouse gas emissions under the Low emission and Baseline scenarios
Tables
Table 21: Comparison of real effective fuel excise rates in 2015 and 2020 prior to and after 2014-15 budget changes assuming a constant 2.5 per cent consumer price index (2015 dollars)
Table 41: Ranking of surveyed factors considered in buying a vehicle from ABS (2009)
Table 42: Assumed current and future representative vehicle costs, $,000
Table 43: Average Australian heavy duty vehicle fleet fuel efficiencies in litres per 100 kilometres, 2002 and 2012
Table 44: Assumed rules and shares for allocating natural gas and biofuels in the non-road fuel mix and fuel efficiency improvement by 2050
Table 45: Implied consumption of ethanol in ML converting all biofuel energy reported in BREE Australian Energy Statistics Table F by 23.4 MJ/L
Table 71: Comparison of real effective fuel excise rates in 2015 and 2020 prior to and after 2014-15 budget changes assuming a constant 2.5 per cent consumer price index (2015 dollars)
Table 81: Allowable road mode and fuel combinations
Table 82: Allowable road mode and engine combinations
Table 83: Non-fuel cost categories in total road travel cost
Table 84: Comparison of whole of life transport cost estimates for Australian petrol passenger vehicles (c/km)
Table 85: Properties of selected fuels (/L, or /m3 for CNG and H2)
Table 86: Combustion process according to fuel
Table 87: Allowable mode and fuel combinations
Acknowledgments
CSIRO would like to acknowledge the input of staff at the Department ofEnvironmentand an internal referee in developing this report. However, any remaining errors remain the responsibility of the authors.
List of acronyms and abbreviations
4WDFour-Wheel Drive
ABAREAustralian Bureau of Agricultural and Resource Economics
ABSAustralian Bureau of Statistics
ACTAustralian Capital Territory
Art’dArticulated
ANLArgonne National Laboratory
B20A blend of 20 per cent biodiesel and 80 per cent diesel
bblBarrel
BITREBureau of Infrastructure, Transport and Regional Economics
BREEBureau of Resource and Energy Economics
CCSCarbon Capture and Storage
CH4Methane or natural gas
CICompression Ignition
CO2Carbon dioxide
CO2eCarbon dioxide equivalent
CNGCompressed Natural Gas
CSIROCommonwealth Scientific and Industrial Research Organisation
CTLCoal-to-liquids diesel
DMEDimethyl ether
DoEDepartment of the Environment
E10A blend of 10 per cent ethanol with 90 per cent petrol
E85A blend of 85 per cent ethanol with 15 per cent petrol
ESMEnergy Sector Model
EUEuropean Union
EVElectric vehicle
FAMEFatty Acid Methyl Ester
FCAIFederal Chamber of Automotive Industries
FCVFuel cell vehicle
GHGGreenhouse gas
GJGigajoule
GTLGas-to-liquids diesel
HYBHybrid internal combustion engine
ICEInternal combustion engine
IEAInternational Energy Agency
LCVLight commercial vehicle
LNGLiquefied natural gas
LPGLiquefied petroleum gas
MLMegalitres
MtMegatonnes
N2ONitrous oxide
NRMANational Roads and Motorists’ Association
NSWNew South Wales
PASPassenger
PHEVPlug-in hybrid electric vehicle
PJPetajoules
SISpark Ignition
STLShale-to-liquids diesel
SUVSport Utility Vehicle or Suburban Utility Vehicle
USUnited States
VKTVehicle kilometres travelled
WEOWorld Energy Outlook
Glossary
Alternative drive train–a drive train involving a power source in combination or separate from internal combustion to provide power to a vehicle
Alternative fuels –fuels other thanpetrol or diesel
Articulated vehicle –vehicles constructed primarily for the carriage of goods, consisting of a prime mover (having no significant load-carrying capacity) but linked, via a turntable device, to a trailer
Bio-derived jet fuel – a synthetic jet fuel manufactured via the conversion of biomass into jet fuel
Biodiesel – a diesel fuel substitute made from biomass. Those biodiesels produced using the transesterification process are often called Fatty Acid Methyl Esters (FAME) whilst those biodiesels produced using deoxyhydrogenation or Fischer-Tropsch gasification are call ‘renewable biodiesels’. Here we use the term biodiesel to cover both types.
Biomass – trees, crops, stems or other lignocellulosic or woody matters, plant oils or animal fats
Bio-SPK – synthetic paraffinic kerosene produced from tree or plant oils via the deoxyhydrogenation process
Cross-price elasticity of demand – the ratio between the proportional change in demand for a good or service divided by the proportional change in the price of another good or service (at given prices)
Deoxyhydrogenation – a refining process which removes the oxygen from vegetable oils and animal fats using various catalytic reactions at temperature and pressure. Hydrogen is a key input.
Diesel – a petroleum derived fuel suitable for use in compression ignition internal combustion engine vehicles
Drive-trains – the collection of all power transmission components in a vehicle, including the engine, which convert the fuel source into wheel propulsion