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Gregory Brew

Gregory Brew

Gregory Brew is a researcher and analyst based in Washington D.C. He is currently pursuing a PhD at Georgetown University in oil history and American…

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Britain To Ban Fossil Fuel Vehicles By 2040

EVs

Great Britain will ban all new diesel and gasoline-powered automobiles after 2040, according to Environment Secretary Michael Gove. In an announcement Wednesday morning, Gove confirmed that vehicles powered solely by fossil fuels will no longer be sold in Britain, and will instead be replaced by electric vehicles (EVs).

The announcement comes after the British High Court ruled further action was necessary to improve the quality of Britain’s air. The Conservative government had previously lobbied against taking such action but were overruled by the court in November 2016.

The British announcement comes only a few weeks after France declared a similar goal. As part of its commitment to the Paris climate accord, the government of Emmanuel Macron wants to allow only electric vehicles on French roads after 2040. Both countries are responding in part to tough European Union emissions rules, which affect Britain despite that country’s decision to leave the EU.

To prepare for the adjustment, Britain plans to invest £800 million in driverless and zero-emission technology, as well as £246 million in improved batteries, according to Bloomberg. Market trends indicate that by 2040 almost 80 percent of all new auto sales in the UK will be of electric vehicles, though it will take decades for gasoline and diesel-powered vehicles to vanish from British streets entirely.

It’s a trend sweeping across Europe, where electric cars are becoming increasingly popular as governments undertake more aggressive policies to combat climate change and reduce emissions. Norway, which already has the highest percentage of electric vehicles in the world, has instituted a similar policy, though it wants to eliminate gasoline and diesel car sales by 2025. Some federal states of Germany, which has yet to adopt a national policy, want to phase-out traditional vehicles by 2030.

Related: Daily OPEC Oil Prices Now Public For The First Time Ever

The British news will put further pressure on major carmakers to step up their development of electric vehicles. Some manufacturers have already begun taking steps to prepare.

Volvo Car Group announced recently that by 2019 it will manufacture only electric vehicles. The Swedish company has plans to put 1 million EVs on the streets by 2025.

French car makers like Peugeot, Citroën and Renault-Nissan are all enthusiastic proponents of EV technology and have embraced the production of electric vehicles. France already relies on nuclear power for 80 percent of its electricity, so cutting emissions from automobiles would have a huge impact on the country’s overall emissions output, helping it reach the goals set by the Paris climate accord. Renault-Nissan, a French-Japanese carmaker, has been particularly keen on seizing EV market share, accounting for 425,000 out of 2 million EVs sold worldwide.

German automakers has also embraced EV, with BMW challenging Tesla, the world’s foremost innovator in EV technology, by announcing plans to electrify all its car brands. BMW believes electric vehicles will account for 15-25 percent of its sales by 2025. Volkswagen, the world’s largest car manufacturer, has plans to undercut Tesla’s competitive Model 3: the German carmaker wants to market its own EV for $7000 less than the Tesla option.

Germany, the world’s largest auto manufacturer, has been wary of the EV trend as it could affect a huge industry and impact thousands of jobs. The German government, which has adopted a progressive line on a number of energy and emissions-related issues, has been reticent to take too strong a line, with German chancellor Angela Merkel warning against “demonizing” diesel engines in response to Britain’s announced ban on diesel cars after 2040.

The EV boom, while much anticipated, definitely isn’t here yet. Electric vehicles made up a tiny fraction of the world auto market in 2015, accounting for just over 1 percent of global sales. Even in Europe, only 0.6 percent of new car registrations were for purely electric vehicles, while in France the figure was 1.1 percent. The IEA has pointed out, however, that this represents a phenomenal growth from 2005, when sales of EVs were measured in hundreds. Related: Shortage Of Fracking Crews Slows The Shale Boom

Optimists and EV advocates point to plummeting battery costs, improving technology, superior brands (EVs have, after decades of failed attempts, become “cool”) and supportive government policies as signs that the EV boom will be bigger than expected.

But a stumbling block could be access to lithium, the mineral needed to manufacture EV batteries. If EV demand spikes by as much as some advocates and market watchers suggest, lithium mining might have problems scaling up to meet demand.

And while advocates of EV point to the improvements widespread adoptions of EV could bring to emissions levels, it deserves mentioning that lithium mining is an expensive, time-consuming process that can be as environmentally damaging as oil production. Should demand for EVs become as aggressive as anticipated, lithium supply could have problems keeping up, and if it does it could pose an entirely new environmental challenge.

By Gregory Brew for Oilprice.com

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