Trump Administration Rolls Back Obama's CO2 Rule For Cars
In this newsletter:
1) Europe’s Car Makers Seek Delay Of EU’s CO2 Rules To Save Industry From Destruction
Neil Winton, Forbes, 30 March 2020
2) Trump Administration Rolls Back Obama's CO2 Rule For Cars
The Wall Street Journal, 30 March 2020
The Wall Street Journal, 30 March 2020
3) U.S. Car Companies Bank On SUVs, Not EVs, Production Plans Show
Reuters, 26 March 2020
The Daily Telegraph, 30 March 2020
5) UK Car Industry Running Out Of Road
The Daily Telegraph, 30 March 2020
6) Coronavirus in Europe: One Million Job Losses In Two Weeks Is Tip Of The Iceberg
Euro News, 31 March 2020
The Daily Telegraph, 30 March 2020
6) Coronavirus in Europe: One Million Job Losses In Two Weeks Is Tip Of The Iceberg
Euro News, 31 March 2020
7) And Finally: China Extracts Record Amount Of Natural Gas From ‘Fire Ice’ In South China Sea
OilPrice.com, 30 March 2020
Full details:
1) Europe’s Car Makers Seek Delay Of EU’s CO2 Rules To Save Industry From Destruction
Neil Winton, Forbes, 30 March 2020
The European auto industry has asked the European Union (EU) to delay implementation of its CO2 emissions rules because the impact of the coronavirus is causing short-term mayhem in the industry.
The rules start this year, get harsher in 2025, and demand an effective average fuel economy of 92 miles per U.S. gallon by 2030.
The European Automobile Manufacturers Association, plus the tyre makers, suppliers and dealers associations made the plea in a letter (see www.acea.be) to Ursula von der Leyen, President of the European Commission dated March 25.
“No production, development, testing or homologation work occurs for the time being (because of the impact of the coronavirus). This upsets the plans we had made to prepare ourselves for complying with existing and future EU laws and regulations within the applicable deadlines set in these regulations. We believe therefore that some adjustment would need to be made to the timing of these laws,” the letter said.
“Please be assured, however, that it is not our intention to question the laws as such nor the underlying objectives of road safety, climate change mitigation and protection of the environment. Looking into the future, industry and policy makers must together, and in a timely manner, start planning for the period beyond the immediate health crisis,” the letter said.
Brussels-based environmental lobby group Transport & Environment wasn’t happy, saying that such a plea is unfounded and potentially damaging for the long-term sustainability and competitiveness of the car industry in Europe.
Asked to comment on the joint letter, the European Auto Manufacturers Association, known by its French acronym ACEA, said the industry has been halted by the virus in this statement.
"The primary concern of ACEA and all its members right now is to manage the immediate crisis facing the auto industry, which has essentially come to an abrupt halt – something the sector has never experienced before,” Director General, Eric-Mark Huitema said.
“Our first priority is to protect the health and jobs of the almost 14 million Europeans who work directly or indirectly in this sector. In parallel, we are active in directing resources to help fight the ongoing health crisis, for instance by providing vehicles and where possible medical equipment and protective gear.”
“In this emergency context, it has not yet been possible to undertake a detailed analysis of the implications of this crisis on legislation affecting our industry. Nonetheless, ACEA has already drawn the European Commission’s attention to the fact that there will inevitably be consequences in this domain, given that no production, development, testing or homologation work is able to happen now or in the foreseeable future due to company shutdowns and other measures to contain the virus.”
“This will require discussions between the industry and policy makers in due course. In the meantime, ACEA will work with its members to examine what the practical implications are for the most critical legislative issues. As a general principle, it should be stressed that it is not the industry’s intention to question any laws as such nor the underlying objectives of road safety, climate change mitigation and protection of the environment for example,” Huitema said.
The industry has been alarmed about the impact of the CO2 rules, even before the coronavirus struck, not least because the EU Commission had been talking about making the rules even tougher.
According to a report from investment researcher Jefferies last year, if the auto industry makes no progress in curbing CO2 from 2018 towards meeting the EU’s 2020/21 regulations, it faces fines totalling the equivalent of $36 billion, twice its estimated profits, and could be forced to raise prices up to 10%. Latest data suggests in 2019, the industry went backwards not forwards in production of CO2 thanks to the popularity of SUVs and the demise of diesel.
Full story
2) Trump Administration Rolls Back Obama's CO2 Rule For Cars
The Wall Street Journal, 30 March 2020
WASHINGTON—The Trump administration is completing new rules on tailpipe emissions that would slash the emissions targets auto makers must reach over the next five years, according to people familiar with the situation.
The rules expected to be announced Tuesday would require auto makers to achieve 1.5% annual increases in fleetwide fuel efficiency through 2026, using an industry measure that takes both gas mileage and emissions reductions into account, the people said.
That requirement would be down from a 5% annual increase in efficiency mandated by the Obama administration. Under that former standard, auto makers were expected to produce a roughly 3% increase in fuel efficiency in the current model year, before more stringent targets kick in.
Challenges are likely from environmentalists and several states led by California, which has long imposed tougher emissions standards. The Trump administration has separately moved to establish federal supremacy, stripping California’s authority to set more stringent vehicle-emission standards for greenhouse gases. That move has drawn a challenge in federal court.
In easing the requirements, Trump administration officials note the industry was struggling to meet the increasing mandate and say the compromise sets attainable limits while still ensuring progress on environmental protection.
The administration also says the policy will make new cars more affordable, boosting vehicle sales and the frequency with which consumers replace older vehicles with more efficient models.
Critics of the rule say the loss in efficiency will be more expensive for consumers over time and that it is a setback in efforts to reduce greenhouse-gas emissions and slow climate change.
California has said it would challenge efforts to weaken the rules. A spokeswoman for California Attorney General Xavier Becerra says more urgency exists now—amid the novel coronavirus pandemic—to defend all policies that affect public health.
Full story
The Wall Street Journal, 30 March 2020
WASHINGTON—The Trump administration is completing new rules on tailpipe emissions that would slash the emissions targets auto makers must reach over the next five years, according to people familiar with the situation.
The rules expected to be announced Tuesday would require auto makers to achieve 1.5% annual increases in fleetwide fuel efficiency through 2026, using an industry measure that takes both gas mileage and emissions reductions into account, the people said.
That requirement would be down from a 5% annual increase in efficiency mandated by the Obama administration. Under that former standard, auto makers were expected to produce a roughly 3% increase in fuel efficiency in the current model year, before more stringent targets kick in.
Challenges are likely from environmentalists and several states led by California, which has long imposed tougher emissions standards. The Trump administration has separately moved to establish federal supremacy, stripping California’s authority to set more stringent vehicle-emission standards for greenhouse gases. That move has drawn a challenge in federal court.
In easing the requirements, Trump administration officials note the industry was struggling to meet the increasing mandate and say the compromise sets attainable limits while still ensuring progress on environmental protection.
The administration also says the policy will make new cars more affordable, boosting vehicle sales and the frequency with which consumers replace older vehicles with more efficient models.
Critics of the rule say the loss in efficiency will be more expensive for consumers over time and that it is a setback in efforts to reduce greenhouse-gas emissions and slow climate change.
California has said it would challenge efforts to weaken the rules. A spokeswoman for California Attorney General Xavier Becerra says more urgency exists now—amid the novel coronavirus pandemic—to defend all policies that affect public health.
Full story
3) U.S. Car Companies Bank On SUVs, Not EVs, Production Plans Show
Reuters, 26 March 2020
DETROIT (Reuters) - General Motors Co (GM.N) and Ford Motor Co (F.N) have widely touted their commitment to emission-free electric cars, but their production plans show a growing reliance on ever-larger gas-powered vehicles.
The two biggest U.S. automakers will make more than 5 million SUVs and pickup trucks in 2026, but only about 320,000 electric vehicles, according to detailed production plans for North America seen by Reuters.
That will be about 5% of their combined vehicle production in North America, but less than Tesla Inc (TSLA.O), the world leader in electric vehicles, produced last year.
The plans show that Detroit’s Big Two are betting their short-term future on satisfying America’s demand for bigger, petroleum-fueled vehicles which they can sell at a higher profit margin than mostly smaller, expensive-to-develop electric vehicles.
Large SUVs consume about a quarter more energy than midsize cars, meaning the plans will most likely wipe out any gains in overall fuel efficiency or reduction in auto emissions that were targeted over the next six years, according to industry experts.
The recent collapse of oil prices - pointing toward cheap gas for the foreseeable future - and a dip in demand caused by the coronavirus may only serve to strengthen automakers’ commitment to the strategy.
Detroit has tried to latch onto the consumer and investor excitement over electric vehicles made by Tesla, whose market value is double that of GM and Ford combined, even though its sales are much smaller.
GM executives have been repeating a “zero emissions” mantra since 2017, and the company’s website features a prominent commitment to its “all-electric future.” Ford’s Executive Chairman Bill Ford told the Detroit auto show two years ago: “We’re all in on this. We’re taking our mainstream vehicles, our most iconic vehicles, and we’re electrifying them.”
But it is hard to detect a major change of direction from the companies’ production plans.
According to data from AutoForecast Solutions seen by Reuters, North American production of SUV models by GM and Ford will outpace production of traditional cars by more than eight to one in 2026, and 93% of those SUVs are expected to be gas-fueled. The data has not previously been reported.
AutoForecast’s data is based on planning information provided to suppliers by the automakers, and is widely used across the industry. GM and Ford executives interviewed by Reuters did not dispute the accuracy of the data.
“GM and Ford understand that buyers want more SUVs and trucks, but they’re also trying to play to Wall Street, which thinks the future is all about electric vehicles,” said Sam Fiorani, vice president, global vehicle forecasting at AutoForecast. “The Detroit automakers would love to get a little of that Tesla magic and money.”
‘DON’T VIOLATE THE LAWS OF ECONOMICS’
Internal production plans from other industry sources seen by Reuters support AutoForecast’s numbers, which show GM and Ford expect to produce about 320,000 pure electric vehicles - powered solely by a battery - in North America in 2026. That is nearly 10 times the 35,000 they have planned to build in 2020, but fewer than the 367,500 Tesla delivered last year.
It is only a fraction of the 5.2 million SUVs and pickups that GM and Ford expect to make in North America in 2026, according to the AutoForecast data, up 14% from 4.6 million SUVs and pickups in 2019. SUVs and pickups will account for about 87% of vehicles made by GM and Ford in the region in 2026, compared with about 82% last year.
Full story
4) UK Govt's Releases Plan To Kill Conventional Car Industry, Sticking To EU Strategy Reuters, 26 March 2020
DETROIT (Reuters) - General Motors Co (GM.N) and Ford Motor Co (F.N) have widely touted their commitment to emission-free electric cars, but their production plans show a growing reliance on ever-larger gas-powered vehicles.
The two biggest U.S. automakers will make more than 5 million SUVs and pickup trucks in 2026, but only about 320,000 electric vehicles, according to detailed production plans for North America seen by Reuters.
That will be about 5% of their combined vehicle production in North America, but less than Tesla Inc (TSLA.O), the world leader in electric vehicles, produced last year.
The plans show that Detroit’s Big Two are betting their short-term future on satisfying America’s demand for bigger, petroleum-fueled vehicles which they can sell at a higher profit margin than mostly smaller, expensive-to-develop electric vehicles.
Large SUVs consume about a quarter more energy than midsize cars, meaning the plans will most likely wipe out any gains in overall fuel efficiency or reduction in auto emissions that were targeted over the next six years, according to industry experts.
The recent collapse of oil prices - pointing toward cheap gas for the foreseeable future - and a dip in demand caused by the coronavirus may only serve to strengthen automakers’ commitment to the strategy.
Detroit has tried to latch onto the consumer and investor excitement over electric vehicles made by Tesla, whose market value is double that of GM and Ford combined, even though its sales are much smaller.
GM executives have been repeating a “zero emissions” mantra since 2017, and the company’s website features a prominent commitment to its “all-electric future.” Ford’s Executive Chairman Bill Ford told the Detroit auto show two years ago: “We’re all in on this. We’re taking our mainstream vehicles, our most iconic vehicles, and we’re electrifying them.”
But it is hard to detect a major change of direction from the companies’ production plans.
According to data from AutoForecast Solutions seen by Reuters, North American production of SUV models by GM and Ford will outpace production of traditional cars by more than eight to one in 2026, and 93% of those SUVs are expected to be gas-fueled. The data has not previously been reported.
AutoForecast’s data is based on planning information provided to suppliers by the automakers, and is widely used across the industry. GM and Ford executives interviewed by Reuters did not dispute the accuracy of the data.
“GM and Ford understand that buyers want more SUVs and trucks, but they’re also trying to play to Wall Street, which thinks the future is all about electric vehicles,” said Sam Fiorani, vice president, global vehicle forecasting at AutoForecast. “The Detroit automakers would love to get a little of that Tesla magic and money.”
‘DON’T VIOLATE THE LAWS OF ECONOMICS’
Internal production plans from other industry sources seen by Reuters support AutoForecast’s numbers, which show GM and Ford expect to produce about 320,000 pure electric vehicles - powered solely by a battery - in North America in 2026. That is nearly 10 times the 35,000 they have planned to build in 2020, but fewer than the 367,500 Tesla delivered last year.
It is only a fraction of the 5.2 million SUVs and pickups that GM and Ford expect to make in North America in 2026, according to the AutoForecast data, up 14% from 4.6 million SUVs and pickups in 2019. SUVs and pickups will account for about 87% of vehicles made by GM and Ford in the region in 2026, compared with about 82% last year.
Full story
The Daily Telegraph, 30 March 2020
The Government publishes a new paper on reducing transport CO2 emissions – but doesn't tell anyone
The Department for Transport (DfT) has launched a consultation paper on the future of UK transport, which calls for a major shift out of cars into cycling, walking and buses, and "using cars differently in future", but hasn't told anyone about it.
The paper crept out on March 26, the day that UK Covid-19 victims reached 578, up to that point the largest recorded daily increase. Decarbonising Transport: Setting The Challenge calls for respondents to the debate, as set out by the Government, prior to the publication of a full transport decarbonisation plan, due in November to coincide with the UN's annual climate-change conference COP26 due to be held in Glasgow.
Citing the Government's 2050 net-zero greenhouse-gas emissions target, Grant Shapps, the transport secretary, espouses a vision where "we will use our cars less and be able to rely on a convenient, cost-effective and coherent public transport network.
"From motorcycles to HGVs, all road vehicles will be zero emission," he writes, "and technological advances… will change the way vehicles are used."
The paper also confirms that even though it has left the EU, the UK will continue to adhere to the EU's strict CO2 emissions standards for cars, which are the toughest in the world.
Full story
5) UK Car Industry Running Out Of Road
The Daily Telegraph, 30 March 2020
Coronavirus means the already stalling car industry is one of the first sectors to run out of road
Even before car dealerships were ordered to close by the Government, many had already decided to shut their doors and close down forecourts.
“Over the past 48 hours it has become clear that maintaining safe social distancing measures whilst continuing to operate car dealerships has become increasingly difficult,” said dealer group Lookers the morning before the lockdown.
Getting into a enclosed space for a test drive was not a priority for either motorists or sales staff as they digested government warnings about coronavirus.
It's the same for online. While drivers can still configure cars on lavish manufacturer websites, specifying every conceivable option, car companies across Europe have halted the production lines, and even buying existing vehicles has ground to halt as cars cannot be delivered.
Britain’s £82bn-a-year car industry was slowing long before coronavirus hit. Economic worries related to diesel uncertainty, new emissions controls, Brexit and wider global concerns meant in 2019 new car sales fell for the third year running to 2.3m, the lowest level since 2013, with jobs being shed across manufacturers in response.
Globally the picture was equally bleak. As recently as last month, S&P was predicting world car and light vehicle sales would fall 3.6pc to 87m. In the face of the coronavirus pandemic, S&P last week slashed its forecast, and now predicts global sales will fall 15pc this year to 78m.
With economies being ravaged by Covid-19 and millions losing their jobs, buying a new car - or even paying for one already on the drive - is no longer a priority for people worried about keeping a roof over their heads.
Full story
7) And Finally: China Extracts Record Amount Of Natural Gas From ‘Fire Ice’ In South China SeaThe Daily Telegraph, 30 March 2020
Coronavirus means the already stalling car industry is one of the first sectors to run out of road
Even before car dealerships were ordered to close by the Government, many had already decided to shut their doors and close down forecourts.
“Over the past 48 hours it has become clear that maintaining safe social distancing measures whilst continuing to operate car dealerships has become increasingly difficult,” said dealer group Lookers the morning before the lockdown.
Getting into a enclosed space for a test drive was not a priority for either motorists or sales staff as they digested government warnings about coronavirus.
It's the same for online. While drivers can still configure cars on lavish manufacturer websites, specifying every conceivable option, car companies across Europe have halted the production lines, and even buying existing vehicles has ground to halt as cars cannot be delivered.
Britain’s £82bn-a-year car industry was slowing long before coronavirus hit. Economic worries related to diesel uncertainty, new emissions controls, Brexit and wider global concerns meant in 2019 new car sales fell for the third year running to 2.3m, the lowest level since 2013, with jobs being shed across manufacturers in response.
Globally the picture was equally bleak. As recently as last month, S&P was predicting world car and light vehicle sales would fall 3.6pc to 87m. In the face of the coronavirus pandemic, S&P last week slashed its forecast, and now predicts global sales will fall 15pc this year to 78m.
With economies being ravaged by Covid-19 and millions losing their jobs, buying a new car - or even paying for one already on the drive - is no longer a priority for people worried about keeping a roof over their heads.
Full story
6) Coronavirus in Europe: One Million Job Losses In Two Weeks Is Tip Of The Iceberg
Euro News, 31 March 2020
At least one million people have lost their jobs during the past two weeks in Europe according to the latest data from the European Trade Union Confederation (ETUC).
The startling figure comes from reports submitted by trade unions across Europe, and only includes contract workers who have applied for unemployment benefits.
"What we are experiencing at the moment, especially in the last week, is that the number of companies disappearing from the market is increasing dramatically," explains Luca Visentini, ETUC Secretary General.
"Thousands and thousands of small and medium enterprises that have been locked down will not be able to come back to the market because they are dying. And on the other side we are witnessing at least one million workers that became unemployed across the different European countries because of the lack of short time work arrangements or sick pay."
The true number - including those without contracts and freelancers could be far higher.
"Can you imagine what is going to happen after Easter if this situation is not fixed by some emergency measures?" asks Vicentini, "The risk is that it will be triplicate, quadruplicate."
Full story
Euro News, 31 March 2020
At least one million people have lost their jobs during the past two weeks in Europe according to the latest data from the European Trade Union Confederation (ETUC).
The startling figure comes from reports submitted by trade unions across Europe, and only includes contract workers who have applied for unemployment benefits.
"What we are experiencing at the moment, especially in the last week, is that the number of companies disappearing from the market is increasing dramatically," explains Luca Visentini, ETUC Secretary General.
"Thousands and thousands of small and medium enterprises that have been locked down will not be able to come back to the market because they are dying. And on the other side we are witnessing at least one million workers that became unemployed across the different European countries because of the lack of short time work arrangements or sick pay."
The true number - including those without contracts and freelancers could be far higher.
"Can you imagine what is going to happen after Easter if this situation is not fixed by some emergency measures?" asks Vicentini, "The risk is that it will be triplicate, quadruplicate."
Full story
OilPrice.com, 30 March 2020
We might be sitting on enough gas to power the world for hundreds, if not thousands, of years.
China conducted its first operation to extract natural gas from gas hydrates in the South China Sea in 2017. Photo: Reuters
In a world awash in oil and gas, you’d think it couldn’t get any worse. Well, it can: China just announced that it had extracted a record amount of what has been poetically called fire ice. It is, however, a form of natural gas trapped in frozen water.
At 861,400 cubic meters, this record might not be a whole lot of gas, but it may well be the start of something new, and gas producers may not like this ‘something’.
Gas hydrates don’t garner a lot of media attention as a rule, simply because they have yet to become an addition to the world’s energy mix. But when they do—if they do—they may change the international oil and gas market even more than the coronavirus outbreak has changed it now by decimating demand for hydrocarbons.
First, what are gas hydrates?
Gas hydrates are molecules of natural gas, most commonly methane, trapped in a “cage” made from water molecules. They exist in cold climates, such as beneath the Arctic permafrost and Antarctic ice, but also in sedimentary deposits–the same kind of deposits where oil and gas collect along the margins of continents and also under the seabed of specific basins such as the South China Sea.
Because they only exist in cold places, research on gas hydrates has been challenging. As geologist Hobart M. King explains in an article on hydrates for Geology.com, hydrates are only stable in the environment where they formed.
To study them, researchers need to remove the samples from their environment. The change in temperature in pressure, however, melts the water cage, and the methane escapes.
Why bother with hydrates at all, then? Because they may be more abundant than all other hydrocarbons taken together: oil, gas, and coal.
According to the U.S. Department of Energy, the world’s methane gas hydrates could be as vast as 250,000 to 700,000 trillion cu ft. According to the UN Environmental Programme, the world’s reserves of gas hydrates could be as large as 3,000 to 30,000 trillion cubic meters. But these are just enormous figures that are difficult to digest.
Here’s an estimate that might be more palatable: the world’s gas hydrate reserves could be between 100,000 and 1.1 million exajoules. For context, the world’s total annual energy consumption as of 2014 when the UNEP paper was written was about 500 exajoules.
This means we might be sitting on enough gas to power the world for hundreds, if not thousands, of years.
It’s packed tightly, too. According to the Department of Energy, a single cu m of hydrate can release as much as 164 cubic meters of natural gas. Talk about energy density.
China is among just a handful of countries pursuing research into gas hydrates with a focus on extraction. With its dependence on imported oil and gas, this is hardly surprising. The first extraction experiments in the South China Sea, in 2017, resulted in an output of 300,000 cubic meters extracted over a period of two months. Now, the Ministry of Natural Resources has reported an output of 287,000 cubic meters achieved in a single day. This is quite a significant progress in three years.
And that’s not all.
According to the ministry, the output achieved during this phase of the gas hydrate trials provided a “solid technical foundation for commercial exploitation.”
This is probably the last thing gas producers around the world need to hear right now, but it is what they need to hear. Full-scale commercial production may be years or even decades away, but China is getting there. It seems, however, that it is getting there in strides rather than baby steps. This could spur others into action or, as it were, faster action.
Full story
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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