Hydrogen as key pilar of energy transition

The Hydrogen Council coalition has launched its first ever globally quantified vision of the role of hydrogen. A study developed with support from McKinsey. The study shows that enabling hydrogen for energy transition it can reduce CO2 emissions by 6 gigtaons by 2050. Also the study shows that it can create millions of jobs.

Complete Taking the Hydrogen Council’s vision for hydrogen to the next level, the study entitled 'Hydrogen, Scaling up' outlines a comprehensive and quantified roadmap to scale deployment and it’s enabling impact on the energy transition. Deployed at scale, hydrogen could account for almost one-fifth of total final energy consumed by 2050. This would reduce annual CO2 emissions by roughly 6 gigatons compared to today’s levels, and contribute roughly 20% of the abatement required to limit global warming to two degrees Celsius.

On the demand side, the Hydrogen Council sees the potential for hydrogen to power about 10 to 15 million cars and 500,000 trucks by 2030, with many uses in other sectors as well, such as industry processes and feedstocks, building heating and power, power generation and storage. Overall, the study predicts that the annual demand for hydrogen could increase tenfold by 2050 to almost 80 EJ in 2050 meeting 18% of total final energy demand in the 2050 two-degree scenario.

Achieving such scale would require substantial investments; approximately 20 to 25 billion US-dollar annually for a total of about 280 billion US-dollar until 2030. Within the right regulatory framework – including long-term, stable coordination and incentive policies – the report considers that attracting these investments to scale the technology is feasible. The world already invests more than 1.7 trillion US-dollar in energy each year, including 650 billion in oil and gas, 300 billion in renewable electricity, and more than 300 billion US-dollar in the automotive industry.

The launch of the new roadmap came during the Sustainability Innovation Forum in the presence of 18 senior members of the Hydrogen Council led by co-chairs Takeshi Uchiyamada, Chairman of Toyota and Benoît Potier, Chairman and CEO, Air Liquide. Launched at the World Economic Forum in Davos in early 2017, the Hydrogen Council is a first-of-its-kind global CEO initiative to foster the role of hydrogen technologies in the global energy transition.

Hydrogen is a versatile and clean energy carrier that can be used as fuel for power or in industry as feedstock. Generating zero emissions at point of use, it can be produced from (renewable) electricity and from carbon-abated fossil fuels, thereby achieving completely zero-emission pathways. The uses for hydrogen continue to grow as it can be stored and transported at high energy density in liquid or gaseous form and can be combusted or used in fuel cells to generate heat and electricity. This versatility confers to hydrogen a key enabling role all together in the transport, the industry and the residential sectors, as well as for the large-scale storage of renewable energies, making it a promising solution to overcome the challenges of the energy transition.

Hydrogen, scaling up McKinsey study takeaways1 hydrogencouncil.com/wp-content/uploads/2017/11/Hydrogen-scaling-up-Hydrogen-Council.pdf

February 16, 2018 · Jos Haas

New expert: Cesar Augusto Vargas Borraez - an introduction

GRUPO C COLOMBIA S.A.S. is the innovative company in bus travel with a trajectory of 16 years that has broken the limits in the provision of services focused on increasing the flow of passengers for traditional transport companies with its S.I.A.P. (Comprehensive Passenger Service) especially with the introduction of FreestyleBus that revolutionizes the industry giving customers more assistance, comfort, information, freedom and flexibility.

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February 09, 2018 · Vargas Borraez

Joint affords to speed up electrifying EU bus fleet

Since 2013 the project ZeEUS is running. It's aim is to get attention from the public transport sector for electric bus systems. Zero Emissions Urban Bus System (ZeEUS) is EU funded with ten cities around Europe participating. ZeEUS is coordinated by the UITP. The European Commission sees it as a wonderful task to make public transport sustainable, Claire Deprés, Head of Claire Depré Head of unit Sustainable and Intelligent Transport European Commission DG Move, explained during last years UITP Busworld congress.

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January 28, 2018 · Jos Haas

The Global Heavy Bus and Coach Market: 2017 Q3 update

The global bus and coach market continued its downward trajectory from Q1 into Q2, with sales falling by 11% YoY in Q2, contributing to a decrease of 13% YoY over the first half of the year. This dip is largely a consequence of large declines in China and India following policy change, which has negatively impacted bus and coach sales. In addition, Brazil and Turkey have seen sales fall in the first half of the year, with the latter hindered by recent political uncertainty and the former constrained by a recessionary economy, both of which have impacted on fleet renewals. Nevertheless, the second quarter’s outturn indicates that the Brazilian bus market is set to rebound (slowly) following an upswing in FDI and positive economic activity. The other major South American market, Argentina, backed by strong macroeconomic fundamentals, is also experiencing a surge in bus and coach sales, so bus sales in the region as a whole are set to show improvements. In addition, Russian bus demand has soared year-on-year and Japan is on track to post a second consecutive record-breaking year of bus sales growth in the midst of a tourism boom. Also noteworthy: North America and Korea have experienced resilient growth in the first half of 2017.

China bus and coach sales fell by roughly -27% YoY in the first half of the year. This slump in sales is primarily a result of the introduction of the State V emission standards at the start of the year, as well as the government’s decision to slash the New Energy Vehicle (NEV) subsidy. Although rather blunt in its administration, the NEV subsidy cut of 50% was not completely surprising following high-profile cases of fraudulent behaviour by some manufacturers. The amended version of the new NEV subsidy raises the technical threshold for manufacturers (favouring electric vehicles and fast charging systems), as well as ensuring the vehicle is now verified presale before subsidising it to prevent falsified claims. Moreover, the government has proposed a timeline to incrementally cut NEV subsidies so they phase out before the state VI emissions standard deadline in July 2020. Over the last few years, NEV subsidies have been a boon for electric bus and coach demand and, noticeably, the cut has had a negative impact on sales in the first half of the year. Nevertheless, we anticipate NEV sales to rebound in the second half of the year and demand for NEV’s to continue to grow over the forecast period.

The Indian bus and coach market has seen sales fall in the first half of the year by over 9% YoY, or 2,500 units. The contraction in bus sales over this period, as for China, is mainly attributable to policy distortions caused the implementation of a series of recent structural reforms by India’s central government, as well as the introduction of Bharat Stage (BS) IV emission standards from April 2017. More specifically, the introduction of India’s demonetisation policy at the end of 2016, enacted to clamp down on illegal tender and to improve tax compliance, led to a short-term fall in liquidity. The temporary cash shortfall has hit multiple sectors and driven down bus order intake. Over the next few months, we expect sales to continue to decline as a consequence of BS IV’s implementation, although, to some extent, we anticipate the fall to be cushioned by strong domestic economic activity. Additionally, the automotive industry is likely to be impacted by the introduction of the Goods and Service Tax (GST) Bill in July 2017 to make tax levels uniform over state lines, but whether this will be negative or positive has been a source of much debate. The aim of this Bill (and demonetisation for that matter) is to increase the ease of doing business within India to encourage investment. According to The World Bank’s namesake index, India is 100th of 190 countries as of June 2017, up 30 places from a year ago, so these changes appear to be having the desired effect. For buses specifically, we assume the GST Bill will reduce the cost of production, the benefits of which are likely to be passed on to the consumer, as well as facilitate the development of a long-distance transport industry. Indeed, Volvo-Eicher CV has recently cut the price of their buses due to savings they now make in production. In a competitive market such as India, we suspect it will not be long before other OEMs follow suit and buses become more attractive to buyers.

After a disappointing start to the year (-34% YoY in Q1), Brazilian bus and coach sales rallied to post year-on-year growth of 5% in Q2 2017. The uptick in bus sales in Q2 marked the first quarter of YoY growth since 2013, although the net decline of 14% YoY in the first half of the year is still considerable. In line with expectations that Brazil will return to economic growth this year, we anticipate that bus and coach sales will grow 2-3% in 2017. Across the border, Argentina, Brazil’s biggest trading partner, has seen sales rocket in the first half of the year, growing 59% YoY. With the economy growing and infrastructure spending picking up, this has strengthened bus and coach demand. Looking forward, sales are likely to almost double YoY in 2017 before tailing off somewhat and flattening out over the forecast horizon.

The EU+2 bus market contracted by 0.5% YoY in H1 2017. The first half of this year saw something of a role reversal from last year with West Europe in slight decline and East Europe posting growth. Even so, it has been the high-volume markets of Germany (+10%) and Spain (+18%) that have gone someway to offsetting the decline in France (-16%) and some Scandinavian countries (Norway: -43%, Sweden: -42%) over H1 when compared to the same period in 2016. Nevertheless, we expect the fall in Q2 to be a blip rather than a trend, and with geopolitical uncertainty likely to subside and investment to return to the East as the year progresses, we expect stronger growth of 6-7% for the EU+2 region as a whole this year. Strong growth in Germany has come directly from increases in the coach segment since the liberalisation of the long-distance transport industry with even more demand expected to be realised in 2017. With this in mind, other EU member states may see a similar increase in long-distance coach sales following the European Commission’s Directive on Passenger Coach Service within the Clean Mobility Package, which discusses ways to stimulate a development of bus connections over long distances to offer better alternatives to car use. As such, we anticipate coach fleet expansion to continue to bolster sales of these vehicles in other European nations in the medium-term.

Within our extended view of Europe we consider Turkey and Russia. In Turkey, bus and coach sales fell -20% YoY in the first half of 2017, mainly due to political uncertainty within this country and current conflict in the surrounding region. By contrast, the Russian market has seen an upswing in sales of +28% YoY in H1 2017. The jump in demand has been supported by the government investing 3 billion roubles into updating the school bus fleet, as well as a boost in sales ahead of the Confederations Cup in 2017 and the World Cup in 2018. The outlook for the EU+2 remains positive; we forecast the bus and coach market to pick up in the second half of the year, with sales posting +6% YoY.

In North America, class 4-7 bus and coach sales started the year strongly with a growth rate of 5% in the first half of 2017. Each NAFTA country saw positive YoY growth in H1; Mexico (+3.7%), Canada (+1.6%) and USA (+5.1%). Economically, the NAFTA region experienced a solid outturn. However, risks to the economy remain, one being the cloud of uncertainty over prevailing policies in the USA and its risk to economic growth. This in turn could have an impact on the bus and coach sector, although, for now the outlook for the North American market remains unchanged, with sales predicted to remain relatively flat, seeing a slight uptick of 1% YoY over the forecast horizon.

This information is provided by LMC Automotive and based on our previous quarter’s Global Bus Forecast. More up-to-date and in-depth data and analysis is available on request. If you are interested in learning more about further services that LMC Automotive is able to provide, please visit our website at www.lmc-auto.com, send us an email to forecasting@lmc-auto.com or telephone our head office on +44 1865 791737.

Powertrain options of the future

‘Powertrain options for commercial vehicles’, a conference held by ACEA (European Automobile Manufacturers’ Association) to explore the short-, mid- and long-term power choices for trucks, vans and buses either conventional powertrains, running on diesel or petrol, or alternative drives, running on biofuels, natural gas and hydrogen, as well as electric and hybrid-electric technologies. This conference was held 29 November 2018 and attended by over 230 people - including industry representatives, policy makers and end-users of commercial vehicles.

An issue debated was why today diesel powers well over 90% of all trucks, vans and buses on the roads, and what it will take to increase the market uptake of alternatively-powered vehicles in the future. ACEA states it supports the EU Commission’s action plan for boosting investment in charging and refuelling stations throughout the EU but it also says that for all power choices there is need for adequate infrastructure. This ranges in complexity from the continuation of low-sulphur diesel, to the availability of electrical charging stations, compressed or liquefied natural gas fuelling stations and an electrical grid to cope with demand if high volumes of electrically-powered vehicles are introduced into the market. During the conference it was said that not every powertrain is ideal for all tasks, so it is not possible to designate a single technology for a particular vehicle, let alone an entire vehicle class. According to ACEA the choice should ultimately be commercially-determined by the end-user, based on his or her specific and unique needs, and the overall benefit to society. As ACEA Secretary General, Erik Jonnaert, summed up, “different transport needs require different transport solutions”. Hakan Agnevall, President of Volvo Bus Corporation and Chairman of ACEA’s Bus and Coach Committee, stated: “Electrification is going to be one of the major ways forward in city transport, but not the only one.” In parallel, the latest-generation of diesel technology – delivering low CO2 emissions and low real-world pollutant levels – will continue to be a powertrain of choice for many use-cases.


December 29, 2017 · Jos Haas

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