Memorandum submitted by General Motors
UK and Ireland
This submission represents the views of General
Motors, incorporating the Vauxhall, Saab, Chevrolet, Cadillac,
Corvette and Hummer brands in the UK.
We have provided responses to the majority of
questions; some we have not responded to as we feel these are
less relevant to the company and are more orientated towards the
fuel supply industry.
INTRODUCTION: GENERAL
MOTORS' ADVANCED
PROPULSION AND
ALTERNATIVE FUELS
STRATEGY
General Motors has a comprehensive strategy
aimed at removing the automobile from the energy and environmental
equation, encompassing short, medium, and long-term goals.
In the short term, General Motors continues
to work on delivering further refinements to the conventional
internal combustion engine, incorporating engine downsizing and
turbo-charging, as well as active fuel management, six speed transmissions,
and variable valve timing.
As a specific example of these efforts, the
2007 mid-cycle Astra (GM's largest volume model in the UK), the
five-door variant of which is manufactured at the company's Ellesmere
Port assembly plant, delivers a 14% reduction in CO2 emissions
across the engine range compared to the previous version of the
vehicle.
Short to medium term, we are developing vehicles
which can run on biofuels in both low and high blends, as a consumer-friendly
and cost-effective way of reducing CO2 from the cars we sell.
In the medium term, General Motors sees an important
role for plug-in battery powered electric vehicles in delivering
low carbon road transport. GM's E-Flex system is showcased in
the Chevrolet Volt concept vehicle, launched at the Detroit Motor
Show in January 2007, and the Opel Flextreme concept, launched
at the Frankfurt Motor Show in September 2007. These prototype
vehicles are battery powered electric vehicles which use a small
turbo-charged internal combustion engine to produce additional
electricity from petrol, diesel, ethanol, or biodiesel. The battery
can be fully charged via mains electricity in six hours, providing
40 miles of pure electric range.
With additional improvements to today's lithium-ion
battery technology, GM anticipates that these vehicles could be
ready for commercial production between 2010 and 2012. In June,
GM announced it would be awarding contracts to two companies for
advanced development of lithium-ion batteries—namely, Compact
Power Inc., based in Troy, Michigan (a subsidiary of Korean battery
manufacturer LG Chem), and Continental Automotive Systems, based
in Frankfurt, Germany (a division of tier one automotive supplier,
Continental A.G.).
General Motors' long-term strategy is to develop
hydrogen fuel cell vehicles which emit only water vapour at the
tailpipe. The company has already invested in excess of $1 billion
in research and development into hydrogen fuel cell technology.
In 2005, the company produced the Chevrolet Sequel, the first
vehicle in the world to travel 300 miles non-stop with zero tailpipe
emissions.
Next year, the company will launch the world's
largest ever market trial of fuel cell vehicles, placing over
100 vehicles in the hands of customers, to give them first-hand
experience of running a fuel cell vehicle in a real world environment.
For fuel cells to become a viable mass market
solution, we need to have in place a fuel cell propulsion system
which can compete with conventional engine technology on cost,
performance, and durability. In this context, the company continues
to work hard to meet its stated corporate objective of designing
and validating an automotive-competitive fuel cell propulsion
system by 2010. We have recently announced a move to integrate
our global fuel cell development team into the company's core
powertrain and vehicle engineering functions, as the first step
towards preparing this technology for future production.
GM's latest, fifth generation of fuel cell propulsion
system was introduced at this year's Shanghai Auto Show as the
fuel-cell powered E-Flex platform used on the Chevrolet Volt.
1. What are the possible positive and negative
social, environmental and economic consequences of biofuels? How
might trade-offs between climate benefits and environmental and
social impacts be made? Is there a need to develop a new biofuel
strategy for the UK or EU, to balance the environmental, social,
economic and climate impacts of biofuels?
There are undoubtedly some potential negative
impacts associated with biofuel production, if this is carried
out in an irresponsible or inefficient way.
On the positive side, when responsibly and efficiently
produced, biofuels can deliver significant source to wheels reductions
in CO2, offering a cost-effective and consumer friendly means
of reducing CO2 from road transport, as part of a broader environmental
technology strategy.
Fundamentally, GM believes that continued reliance
on fossil fuels for 97% of global road transport needs is unsustainable.
We therefore maintain that the UK and EU must adjust existing
policy frameworks towards a broader strategy that encompasses
the promotion of greater energy diversity and reduced reliance
on fossil fuels. In this context we are convinced that promotion
of biomass based fuels has a critical role to play.
2. Should biofuels be regulated to minimise
the negative environmental and social impacts, and in what way?
How might regulation fit in with international trade agreements
and rules? Should there be regulation of the entire carbon cycle
of biofuels?
Clearly, there is a need to develop mechanisms
to ensure that carbon savings from biofuels are accurately measured,
in order to encourage efficient production methods. GM believes
that such mechanisms could provide a basis to incentivise low
CO2 biofuels through specific taxation measures. GM is an active
partner in the Low Carbon Vehicle Partnership (LowCVP) and supports
its ongoing work to develop a robust system of carbon accreditation
and sustainability certification in association with the implementation
of the DfT's Renewable Transport Fuels Obligation (RTFO).
At the same time, with specific reference to
sustainability, GM is concerned that the specific impact of biofuels
on broader issues of sustainability needs to be kept firmly in
context. Increased demand for biofuels is only one factor affecting
complex issues such as rising food commodity prices and deforestation
in sensitive regions. Consequently, these issues cannot be expected
to be resolved by a restrictive policy specifically focused on
biofuels. At the same time, the risk associated with introducing
premature and restrictive regulations on biofuel production is
that these threaten to halt early development of an industry which,
as already indicated, has a critical role to play in delivering
greater energy diversity for the long term.
Accurate measurement of the carbon impact of
individual biofuels, tax measures to encourage efficient production
and maximum carbon savings, and auditing and reporting fuel supply
chains against defined sustainability criteria all have a role
to play in ensuring that the emerging biofuels industry develops
in a responsible and sustainable way, and delivers genuine and
significant savings in CO2.
3. How successful are existing international
structures, such as the Roundtable on Sustainable Palm Oil, at
ensuring that imports of biofuels can be obtained from sustainable
sources? To what extent is it currently possible to identify the
provenance and production standards of imported biofuels?
GM believes that existing systems for environmental
auditing could be adapted to measure the sustainability of biofuels
throughout their supply chain.
4. At what stage is biofuel technology? Is
there enough support for the development of biofuel technology?
A UN report found that the climate change benefits of solid biomass
fuels outweigh those of liquid biofuels. Are current policies
promoting the development and deployment of a range of biofuel
technologies? How successful have EU strategies and Directives
been in stimulating biofuel usage? Will the 2010 biofuel target
be reached? How effective are the Government's fiscal arrangements
for biofuels?
The various biomass feedstocks used for producing
biofuels can be grouped into two basic categories. The first is
the currently available "first-generation" feedstock,
which comprises various grain and vegetable crops. These are harvested
for their sugar, starch or oil content and can be converted into
liquid fuels using conventional technology. The yields from the
feedstock vary considerably, with sugar cane and palm oil currently
producing the most litres of fuel per hectare[14].
By contrast, the "second-generation"
of biofuel feedstock comprises cellulose-rich organic material,
which is harvested for its total biomass. These fibres can be
converted into liquid biofuels only by advanced technical processes,
many of which are still under development.
Second-generation biofuels offer several advantages
over first-generation fuels, most importantly that they can be
produced from agricultural waste by-products, thereby significantly
increasing land use efficiencies.
At present the cost of producing second-generation
biofuels is very high. We are aware of a small number of government
and industry-sponsored efforts to lower these costs, with some
success. For example, there are at least two projects currently
underway to produce ethanol from wood—a demonstration facility
in Ottawa, Canada and a commercial-scale facility in Louisiana,
USA[15].
Some development of "synthetic" biofuels is underway
in Germany, Sweden and Austria[16].
By providing additional incentives to encourage
the domestic biofuels industry to develop and greater support
for research into the development of second generation cellulosic
biofuels from agricultural and forestry by-products, GM believes
that the government can help to enhance the sustainability of
biofuels for the longer term.
While the UN may have produced evidence to suggest
that the climate change benefits of solid biomass fuels outweigh
those of liquid biofuels, GM would again point out the priority
need to address the high level of dependence of road transport
on fossil fuels, due to the current lack of widely available alternative
energy sources for this sector. While the industry will continue
to improve vehicle efficiency, increasing global demand for vehicles—particularly
in developing countries—means that, in the long term, these
efforts will not be enough by themselves to achieve significant
reductions in CO2 output from road transport at the global level.
Future ultra low CO2 alternative propulsion systems such as plug-in
electric vehicles and hydrogen fuel cells (in which GM is investing
heavily) will require a broad portfolio of renewable energy sources
to generate power.
By supporting the liquid biofuel industry now,
governments will be supporting technologies which can be converted
to solid biomass fuels at a later stage, as alternative forms
of propulsion become more widely available.
Concerning the effectiveness of the Government's
current fiscal arrangements for biofuels, we maintain that these
are currently entirely inadequate and can be summarised as follows:
— From April 2008, drivers of E85-capable
cars will receive a 2% discount from annual company car tax.
— E85 vehicles qualify for a £20
discount from VED.
— The current rebate of 20 pence per
litre on biofuels is fixed until 2010.
By comparison, in Sweden, a wide range of consumer
incentives is available, helping to equalise the cost of running
a vehicle on bioethanol E85 as opposed to conventional fuel, specifically:
— A 20% discount from company car tax.
— A 30% discount from vehicle registration
tax.
— Exemption from the Stockholm congestion
charge.
— A 30 pence per litre rebate on fuel
duty.
— A recently introduced government
grant of 10,000 SEK (around £730) towards the purchase of
an "environmentally friendly car" for private customers.
In addition, there is a legal requirement in
Sweden for 50% of all refuelling stations in the country to be
equipped with a renewable fuel pump by 2009.
5. The EU Strategy for Biofuels claims that
biofuels "are a direct substitute for fossil fuels in transport
and can readily be integrated into fuel supply systems".
What proportion of UK domestic transport and energy generation
could be fuelled by UK-produced biofuels? Is it possible for biofuels
to entirely replace oil for transport purposes? Is there a role
for public procurement or public transport? Will biofuels improve
fuel security? How secure are biofuel crops from unexpected events
such as drought or disease?
Increasing energy diversity will undoubtedly
help to reinforce security of energy supply. Increased use of
biofuels can make an important contribution to this objective.
At the same time, for GM, biofuels are just one element of a much
broader strategy to reduce the environmental impact of our products.
This strategy also incorporates continuing refinements to the
internal combustion engine, use of hybrids, investments in plug-in
electric vehicles and hydrogen fuel cells. We are also currently
running a marketing campaign through our Vauxhall brand in the
UK to encourage customers to trade in old vehicles for scrappage
and recycling in exchange for a trade-in deal on a new, fuel-efficient
Vauxhall.
In accordance with the existing European fuel
standards EN 228 for petrol and EN 590 for diesel, conventional
GM vehicles in Europe are currently warrantied to run on a blend
of no more than 5% bioethanol to petrol and no more than 5% biodiesel
to diesel. Blending above 5% creates challenges for existing powertrains,
although GM has made a commitment that, if European fuel standards
are revised accordingly, we will make the necessary technical
adjustments to allow blending up to 10% with conventional fuels.
However, given the time it will take for the existing vehicle
parc to be renewed, moving to a 10% blend as the standard for
conventional fuels will create significant problems for many consumers
for a significant number of years to come.
On this basis, GM is firmly of the view that
an effective strategy for the promotion of biofuels in the UK
and across Europe needs to incorporate specific measures to encourage
the purchase and use of vehicles equipped to run on high blend
biofuels, alongside measures to encourage low level blending into
mainstream fuels.
Using figures supplied by the former DTI, DEFRA,
and the National Farmers Union, General Motors has calculated
that, over five years, there is enough spare arable land in the
UK to produce sufficient bioethanol from wheat to achieve 5% blending
with all petrol supplied in the UK and to power 22% of new car
sales on E85 from domestic sources.
As we move to second generation biofuels, which
use waste by-products from agricultural production rather than
the main crop, over five years, enough bioethanol could be produced
from 50% of waste straw from UK cereal production to achieve 10%
blending with all petrol supplied in the UK and to power an additional
10% of new car sales on E85 from domestic sources.
6. What impact would an expansion of UK production
of biofuels have on the ability of the UK to produce its own food?
How might this impact on greenhouse gas emissions from international
trade patterns? What impact might the expansion of biofuels have
on international food security and prices?
Please see the answer to question 5. We believe
there is scope significantly to expand biofuel production in the
UK without impacting on food production.
7. How might farm viability in both developed
and developing countries change with an expansion of biofuels?
What implications are there for poverty in developing countries?
Should we be concerned about large monopolies forming in the biofuel
sector?
As a vehicle manufacturer, GM does not feel
qualified to answer this question.
4 October 2007
14 Worldwatch Institute-Biofuels for Transportation
2006 Back
15
Iogen Corporation-Cellulose ethanol is ready to go 2006 Back
16
CE Delft-Biofuels under development: An analysis of currently
available and future biofuels, and a comparison with biomass application
in other sectors 2005 Back
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