The road to efficiency

Fuel has been a hot topic lately; the cost is up (or down), regional areas are being hit by higher pricing, our nation’s fuel security is at risk ... the list goes on.

While as individuals, fleet managers and business operators we can’t exactly affect the dynamics of the international market, we can make vehicle purchasing choices based on fact, rather than assumption, and encourage practices that promote more efficient fuel use, benefiting the environment and ensuring an ongoing stable supply.

In Feburary 2014, ClimateWorks Australia (CWA) released a briefing paper titled ‘Improving Australia’s Light Vehicle Fuel Efficiency’. CWA aims to facilitate substantial reductions in Australia’s greenhouse gas emissions over the next five years and works on a platform of analysis, engagement and assessment. In short, this means identifying the most efficient opportunities for emissions reduction; partnering with business, government and community to remove barriers to those reductions; and, assessing our national progress to ensure any ensuing goals are being met.

We’re behind the 8-ball

The paper is the result of substantial financial modelling, which we won’t detail too deeply here, but it raises some interesting points. Despite the concerted ongoing efforts of government, industry and consumer groups, Australia lags behind most other developed economies when it comes to the introduction of regulated fuel-efficiency (or CO₂ emissions) standards. CWA believes that the successful design and implementation of best practice standards in Australia could realise a light vehicle fleet fuel-efficiency improvement of over 50% within the next 10 years.

The current system in Australia relies heavily on higher fuel prices as a mechanism to encourage new vehicle buyers to purchase a more fuel-efficient option. However, CWA says that evidence suggests a high degree of price inelasticity, meaning that significant fuel price increases are required before a shift in consumer preference is realised. They state that other developed economies use a combination of regulatory standards, voluntary targets, financial incentives and consumer information to achieve efficiency improvements and that Australia as a nation could learn from that.

What happens if we don’t?

According to CWA, our oil self-sufficiency rates are in decline, so we are increasingly reliant on imports to cover our needs. Combined with an explosion in emerging economy vehicle ownership, now and in the future, we are in a precarious position when it comes to energy security. Again, the efficiency standards are cited as a method for reducing that reliance. Given that the average age of all vehicles on the road in Australia is 10 years, higher than the global average, delaying the development of these standards could lead to ‘emissions lock-in’, a situation whereby a larger proportion of vehicles on our roads are less efficient than they would be with the standards in place.

Hanging off their coat-tails

A range of technologies exist that can be (or already have been) integrated into vehicles to improve efficiency. CWA says that as most of these have been developed to meet with existing or forthcoming legislative requirements in international markets, Australia can benefit because the rate of adoption will be faster and costs significantly reduced.

Some of these vehicle improvements include: direct injection and lean burn, variable valve actuation, downsizing engines with turbo or super charging, dual clutch transmissions, electric motor assist, light-weighting, low rolling resistance tyres and improved aerodynamics. Alternative fuels, such as biofuels and electric/hybrid technologies, also come into play, although penetration of these advances are affected by factors including time required to optimise the production scales, build fleet operator confidence and cost.

Standards won’t stand alone

CWA says that fuel emissions standards alone are not enough and that the introduction of other measures will enhance fuel efficiency overall. Again, they look to the global market for examples of successful campaigns including:

Consumer education

Consumer attitudes are an effective starting point and labelling schemes that clearly show the running costs and subsequent fuel efficiency of new cars are a valuable way to build consumer awareness. Similar to energy rating schemes already familiar to Australian whitegoods buyers, these provide a simple but effective point of comparison. Additionally, programs that promote eco-driving and car sharing are seen as useful complements to the more formal schemes.

Fuel quality

CWA recommends a review of Australian fuel quality standards, with a view to mandating fuels compatible with the Euro 5/6 emissions standards. If there is no harmonisation of fuel quality standards, this will impact on the success of importing fuel-efficient vehicles or transferring engine technology into the local market.

Road access pricing

Congestion is a killer - not only does it make commuting a nightmare, it also impacts negatively on health levels. A road access pricing scheme would see users charged based on distance charged on certain roadways, in an effort to reduce the number of ‘low value’ kilometres driven. CWA says these types of measures have been introduced in Singapore, as well as parts of the EU and the United States.

Fuel and vehicle fees

Aligning registration fees with CO₂ emissions provides an effective purchase influencer. In the UK, progressive CO₂ taxation of company cars has been very effective in driving consumer choice, according to the UK Low Carbon Vehicle Partnership (as cited by CWA). It certainly makes more sense to align fuel and vehicle fees with emissions, rather than attributes such as weight, and it has the added benefit of encouraging car manufacturers to go beyond compliance of the minimum mandated levels.

Will fuel even figure in the future?

While there’s plenty of evidence to suggest that legislative intervention in some form is required to increase the nation’s fuel efficiency, there is a definite whiff of change in the wind. The 2014 Wheels Car of the Year (largely considered as Australia’s most influential vehicle award) top five finalists encompassed two electric cars and it was a surprise to many when one was announced the winner in late January 2015. With a range of around 100-120 km before recharge, it’s probably not the best option for fleet managers or for long-distance drivers at this stage, but it does herald the beginning of a new era.

Our fuel supplies won’t last forever, so making better and more informed choices now just seems like the sensible thing to do.

Image credit: © Sean Gladwell/Dollar Photo Club