Future fuels

Issue description
There are strong drivers for replacing the use of fossil fuels, such as oil, coal and natural gas that contribute to the increasing levels of greenhouse gases in the atmosphere. The climate change is one of the most important environmental issues of our time. Other strong drivers for replacing the dependence on fossil fuels are the finite resources of fossil energy, security of supply and economy issues.

Reductions of greenhouse gas emissions are addressed in national and international strategies and programmes. The transport sector is one focused area. More than 97 per cent of energy used in the transport sector comes from crude oil. Political and industrial initiatives are taken to diversify the energy supply towards non crude oil sources, particularly natural gas and renewable resources. Changing the fuel process pattern from crude oil based fuels to other energy sources will be a slow process.

The dominant fuel for commercial vehicles will be conventional diesel fuel also in the foreseeable future, possibly containing synthetic components. The growing demand of crude oil together with a limitation in supply leads to price increases and will make conventional diesel fuels less viable. This will trigger a need for large-scale investments in production of fuels from other energy sources. In the beginning of this process, several alternatives need to be evaluated. Sometimes these new fuels are highly subsidized, which creates artificial markets. A competitive future fuel is characterized by high efficiency in energy from well to wheel together with low emissions of greenhouse gases. Other necessary features are sustainable supply and cost.

Impact on the Volvo Group
Volvo combines experience in the traditional technologies with new technologies and methods. Volvo needs to bring commercially viable solutions with minimal environmental impact timely to the market.

Volvo Group's position

Volvo supports a holistic approach in the selection of future fuels, prioritizing, on a well to wheel basis, the energy efficiency and greenhouse gas emissions.
Renewable energy resources are limited for several decades with present energy consumption. Optimisation of energy use is needed between transportation, heating and electricity sectors to ensure efficient use of available energy resources and highest potential for CO2 reduction.
Volvo is continuously aiming for improved fuel efficiency in the complete vehicle operation regardless of the choice of fuel.
Volvo supports an evaluation of different alternative fuels in order to reduce dependence on fossil fuel in the transport sector.

The following alternative fuels Volvo considers feasible in Heavy Duty applications:
- Bio-diesel (FAME/RME): Volvo supports a five per cent blend in diesel fuel. Competitive cost due to tax subsidies together with regional availability facilitates the use.
- Methane (natural gas and biogas): is a vehicle fuel when regionally available to a competitive price. Biogas is close to CO2 neutral.
- Gasification of organic compounds (coal, natural gas, biomass) with subsequent fuel synthesis is a flexible method to produce alternative fuels such as DME (dimethylether) and synthetic diesel fuel (Fischer-Tropsch). These fuels are close to CO2 neutral if produced from biomass. DME is clearly the most energy efficient of the two. The energy efficiency is even higher if the base is black liquor, an energy product at pulp mills.
Volvo prefers DME because of the high overall energy efficiency, although there are adaptations to be made in the diesel engines and infrastructure.

Environmental and Public Affairs

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