w w w . a u t o s t e e l .

o r g

Great Designs in Steel is Sponsored by:

ArcelorMittal Dofasco, ArcelorMittal USA, Nucor Corporation, Severstal North America, Inc. and United States Steel Corporation
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ENVIRONMENTAL DEFENSE FUND

Automotive Lightweighting and Upcoming EnergyEnergy -Climate Policy Opportunities

John M. DeCicco Senior Fellow Automotive Strategies Environmental Defense Fund

Great Designs in Steel

Livonia, Michigan May 13, 2009

Outline
Current Policy Overview
CAFE, California, EPA

National Climate Legislation

USCAP approach, Waxman bill

Implications for Automobiles

Ongoing policy driver likely, fuels issues

Role of Lightweighting
Clear role regardless of powertrain / fuel

Conclusions
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Current Policy Overview

Fuel economy / auto CO2 emissions have been a longstanding challenge for public policy Result has been an evolving mix of requirements CAFE: historical federal policy rationalized largely around energy security CA AB 1493 (Pavley): automobile GHG standards enacted in 2002; status unresolved (EPA, courts) EPA: Mass. vs EPA 2007 Supreme Court decision, leading to the April 17 proposed endangerment finding that would trigger GHG regulation

Automotive Technology Trends

New U.S. vehicles, car and light truck combined fleet 1975-2008

1.75
FUEL ECONOMY

Index (1975=1)

1.50 1.25 1.00 0.75 1970

HORSE POWER

WEIGHT

1980

1990 Model Year

2000

2010
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Source: derived from EPA data

Total Air Pollution and Fuel Consumption Trends for U.S. Cars and Light Trucks

2.0 IN D EX (1970=1) 1.5 1.0

-65%

Fuel Demand
+73%

0.5
Air Pollution

0.0 1970 1980 1990 2000 2010 The Clean Air Act framework has proven to be a critical driver for success.

Need for New Policy

Importance of regulatory coordination
Automakers call for "one national standard" Obama Administration is reviewing California waiver application and policy context. Waxman bill: 211(a) " to the extent practicable, harmonize standards by [NHTSA, EPA, Calif.]"

Desire for new national climate policy

"Notwithstanding this required regulatory process, both President Obama and Administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy." USCAP: Blueprint for Legislative Action (Jan 2009)
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USCAP BLA Cover Page

Diverse Voices Represented

Member Organizations:

The Scientific Case for Action

Science is sufficiently clear to justify prompt action to protect our environment Each year we delay action increases the risk of unavoidable and potentially costlier consequences
Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea level. Intergovernmental Panel on Climate Change, Climate Change 2007: Synthesis Report

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The Economic Case for Action

Unchecked greenhouse gas emissions will strain public budgets, limit economic growth Investment in 21st century technologies and practices can generate jobs, economic growth U.S. needs to be positioned to succeed in the new lowlow-carbon, global economy
" to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America." President Barack Obama, Address to Joint Session of Congress, Feb. 24, 2009

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Cap and Trade

Federal cap cap-and and-trade program coupled with cost containment measures and complementary policies ensures environmental integrity, economic stability Declining, economyeconomy-wide emission reduction targets Provides incentives to transition to new technologies while ensuring GHG emissions reductions

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What is the Blueprint?

Detailed framework for climate legislation An approach to achieve aggressive environmental goals in a responsible and economically sustainable manner Consensus of a diverse organization, but not the only path forward

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Core Blueprint Components

Targets & Timetables

Climate Protection 80% GHG Reduction by 2050

Scope of Coverage

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Core Blueprint Components

Cost Containment

Targets & Timetables

Economic Protection
Climate Protection
80% GHG Reduction by 2050

Allocation of Allowance Value

Offsets

Scope of Coverage

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Core Blueprint Components

Cost Containment

Targets & Timetables

Economic Protection Climate Protection

80% GHG Reduction by 2050

Allocation of Allowance Value

Offsets

Scope of Coverage

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Fair and Equitable Allocation

Blueprint identifies principles to guide fair and equitable allocation of allowances to:
EndEnd-use consumers of electricity, natural gas, transportation fuels Energy intensive industries facing international competition Trade Trade-exposed commodity products Competitive power generators and other nonnon-utility large stationary sources Low Low-income consumers and workers in transition Programs to achieve technology transformation Adaptation needs of vulnerable people and ecosystems at home and abroad

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COMPLEMENTARY MEASURES

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Transportation
Economy Economy-wide emission reduction targets require systematic approach involving:
Fuel providers Vehicle and equipment manufacturers Consumers and other end users Public transportation, infrastructure and land use officials

Recommendations include improving fuel and vehicle standards, efficiency of transportation system

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Auto Efficiency is a Matter of Design Priority

Technology progress has been steady
Most technologies have multiple benefits Whether fuel efficiency is gained depends on:
- Design objectives of a given vehicle - Overall mix of vehicles sold (e.g., car vs. truck)

Until very recently, past two decade's auto technology improvements have gone mainly to improving power, capacity and other amenities

Going forward, outcome will depend on jointly expressed priorities of consumers, automakers, and policymakers
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Options for Auto Efficiency

Powertrain efficiency
? Advanced gasoline engines: many opportunities Improved transmissions HybridHybrid -electric, diesel in some applications Breakthrough options: fuel cells, plug plug-in electric

Platform efficiency
Mass reduction through balancing of fleet mix, plus lightweight materials and design techniques Aerodynamic drag reduction Tire and accessory improvements Cost-effective approaches for mass reduction will be Costfundamental regardless of the powertrains and fuels used.
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Fuel Options
Many are promising, but few will be chosen. Fuels ultimately will succeed only by demonstrating market competitiveness

Biofuels
Ethanol Biodiesel Fully fungible fuels: green gasoline & diesel (including coal+biomass to liquids with carbon capture & storage)

Electricity
PlugPlug-in hybrids Pure electric (battery only)

Natural gas ("Pickins Plan") Hydrogen ("FreedomCAR")

The most efficient vehicle mix possible will be crucial no matter what fuels are chosen, to minimize both consumer costs and other impacts.
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Advanced Gasoline Engines

GM's upcoming inline 44-cylinder engine with Variable Valve Timing All All-new, 1.4L turbo version to power 2011 Chevy Cruze 140 hp output and 148 lblb-ft of torque Also to be used in two additional GM vehicles not yet announced Non Non-turbo version to serve as rangerangeextender for the Chevy Volt
Source: GM Media 2008 General Motors and Wieck Media Services, Inc.

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Findings from MIT "On the Road in 2035" study

Costs and Benefits of Technology Options Relative to a 2006 Midsize Car

70% Increase in Cost 60% 50% 40% 30% 20% 10% 0% 0% 20% 40% 60% 80% Reduction in GHG Emissions
Source: http://web.mit.edu/sloan-auto-lab/research/beforeh2/otr2035/ (July 2008)
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BATTERY ELECTRIC

FUEL CELL DIESEL TURBO GASOLINE

PLUG-IN HYBRID GASOLINE HYBRID

GASOLINE TURBO

ULSAB-AVC design results: ULSABSteelSteel -based 52 mpg Midsize Car

Source: American Iron and Steel Institute ULSABULSAB-AVC report

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Selection of low CO2-intensive materials is critical for reducing a vehicle's fuel use and net CO2 footprint

Source: WorldAutoSteel
Steel Lifecycle GHG Benefits 26

Incentives for Progress

Lightweight steel technologies are an important but perhaps underunder-recognized technology option for vehicle efficiency and GHG reduction "Advanced Technology Vehicles Manufacturing Incentive Program" (EISA 2007, 136)
Powertrain orientation: 25% higher fuel economy requirement for qualifying vehicles Does allow for qualifying components and vehicle integration costs

A need to educate policy makers regarding the critical enabling role played by technologies for lightweighting, particularly "the new steel."
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Conclusions
Current policy is in flux but presents opportunities Many parties point to need for new legislation to enable a balanced approach on energy and climate Climate policy will establish a steady, measured driver for higher vehicle efficiency (as opposed to the unsteadiness of energy policy and unanticipated market forces) Ultimately, auto efficiency is a matter of design priority, not just "technology" Important role for platform efficiency and material solutions, especially advanced highhigh-strength steels Truly technology technology-neutral policy is essential for maximizing associated economic opportunities
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Thank you!
Contact: John M. DeCicco, Ph.D. Senior Fellow for Automotive Strategies Environmental Defense Fund jdecicco@edf.org / www.edf.org

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w w w . a u t o s t e e l . o r g

Great Designs in Steel is Sponsored by:

ArcelorMittal Dofasco, ArcelorMittal USA, Nucor Corporation, Severstal North America, Inc. and United States Steel Corporation
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