Newsletter – February 2016

 

 

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NEWSLETTER: February 2016

CEO Corner: Impacts of the Paris Climate Treaty

Contributed by Joerg Ferchau, CEO
Last month, representatives of 195 nations reached a landmark accord — committing nearly every country to lowering its greenhouse gas emissions. United Nations diplomats have been working on the accord for nine years, and it requires action in some form from every country.

Many say that a crucial contributor to the execution of the agreement came last year in the U.S. as President Obama enacted the nation’s first climate change policy- a set of new EPA regulations designed to significantly reduce greenhouse gas pollution. In addition, the agreement between the U.S. and China last year to jointly cut domestic greenhouse gas emissions, helped to cement the path to the Paris Treaty.

While the global alignment doesn’t solve for climate change issues, it sets the course in the right direction. Much of the work to be done lies within the transportation industry, which a large source of emissions in many economies. To date, most countries are featuring transportation commitments to increase support for advances in electrification, alternative fuels, increase MPG, and reduce emissions significantly. As we look ahead, it is likely that governments will begin making increased investments to commercialize and deploy new vehicle and fuel technologies.

“This is a truly historic moment,” the United Nations secretary general, Ban Ki-moon, said in an interview. “For the first time, we have a truly universal agreement on climate change, one of the most crucial problems on earth.”

Further details are available here.

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United States Emissions Reductions Trends in 2016

With the arrival of a new year and, inevitably, new developments, emission reduction mandates in the United States are seeing lofty new goals as well. Climate change is no longer something that can be ignored—with the environment on the line, the government has made moves to repair the damage before it is too late. Here are three things to know about the race to reduce our carbon footprint.

Joint Ruling
The US Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) have teamed up to create a joint rule that establishes a national program of new standards that will apply to all light vehicles manufactured in model years 2012 to 2016—a combined average emissions level of 250 grams of carbon dioxide (CO2) per mile in 2016, or about 35.5 miles per gallon. The aim is to reduce greenhouse gas emissions and improve fuel economy. In addition, the EPA has outlined an unprecedented Clean Air Act, which will serve as the national greenhouse gas (GHG) emissions standards.

2025 Emissions Target
President Obama has set his sights and declared a target value for emissions reduction in the next ten years—an aggressive 26% to 28% decrease in comparison to ten years ago, in 2005. He also launched the Climate Action Plan, with main areas of focus being regulation of existing power plants, standards for heavy-duty vehicles, and measures for energy efficiency.

Sustainability Plans
Institutions that control fleets of large and heavy-duty vehicles are taking steps to reduce emissions in different ways. The Department of Homeland Security (DHS) has pledged to clean energy and sustainability even in their day-to-day work—they’ve streamlined their fleets, cut petroleum use, and replaced over a thousand vehicles with just fewer than three hundred more energy-efficient models, saving 1.5 million gallons of gasoline.

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News Recap:

EDI and Ford Enter Hybrid Vehicle Patent License Agreement

EDI announced its entry into a license agreement for hybrid vehicle patents with Ford Motor Corporation. The terms of the license agreement to Ford are confidential. The agreement comes after EDI previously entered into an agreement regarding the portfolio with Toyota Motor Corp. CEO Joerg Ferchau comments, “We look forward to continuing our work in the green vehicle industry, and are enthusiastic about the future of zero-emissions technologies.”

For more information read the official press release.

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News Recap:

EDI and North America Repower (NAR) begin RNG PHEV Armored Truck Conversions

As part of a State of California CEC grant program last year, NAR and EDI were awarded a contract to “repower” a small fleet of Sectran armored trucks which are based on an International chassis and which were diesel powered. When deployed, the repowered vehicles are expected to reduce certain emissions by over 90 percent and will also prolong the useful life of the vehicles.

The first vehicle has been converted by NAR and has been updated with a renewable natural gas engine and fuel system to which EDI is currently adding its advanced PHEV PowerDrive ™ hybrid/electric powertrain system. The new trucks will significantly reduce emissions, will have full electric and hybrid operating capabilities and will provide a highly attractive payback for Sectran.

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News Recap:

Shaanxi Port Truck with EDI PowerDrive ™ system commissioned

Announced as a new project in late in 2015, the new Shaanxi Port truck which includes the EDI PowerDrive ™ drivetrain was constructed and has just completed over 4 months of OEM testing as of January 2016. To date, vehicle has successfully completed functional and characterization testing and is awaiting shipment to the Port of Shanghai where it will undergo field testing during 2016. Shaanxi is one of the largest manufacturers of port trucks in China and is a long time EDI relationship.

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China government directive should speed up local fleet electric bus purchases

Contributed by guest Author: Alysha Webb
Beijing, China – In late fall, news that China’s central government would cut taxes on gasoline-powered vehicles with engines of 1.6 liters or less got a lot of press. The measure will surely boost sales of qualified passenger cars.

Another part of that same announcement received much less press, but could be a game changer where electrified bus purchases are concerned. Beijing said that local governments who did not speed up their electrified bus purchases would face fuel and operational subsidy cuts. That kind of stick is needed to speed up purchases of electric buses by China’s public transportation fleets. Cities in China have been adding electric buses to their fleets, but not very quickly. Even the city of Beijing, where the central government is based, seems to be dragging its feet in adding electric buses to its fleets. On a recent trip to Beijing, this visitor saw few electric buses on the road though the municipal government has set a goal of electrifying around 30% of its some 13,800 public buses by 2017.

To be sure, the city has acquired some electric buses. For example, 30 battery electric buses were delivered to the Beijing suburb of Huairou to transport delegates at the Asia Pacific Economic Cooperation (APEC) summit late last year.

Those buses were produced by a local company, BAIC Foton Motor Co. Ltd., which is partly owned by the Beijing Municipal government. Foton will deliver another 30 electric buses to Huairou this year as part of a total order for 700 units.

This preference for buying locally is one stumbling block to faster expansion of municipal electric bus fleets, says Yale Zhang, managing director of Auto Foresight, a consultancy based in Shanghai.

“Local governments do not want to spend their money elsewhere,” he says.
That means waiting until a local company has developed a suitable electric bus product for a municipal fleet’s needs. For example, the Foton purchase will eventually include 8.5 meter, 12-meter, and 18 meter buses, some articulated, for both city and longer distance use.

Cost is another barrier to widespread adoption, says Pau Gao, a director at McKinsey & Co. in Shanghai. Electric buses are very expensive, at 2 million RMB (US$ 310,000) or more each.

Local governments already heavily subsidize municipal fleets. Says Gao, “At a time when many local governments' own finances are under stress, many are reluctant/unable to pay for the expensive buses.”

Municipal governments can’t ignore the central government for long
Though they are dragging their feet, local governments haven’t been able to ignore calls by the central government to boost the number of electric vehicles in their fleets. They have been buying electric buses, and in a country the size of China that can still produce some impressive numbers.

According to market research firm Research in China, municipal governments account for 85 percent of electric bus sales in China. In 2014, sales of electric buses in China surged 160.3 percent to 27,000 units, and in the first half of 2015 close to 20,000 units were sold. By 2020, annual sales are expected to hit 154,000 units.

The south China city of Shenzhen – which claims to have the largest electric vehicle fleet in the world–is one city in where widespread adoption of electric buses is already occurring.

There are 3,050 electric buses on Shenzhen streets now; the city aims for 3,600 by year’s end. Most of those buses were produced by BYD, which is based in Shenzhen.

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