Renewable/Biofueled Vehicles

Current Generation Biofuels

Ford has a long history of developing vehicles that run on renewable biofuels. We produced the first flexible fuel vehicle approximately 100 years ago: a Model T capable of running on gasoline or ethanol. Since 1997, we have offered flexible fuel vehicles (FFVs) capable of running on gasoline or E85 ethanol – a blended fuel that contains up to 85 percent ethanol and at least 15 percent petroleum-based gasoline. To date, we have more than 4 million E85-capable vehicles on the road, including more than 2.5 million in North America and 1.8 million in Brazil. In 2007 alone, we introduced approximately 300,000 FFVs in North America. In Europe, Ford is a market leader and pioneer in bio-ethanol-powered FFVs, with nearly 65,000 vehicles delivered to customers since 2001. Ford FFV models are now available in 17 European markets, with Sweden, Germany, the Netherlands, Spain and France showing the strongest demand.

Globally, Ford currently offers 19 models in the United States, Europe, Asia and South America that can run on E85. These include the Ford Crown Victoria, Mercury Grand Marquis, Lincoln Town Car, Ford Fusion, Mercury Milan, Lincoln Navigator, Ford Expedition, Ford Econoline and Ford F-150 in North America; the Volvo XC60, Ford Mondeo, S-MAX, C-MAX, Focus and Galaxy in Europe; the Ford Fiesta, EcoSport and Focus in Brazil; and the Ford Focus in Thailand.

Next-generation Biofuels

We are continuing to develop the next generation of biofueled vehicles, including vehicles capable of running on advanced biofuels. Our current research focuses on two primary biofuels: bio-ethanol and biodiesel. Bio-ethanol (used for example in E85) is a gasoline alternative derived from plant material. Most bio-ethanol in the United States is made from corn. In other parts of the world it is made from other locally available crops, including sugar cane in Brazil and sugar beets in Europe. All modern gasoline vehicles can run on E10, a gasoline/bio-ethanol mixture of up to 10 percent by volume bio-ethanol.

Biodiesel is a diesel alternative made from vegetable oils obtained from oil seeds, including soy, canola, palm and rapeseed, or from animal fat. In the United States, most biodiesel is currently made from soybeans. In the U.S. and Europe our diesel vehicles can run on B5, a blend of five percent biodiesel and 95 percent petroleum diesel. We are working with fuel standards organizations to allow the use of biodiesel blends of greater than B5 in our future products.

Bio-ethanol, biodiesel and other renewable fuels have significant advantages. They can be made with locally available raw materials, reducing the need for foreign-supplied oil while increasing energy security, and they produce fewer lifetime CO2 emissions. However, important issues remain regarding biofuels' energy density, the best way to use these fuels to reduce greenhouse gas (GHG) emissions, and their ability to meet fuel needs without diminishing food supplies. (These issues are discussed in more detail later in the Biofuel Challenges section.)

Ford is working to support and promote the next generation of biofuels, including cellulosic biofuels. These are fuels made from plant cellulose – stalks, leaves and woody matter – instead of from sugars, starches or oil seeds. Cellulosic biofuels have many advantages. They minimize possible market competition between food and fuel. They allow more efficient use of crops such as corn and soybeans by using more of the plant. In addition, cellulosic biofuels can be made from crops that require less energy-intensive farming, such as switchgrass and wood, further reducing the total CO2 footprint of fuels used for operating vehicles.

Biofuel Infrastructure

To make an impact on GHG emissions and energy security, biofuels must become more widely available. Ford has committed to doubling the number of FFVs in its lineup by 2010, and, if the market dictates, will commit to expanding FFV output to 50 percent of total vehicle production by 2012.

Ford is also working in Europe and other parts of the world to promote the use of biofuels. We are part of Bio-Ethanol for Sustainable Transport, or BEST, which focuses on increasing the use of ethanol. BEST pilot projects are planned or underway in the UK, Spain, Italy and the Netherlands. We are also supporting the PROCURA project, which is establishing test programs for ethanol, biodiesel and natural gas in Italy, Portugal, Poland, Spain and the Netherlands.

United States Renewable Fuel Standard and the Future of Biofuels

The Energy Independence and Security Act of 2007 established a new Renewable Fuel Standard (RFS) requiring a significant increase in the use of biofuels – up to 36 billion gallons per year by 2022. In addition, this law requires that by 2013 a certain portion of biofuels must be advanced and/or cellulosic-based fuels. Ethanol blended into gasoline is expected to supply a large percentage of this biofuel mandate and could displace nearly 20 percent of U.S. gasoline demand by 2022.1 The use of biodiesel in the U.S. is also likely to increase in the coming years. However, it will not likely increase to the same levels as ethanol, because the RFS mandates lower volumes of biomass-based diesel and because a relatively small percentage of light-duty passenger vehicles in the U.S. use diesel.

Using low-level ethanol blends such as E10, which is the current compatibility limit for all non-FFV light-duty vehicles, would achieve approximately 40 percent of the RFS-mandated biofuel use by 2022. Therefore, meeting the full RFS biofuel requirement will require the use of more E85-capable FFVs and/or the development of vehicles that can use mid-level blends of ethanol (i.e., between E10 and E85). Furthermore, a corresponding increase in the E85 fueling infrastructure in the next 10 to 20 years will be required. An approach using mid-level blends would require that all new vehicles be designed for higher ethanol capability, and the existing fueling infrastructure would need to be redesigned for higher ethanol compatibility. Regardless of the specific strategy used, coordinated efforts will be required between automakers, fuel suppliers, consumers and the government to meet the RFS mandate while ensuring the compatibility of vehicles and ethanol-blended fuel.

Biofuel Challenges

Much of the interest in biofuels results from their potential to lessen the environmental impacts of transportation fuels while contributing to energy independence. Biofuels are made from domestic and renewable resources, they provide an economic boost to farmers, and they help to reduce climate-change-causing greenhouse gas emissions because the plants from which they are made absorb CO2 while they are growing. But are biofuels the solution to our growing fuel-related environmental, economic and political problems? The issues are complex. We believe biofuels are an important part of the equation for addressing climate change and energy security. We recognize, however, that major advances need to be made in production processes, source materials and fuel types in order to achieve the full promise of biofuels.

Some of the challenges relating to today's biofuels include the following:

• Energy density

  The energy density of ethanol is approximately two-thirds that of gasoline.2 This means there is approximately one-third less energy in a gallon of ethanol than in a gallon of gasoline. As a result, drivers using blends with a high amount of ethanol will have to refuel more frequently to drive the same distance. Biodiesel has approximately the same energy density as conventional diesel.

• Life-cycle greenhouse gas emissions

  The plants used to produce biofuels capture as much carbon dioxide during their growth as they release when burned. However, current farming and production processes utilize fossil fuels in the production of bio-ethanol and biodiesel, so the production of these biofuels for use in vehicles results in a release of some fossil-fuel-based GHG emissions on a life-cycle basis. Recent studies have suggested that N2O emissions from fertilizers required to grow biofuel feedstocks may have been underestimated and that these emissions reduce the GHG benefits attributed to biofuels. We agree that N2O emissions from biofuel production need to be carefully considered for all different types of biofuel feedstocks and farming techniques on a full life-cycle basis, including allocation of emissions to co-products derived from biofuel production. We agree with government and academic studies that suggest that current E85 ethanol from corn results in 20 to 30 percent less life-cycle GHG emissions than today's gasoline, on an energy-equivalent basis. In addition, GHG emissions related to petroleum can vary greatly depending on the source. Producing crude oil from tar sands, for example, results in a greater release of GHGs than producing crude oil from conventional sources. The use of renewable fuels in the production of bio-ethanol and biodiesel production can reduce their life-cycle GHG emissions further. We believe that developing cellulosic or biomass-based biofuels with next-generation processes will significantly decrease GHG emissions associated with biofuels, perhaps by up to 90 percent.3

• Competition with the food supply

  Another concern about current corn- and soybean-based biofuels is that they compete in the marketplace with food supplies and increase food prices. Demand for corn used directly for human food (including high-fructose corn syrup) comprises less than 10 percent of the total corn supply. Approximately half of the corn produced in the U.S. is used for animal feed. In 2008, about 30 percent of the corn harvest in the U.S. was used to produce ethanol. The ethanol process removes only the starch from the corn – the remaining portion is a highly valued feed product (called distiller grains) and a good source of energy and protein for livestock and poultry. If next-generation biofuels can efficiently utilize biomass such as plant stalks, woodchips or grasses and be grown on marginal land with little irrigation, then competition with food crops should remain minimal.

• Land use conversion for biofuel production

  Recent studies have looked at the overall CO2 and nitrous oxide (N2O) impacts of converting natural ecosystems to farmland for the production of biofuels. This is an important and complex issue. Converting natural lands to croplands for fuel production can lead to the release of carbon stored in above- and below-ground biomass. Releasing this carbon in the form of CO2 during land conversion to energy crops creates a carbon "debt", which may take a very long time to repay through the greenhouse gas benefits of biofuel use. The use of degraded pastures or abandoned farmland, by contrast, rather than natural ecosystems, would incur minimal carbon debt, because there is limited CO2 storage in these previously altered ecosystems. At Ford, we are following the debates about biofuels closely. As we proceed, we need to consider how biofuels are derived and carefully review issues such as the potential net greenhouse gas benefits; political, economic, social and environmental concerns related to biofuel and petroleum use; and the management of land, food and water resources. We agree with the general consensus among scholars and industry experts that the current generation of biofuels (e.g., corn-based bio-ethanol and soybean-based biodiesel) have modest environmental benefits and are a first step toward cleaner vehicles and energy independence. We are actively investigating next-generation biofuels that have greater environmental, energy security and economic benefits. We believe that improvements in the efficiency of farming technologies and biomass production processes, and the development of advanced biofuels, will significantly increase the benefits and long-term sustainability of biofuels. Even with these improvements, solving our climate change and energy security problems will require a multifaceted set of solutions, including new fuels, improvements in vehicle fuel economy and changes in consumer driving patterns and practices.