28/10/2021
Following on from our previous Automotive Round Tables on Future Powertrains and Connected and Autonomous Vehicles, the Automotive Group at Reddie & Grose recently held their third virtual round-table with a select group of experts in the industry. We had a broad range of attendees, including from a private-public body supporting hydrogen projects, an energy and sustainability strategy consultancy, and an automotive research & consulting firm. We also had a patent litigator with a broad range of experience including in Standard Essential Patents, and an independent automotive consultant who is also part of a seed investment platform for advanced automotive technologies.
The agenda we set ourselves was to discuss sustainability in the automotive industry generally, and what role alternative fuels such as hydrogen and biofuels, specifically, may play in the future of sustainable transport, which seemed particularly salient due to the recent adoption of E10 fuel throughout the UK.
Electric vehicles, a great solution with some underappreciated downsides
We started off by discussing the cradle to grave impact of vehicles with various types of powertrains. Polestar, the electric vehicle (EV) arm of Volvo, recently published a complete life cycle emissions analysis of one of its models, which was noted with interest by everyone present.
However, while publication of such life cycle emission analyses is to be applauded, the devil is in the detail. Embedded emissions in EVs, that is the emissions created by manufacturing an EV, are significantly higher than for traditional internal combustion engine (ICE) vehicles. The major contributor to the higher embedded emissions is the battery cells. Life cycle emissions analysis often also does not consider the environmental and social effects of mining the materials required for the battery cells.
Coming back to the cumulative lifetime emissions of a battery EV (BEV), if the BEV is charged entirely with renewable electricity, then the lifetime emissions of the EV are made up entirely of the embedded emissions. However, more realistically, depending on which country an EV is used in, at least some part of the electricity will be generated by fossil fuels, thereby increasing lifetime emissions during use of the BEV.
For an ICE vehicle, embedded emissions are significantly lower, and lifetime emissions depend on the additional emissions used for driving – if it runs on conventional fuels, its lifetime emissions will be higher, but if it runs on renewable fuels, its lifetime emissions will be lower. Depending on various factors, an ICE vehicle running on renewable fuel or bio gasoline may have lower lifetime emissions than a BEV until it has run for 100,000 miles or more.
There was a feeling in the group that the current conversation was mostly about emissions from running a vehicle, rather than total emissions considering manufacturing.
However, this does not mean that the representatives at the round table were downbeat about EVs, but rather that the public conversation should expand to consider lifetime emissions, and that goal should be to reduce the embedded emissions in EVs as much as possible by improving emissions from manufacturing.
The attendees generally appeared to feel that the battery manufacturing industry had not done enough to improve sustainability, as the focus had been on physical attributes of the battery such as its energy density, charging time, and the like. However, as demonstrated by Northvolt, a Swedish battery developer and manufacturer, which was pointed to as a company in the industry that was attempting to reduce the emission footprint of its batteries, there is significant potential for innovation in improved sustainability of battery manufacturing.
Recycling of batteries from BEVs is also becoming an issue of growing concern (see here) – with some believing that electronic waste as a whole, and not just batteries should be the issue to focus on. Research in the UK suggests that extracting lithium from batteries is currently very energy (and time) intensive, and that it requires less energy to produce a new battery than to extract lithium from an old one.
Second-life battery applications may be part of the solution, but the business models for second-life of batteries have not yet been shown to work. In addition, the attendees were concerned that there may simply be too many batteries for such applications, and while automotive manufactures are generally very good at recycling their (ICE) vehicles, a lot of second-life users may prefer “good” batteries over “cheap” (second-life) batteries.
There may need to be some incentives for OEMs to take batteries back and update them – although this may be costly and a technological challenge. The general feeling at the round table was that a lot of work was needed to make batteries more easily recyclable.
The question was raised whether IP may get in the way between OEMs recycling, or updating, batteries and battery manufacturers. Although exhaustion of rights means that repairing a genuine product bought from the patent holder or a licensee is possible, it can be difficult to know if the boundary from (permissible) repair to (infringing) making is being crossed if extensive repairs are required. However, it was pointed out that updating of batteries may become a valuable new revenue stream for OEMs, and may lead to further innovation in the field.
Besides all this, EVs are not only considered “cleaner” because they do not emit emissions when being driven, but also as a solution to pollution given broader social trends such as urbanisation. Unsurprisingly, however, most of the group did not believe that the “simple” banning of IC engines by as soon as 2035 would achieve the desired result, the problem being far more complex – which conformed with the opinion at our first automotive round table.
Regulatory inconsistency and changing policy was also pointed to as having a negative impact on the adoption of, for example, hybrid EVs, as consumers may be uncertain whether and for how long they may be allowed on the roads. While most large car manufacturers have clearly decided to focus on BEVs, there is still a lot of innovation in ICEs (see here), albeit innovation in battery EV related technologies is obviously increasing fast (see here).
The future of ICEs and the role alternative fuels may play
However, the move away from ICEs will likely leave users of ICEs who cannot easily switch to electric engines, such as heavy duty applications, to suffer from a lack of investment.
There was a feeling that ICEs may help to lower emissions immediately, whereas BEVs are more likely to lower emissions in future. Indeed, as noted by one attendee, given the embedded emissions of a BEV caused by manufacturing, replacing ICE vehicles with EVs would actually lead to a short-term increase in emissions. However, there was some disagreement here, and the growing divide between national and local governments on emissions and pollution was thought to likely lead to tighter regulation in cities than elsewhere. This can already be seen in London and many other cities around the UK and elsewhere, which allow only certain cars to drive within the city.
The rollout of E10 over the summer in the UK has been much covered by the media. The difference between E5, which was previously sold at UK petrol stations, and E10, is that the maximum percentage of bio-ethanol in the fuel has increased from 5% to 10%. While bio-ethanol has significant emission savings compared to fossil fuel, 10% may be the upper limit for a fuel mix which can ensure backwards compatibility, i.e. which may be used as a drop-in fuel with current ICEs. RDE2 standards are also a concern when it comes to bio-diesel as ICEs using bio-diesel are known to produce higher emissions of nitrogen oxides (NOx).
Biofuels are nevertheless seen as important for transport segments which are particularly difficult to electrify, such as shipping and heavy duty. Work on biofuels started over two decades ago, and it was felt by the participants of the round table that more should be done to support scale-up of relevant technologies. There currently does not seem to be sufficient incentive to develop and use bio-fuels: the consumer does not get any benefit from using 100% biofuel, OEMs have no incentive as they cannot control what users put in their ICEs, and biofuels are more expensive to manufacture for oil companies.
The general consensus seemed to be that government policy was needed to support biofuels, and that every possible contributory solution should be explored, rather than everything but BEVs being banned.
Hydrogen may currently receive more funding then biofuels, but how is hydrogen technology progressing? Electrolysis (as discussed here) is still struggling with efficiency concerns – although this problem goes away if there is a surplus of (renewable) electricity. However, electrolysis for hydrogen may need to compete for the surplus of electricity with industrial demand as the electrification of industry progresses, and with second-life battery application. As such, the efficiency problem is central to green hydrogen production and the research currently going on to make it more efficient may be central to its future success.
Although our experts did not expect small hydrogen vehicles to make up a significant share of the market in future, for heavy duty applications, the future of hydrogen may look more promising.
However, currently, life cycle analysis for hydrogen does not look promising, as about 95% is produced by steam reforming from fossil fuels, which may result in whole of life emissions for a hydrogen vehicle being higher than for an equivalent ICE vehicle running on conventional fuels.
There are some projects which look to address some of these issues, such as Siemens’ and Porsche’s investments in a hydrogen-to-biofuel plant in Chile, where strong winds in Patagonia can be used to generate large amounts of excess wind power. Turning hydrogen into a liquid hydrocarbon makes it easier to transport around the world, largely using existing networks. However, the further step of producing a liquid hydrocarbon may add to, rather than solve, the efficiency problems.
Another aspect of sustainability briefly discussed were bio composites for manufacturing parts of vehicles, and mobility as a service. However, these topics deserve more time and we hope to discuss them in dedicated Automotive Round Tables in the future.
Conclusions?
Our discussion, whilst unfortunately not saving the world, touched on many big problems we are facing, but there seemed to be a genuine belief that technology and innovation will play their part in addressing the climate emergency.
We in the Future Transport Group are very much looking forward to working with our clients to protect their IP in that technology and innovation to help them achieve their commercial goals which will no doubt help achieve societies goal of addressing the climate emergency.
In the meantime, we will be hosting our next event later in the year, where the topic will be the hydrogen economy. If you work in this industry, and would like to be involved, please do get in touch.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
