As the world’s largest vehicle markets move toward electric vehicles to decarbonize road transportation, many legacy automakers support doubling down on existing efforts to use biofuels in Brazil, and they’re focusing on using them in plug-in hybrid electric vehicles (PHEVs) as an alternative to battery electric vehicles (BEVs). Additionally, Brazil’s new vehicle emissions regulation (MOVER) will offer tax discounts (until 2026) exclusive to hybrid vehicles that could be larger than the discounts granted for vehicles that meet energy-efficiency targets. Although such support is sometimes tied to assertions of environmental benefits, research by the ICCT shows that PHEVs have embedded climate risks that could compromise the country’s goal of reaching climate neutrality by 2050.

First, our analysis shows that ethanol-gasoline flex-fuel PHEVs have less greenhouse gas (GHG) emissions mitigation potential than BEVs. The same is true for hybrid electric vehicles that don’t plug in, and for these, life-cycle emissions are estimated to be higher than PHEVs when using the same fuels.

Figure 1 highlights the results from our life-cycle assessment of passenger cars in Brazil. It compares medium-segment internal combustion engine vehicles (ICEVs), PHEVs, and BEVs sold in 2023 (left) and those projected to be sold in 2030 (right). For ICEVs and PHEVs, the three rows represent, from top to bottom, cars operated with (a) 100% gasoline C (E27), (b) the market average of gasoline C (E27) and ethanol, and (c) 100% ethanol (E100). The analysis did not consider flex-fuel PHEVs sold in 2023 because none were available. Emissions from electricity production for BEVs and PHEVs were calculated using the current and projected national grid emissions, including power plant construction and transmission, distribution, and charging losses.

Figure 1. Estimated life-cycle greenhouse gas emissions from medium segment ICEVs, PHEVs, and BEVs in Brazil, for models sold in 2023 and projected to be sold in 2030. The three rows of bars for ICEVs and PHEVs represent, from top to bottom, vehicles operated with (a) 100% gasoline C (E27), (b) the market average sales of gasoline C and ethanol, and (c) 100% ethanol (E100). For BEVs and PHEVs, electricity production emissions correspond to the national grid mix. Source: Mera et al. (2023).

For 2023 models, PHEVs correspond to about 20% fewer emissions than ICEVs when both are operated solely with gasoline C. However, when compared with ICEVs with the average gasoline-ethanol use in Brazil, current PHEVs’ emissions are only 3% lower. ICEVs operating exclusively on ethanol correspond to fewer emissions than gasoline PHEVs over their life cycles. In contrast, current BEVs have estimated life-cycle emissions that are 66% below ICEVs with market average ethanol-gasoline consumption and 65% less than current gasoline PHEVs.

For projected 2030 flex-fuel PHEVs using the market average gasoline-ethanol mix, we estimated the life-cycle emissions to be 17% below ICEVs. The lowest emissions for PHEVs are achieved by combining 100% ethanol with an optimistic electric drive share of 55%; this results in 87g CO2 eq./kmg CO2 eq./km and that is still twice the life-cycle emissions estimated for a corresponding BEV. 

These results alone cast doubts over the climate benefits of flex-fuel PHEVs in Brazil. And there’s more.

ICCT studies regarding the real-world operation of tens of thousands of PHEVs in Europe and the United States showed that average PHEV owners operate less on electric drive than regulators previously assumed. In Europe, for vehicles with a type-approval electric range of 40 km to 75 km, the official type-approval values assumed electric driving shares of 70%–85%. In real-world operation, however, the average electric driving share was found to be only about 45%–49% for private cars and about 11%–15% for company cars. As a result, the real-world fuel consumption of PHEVs was found to be on average three and five times higher for private cars and company cars, respectively, than type-approval values. In the United States, electric drive shares were found to be 26%–56% lower than assumed by the Environmental Protection Agency’s labeling program, and this contributed to the real-world fuel consumption being on average 42%–67% higher. Other studies also identified significant differences between the electric drive shares of PHEVs in real-world situations compared with previous type-approval values, and in 2023, the European Commission reduced and the U.S. Environmental Protection Agency proposed reducing the electric drive share assumed in type-approval toward values to be closer to real-world use. 

Would similar real-world drive shares be expected in Brazil, also? Yes. Figure 2 shows Brazil’s 10 best-selling PHEVs during the first two quarters of 2023 and includes the battery capacity (x-axis) and the electric driving range (y-axis), the latter of which we calculated by considering a reduction of 30% in type-approval values to reflect real-world range. The size of the bubbles corresponds to sales. 

Figure 2. Battery capacity and electric driving range of the 10 best-selling PHEVs in Brazil. Source: ABVE, ten best-selling PHEVs between January and June 2023. 

The mean electric driving range of these vehicles, which are mostly large, luxury SUVs that are imported, is 44 km. That’s similar to the average electric range of PHEVs in Europe and the United States. This range can cover most urban trips, but frequent charging would be necessary and that could favor the use of combustion engines. Indeed, as there are fewer charging points available in Brazil, it’s unlikely that PHEV models sold in Brazil will realize a higher electric driving share than observed in Europe and the United States, at least in the near term.  

Policies could increase the electric driving share of PHEVs, including those that establish maximum fuel tank size and minimum electric ranges, require home charger installation upon purchase, and link tax incentives to real-world use and emissions data. But even still, the choice of fueling a flex-fuel car with gasoline and ethanol determines its emissions. In 2020, hydrous ethanol was 35% (by volume) of the total sales of fuels for otto cycle light-duty vehicles in Brazil. Gasoline C (E27) is a blend of 27% anhydrous ethanol and 73% gasoline. In total, hydrous and anhydrous ethanol was 52% of the national demand, by volume, in 2020 and about one third of it in energy. That means only one-third of the fuel demand from the national passenger car fleet was supplied by hydrous ethanol (E100). More 75% of the national car fleet, and 92% of those sold after 2013, are flex-fuel cars and these could be fueled with ethanol exclusively. Yet, over the past few years, ethanol consumption has stagnated while gasoline sales increased. 

As this all shows, there are limits that flex-fuel PHEVs would impose on Brazil’s climate ambitions. Even the availability of flex-fuel PHEVs is not yet guaranteed, particularly for smaller, less-expensive models. Only a few PHEV models are expected to be produced domestically in the near future and they are luxury SUVs. Government incentives favoring this decarbonization pathway like those announced in the new MOVER program may result in only a small reduction of emissions if PHEVs have a low real-world electric drive share. That could, in turn, require more abrupt action to decarbonize the country’s on-road vehicle fleet over a shorter period, if Brazil is still to meet its climate goals by 2050. Effective public policies for transportation decarbonization differentiate incentives based on real-world emissions, and BEVs have far higher mitigation potential than PHEVs. 

Leia este blog em Português aqui.

À medida que os maiores mercados de veículos do mundo optam por veículos elétricos para descarbonizar o transporte rodoviário, algumas das maiores montadoras tradicionais do Brasil reforçam suas apostas nos biocombustíveis, com planos de utilizá-los em veículos híbridos plug-in (PHEVs, do inglês plug-in hybrid electric vehicles) como alternativa aos veículos elétricos a bateria (BEVs, do inglês battery electric vehicles). Além disso, o novo programa de regulação de emissões de veículos do Brasil (MOVER) oferecerá descontos fiscais (até 2026) exclusivos para veículos híbridos maiores do que os descontos concedidos para veículos que atingirem as metas de eficiência energética. Embora estes incentivos estejam vinculados a possíveis benefícios ambientais, pesquisas do ICCT mostram que a adoção de PHEVs têm riscos climáticos que poderiam comprometer a meta do país de atingir a neutralidade climática até 2050. 

Nossa análise mostra que os PHEVs flex têm menor potencial de mitigação de emissões de gases de efeito estufa (GEE) do que os BEVs. O mesmo vale para veículos elétricos híbridos que não são plug-in (HEVs, do inglês hybrid electric vehicles). Para os HEVs, as emissões estimadas ao longo do ciclo de vida são mais altas do que as dos PHEVs, quando ambos utilizam os mesmos combustíveis. 

A Figura 1 destaca os resultados da nossa avaliação do ciclo de vida em carros de passeio no Brasil. Ela compara veículos de motor de combustão interna do segmento médio (ICEVs, do inglês internal combustion engine vehicles), PHEVs e BEVs vendidos em 2023 (à esquerda) e os veículos projetados para serem vendidos em 2030 (à direita). Para ICEVs e PHEVs, as três fileiras representam, de cima para baixo, carros operados com (a) 100% de gasolina C (E27), (b) a média de mercado de gasolina C (E27) e etanol, e (c) 100% de etanol (E100). A análise não considerou PHEVs flex vendidos em 2023 porque nenhum modelo estava disponível no mercado. As emissões provenientes da produção de eletricidade para BEVs e PHEVs foram calculadas usando as emissões atuais e projetadas da matriz elétrica nacional, incluindo as emissões de construção de usinas de geração elétricas e perdas de transmissão, distribuição e carregamento. 

Figura 1. Emissões estimadas de gases de efeito estufa no ciclo de vida para veículos de segmento médio com motores a combustão interna (ICEVs), veículos híbridos plug-in (PHEVs) e veículos elétricos a bateria (BEVs) no Brasil, para modelos vendidos em 2023 e modelos projetados para serem vendidos em 2030. As três fileiras de barras para ICEVs e PHEVs representam, de cima para baixo, veículos operados com (a) 100% de gasolina C (E27), (b) a média de vendas de gasolina C e etanol, e (c) 100% etanol (E100). Para BEVs e PHEVs, as emissões de produção de eletricidade correspondem a matriz elétrica nacional. Fonte: Mera et al. (2023). 

Para os modelos de 2023, as emissões estimadas dos PHEVs são 20% menores do que as emissões dos ICEVs quando ambos utilizam exclusivamente gasolina C. No entanto, quando comparadas aos ICEVs que utilizam a média de mercado de gasolina e etanol no Brasil, as emissões dos PHEVs atuais são apenas 3% menores. ICEVs operando exclusivamente com etanol tem emissões estimadas no ciclo de vida menores do que os PHEVs a gasolina. Em contraste, os BEVs atuais têm estimativas de emissões ao longo do ciclo de vida que são 66% abaixo dos ICEVs com consumo médio de gasolina-etanol no mercado e 65% menos do que os PHEVs atuais a gasolina.

Para os PHEVs flex projetados para 2030, usando a mistura média de mercado de gasolina e etanol, as emissões estimadas no ciclo de vida são 17% menores, em comparação com ICEVs. As emissões dos PHEVs que utilizam 100% etanol, assumindo uma parcela de condução no modo elétrico otimista de 55%; são estimadas em 87 gCO_2eq/km. Este valor corresponde ao dobro das emissões estimadas no ciclo de vida de um BEV do mesmo segmento.

Esses resultados põem em xeque os benefícios climáticos dos PHEVs flex no Brasil. E tem mais.

Estudos do ICCT sobre o uso real de dezenas de milhares de PHEVs na Europa e nos Estados Unidos mostraram que, em média, os proprietários de PHEVs utilizaram o modo de condução elétricas menos do que os reguladores assumiam. Na Europa, para veículos com uma autonomia elétrica de 40 km a 75 km, os valores aprovados oficialmente assumiam parcela de condução elétrica de 70% a 85%. Na operação real, no entanto, a parcela média de condução elétrica medida foi de 45% a 49% para carros particulares e cerca de 11% a 15% para carros de empresa. Portanto, o consumo real de combustível dos PHEVs foi em média três a cinco vezes maior para carros particulares e carros de empresa, respectivamente, do que os valores oficiais. Nos Estados Unidos, a parcela verificada de condução elétrica foi de 26% a 56% menor do que o assumido pelo programa de etiquetagem da Agência de Proteção Ambiental, contribuindo para um consumo real de combustível, em média, de 42% a 67% maior. Outros estudos também identificaram diferenças significativas entre a parcela de condução elétrica de PHEVs em situações reais em comparação com testes. Isso levou, em 2023, a Comissão Europeia a reduzir e a Agência de Proteção Ambiental dos EUA propor a redução da parcela assumida de condução elétrica, aproximando os valores de etiquetagem do uso real.

Pode-se esperar resultados semelhantes no uso real de PHEVs no Brasil? Sim. A Figura 2 mostra os 10 PHEVs mais vendidos no Brasil durante o primeiro semestre de 2023 e inclui a capacidade da bateria (eixo x) e a autonomia elétrica (eixo y), sendo esta última calculada considerando uma redução de 30% nos valores de testes para refletir a autonomia real. O tamanho das bolhas corresponde às vendas.

Figura 2. Capacidade da bateria e autonomia elétrica dos 10 PHEVs mais vendidos no primeiro semestre de 2023 no Brasil. Fonte: ABVE, dez PHEVs mais vendidos entre janeiro e junho de 2023. 

A autonomia média desses veículos, em sua maioria SUVs grandes importados, é de 44 km. Esse valor é semelhante à autonomia média dos PHEVs na Europa e nos Estados Unidos. Essa autonomia é suficiente para a maioria das viagens urbanas, mas seriam necessárias recargas frequentes, o que poderia favorecer o uso de motores a combustão. De fato, como há menos pontos de carregamento no Brasil, é improvável que os PHEVs vendidos nacionalmente alcancem uma parcela de condução elétrica maior do que a observada na Europa e nos Estados Unidos, ao menos no curto prazo. 

Algumas políticas poderiam aumentar a parcela de condução elétrica dos PHEVs, como estabelecer um tamanho máximo dos tanques de combustível e uma autonomia elétrica mínima, exigir o fornecimento e instalação de carregadores domésticos na compra de veículos PHEVs e vincular incentivos fiscais ao consumo real de combustível e emissões. Mas mesmo assim, a escolha de abastecer um carro flex com gasolina ou etanol determina suas emissões. Em 2020, o etanol hidratado (E100) representou 35% (em volume) das vendas totais de combustíveis para veículos leves de ciclo Otto no Brasil. No total, o etanol hidratado e anidro representaram 52% da demanda nacional, em volume, em 2020 e cerca de um terço dela em energia. A gasolina C (E27), uma mistura de 27% de etanol anidro e 73% de gasolina. Isso significa que apenas um terço da demanda de combustível da frota nacional de carros de passeio foi suprida pelo etanol hidratado (E100). Mais de 75% da frota nacional de carros e 92% daqueles vendidos após 2013 são carros flex e poderiam ser abastecidos exclusivamente com etanol. No entanto, nos últimos anos, o consumo de etanol estagnou enquanto as vendas de gasolina aumentaram. 

Como tudo isso mostra, os PHEVs flex impõe limites às ambições climáticas do Brasil. Mesmo a disponibilidade de PHEVs flex ainda não está garantida, especialmente para modelos menores e mais baratos. Espera-se que apenas alguns modelos de PHEVs sejam produzidos domesticamente nos próximos anos e estes são SUVs de luxo. Incentivos governamentais favorecendo PHEVs flex para a descarbonização do transporte, como os anunciados no novo programa MOVER, podem resultar em limitadas reduções de emissões se os PHEVs tiverem uma baixa parcela real de condução elétrica. Isso poderia, por sua vez, exigir ações mais abruptas para descarbonizar a frota de veículos do país em um período mais curto no futuro para atingir as metas climáticas anunciadas para 2050. Políticas públicas eficazes para a descarbonização do transporte devem diferenciar incentivos com base em emissões reais, e os dados apontam um potencial de mitigação muito maior em BEVs do que os PHEVs. 

Read this blog in English here. 

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050. While the revised strategy is not legally binding, the measures used to implement it can be, and in many ways it’s the stringency of these measures that will ultimately determine shipping’s contribution to future global warming.  

Earlier this week, our colleague highlighted the need for measures that limit emissions from ships measured on a life-cycle basis, the well-to-wake (WTW) emissions. With this blog post, we show how one proposed measure, the GHG Fuel Standard (GFS), can be used to reduce emissions in line with the IMO’s revised 2023 strategy or with a pathway consistent with limiting warming to 1.5°C. 

The GFS being designed now will require ships to use fuels that emit fewer WTW GHG emissions until there is a complete transition to all zero-emission fuels. This GFS is meant to encourage the adoption of new fuels including renewable e-fuels (hydrogen, ammonia, and methanol) and sustainable biofuels; by setting limits on the GHG emissions intensity of fuels, it will drive investments in production capacity and infrastructure for new fuels. One effective design of the GFS would identify the date by which the WTW GHG intensity of marine fuels is to reach zero and include interim GHG intensity targets (at regular intervals) to keep the sector on a steady course toward its final goal. Here we use ICCT’s new Polaris model to estimate the WTW GHG intensity reductions that would be needed to achieve net-zero by 2050 in a pathway consistent with the 2023 IMO GHG strategy. Polaris is a global maritime emissions projection model that reports tank-to-wake (TTW) and WTW emissions as carbon dioxide equivalents (CO₂e) based on the 100-year or 20-year global warming potentials of CO₂, methane, nitrous oxide, and black carbon (we exclude black carbon in this particular analysis because it’s not accounted for in the guidelines on life-cycle GHG intensity of marine fuels). 

Figure 1 shows the straight-line GFS trajectory that satisfies the emissions reduction targets in the 2023 IMO GHG strategy and an S-curve trajectory that would stay below the cumulative emissions limit for 1.5°C estimated here. The GFS trajectories were determined based on the business as usual (BAU) predicted energy use from the Polaris model and target emissions in the 2023 IMO strategy and 1.5°C aligned pathways (using 100-year global warming potentials, GWP100). For 2030, the 2023 IMO strategy set a goal of at least a 20% reduction in absolute GHG emissions compared to 2008 levels, and “striving for” a 30% reduction; for 2040, the GHG reduction goals are at least 70% and striving for 80% below 2008 levels. Predicted energy use from Polaris goes from 10.7 EJ in 2023 to 14.5 EJ in 2050, and we estimated the baseline GHG intensity of marine fuels at 92.5 gCO₂e/MJ from shipping’s fuel mix in 2019 using ICCT’s Systematic Assessment of Vessel Emissions (SAVE) model and excluding black carbon emissions. 

Figure 1. Well-to-wake GHG intensities of marine fuels required to align the IMO GHG Fuel Standard (GFS) with IMO’s 2023 GHG strategy and a 1.5 °C-compatible emissions trajectory.

As Figure 1 illustrates, to achieve the minimum IMO targets, the GHG intensity of marine fuels will have to reduce by 18% to 76 gCO₂e/MJ by 2030 and by 72% to 26 gCO₂e/MJ in 2040 compared to the 2019 baseline. For the “striving” scenario, reductions in 2030 and 2040 will have to be 28% to 67 gCO₂e and 81% to 17 gCO₂e/MJ, respectively. A 1.5°C-aligned pathway requires 32% reductions in WTW GHG intensity in 2030 to 63 gCO₂e/MJ and 99% in 2040 to nearly zero GHG emissions. All pathways require 100% reductions by 2050. Following the GHG intensities in Figure 1 would result in the absolute emissions reduction pathways presented in Figure 2.

Figure 2. Absolute well-to-wake GHG emissions trajectories under each scenario.

Table 1 specifies the GHG intensity limits needed to follow the absolute emissions reduction pathways in Figure 2. This table can be used by policymakers as they develop the GFS.

Table 1. Well-to-wake GHG intensities (gCO₂e/MJ) and reductions in well-to-wake GHG intensities of marine fuels from the 2019 fossil fuel baseline needed to align the GFS with different emissions trajectories.

The cumulative WTW CO₂e emissions compared to “well-below” 2°C (interpreted by us as keeping warming to not more than 1.7°C) and 1.5°C limits are presented in Figure 3. Achieving the minimum or striving IMO targets is consistent with limiting warming to well-below 2°C and the S-curve is consistent with 1.5°C.

Figure 3. Cumulative well-to-wake GHG emissions from 2020-2050 implied by each scenario.

The 2023 GHG strategy also includes a target for the uptake of zero or near-zero GHG emission fuels and/or energy sources that should represent at least 5% (striving for 10%) of the energy used by international shipping by 2030. Achieving even the minimum 5% energy target in 2030 would require 0.6 EJ of zero/near-zero fuels. To put this target into perspective, 0.6 EJ represents around 14% of global biofuel demand in 2022 (~4.3 EJ), whereas shipping (~11 EJ/year) represents about 2.5% of global energy demand (~442 EJ/year). When considered in the context of the limited availability of sustainable advanced biofuels for use in shipping, this underlines the importance of scaling up e-fuels to achieve IMO’s target. 

The stronger the GFS targets, the greater the demand for zero/near-zero GHG emission fuels, the fewer GHGs emitted by the sector, and the greater the likelihood that shipping aligns with both IMO’s GHG strategy and the Paris Agreement. The next opportunity for IMO delegates to contribute to the design of the GFS is at the meeting of the 16th Intersessional Working Group on GHG emissions from ships in March 2024.