Fuel

Improving fuel economy alone will not reduce life cycle greenhouse gas (GHG) emissions to the levels required for carbon dioxide (CO₂) stabilization. We also need fuels with lower fossil carbon content¹, including biofuels, electricity, and gaseous fuels such as compressed natural gas (CNG), liquefied petroleum gas (LPG), and hydrogen. Ford cannot increase alternative fuel use simply by offering vehicles that can use these fuels. Widespread use of these fuels will also require significant efforts by fuel and energy providers, including continued development of the fuels themselves and considerable updating or expansion of refueling infrastructure. Government action will also be required to facilitate the adoption of common standards for fuel quality and refueling infrastructure, as well as measures such as tax incentives to encourage manufacturers to produce the fuels and consumers to use them.

In this section, we briefly discuss fuel alternatives Ford is currently implementing commercially: electrification, biofuels, and two gaseous fuels, compressed natural gas (CNG) and liquefied petroleum gas (LNG, or propane autogas). For more information on how Ford is developing and rolling out vehicles and powertrains that use these fuels, please see Sustainable Technologies and Alternative Fuels Plan.

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Electrification

Electrification addresses both energy security and climate change concerns, because electricity can be made from a wide variety of fuels, including domestic sources and renewable energy.

Ford foresees a future that includes a variety of electrified and traditional vehicles, something we call “power of choice.” We are electrifying existing, traditional vehicle lines rather than creating unique electrified vehicle models. That way, our customers can choose from a variety of vehicle powertrains, including efficient gasoline engines, hybrid electric vehicles, plug-in hybrids and full-battery electric vehicles. Our comprehensive electrification strategy touches all aspects of the electrification ownership experience, seeking to make it engaging, empowering and easy to live with.

For more information on Ford’s approach to electrified vehicles, as well as issues associated with using electricity as a vehicle fuel, please see Electrification: A Closer Look. For more information on the hybrid electric, plug-in hybrid and battery electric vehicles we have launched or plan to launch, please see the Sustainable Technologies and Alternative Fuels Plan.

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Biofuels

Biofuels are a key piece of our blueprint for sustainability to reduce CO₂. While current corn-based ethanol production in the U.S. is estimated to provide a modest (approximately 20 percent) reduction in vehicle GHG emissions on a well-to-wheels basis, next-generation biofuels such as lignocellulosic bioethanol could offer up to a 90 percent GHG reduction benefit.² Consistent with consumer demand, Ford will continue to provide a range of products designed to run on a wide range of ethanol blends. Flexible fuel vehicles (FFVs) provide fuel choice to consumers when the fuel is available and are necessary to transition to advanced alternative fuels.

We believe that the use of biofuels may increase from a current level of approximately 2 to 3 percent globally to 10 to 30 percent of global liquid road-transportation fuel over the next few decades. We are conducting research and development to ensure that our vehicles will be compatible with and able to incorporate the full benefits of biofuels. Our current work focuses on the two biofuels that are available at a commercial scale: ethanol and biodiesel. Biofuel use has been expanding globally. Bioethanol (frequently called just ethanol) is made from corn, beets or sugar cane and substitutes for gasoline. Biodiesel is derived from plant oils and substitutes for diesel fuel. In the U.S. in 2007, federal legislation expanded the Renewable Fuel Standard (RFS), mandating a significant increase in the use of biofuels by 2022.

The following describes issues and challenges associated with expanding the use of biofuels in vehicles.

Current Generation Biofuels

The U.S. and Brazil are the world’s largest producers of ethanol, which is made from the fermentation of sugars. In the U.S. the sugar is typically derived via the hydrolysis of corn starch, while in Brazil the sugar is obtained directly from sugar cane. Ethanol is primarily used in blends with gasoline. Hydrous ethanol, which is approximately 95 percent ethanol and 5 percent water, is also used in Brazil. Blends are identified using the volumetric content of ethanol, which is specified numerically after the letter “E” for ethanol. For example, E10 is 10 percent by volume ethanol and 90 percent petroleum gasoline. Most automotive fuel supplied in the U.S. is E10. The U.S. Environmental Protection Agency (EPA) has recently issued a waiver permitting E15 to be sold in the U.S. for use in 2001 or newer model year vehicles. Our position regarding E15 is discussed in the Renewable Fuels Policy section.

An important benefit of ethanol is its higher octane rating, which can improve the efficiency and torque of today’s high-efficiency internal combustion gas engines. We developed a new fundamental molecular approach to calculating the octane increase provided by ethanol blended into gasoline, which is more accurate than previous approaches.^3,4 The octane rating of a fuel is a critical fuel property that describes its resistance to “knock,” which results from early or uncontrolled fuel ignition. To avoid “knocking,” the compression ratios designed into engines are limited by the lowest expected octane rating of available fuels. However, engines operate at higher thermal efficiency when they can be operated at higher compression ratios using appropriate higher-octane fuel. The increased availability of ethanol in the future provides an opportunity for fuel providers to deliver fuels with higher octane ratings and automakers to provide higher compression ratios – and therefore more efficient engines.⁵ For example, our studies suggest that increasing the percentage of ethanol in gasoline from the current 10 percent (E10) found in most commercially available gasoline, to 20 percent (E20) while also improving engine compression ratios to take advantage of the associated increase in fuel octane, would reduce vehicle CO₂ emissions by nearly 5 percent.⁶

High-octane ethanol blends offer a win-win-win opportunity in which the increased availability of ethanol could enable increased engine efficiency, resulting in fuel savings for our customers, improved energy security and reduced CO₂ emissions. However, ethanol blends above E10 also may damage engines that are not designed to operate on higher concentrations of ethanol; this poses a particular concern for older vehicles. Appropriate planning and coordination between stakeholders is needed to manage transition issues such as these. Our research into ethanol fuels and octane rating implications will help us take the best advantage of higher-octane ethanol-fuel blends when they are made available in the future.

Biodiesel is a biofuel alternative to petroleum diesel that is made from the transesterification of vegetable oils, including soy, canola, palm and rapeseed, or from animal fat. Biodiesel is distinct from “renewable diesel,” which is made by hydrotreating vegetable oils or animal fats. In the U.S., most biodiesel is currently made from soybean oil. Biodiesel is typically used in blends with petroleum diesel, where the volumetric content of biodiesel is specified numerically after the letter “B” representing biodiesel.

Future Biofuels

The biofuels currently available at a commercial scale (e.g., ethanol and biodiesel) have advantages relative to their petroleum-derived counterparts. They can be made from locally available raw materials, providing support for rural communities and reducing the need for foreign-supplied oil, while increasing national energy security. They also reduce life cycle (or well-to-wheels) CO₂ emissions compared to conventional petroleum-based fuels. However, important issues remain regarding the energy density of some biofuels, the best way to use these fuels to reduce GHG emissions, their ability to meet fuel needs without impacting food supplies and their potential impact on land-use decisions. (These issues are discussed in more detail below in the Biofuel Challenges section.)

Meanwhile, Ford is working to support and promote the next generation of biofuels, including cellulosic biofuels. These are primarily fuels made from plant cellulose – stalks, leaves and woody matter – instead of from sugars, starches or oil seeds. Cellulosic biofuels will have many advantages. They should minimize possible market competition between food and fuel. They would allow for the more complete use of crops such as corn and soybeans by using additional parts of these crops, including stems and leaves, for fuel production. In addition, cellulosic biofuels can be made from “energy crops,” such as switchgrass and wood, that require less fertilizer and less energy-intensive farming methods. This would further reduce the total CO₂ footprint of the resulting biofuels. There has been significant progress in technologies and processes to transform biomass feedstocks into ethanol in recent years and a few small-scale plants are now in operation in the U.S. and elsewhere. Technological barriers to large-scale production of cellulosic ethanol have been largely overcome. The main barrier now is the regulatory uncertainty associated with recent downward revisions of cellulosic biofuel mandates and the associated poor business case for cellulosic ethanol production in an uncertain market. Capital availability also remains a significant challenge to commercialization. Given these challenges, it is our assessment that next-generation biofuels will not be available at scale in the marketplace for at least 10 years. Looking further into the future, if additional technical breakthroughs in production efficiencies are made, and if the investment climate is sufficiently favorable to encourage the large capital outlays required to build the necessary biorefineries, next-generation biofuels could play a significant role in addressing climate change and energy security.

The United States Renewable Fuel Standard and the Future of Biofuels

The Energy Independence and Security Act of 2007 expanded the Renewable Fuel Standard (RFS) by requiring a significant increase in the use of biofuels – to a total of 36 billion gallons per year by 2022. This law also requires that, beginning in 2010, a certain portion of biofuels must be “advanced” and/or cellulosic-based fuels. Ethanol blended into gasoline is expected to supply the majority of this biofuel mandate and could displace a substantial fraction of U.S. gasoline demand by 2022.⁷ 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, there is less availability of cost-effective feedstock material, and because a relatively small percentage of light-duty passenger vehicles in the U.S. use diesel fuel.

Full deployment of E10 for gasoline-powered vehicles would achieve approximately one third of the RFS-mandated biofuel use by 2022. Therefore, meeting the full RFS biofuel requirement will require much greater use of E85 in FFVs and/or the development of vehicles that can use “mid-level blends” of ethanol and gasoline (i.e., between E10 and E85). The expanded use of E85 in FFVs would require a corresponding increase in the E85 fueling infrastructure in the next 10 to 20 years. An approach using mid-level ethanol blends would require that all new vehicles be designed for higher ethanol capability, and the existing fueling infrastructure would need to be updated for compatibility with fuel containing higher concentrations of ethanol. While the introduction of and expanded use of E15 might help achieve the RFS goals if carried out properly, the problems associated with the approach taken by the EPA to date (as discussed above) outweigh the benefits. For any of these approaches to be successful, the new ethanol-blend fuels will have to provide enough value to the consumer to attract them to buy these fuels. 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. Without alignment between vehicles, fuels and infrastructure, a mismatch will occur, and it will be difficult to meet the RFS mandate successfully.

Biofuel Infrastructure

More widespread use of biofuels would increase their benefits for reducing GHG emissions and improving energy security. This requires greater availability of both biofuels and vehicles capable of using biofuels. In the U.S., the E85 refueling infrastructure remains inadequate. Out of more than 160,000 refueling stations in the U.S., approximately 3,300 (or slightly more than 2 percent) offer E85. This trails the availability of E85 vehicles in the marketplace. FFVs make up approximately seven percent of the current U.S. light-duty vehicle and FFVs now account for nearly 20 percent of all new light-duty vehicles being produced. The FFV fleet is substantial and growing. To reap the energy security and climate change opportunities of the FFV fleet more infrastructure, particularly more access to affordably priced E85, is necessary.

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 typically made from domestic and renewable resources, they provide an economic boost to rural communities, and they help to reduce greenhouse gas emissions because the plants from which they are made absorb atmospheric CO₂ while they are growing. But are biofuels the best 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 for biofuels to achieve their full potential.

Challenges relating to today’s biofuels include the following:

• Energy Density: The energy density of ethanol is approximately two-thirds that of gasoline.⁸ This means there is approximately one-third less available energy in a gallon of ethanol than in a gallon of gasoline. As a result, drivers using fuels containing higher amounts of ethanol will have to refuel more frequently. Ethanol does have improved qualities, such as higher octane, that can be leveraged to offset some of the lower energy content relative to gasoline. In 2012, Ford researchers published an assessment that quantified the potential benefits of high-octane ethanol gasoline blends in the U.S.⁹ Biodiesel has approximately the same energy density as conventional petroleum-based diesel.
• Lifecycle Greenhouse Gas Emissions: The CO₂ that is released when biofuels are burned is from carbon that was captured from the atmosphere by the plants used to produce biofuel feedstocks. However, current farming and production processes utilize fossil fuels in the production of ethanol and biodiesel, so the production of these biofuels results in a release of some fossil-fuel-based GHG emissions on a complete lifecycle basis. In addition, emissions of nitrous oxide (N₂O), another GHG resulting from biofuel feedstock production, need to be carefully considered for all types of biofuel feedstocks and farming techniques on a full life cycle basis, including the appropriate allocation of emissions to co-products (such as animal feed) derived from biofuel production. Government and academic studies suggest that using E85 with ethanol from corn results in approximately 20 to 30 percent fewer life cycle GHG emissions than gasoline, on an energy-equivalent basis. 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 energy sources in the production of ethanol and biodiesel production can reduce their lifecycle GHG emissions further. We believe that developing cellulosic or biomass-based biofuels with next-generation processes will significantly decrease the GHG emissions associated with biofuels, by up to 90 percent.¹⁰
• 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 are often cited as one of the factors that increase food prices. In 1990, the production of ethanol in the U.S. consumed approximately 3 percent of the corn harvest, but in 2012 that figure was 41 percent. Ethanol production removes only the starch from the corn kernel – the remaining portion (about one-third of the weight of the corn kernel) is a highly valued feed product (called distillers grains) and a good source of protein and energy for livestock and poultry. When taking into account the livestock feed yield of the distiller’s grains, about 30 percent of the U.S. corn harvest was used for ethanol production. This mitigates the competition between ethanol production and food production. In addition, the growth of the energy crop market has encouraged improvements in farming productivity (e.g., bushels per acre) that may not have occurred otherwise, further reducing the impact of biofuels on corn availability. The increase in corn used for ethanol production in the U.S. over the past 10 to 15 years has been essentially matched by the increased harvest over the same period. The increased harvest has been driven mainly by improved yield per acre and, to a lesser extent, by increased acreage. 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 be minimized.
• Land-Use Conversion for Biofuel Production: Recent studies have looked at the overall CO₂ and N₂O impacts of “direct” land-use changes associated with biofuels – i.e., converting natural ecosystems to farmland for the production of crops to make biofuels. Additional studies have considered an “indirect” land-use change scenario in which the use of farmland for biofuels in one region indirectly leads to the conversion of natural ecosystems to farmland in another region due to crop market feedbacks (either replacing the grain in the marketplace or due to increased prices). Recent studies indicate that the magnitude of land-use changes in the early studies were overestimated. Significant uncertainty remains and this is an area of active research.

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 has modest environmental benefits and is a first step toward cleaner transportation and energy independence. We are actively investigating the potential of 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 efficiency, and changes in consumer driving patterns and practices.

For more information on our implementation of biofueled vehicles, please see Renewable Biofueled Vehicles. To learn about Ford’s perspective on biofuel-related public policy issues, please see Climate Change Policy and Partnerships.

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Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG or propane autogas)

Interest in and use of CNG and LPG, or propane autogas, as a vehicle fuel is expanding, although they still account for a small percentage of vehicle fuels used today.. Supply of CNG and LPG is also growing as new reserves of natural gas are being accessed through non-conventional drilling methods. These fuels also offer some environmental and cost benefits that make them good options for some drivers. CNG and LPG are especially relevant for centrally fueled vehicles, such as government fleets, taxis, delivery trucks, and construction and maintenance fleets.

In the U.S. increasing domestic natural gas production is further reducing prices. This increase in domestic supply, coupled with improved vehicle technologies, is promoting many fleet managers to reconsider using these fuels in their fleets.

In the U.S. CNG is primarily used in heavy-duty vehicles, such as long-haul trucks and buses, and medium-duty vehicles, such as our Ford Super Duty trucks. However, as a result of additional requests from business and fleet customers, Ford also announced plans to offer an F-150 with CNG capability in 2014. LPG is used primarily in medium-duty vehicles and some light-duty vehicles such as taxis.

In Europe, South America and Asia, these fuels are somewhat more widely used. CNG is most widely used in Iran, Pakistan, India, Argentina and Brazil. LPG is most widely used in Turkey, South Korea, Poland, Italy and Australia. Globally, CNG is used in only about 1.3 percent of the total vehicle fleet, while LPG is used in about 3 percent.

CNG- and LPG-fueled vehicles emit less greenhouse gases than comparable gasoline-powered vehicles. Vehicles running on CNG typically emit about 25 percent less CO₂ and about 10 percent fewer total GHGs on a well-to-wheels basis. Vehicles running on LPG typically emit 15 to 25 percent fewer total life cycle GHG emissions. CNG and LPG also reduce non-CO₂ tailpipe emissions such as NOx, SOx, particulate matter and carbon monoxide.

CNG and LPG also have significantly lower fuel costs. CNG costs approximately 40 to 70 percent less than gasoline on a gasoline-gallon equivalent basis depending on location. LPG costs approximately 50 percent less per gallon compared to gasoline. While CNG provides better GHG and fuel costs reductions, LPG can have other benefits. For example, LPG refueling systems typically cost significantly less to install. LPG fuel tanks are also smaller than CNG, resulting in less loss of cargo and/or passenger capacity.

There are some significant challenges to wider adoption of CNG and LPG as vehicle fuels. Though both fuels are widely available in most countries, there is not an established refueling infrastructure for vehicles in most countries. In addition, to provide adequate driving range, both gases must be stored under pressure in the vehicle, requiring larger and heavier tanks that reduce vehicles’ passenger and cargo capacity.

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