Volkswagen and Shell Argue for Biofuels Over Electric

Biofuels are better than electrified vehicles for hitting carbon reduction targets, according to a study commissioned by automakers and oil companies.

“Integrated Fuels and Vehicles Roadmap 2030 and Beyond” is a new 138-page study that’s biased toward biofuels as the European Union creates new fuel efficiency and emissions targets for 2025 to 2030. The EU has been tipping toward plug-in electrified vehicle technologies on these new standards emanating from the Paris climate summit last year, and the coalition that funded the study would like to see biofuels win out.

Roland Berger, a consulting firm based in Munich, Germany, was commissioned by the EU Auto Fuel Coalition, to conduct the study. The coalition is comprised of BMW, Daimler, Honda, NEOT/St1 (North European Oil Trade), Neste (an oil refining and biofuels company), OMV (an oil and gas company), Shell, Toyota, and Volkswagen.

At a meeting in Brussels this week, executives from Volkswagen and Shell made public statements supporting and explaining the study. Ulrich Eichhorn, VW’s new head of research and development, said that “modern diesel,” natural gas, and biofuels-fueled cars will be absolutely necessary for hitting EU carbon targets. Eichhorn said that plug-in hybrids and more efficient vehicles were “building blocks” for the future, but that “higher shares” for biofuels would be needed.

Both VW and Shell see alternative fuels such as E85 offering an easier, more profitable path than EVs. Possible solutions for hitting targets include CO2 car labelling, adding more biofuel blends, and the expansion of the EU’s emissions trading system (ETS). Shell’s Colin Crooks said that liquid fuels will remain essential during the EU’s transition since internal combustion engines are expected to take the lead for years to come.

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The commissioned study says that customers perceive many hurdles when it comes to acceptance and adoption of electric mobility. These hurdles include higher purchase prices for EVs, perceived risks in using the technologies, range limitations, limited charging infrastructure, and long charging times. As for the technology hurdles, the study identifies burning lithium ion batteries in early EVs and lack of customer experience with battery lifetime reliability.

VW is launching EV concept cars at auto shows as a way to improve its image during the diesel emissions scandal. VW and the coalition see biofuels as a logical extension of what they’re already manufacturing and processing for the EU’s emissions targets. EVs and charging will cost too much for the coalition, the study says.

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