VTT/VATT Report

2015 Report

In 2015, the following report was published: ”Tieliikenteen 40 %:n hiilidioksidipäästöjen vähentäminen vuoteen 2030: Käyttövoimavaihtoehdot ja niiden kansantaloudelliset vaikutukset” [“Reduction of road traffic carbon dioxide emissions by 40% by the year 2030: Power alternatives and their impacts on the national economy”]. The sorts of measures as well as by which costs it would be possible to achieve a reduction of 30% or 40% in road traffic carbon dioxide emissions (CO2) by the year 2030, when the reference year is 2005, were assessed therein.

The report was prepared by VTT Technical Research Centre of Finland Ltd and the VATT Institute for Economic Research, and the bulk of calculations were completed in 2014. The report was part of the TransSmart research programme. The goal was the specification of maximally effective development paths for the reduction of traffic emissions as well as the deployment of renewable and carbon-neutral energy.

It was noted in the report that Finland should be especially encouraged to invest and contribute to wood-, waste- and residue-based ‘drop-in’ biofuels, as these are the most economical in terms of the national economy and, from the perspective of emission reductions, the most significant method of minimising traffic emissions.

Update released in 2017

In its national energy and climate strategy of November 2016, the government targeted the reduction of traffic emissions by approximately 50% by the year 2030. The share of biofuels would be 30% (actual energy share). The projected total number of electric cars was set at 250,000 and natural gas vehicles at 50,000.

VTT Technical Research Centre of Finland produced an update on the earlier report submitted in 2016, which was published in spring 2017. In this update, the energy efficiency and performance-related development assessments were further detailed and specified, and a new baseline was calculated up to the year 2030. In addition, two new equipment scenarios were created: a scenario maximising the number of electric cars and the same for natural gas-powered vehicles. Assessments were also further detailed with regard to the production potential of renewable fuels. Both scenarios for electric and natural gas-powered motor vehicles would require not only changes in the vehicle fleet but considerable modifications to the distribution infrastructure for these power alternatives, which would incur expenses.

Compared to the basic scenario (-21%) of the study, 250,000 electric cars in 2030 would further reduce emissions by slightly less than 5 percentage points. Similarly, if the share of biofuels were raised from the current 13% to 30%, CO2 emissions would decline by about 12 percentage points. In light of this, the report authors note that in 2030 vehicles that use advanced biofuels as well as electric cars that incorporate carbon-free electricity will be needed in order to achieve a reduction of 40% or 50% in greenhouse gas emissions.

According to the report, the relative cost impacts of the various solutions primarily depend on external factors, such as the price of crude oil and electrically-powered vehicles. Moreover, the pricing of CO2 emissions as well as the steering mechanisms controlling EU climate policies up to the year 2030 affect the situation. With respect to domestic biofuel production, in some respects price development can be affected by our own actions. According to the report, the significance of tax-related solutions is critical in the path towards low-carbon and ‘smart’ traffic. The calculations indicate that possible advancement measures with regard to electric cars should be initiated only when the prices have declined and the (battery) performance of these vehicles has improved.

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