Munich/Potsdam. Biofuels, electricity, hydrogen: the
world of fuels for automobiles will become even more complex in the
future. Electric cars, for example, are a solution to the
challenge „Sustainable Mobility“, since they are
driven locally emission-free and, therefore, no longer directly emit
Dr. Thomas Becker, Vice President Governmental Affairs and
responsible for the policy activities of BMW Group, indicates the need
for different framework conditions in the medium-term:
„The relevance of the upstream emissions increases in the
traffic sector: Contrary to the fuel world dominated by gasoline and
diesel today, alternative fuels are produced with extremely different
environmental impacts. The CO2 balance of one kilowatt hour of
electricity that comes e.g. from a coal power station differs from one
that was generated by wind power significantly. Hence, in order to
assess the actual CO2 footprint of a certain fuel, we need the
implementation of a new system."
This is particularly obvious with electricity: the CO2 emissions of
electricity generated from renewable energies, such as wind, water, or
sun is in contrast to electricity generated from coal or natural gas.
The environmental impacts from biofuels are also defined mainly by its
production. The comparability is missing, when for example electricity
and a mix of fossil diesel and bio-diesel will be competing in the
future for the lowest overall emissions. A long-term political
framework is needed here that will address the CO2 reduction in the
traffic sector comprehensively and in a transparent way for industry
Study CITIES: The Solution is Cap and Trade
According to the study „Car Industry, Road Transport and an
International Emission Trading Scheme“ (CITIES) developed under
the direction of Professor Ottmar Edenhofer of the globally renowned
Potsdam Institute for Climate Impact Research (PIK), the use of an
instrument is now recommended that enables a treatment of the upstream
emissions of fuels: Cap and Trade.
Used in Europe already within the scope of the emission trading for
stationary systems, Cap and Trade can in the future effectively reduce
the total CO2 emissions in the traffic sector. A total volume of CO2
will be specified that is reduced annually. Every fuel will be
comprehensively assessed according to the climate impact of its
production and use. CO2 certificates can be traded within the system.
Thereby, reaching the CO2 targets for fuels will be simplified, while
trading CO2 certificates promotes a competition for the introduction
of innovative and efficient technologies.
Cap and Trade: An Effective Contribution to the Climate
Protection in the Transport Sector
Professor Ottmar Edenhofer, the deputy director and chief economist
at PIK, was authoring the study in collaboration with Dr. Felix
Creutzig. He describes the significance of the results: „The
study CITIES indicates how the energy sector, in addition to the
innovations of the automobile industry, can contribute to sustainable
mobility. Going forward, the CO2 emissions will no longer be
determined by the automobile alone, but to a large degree by the
upstream energy chain. To include the emissions from the transport
sector at the fuel production level will provide for a more stringent
macroeconomic treatment of the greenhouse gases. Simultaneously, a
maximum flexibility and economic efficiency will be guaranteed for the
mitigation options. The respective responsibilities of the actors will
be more precisely defined with an emission trading for fuel producers
and efficiency regulation for automobile manufacturers“.
The study was commissioned and financed by the BMW Group. Dr. Thomas
Becker explains: „Our task is to increase the efficiency of our
products, regardless of the drive concept. The legislative bodies and
our costumers rate us on that. Due to the increasing electrification
of mobility and the use of biofuels and hydrogen, most of the CO2
emissions depend on the upstream and no longer on the vehicle itself.
Cap and Trade is the correct lever for CO2 reduction in the upstream
in an efficient, economical and ecological manner. “
Important Results from the Study:
In order to reduce CO2 emissions in the transport sector, all
system participants must live up to their respective responsibility.
Fuel producers must reduce the CO2 content of their fuels;
automobile manufacturers must increase the efficiency of their
The CO2 content varies considerably depending on the production
method, regardless of the type of fuel used. Automobile
manufacturers have no influence on that. As a result, political
instruments must be created that specifically address fuel producers
and automobile manufacturers in their respective responsibilities.
The introduction of emission trading for fuels is not supposed to
replace the regulations on CO2 emissions for new cars. Rather it can
bring forward the additional decarbonization of the entire traffic
sector in a comprehensive manner.
Electric cars should be credited with 0 gr/km CO2 within the
context of regulations on fleet consumption, since the automobile
manufacturers have no control over the origin of the electricity. In
the longer term, an efficiency factor (i.e. MJ/km) can be used that
rates the car's energy consumption technology-neutral for all kinds
of propulsion systems, regardless of the respective fuel.
The CO2 content of fuels should be regulated at the level of the
fuel producers, in order to increase the efficiency of the
regulation and provide incentives for CO2 reductions.
In the light of changing conditions on the fuel market and the
related CO2 emissions, Cap and Trade is suitable as an instrument to
holistically realize the CO2 reduction goals in the traffic sector.
The study CITIES was authored by scientists of the Technical
University Berlin and the Potsdam Institute for Climate Impact
Research. The department “Economics of Climate Change” at
Technical University Berlin researches the relations between mobility,
economics and climate change. Scientists at the Potsdam Institute for
Climate Impact Research are working interdisciplinarily on researching
climate change and its impacts on ecological, social and economic
systems. Professor Ottmar Edenhofer, as deputy director and chief
economist, heads the field of study Sustainable Solution Strategies at
PIK and has a professorship at TU Berlin. He is also co-chair of the
working group III of IPCC, Dr. Felix Creutzig is the Team Leader for
Sustainability and Transport Economy at the Technical University
Berlin and lead author of the transportation section of the upcoming
The BMW Group is one of the most successful manufacturers of
automobiles and motorcycles in the world with its BMW, MINI and
Rolls-Royce brands. As a global company, the BMW Group operates 24
production facilities in 13 countries and has a global sales network
in more than 140 countries.
The BMW Group achieved a global sales volume of approximately 1.29
million automobiles and over 87,000 motorcycles for the 2009 financial
year. Revenues totaled euro 50.68 billion. On 31 December 2009, the
company employed a global workforce of approximately 96,000 associates.
The success of the BMW Group has always been built on long-term
thinking and responsible action. The company has therefore established
ecological and social sustainability throughout the value chain,
comprehensive product responsibility and a clear commitment to
conserving resources as an integral part of its strategy. As a result
of its efforts, the BMW Group has been ranked industry leader in the
Dow Jones Sustainability Indexes for the last six years.