Strategies to Reduce Greenhouse Gases from Irish Transportation

Strategies to Reduce Greenhouse Gases from Irish Transportation
Strategies to Reduce
Greenhouse Gases
Irish Transportation
Strategies to Reduce Greenhouse Gases from Irish Transportation
August 2004
Sustainable Energy Ireland
Sustainable Energy Ireland (SEI) is Ireland’s national energy authority. Established on May 1st 2002 under
the Sustainable Energy Act 2002, SEI has a mission to promote and assist the development of sustainable
energy. This encompasses environmentally and economically sustainable production, supply and use of
energy, in support of Government policy, across all sectors of the economy. Its remit relates mainly to
improving energy efficiency, advancing the development and competitive deployment of renewable
sources of energy and combined heat and power, and reducing the environmental impact of energy
production and use, particularly in respect of greenhouse gas emissions.
SEI is charged with implementing significant aspects of the Green Paper on Sustainable Energy and the
National Climate Change Strategy as provided for in the National Development Plan.
SEI manages programmes aimed at
• assisting deployment of superior energy technologies in each sector as required,
• raising awareness and providing information, advice and publicity on best practice,
• stimulating research, development and demonstration,
• stimulating preparation of necessary standards and codes,
• publishing statistics and projections on sustainable energy and achievement of targets.
SEI is responsible for advising Government on policies and measures on sustainable energy;
implementing programmes agreed by Government and stimulating sustainable energy policies and
actions by public bodies, the business sector, local communities and individual consumers.
Report prepared by Lisa Ryan
Executive Summary
Transport represents the sector with the fastest growing greenhouse gas emissions in Ireland. SEI has identified a
need to examine the means available to reduce energy usage and associated greenhouse gas emissions from the
sector. The objective of this report is to:
Present the historical and projected trends of greenhouse gas emissions from transport.
Update other work completed in the area and provide realisable options for policymakers concerned with
mitigating greenhouse gas emissions from Irish transport.
The European Environmental Agency’s DPSIR (driving forces - pressures – state – impact – response) model is the
framework used to do this. The focus is mainly on road transport, in particular passenger cars, since it is the source of
93 percent of greenhouse gas emissions from domestic Irish transport. An economic analysis of these measures has
not been carried out to examine their cost-effectiveness and should be a target for future work.
Greenhouse gas emissions in Ireland
The National Climate Change Strategy for Ireland in 2000 identified transport as a significant and fast-growing
source of greenhouse gas emissions. Several measures were identified to reverse this trend and keep on track the
Irish commitment to the EU burden sharing initiative as part of the Kyoto commitment, however few have been
implemented to date. The measures outlined were anticipated to reduce CO2 emissions from transport from 14.2Mt
by 2.67Mt to 11.5Mt by 2010. New data has been collected and published in 2004 as part of the emissions trading
scheme consultation process on the National Allocation Plan. The projected greenhouse gas emissions including
mitigation measures in that study were forecast to be higher at 13.2Mt in 2010.
There has been substantial growth since 1996 at every level of the Irish economy. This has resulted in increased
disposable income and purchasing power of the Irish population. The number of passenger cars has increased by 76
percent between 1992 and 2002. Over the same period road freight transport more than doubled; while rail freight
transport declined by 30 percent. International freight transport to and from Ireland is mainly by short-sea shipping
and passenger international transport is predominantly by plane. Air transport is the mode of transport with the
highest carbon intensity; with road transport a close second1.
The impact of the increased mobility in Ireland and ownership of passenger cars has been to increase greenhouse
gas emissions from transport by 124 percent between 1992 and 2002 – a rate of increase higher than any other
sector. This increase has taken place although the official estimate of average CO2 emissions of the new passenger
car fleet in Ireland has decreased from 180 to 163.1 gCO2/km between 1995-2002. This represents a decrease of 9.4
percent over the period.
Technology improvements
In the near future it is expected that conventional technology will remain in use for the purpose of transport.
However, across all modes energy efficiency improvements are expected. Although there is no CO2 emissions
standard currently in place analogous to NOx, CO and PM emissions standards for passenger cars, most developed
countries have initiatives that promote or require fuel consumption and CO2 emissions reduction targets. In Europe a
central tenet of the Commission’s strategy to reduce greenhouse gas from passenger cars is the voluntary
agreement between the European, American, Japanese and Korean automobile manufacturers to reach an average
new fleet CO2 emissions target of 140g/km by 2008. This represents a decrease of 25% compared with 1995
emissions of CO2. This decrease is expected to be achieved by advances in conventional vehicle technology, such as
engine combustion, reduction of drag, vehicle mass and rolling resistances, and shifts in purchasing behaviour.
Generally, greenhouse gas emissions savings as a result of technological improvements for all modes of transport in
2015 are anticipated to be in the range of 15-40 percent compared with today’s level.
Only domestic greenhouse gas emissions from transport are counted for the purpose of Kyoto Protocol targets and so most emissions from Irish air
transport are not included in the Irish inventory.
Alternative fuels
Alternative fuels provide another mechanism to reduce greenhouse gas emissions from transport. No greenhouse
gas emissions are attributed to the combustion of biofuels, according to IPCC reporting guidelines, however there
are life cycle emissions associated with their cultivation, production and distribution. Biodiesel and vegetable oil
produced from rapeseed oil and biothanol produced from wheat and sugar beet represent the most likely biofuel
options for the short-term in Ireland. The EU biofuels directive has recommended substitution targets of 2% and
5.75% of transport fuels in 2005 and 2010 respectively. Achievement of these targets could deliver associated CO2
savings in Ireland of 0.12 and 0.41Mt. Natural gas and liquid petroleum gas are regarded as transitional fuels until
hydrogen technology is mature. In the long term, hydrogen and synthetic fuels are likely to become mainstream and
could represent the bulk of fuels used in transport, which will generate very few CO2 emissions (of the order of
approximately 10 percent of conventional fossil fuel CO2 emissions).
Policy measures to reduce greenhouse gas emissions
Technology improvements alone will not be sufficient to arrest the growth in greenhouse gas emissions from
transport; other policy measures will be necessary. The European Commission produced the White Paper on
transport in 2001, which included 60 measures to improve the sustainability of transport. Many of these measures
are related to greenhouse gas emissions and are in the process of being implemented. Road transport has been
identified as the majority contributor to the growth of greenhouse gas emissions in the EU and various measures
focus specifically on road transport. The three pillars of the EU Commission strategy to reduce CO2 emissions from
passenger cars are
1) Agreements committing the automobile manufacturers to reduce CO2 emissions from passenger cars by 25
percent between 1995-2008 mainly by means of improved vehicle technology.
2) Market-orientated measures to influence motorists’ choice towards more fuel-efficient cars
3) Improvements of consumer information on the fuel-economy of cars
To date, the first and third of these instruments have been implemented and the second has been initiated with a
call for consultation in July 2004 on harmonising vehicle taxation across the EU and differentiating motor taxes
corresponding to vehicle CO2 emissions.
Analysis of potential of policy measures to mitigate CO2 emissions from transport
in Ireland
In Ireland, the main policy instruments available to mitigate greenhouse gas emissions from transport are fiscal and
information instruments. These policy instruments have generally two objectives:
Influence behaviour or the utilisation of public and private transport so that the energy intensity of
transport activity is reduced
Affect purchasing decisions in order to encourage increased market penetration of low carbon
technologies (fuels and vehicles) and hence affect the fleet composition by lowering the energy intensity
of transport.
The OECD has classified greenhouse mitigation measures into three categories- improvements in fuel efficiency,
traffic demand management, and alternative fuels and technologies. From these categories, this report has explored
five instruments to reduce greenhouse gas emissions from transport in Ireland. These are:
Consumer information
Encouraging modal shift
Road charges and tolls
Alternative fuels incentives
All of these measures can be effective in reducing greenhouse gas emissions from transport. This work has
attempted to demonstrate and quantify the potential CO2 emissions reductions that could be achieved by
implementing these measures. Table ES1 presents an overview of the possible options to implement these measures
and the associated CO2-equivalent emissions potentially saved.
The total CO2 savings considered possible from the measures considered here are in the range 0.69-2.66Mt. This
does not include the probable improvements in energy efficiency of road vehicles as part of the industry voluntary
commitments in the EU, as these improvements will occur without any intervention in Ireland.
Measures such as equalising private fuel taxes with those of the UK could reduce fuel tourism and simultaneously
decrease vehicle miles travelled. Increasing taxes does, however, impose a cost on Irish society and this should be
analysed in the future in a cost-benefit analysis. This effect could be reduced if the revenue from an increase in taxes
were ring-fenced to provide a tax exemption in low carbon initiatives such as public transport for example. Also,
revenue foregone through tax exemptions for low carbon initiatives such as biofuels could be made up in the
increased revenue from carbon taxes.
A study carried out for the EU by ECOFYS showed that mitigation measures achieved through technology
improvement in the transport sector are very costly compared with other sectors at -€9972-327/tCO2-eq. per tonne
CO2 abated. The measures assessed here for Ireland are fiscal and information measures, which have lower costs to
implement. The associated costs mainly consist of transaction and administration costs. No formal economic analysis
was undertaken of the mitigation measures discussed in this study, but it is apparent that some measures will
impose a higher cost to Irish society than others.
Policy instrument
CO2-eq. savings
Establishment of independent agency to promote
and disseminate car labelling information.
Increased government support.
Simple CO2 and fuel consumption label design for
Encouraging modal Implementation of DTO measures identified in 2001.
Improve intermodality potential with, i.e. integrated
Taxes :
Replace existing circulation (motor) and registration
taxes with CO2 emissions differentiated taxes,
keeping revenue neutral.
Application of carbon taxes to transport fuels –
increase diesel share, reduce travel demand.
0.32 – 0.62Mt
Increase of fuel taxes to UK level to discourage ‘fuel
Road charges and
Implementation of congestion charges in cities.
Not clear overall CO2
emissions impact. Assumed
Parking pricing increases in highly congested areas.
fuels Remission of excise duty on biofuels
Table ES1: Summary of estimated (by SEI) CO2 emissions reductions through identified transport
policy measures
This study highlights the growing greenhouse gas emissions from the transport sector. Ireland’s chances of success
in meeting its greenhouse gas targets in 2010 are low if action is not taken to reverse this trend. The data in this work
show that the increase in greenhouse gas emissions from transport is mainly a result of increased vehicle ownership
and distances travelled, rather than a decrease in vehicle efficiency.
Transport remains an expensive sector from which to mitigate greenhouse gas emissions, especially through technology
improvements. Nevertheless, this report has presented five types of ‘soft’ measures that could be implemented in Ireland,
which would probably entail lower costs, not require significant infrastructural support, yet be effective in reducing
greenhouse gases from transport. The aim has been to provide policymakers with a menu of possible measures to reduce
greenhouse gas emissions from transport and demonstrate the range of expected reductions that could be achieved by
their implementation.
120,000tonnes CO2 emissions estimated saved with 2% fossil fuel substitution. In 2010, 5.75% fossil fuel substitution could provide a 0.43Mt CO2
Table of contents
Driving forces/ pressures-
1.1. Economic growth
1.2. Key transport numbers
1.2.1 Passenger cars
1.2.2 Freight road transport
1.2.3 Rail passenger and freight transport
1.2.4 Shipping and aviation
Trends in CO2 emissions from transport in Ireland and projections
2.1. CO2 emissions from all modes of transport
2.2. Carbon intensity of transport
2.2.1 Passenger transport
2.2.2 Freight transport
Technological Response- Energy efficiencies of conventional technologies
3.1. Road transport
3.1.1 Passenger cars
3.1.2 Road freight transport
3.2. Rail
3.3. Shipping & aviation
3.3.1 Aviation
3.3.2 Shipping
Technological Response- Alternative fuels and technologies
4.1 Biofuels
Fuel utilisation and vehicle technologies
Greenhouse gas and energy balances
Biofuels in Ireland
4.2 Compressed natural gas and liquid petroleum gas
4.3 Synthetic fuels
4.4 Hydrogen
4.5 Electric vehicles
The European policy framework
Irish policy response
6.1 Existing transport policy measures in Ireland
Vehicle registration tax on new passenger cars
Motor tax
Vehicle labelling
Tax exemption for public transport commuting
Road charges and tolling
Fuel excise duty
The National Climate Change Strategy
6.2 Irish policy options to further reduce greenhouse gas emissions from transport
Encouraging modal shift with public transport
Taxes- vehicles and fuels
Vehicle taxes
Fuel taxes
Road charges and tolls
Alternative fuels incentives
6.3 Conclusions
6.4 Areas for future work
Annex A- International methods for target-setting and policy evaluations in transport
Annex B- Existing Diesel Vehicle Warranties for 100% Biodiesel Operation
As the substance of climate change has become reality, there is less doubt as to its causes. Policymakers worldwide
recognise the pressing need to reduce emissions of greenhouse gases. Reduction targets have been set in the Kyoto
Protocol, which has now been ratified by many countries. The emitting sources of greenhouse gas emissions have
been identified and documented and the pertinent sectors are under pressure to reduce their emissions. Of all
contributory sectors, transport is proving the most difficult to address. Although there have been significant energy
efficiency improvements per vehicle and per kilometre travelled as a result of technological developments, the
demand for passenger and goods mobility still continues to grow, thus counteracting efficiency improvements.
Increasingly in the EU it is recognised that the environment and economy must be integrated in policymaking. This
was officially documented in the Amsterdam Treaty in 1997 and in subsequent Declarations in Lisbon (1997) and
Gothenburg (1999), which established a requirement to integrate environmental actions into EU activities. This
compels policymakers to take account of the potential environmental impact in making decisions for the pertinent
sector. The objective of integration is to reduce the environmental damage caused by related activities.
One methodology employed to assess the impact of a sector on the environment is the European Environment
Agency’s DPSIR framework (Driving forces-Pressures-State-Impact-Response)3. This utilises indicators along a chain
of causal links in a sector to provide the analytical framework to describe the relationship between the causes and
effects of an action and hence uncover the appropriate policy response. This is the framework also used by the Irish
Environmental Protection Agency to examine national transport indicators in 2000 (EPA, 2000).
Historically, transport has been directly coupled with economic growth. GDP growth and disposable income have
been the driving forces for higher mobility rates, generally across all modes of transport. This puts pressure on
infrastructure and the environment and is revealed by indicators such as road vehicle numbers and energy
consumed by transport. The next step in the causal link is the state of the environment and the impact as a result of
these pressures. The externalities associated with transport are diminished air quality, greenhouse gas emissions,
accidents, noise and congestion. The environmental issue addressed in this paper is climate change and the
greenhouse gas emissions from transport that contribute to it. Another impact is energy consumption, which not
only can cause the emission of greenhouse gas emissions but also depletes natural resources. A related motive for
many governments to halt the increased use of energy by the transport sector is to maintain security of the energy
supply. In the EU, the TERM project – Towards a transport and environment reporting mechanism for the EU, has
been developing indicators for assessing the effect of transport on the environment. In parallel, the OECD
Environmental Policy Committee’s Task Force on Transport conducted the project Environmentally Sustainable
Transport, which defined the concept of sustainable transport and germane criteria.
The final link in the DPSIR chain is the societal and associated policymakers response to the environmental
challenge. The OECD, via its Working Group on ‘Analytical Methods of Road Transport Sector Strategies to Reduce
Greenhouse Gas Emissions’, categorises existing measures to reduce greenhouse gas emissions from transport into:
Improved fuel efficiency
Alternative fuels and technologies
Traffic demand management
Emissions from transport in Ireland have been rising rapidly, mainly due to the economic boom of the late 1990’s. In
this study the data available for transport of all modes in Ireland are pulled together using the DPSIR framework in
order to depict the status quo and to view the current situation with the perspective of international guidelines. The
driving forces that have caused the increase in mobility in Ireland are presented briefly together with the pressures
that are placed on the transport system and society as a result. The latest figures on greenhouse gases are put
forward in Chapter 2 as the direct consequence of this growth.
Of the three categories of policy measures for the mitigation of greenhouse gases from transport specified by the
OECD, the first and partially the second are exogenous to Ireland. Since Ireland has no indigenous vehicle
manufacturing industry and comprises a small market for many transport manufacturers, there can be little Irish
influence on development of technology to reduce fuel efficiency. Therefore the options available for the first two
measures are the implementation of information and fiscal measures to encourage the purchase by consumers of
low carbon technologies and to influence, particularly in private transport, fleet composition. The third category of
measures is traffic demand management, which necessitates the implementation of effective domestic measures.
More information on EEA website-
The policy discussion in this report follows three strands. The first part describes the expected advances in fuel
efficiency (Chapter 3) and alternative fuel replacement (Chapter 4) for all modes of transport in the future and what
greenhouse gas reductions can be assumed as a result. The literature reveals that potential remains to achieve some
greenhouse gas emissions reductions through technology alone across all modes of transport. The second strand is
the EU policy framework relevant to the transport sector and greenhouse gas emissions (Chapter 5). This sets the
tone, and sometimes-legislative basis, for Ireland in the endeavour to achieve the commitment of the Kyoto burdensharing agreement and European transport policy.
The third component of the policy discussion is the Irish policy response (Chapter 6). The transport sector was
included in the National Climate Change Strategy that was published by the government in 2000. The status of
implementation of these measures and the potential for additional measures is examined and discussed.
Driving Forces and Pressures
Historically, economic growth and falling transport prices have driven transport demand, and transport in turn has
been the enabler of economic growth and mobility in the European Union. When congestion occurred new
infrastructure was constructed, thus inducing employment and economic growth and causing transport costs and
time spent travelling to decrease. In the long term improved transport infrastructure could influence the location of
companies and householders, and so change land use patterns to become more transport dependent. The
decoupling of economic growth and resource utilisation has become a centrepiece of EU sustainability and transport
policy. This concept is defined by eco-efficiency (Box 1.1) and is enshrined in the Agenda 21 update (UN, 1997),
which notes the need to consider a ten-fold improvement in resource productivity in industrialised countries. The
EEA also utilises the concept of eco-efficiency across all sectors as an indicator of sustainable development.
Box 1.1: Eco-efficiency
The goal of eco-efficiency is to ‘decouple resource use and pollutant release from economic activity’ (EEA, 1999). This
requires breaking the link between the use of nature, as measured by environmental indicators, and economic
development as measured by output indicators such as GDP, or transport activity. Decoupling involves a reduction
in the negative environmental effects per unit of economic output. This is achieved by either increased efficiency
through technological change or a shift to a less environmentally damaging product.
While improvements in efficiency through technological change are key in reducing greenhouse gas emissions from
transport, they will most likely not be sufficient to achieve targets for reductions by the sector. Absolute reductions
in the use of energy and the emission of greenhouse gases will also be necessary. A question for the future is
whether technological developments and product shifts can keep pace with demands for higher standards of living
(EEA, 2002).
An example is passenger cars in Europe where the average amount of CO2 emissions per km from new cars has
decreased over the past decade due to technological advances, yet the absolute amount of CO2 emissions of the
passenger car fleet has still increased due to the rise in number of new cars sold.
Indicators of eco-efficiency are energy consumption and greenhouse gas emissions as a function of GDP.
Transport remains the source of numerous externalities that cause damage to people and the environment. The
main negative effects normally associated with transport are air pollution, climate change, accidents, noise, and
congestion. There are also significant resources consumed in vehicle production whereas the disposal of the
vehicles, tyres and batteries creates further environmental problems. This chapter will provide an overview of the
historic and projected trends for the driving forces (Box 1.2) behind the increase in transport in Ireland. It will also
explore the pressures that have arisen as a result.
Box 1.2: Driving forces for transport greenhouse gas emissions, the Intergovernmental Panel on
Climate Change emissions in their Special Report on Emissions Scenarios (IPCC, 2000)
‘In aggregate, transport patterns are closely related to economic activity, infrastructure, settlement patterns, and
prices of fuels and vehicles. They are also related to communication links. At the household level, travel is affected by
transport costs, income, household size, local settlement patterns, the occupation of the head of the household,
household make-up and location. People in higher-skilled occupations that require higher levels of education are
more price- and income- responsive in their transport energy demand than people in lower-skilled occupations.’
Economic growth in Ireland
The Irish economy doubled in size between 1990-2001 in terms of the Gross National Product (GNP) (ESRI, 2003).
GNP represents the total of all payments for productive services accruing to the permanent residents of Ireland (CSO,
Economists regard this phenomenon to have been caused by three factors (ESRI, 2003):
The liberalisation of the goods and capital markets
The investment of successive Irish governments in human capital
Directly encouragement of foreign direct investment
Over the thirty-year period between 1970-2000, the GNP per capita rose on average by 2.7 percent per year. The
growth in the 1990’s was driven by a combination of positive developments in productivity, employment,
participation and dependency. The result of these factors was increased disposable income for the Irish population
as illustrated in Figure 1.1.
€ millions
Gross national disposable income
GDP growth(%)
GNP growth (%)
Figure 1.1: Trends in Irish gross national disposable income (adjusted for Consumer Price Index),
and GNP and GDP rates of growth (CSO, 2003)
Strong output growth increased employment (Figure 1.2), this in turn increased the participation in the work force
by women, and decreased the dependency ratio (dependency ratio measures the number of people of working age
in comparison to the population that is not of working age).
Em ploym ent Grow th (%)
Ir eland
1995 1996 1997 1998
1999 2000 2001 2002
Figure 1.2: Employment trends in Ireland 1995-2002. (Department of Finance, 2002)
The rise in employment and disposable income encouraged more people to become consumers with increased
purchasing power. The effect on sales of new cars was immediately apparent (Fig. 1.3). Economic growth is strongly
coupled with mobility and hence the strong growth of the Irish economy in the late 90’s and the resulting affluence
of the population have led to a large increase in sales of new passenger cars.
Vehicle numbers
Figure 1.3 presents the number of road vehicles in Ireland between 1978-2002.
Private Cars
Motor Cycles
Goods Vehicles
No. of vehicles
Figure 1.3: Road transport in Ireland (VRU 2003)
1.2.1 Passenger cars
Nearly 81% of passenger kilometres travelled on land in Ireland in 2000 were by private car. This was marginally
higher than the European Union average of 80.5% (EUROSTAT, 2003).
The last ten years have seen a significant increase in the number of passenger cars sold in Ireland. The fleet has
grown from just over 850,000 in 1992 to just below 1.5 million passenger vehicles in 2002. The sale of new vehicles
peaked in 2000 and the rate of increase of fleet size has begun to slow in the last two years.
The data in Figure 1.3 show that the ownership of private cars in Ireland was quite stable to 1990, but that growth
has been consistent and rapid since then. Ownership rose from 250 per thousand of population in 1993 to the 2002
level of 361 cars per thousand of population. Since this is still much lower than the year 2000 average in the
European Union of 469 (EUROSTAT, 2003), it seems that the trend is likely to continue. The market share of new
diesel passenger cars has traditionally been low in Ireland- diesel represented 17 percent of new car sales and 13
percent of the overall fleet in 2002- and this was the highest level for the last two decades.
EU Average (2000) = 469
UK (2000)
= 419
Source: Eurostat.
Cars per 1,000 of Population
Figure 1.4: Private cars per thousand of population (SEI, 2003a)
no. of passenger cars registered
The age of road vehicles is relevant to the emissions of pollutants, since newer cars are required to fulfil more
stringent emissions standards. Given that sales of new passenger cars in Ireland have increased dramatically
between 1993-2000 a renewal of the total passenger car fleet is evident. At the end of 2002 the average age of
passenger cars was 5.8 years, with 45% of vehicles aged less than four years and 71% less than seven years old.
Years of age
Figure 1.5: Age of passenger car fleet in Ireland in 2002, (VRU, 2003)
Road freight
In 2002, Irish road freight transport increased for the tenth successive year across most of indicators, including
tonne-kilometres activity, tonnes carried, average number of vehicles per year, total vehicle kilometres driven and
number of goods vehicles. The exception is the average kilometres driven per vehicle per year, which has remained
relatively constant. The trends for these indicators are presented in Figure 1.6 below.
In 2001, 96 percent of goods transported by land in Ireland were transported by road, which is substantially above
the European average of 77 percent (EUROSTAT, 2003). In fact, Ireland is second only to Greece in the amount of
freight transported over land by road. Irish registered goods vehicles transported almost 231 million tonnes of
freight by road in 2002, which represents an increase of 13 percent on 2001 and 175 percent compared with 1992.
The average number of goods vehicles has increased by nearly 150 percent since 1992 to 78,753 vehicles. This has
been associated with an average increase in fleet size per annum of approximately 10 percent, although the increase
between 2001 and 2002 slowed.
Tonnes carried (thousand)
Ave. no. of vehicles/ year
Ave km/ vehicle/ year
Total year activity (mio. tonnes-km)
Vehicle kilometres (millions)
Figure 1.6: Irish road freight transport trends 1992-2002, (CSO 2002). Total year activity and
vehicle kilometres on right axis; all other indicators on left axis.
The average distance travelled by road freight vehicles in Ireland is also of interest. In 2002, almost half the total
weight of goods was transported 25km or less, whereas only 11% of the total weight of goods carried were
transported distances of over 151km. This is perhaps not surprising given the dominance of Dublin and its
surrounding areas as a port and metropolitan region. Freight activity is given in tonne-kilometres, which is the
number of kilometres travelled multiplied by the weight of freight transported. The longest journeys (over 151km)
represent 53% of total activity in tonne-kilometres, whereas distances of less than 25km describe only 10% of total
vehicle activity in tonne-kilometres.
Rail passenger and freight transport
Rail passenger transport has been increasing for several decades in Ireland with an increase between 1985-2000 of
60% in annual passenger kilometres travelled (ECMT, 2002). Passenger numbers reached 35 million in 2002, of which
24 million were DART (Dublin Area Rapid Transport) and suburban rail passengers (Iarnród Éireann, 2003). Demand
for passenger rail transport is projected to rise to between 54 - 97 million passengers annually under various
economic growth scenarios modelled in the Strategic Rail Review (Booz et al., 2003).
Rail freight transport activity in Ireland has declined by nearly 30% between 1985-2002 so that in 2000 only 7% of
freight tonne-kilometres were by rail (ECMT, 2003). This is well below the European average of 13.8% in 2000.
Although rail freight increased by 5% in 2001, the numbers decreased again in 2002. Figure 1.7 provides an overview
of the evolution of passenger and freight tonnage kilometres in Ireland over time.
Both the National Climate Change Strategy (Department of the Environment and Local Government, 2000) and the
EU White Paper on Transport Policy target the achievement of a modal shift from road to rail as a policy measure to
reduce greenhouse gases and so the increase in passenger rail demand is a positive development in this direction.
However the rail freight situation is not so positive and is discussed further in Chapter 6.
mio. tonne/passenger-kilometres
Figure 1.7: Evolution of rail passenger and freight kilometres in Ireland. (ECMT, 2003).
Table 1.1 indicates the share of goods transported in the EU by rail and road transport and the distances travelled. It
can be seen that 59 percent of goods that are transported by road are transported a distance of 49 kilometres or less.
Rail appears to be utilised to transport goods over longer distances, with 40 percent of rail freight transported
between 150-499 kilometres. Overall, 56 percent of goods in the EU are transported shorter distances of under 49
kilometres. Table 1.1a gives the distance classes by modal split for Irish freight transport. Freight in Ireland is
transported by rail or by road- there is no utilisation of inland waterways according to EU statistics. Overall
approximately 87 percent of freight by weight in Ireland in 2001 was transported a distance of under 150km.
The significance of this is not trivial- if modes of transport such as inland waterways and rail are not being utilised for
short distances, however most transport in Ireland is over distances less than 49 kilometres, then it should be
questioned whether a modal shift will be possible for the transport of Irish goods. This is also a finding of the
Strategic Rail Review published in 2003 (Booz, Allen and Hamilton, 2003) and summarised in this report in Chapter 6,
which states that the future of Irish rail should be concentrated in the passenger sector, rather than freight transport.
Table 1.1: Modal split (in mio. Tonnes and percent of mode), for freight transport in Ireland in
2001, European Commission, 2003a.
1.2.4 Shipping and aviation
Passenger air transport has become increasingly significant in Ireland, with a growing share of passenger-kilometres
travelled. As a result of its island status and the mobility of the population, Ireland now has one of the highest rates
of emplanement per capita in the EU, as shown in the bottom row of Table 1.2. Only Greece and Spain are higher
and this is due mainly to the holiday season in summer.
3.5 20.9 11.9 30.3 18
14.4 0.3
4.5 28.7 16.1 40.1 21.2
18.1 0.4
19.4 0.4
5.2 30.8 15.2 45.2 23.1
21.3 0.4
22.7 0.5
36 18.5 54.5 28
23.1 0.5
39 20.7 59.3 29
23.6 0.5
29.4 15.3 41.8 22.5
16 49.4 24.1
Index share %
EU15 1990=100 (1)
8.8 28.4 157.3
38.6 201.5
9.5 38.8 208.7
4.6 10.2 39.1 221.9
5.1 11.1 43.2 240.8
5.3 11.5 46.5 260.3
5.7 12.8 50.3 281.5
passenger-km per person per year
634 1186 475 1965 1502 479 1349 409 1209 606 572 864 1096 1419 643
(1) Passenger cars +buses and coaches + tram and metro + railways + air
Table 1.2: Air transport intra-EU-15: from country of origin within EU plus domestic flights, 1000 million passengerkm (European Commission, Energy and Transport in figures, 2003).
Average annual growth in international air traffic in the EU grew by 8% between 1993-1998; in the same period
Ireland’s international air traffic grew by 13%. The busiest route in the EU in 2000 was London-Dublin with 4.4 million
passengers (European Commission, 2003a), although only 2% of airplanes in Europe are registered as Irish
(EUROSTAT, 2003). Approximately 80% of air freight transport is carried in passenger planes (IPCC, 1999), although
this is difficult to substantiate. Only 324 of EU-registered planes mid-2002 were listed as freight or cargo, from a total
of 4872 (EUROSTAT, 2003).
Short sea shipping is of crucial importance for freight transport in Ireland and Europe. Approximately 99% of all Irish
imports and exports (by weight) are transported by sea and so Ireland exports 95% of its GDP by sea, which
represented €150 billion worth of goods in 2001 (IMDO, 2003). Short sea and coastal shipping is defined by the
European Commission as ‘the movement of cargo and passengers by sea between ports situated in geographical
Europe or between those ports and ports situated in non-European countries having a coastline in the enclosed seas
bordering Europe’4. In Europe, short sea shipping has increased considerably from 1990 to 1997 (by 17% in tonnes
and 23% in tonne-kilometres). In fact, freight transport by tonnage in the EU is approximately equal for road and
intra-EU short sea shipping, comprising 44% and 41% respectively of the total (European Commission, 2003a). The
European average distance of a tonne transported in the 1990’s was 100 km for road, 270 km for inland waterways,
300 km for rail, and 1385 km for short sea shipping (Communication from the EU Commission, 1999).
Source: Energy and Transport DG.
D: includes D-E: 1970= 2.8, 1980 = 4.2, 1990 = 5.5.
Table 1.3: International sea shipping activity in Europe in 1000 million tonne-km, (European
Commission, 2003a)
Summary of this chapter:
Economic indicators show substantial growth at every level of the Irish economy between 1996-2001
Transport activity has increased across all modes of transport for the same period, with road transport
demonstrating the most rapid growth.
The level of ownership of private cars per thousand population is still below the European average and hence
the number of vehicles is likely to continue to increase.
Between 1995-2002, road freight activity per year in tonnes-kilometres more than doubled, whereas rail freight
activity declined by approximately 30 percent over the same period.
Passenger rail has increased by more than 20 percent between 1995-2002.
Ireland has one of the highest rate of emplanements in the EU.
Most international freight transport from Ireland is carried out with short-sea shipping.
Environmental impact of transport - Trends in CO2 emissions
The burden-sharing agreement on greenhouse gas emissions within the EU, as part of the Kyoto Protocol target of
an 8 percent reduction in greenhouse gases by 2010 compared with 1990, requires Ireland to limit greenhouse gas
emissions increases to 13 percent above 1990 levels. Irish greenhouse gas emissions exceeded the 1990 baseline by
29 percent in 2002 (EPA, 2004). The main growth over the 1990-2002 period in emissions has been in CO2. Methane mainly from agriculture - is a substantial source in absolute terms but its share has been declining over time;
transport has become an increasing source of greenhouse gases for Ireland (Table 2.1). Thus, following the DPSIR
algorithm, the impact of transport on the environment (in this case greenhouse gas emissions) as a result of the
pressures described in Chapter 1 will be examined.
CO2 emissions from transport in Ireland increased by 124% between 1990 and 2002. Energy use in transport
accounted for 26 percent of energy-related CO2 emissions in 2002, with an annual growth rate of 7.5 percent on
average, the sector has the fastest rate of increase in CO2 emissions for that period. CO2 emissions reached 11.2 Mt in
2002 (or 11.7Mt of CO2 equivalent emissions). Figure 2.1 provides an overview of the relative contributions of sectors
to energy-related CO2 emissions. It should be noted that in 2002 energy-related CO2 emissions comprised 63% of
overall Irish greenhouse gas emissions. Agriculture provided the highest amount of greenhouse gases from a single
sector at 27 percent in 2002 of all greenhouse gases, a fall from 34 percent in 1990. This work will focus on CO2
emissions since they represent 96 percent of energy-related greenhouse gas emissions and 96 percent of domestic
transport CO2 emissions.
Mt CO2
Figure 2.1: Irish energy-related CO2 emissions by sector (SEI, 2002)
Table 2.1 Greenhouse gas emissions in Ireland in 2002. (EEA, 2004)
CO2 equivalent
Total 2002
Total 1990
% change
Total (Net Emissions)
1. Energy
1. Energy industries
2. Manufacturing, Industries and Consruction
A. Fuel Combustion (Sectoral approach)
3. Transport
4. Other Sectors
5. Other
B. Fugitive Emmissions from Fuels
1. Solid Fuels
2. Oil and Natural Gas
2. Industrial Processes
3. Solvent and Other Product Use
4. Agriculature
6. Waste
7. Other
International Bunkers:
5. Land-Use Change and Forestry
Memo Items:
Multilateral Operations
CO2 Emissions from Biomass
Sustainable Energy Ireland (SEI), through the Energy Policy Statistical Support Unit, compiles the Irish Energy Balance
annually. This provides data on the amount of diesel, petrol, kerosene, fuel oil and electricity sold as transport fuel.
The emissions from transport can be estimated from these data, and further disaggregated utilising assumptions on
the vehicle kilometres driven by passenger cars and commercial vehicles. 36% of diesel vehicles in 2002 were private
cars. Assumptions regarding the fuel use are made based on vehicle stocks and mileage data. These are reflected in
Figure 2.2 from SEI (2003a), which provides a graphic overview of the relative share of fuel use in the transport sector
in 2001.
Road (Freight, Public
Service & Other)
Inland Navig.
Total energy
consumed by
transport = 3.9 Mtoe
Road (Private Car)
Figure 2.2: Shares of total transport energy use by mode in 2000 (SEI 2003a)
Box 2.1 Greenhouse gas emissions from transport
The combustion of all transport fuels produces some kind of emissions, depending on the chemical composition of
the fuel and the conditions under which it reacts with oxygen. The combustion of petroleum- or hydrocarbon-based
fuels, such as petrol, diesel, natural gas etc., results mainly in the emission of water vapour and carbon dioxide. Other
gases, mainly nitrogen oxides, carbon monoxide, particulates, and hydrocarbons, are also emitted. With vehicle
emissions regulations in place in most developed countries, vehicles contain emissions control systems in the form
of catalytic and aftertreatment devices to reduce noxious emissions and convert a large part of these gases to CO2,
nitrogen, and water vapour. As a result, CO2 represents on average more than 99% by mass of the gaseous
Methane (CH4) is another greenhouse gas that has a greenhouse effect approximately 20 times greater than the
equivalent amount of CO2. It is emitted from vehicles operated on natural gas fuel. Although natural gas vehicles in
general emit between 15-25% less CO2 than petrol vehicles, their emissions of methane are substantial and hence
the net effect is that of greenhouse gas emissions at a level between diesel and petrol vehicles.
Nitrous oxide (N2O) is an additional naturally-occurring greenhouse gas that is emitted from transport as part of the
combustion process. It has a global warming potential that is 3105 times that of CO2. These greenhouse gases as well
as CO2 must be taken into consideration in any discussion on measures to reduce greenhouse gas emissions from
All global warming potentials taken over 100 year horizon (UNFCCC website
Since Figure 2.2 is essentially a snapshot of fuel consumption in 2001, it is helpful and necessary to examine the data
behind this situation.
While CO2 emissions from domestic transport were 11.1 Mt, N2O and CH4 emissions comprised 1.3 and 2.6t
respectively in 2001. The other greenhouse gases are only discussed in this report where they are produced in
significant amounts, for example through alternative fuel combustion. Total estimates of greenhouse gas emissions,
as given in Table 2.1 are combined in the unit of CO2 equivalent emissions, which takes into account the global
CO2 emissions from all modes of transport
Figure 2.3 illustrates the trend in CO2 emissions in Ireland from each mode of transport. CO2 emissions from all
modes of transport have increased. Road transport represents the greatest share, contributing 93% of domestic
transport CO2 emissions and the amount emitted has increased by 124% between 1990 and 2002. Although rail
transport represents only 3.8% of CO2 emissions from transport, it is the mode with the highest growth in CO2
emissions (185%) over the same period.
Total Transportation
Road Transportation
Civil Aviation
Other Transportation
Figure 2.3: Domestic CO2 emissions reported in National Inventory from Irish transport, Gg/year
(or 1000t/year). Total and Road Transportation on left axis; Civil aviation, Railways, Navigation,
and Other transportation on right axis, (EPA, 2003).
This chapter will describe the current and future greenhouse gas emissions from transport and describe the effect
various measures could have on their mitigation.
CO2 emissions, kt
International marine
International aviation
Road Transportation
Domestic Civil Aviation
Domestic Navigation
Other Transportation
Figure 2.4: Irish CO2 emissions from transport by mode, including domestic and international
emissions, (EPA, 2003).
The share of transport emissions of total Irish greenhouse gases, as reported in the Irish National Inventory, has
increased between 1990-2001 from 9.4 to 15.8 percent. This compares with 21% in the EU. It should be noted that
National Inventory reports required for UNFCC, according to Intergovernmental Panel on Climate Change (IPCC)
guidelines only include domestic emissions. This means that international aviation and shipping emissions are not
contained in National Inventory reports and explains the fact that although total aviation made up 14% of transport
emissions, it comprised only a 1% share is domestic emissions. Since Ireland is an island, it is clear that the majority of
marine and aviation transport operates internationally. Figure 2.4 illustrates both domestic and international
emissions. In 2002, domestic CO2-equivalent emissions stood at 11.7Mt and international greenhouse gas emissions
from transport at 2.6Mt.
The last official projections of greenhouse gas emissions for Ireland were made in 2002 for the European
Environment Agency’s greenhouse gas monitoring reporting (EEA, 2003). The EEA report a projection of 14.2 Mt
CO2–equivalent emissions from domestic transport in 2010 under business-as-usual conditions (described as ‘with
measures’ in EEA documents), which represent an increase of 178% relative to 1990. If mitigation measures (‘with
additional measures’) are implemented, then a smaller increase of 123% is forecast. These projections are illustrated
in figure 2.5 and are based on the measures and projections described in the National Climate Change Strategy,
which was published in 2000. The ongoing review of the National Climate Change Strategy will publish updated
projection figures later this year.
t CO2 emissions/year
With additional
Figure 2.5: Irish CO2 transport emissions trends and projections to 2010 (EEA, 2003).
It is clear that there is much work to be done if the target of 11.4 Mt per annum is to be achieved in 2010 as was set
out in the National Climate Change Strategy, since domestic transport CO2 emissions reached 11.1Mt in 2001. This
represents an increase of 123% between 2010 and 1990.
2.2 Carbon intensity of transport
IPCC has developed ‘generic’ estimates of the carbon intensity of different transport modes to facilitate a
comparison of the CO2 emissions between modes. Carbon intensity is typically estimated in grams of carbon per
passenger-kilometre or per tonne-kilometre. Since there are 12g of carbon in a molecule of CO2, which as a
molecular weight of 44g, multiplying the carbon intensity by 44/12 converts the values to the carbon dioxide
2.2.1 Passenger transport:
Passenger transport demonstrates a wide range of carbon intensity values as a result differences between
technologies and their utilisation, and the availability of public transport. Overall, air and car transport have the
highest carbon intensity.
Figure 2.6: Carbon intensity of passenger transport (IPCC, 1999).
The Carbon intensity or CO2 emissions per passenger-km for different modes of transport is very dependent on the
type of aircraft, train, or car and on the load factor. Typical CO2 emissions for air transport are in the range of 30 to
110 g C per passenger-km, which is comparable with the carbon intensity of passengers travelling by car or light
truck. Emissions of CO2 per passenger-km from bus or coach transport are less than 20 gC per passenger-km. For rail
travel, carbon emissions per passenger-km depend on several factors, such as source of primary energy and type of
locomotive i.e. diesel or electric; and load factor. In general, emissions vary between below 5 and 50 g C per
Box 2.2: Interpretation of energy efficiency data
Care must be taken when comparing transport modes and in interpreting data to appreciate underlying
assumptions and statistics from which they have been drawn. The load factor of transportation modes is critical to
the analysis. Car occupancy, in particular, can vary between 1 and 4. For example, in Europe the average is 1.65 but in
the United States this value is generally less than 1.2 - which implies a significant margin in specific emissions (per
passenger-km) relative to average occupancy. Occupancy levels for air, rail, and bus also vary significantly, but
because of commercial pressures they are more likely to operate at higher levels than private road vehicles.
European scheduled airlines typically operate at a load factor of about 70 percent, although budget airlines often
operate with load factors significantly higher at above 80 percent and charter airlines at about 90 percent. These
figures are comparable to those in the United States, where in 1996 the average passenger load factor ranged from
48.6 to 75.4% for various passenger aircraft types and was 69.4% for all air carrier aircraft types.
Energy consumption and CO2 emissions from electrically powered vehicles, particularly trains, are very dependent
on the mode of electrical power generation. In countries that have a large dependency on hydroelectric or nuclear
power generation, emission of CO2 per passenger-km by rail may be very low. Conversely, emissions of CO2 per
passenger-km from high-speed locomotives with power derived from coal-fired electricity are considerably higher.
In the case of aviation, flight distance is very important. On a short flight (250 km), energy consumption and CO2
emissions are significantly higher than they are for medium- or long-haul flights, because a greater proportion of the
flight is at take-off power (with a relatively higher fuel consumption). Also, available data do not differentiate
between aviation fuel used for passenger transport and that for freight. The OECD has calculated that passengers
roughly account for 71% of the load carried, but on short-haul routes freight may account for less than 10% of the
weight Taken from IPCC, 1999: ‘Aviation and the Global Atmosphere’, Intergovernmental Panel on Climate Change
Special Report, 1999.
2.2.2 Freight transport
Figure 2.7 provides a comparison of carbon emissions from major freight transport modes. Aviation emits 1 to 2
orders of magnitude more carbon than other forms of transport. Although freight may be carried on passenger
flights to exploit capacity, this is not always taken into consideration in all statistics. It should be noted that Figures
2.6 and 2.7 only take the CO2 emissions into account that are released during utilisation of the vehicles and do not
consider the life-cycle (well-to-wheel) emissions. Since all of these vehicles are operated on fossil fuels, with the
exception of electric trains, the fuel production emissions are comparable so that main discrepancies in CO2
emissions arise as a result of differences in the efficiency with which the vehicles are used. The current reporting
requirements of the UNFCCC only necessitate accounting for the CO2 emissions from combustion from the fuel, i.e.
tank-to-wheel. In the longer-term, decisions regarding the most sustainable mode of transport should be made on a
well-to-wheel basis that takes all stages of fuel usage into consideration.
Figure 2.7: CO2 intensity of freight transport (IPCC, 1999)
In summary, this chapter has shown that
The CO2 emissions from all modes of transport in Ireland have increased between 1990 and 2001 by
120 percent with an average annual growth rate of 7.4 percent over this period.
Road transport is the mode that produces the most CO2 emissions in Ireland (93 percent of domestic
transport emissions) and is also the most energy intensive mode.
These trends are likely to continue. The projection in 2010 for business-as-usual Irish transport CO2
emissions is 14.2 Mt, and with the implementation of reduction measures it is 11.4 Mt.
Irish rail transport has the fastest growing CO2 emissions due to the increase in passenger rail but on a
much smaller scale of magnitude compared with road transport.
In general, both freight and passenger transport by air and road have the highest carbon intensities.
Technological response- Energy efficiencies and technologies
The first strand of the policy response to rising greenhouse gas emissions from transport is to improve the energy
efficiency of transport by technological change. This chapter will outline the improvements in energy efficiencies of
current transport technology that can be expected in the future, whereas the next chapter will describe the
alternative fuels and technologies that may come on line in the future.
Since improvements in technologies take time, it is thought that advancements will be gradual. In the short and
perhaps medium term, the current vehicle and fuel infrastructure will be retained and only afterwards (post 2010)
will bigger changes in technology and fuels take place.
Road transport (passenger car and freight)
As the mode of transport responsible for most of the sector’s greenhouse gas emissions, road transport has attracted
a lot of public and policy attention. As the number of vehicle manufacturers shrinks through takeovers and mergers,
the variety of vehicle technologies offered to the market diminishes. This trend can have both a positive or negative
effect for the development of environmental technology. Either it becomes increasingly important that a company
has the edge over its competitors in this area and therefore invests in long-term research to mitigate greenhouse gas
emissions, or alternatively the cost margins become so low that companies are unable to afford to invest in research
into improving their technologies. Consumer preferences play a large role in determining the route a car company
takes. If most consumers are shown to be primarily interested in vehicle price rather than fuel consumption when
buying a car, then companies will be forced to choose the second route and try to reduce costs, and hence prices, as
much as possible. The decision by consumers will be influenced by the relative costs of vehicle and fuel, both of
which can be influenced by policy (see Ch. 6)
3.1.1 Passenger cars:
Although the emission of greenhouse gases is not regulated on a per vehicle basis as are other gases such as NOx,
PM, HC and CO, most industrial countries have fuel consumption or CO2 targets based on fleet emissions or fuel
consumption. In the USA car manufacturers are required to fulfil the Corporate Average Fuel Economy Standards
(CAFE for short), whereby the average fuel consumption per vehicle of each manufacturer’s fleet of passenger cars is
27.5 mpg and 20.7 mpg for trucks (equivalent to 205 and 316g CO2 emissions per km respectively). The European car
industry, which included the ‘Big 3’ American manufacturers, (ACEA) reached a voluntary agreement in 1998 with
the European Commission to achieve a 25% reduction in CO2 emissions from 1995-2008 to a fleet average of 140g
CO2/km. They promised at the same time to develop some vehicles emitting less than 120g CO2/km and placing
them on the market during this period. The Japanese and Korean vehicle manufacturers (JAMA and KAMA
respectively) in Europe have since made identical agreements with the European Commission.
Figure 3.1: Progress in reaching the CO2 emissions target to date, (Commission of the European
Communities, 2004)
By 2002, the average of the new car fleet CO2 emissions had reduced to 166g/km comprising an 10.8% reduction
from 1995 levels (Commission of the European Communities, 2004). Figure 3.1 illustrates the CO2 emissions in g/km
emitted by the European, Japanese and Korean manufacturers new vehicle fleet average values for 1995-2002. The
further reductions that will need to be made in order to reach the target of 140g/km will become increasingly
difficult and more costly. From 1995-2002 a cut in CO2 emissions of on average of about 1.5% per year was achieved
in order to meet the interim target of 165g/km in 2003. It is estimated that for the period up to 2008, reductions in
emissions must continue at a rate of 2.5% per year for ACEA, 2.8 percent for JAMA and 3.4 percent for KAMA to meet
the 140g/km target (Commission of the European Communities, 2004).
Reduction of CO2 emissions from vehicles requires a reduction in fuel consumption, which is achieved generally by
reductions in the weight of the vehicle, and improvements in engine combustion efficiency and the transmission.
The automobile manufacturers appear to agree on the technologies perceived as those most likely to help them
reach the target of 140g/km, see Box 3.1. In 2003 the Commission is undertaking a review of the agreement to judge
whether a further reduction to 120g/km is possible by 2012.
Vehicle powertrain (engine and transmission) efficiencies are generally in the region between 20-30%, depending on
whether they are petrol or diesel engines. Diesel engines are considerably more efficient than petrol engines and
much of the CO2 emissions reductions to date in Europe have been achieved through a rising market share of diesel.
In Ireland the difference between the average fuel consumption of petrol and diesel car fleets is not as great as in
other countries, perhaps due to the fact that a high proportion of petrol vehicles sold were small with a relatively
good fuel efficiency. Over the same period, 1995-2002, the value of average Irish fleet CO2 emissions dropped from
180g to 163.1g/km. In 2002, the average Irish fuel efficiencies6 were 6.9L/100km for petrol and 5.9L/100km for diesel
(ACEA and Commission services, 2003) compared with a European average of 7.3L/100km (172g/km) for petrol and
5.8L/100km (153g/km) for diesel. This divergence from the EU norm is a result of the differences between the fleet in
Ireland and in Europe. In general petrol cars in Ireland have a smaller engine and less power than the European
average, whereas Irish diesel vehicles have a larger engine capacity and more power than the European average.
This reflects the relatively low use of diesel in Ireland, with perhaps most owners using vehicles for commercial
Previously diesel technologies were only used in larger cars because the higher cost could not be justified for smaller
vehicles. Now however, throughout Europe highly advanced diesel technology is being applied to small cars. The
proportion of fuel efficient new vehicles (utilising various technologies) sold is higher than ever before, with the
share of sales in 2001 of vehicles generating less than 140g/km reaching 23 percent, up by 970 percent from 1995.
Sales of ultra-low CO2 emitting vehicles (120g/km) were 306,514 units in 2001.
Reported by ACEA and the European Commission in 2003- it does not include Japanese or Korean vehicles.
In Ireland there has been a shift over time in engine capacity sold. As seen in Figure 3.2, the majority of vehicles sold
over the 1986-2002 period have an engine capacity in the range of 1-1.4 litres. This implies a decrease in CO2
emissions as traditionally smaller engines have lower CO2 emissions compared with a larger engine using the same
technology. The largest percentage change between 1987 and 2002 was in the segment 1.7-1.9 litres engine
capacity. This could reflect the increase in diesel cars sold from 10% in 1999 to 17% in 2002 as many diesel cars have
an engine capacity of 1.9 litres.
Figure 3.2: Irish passenger vehicle sales in engine capacity over time, (VRU, 2003).
no. of vehicles
Box 3.1: Advanced conventional technologies required to meet the 140g/km CO2
emissions target.
Vehicle load reduction:
Reduction of vehicle mass is important and generally achieved through increasing use of lightweight
materials such as plastics, aluminium, and high-strength steel. Average vehicle mass in Europe has
remained stable even as the number of vehicle electronic devices and safety measures continue to mount.
The Vehicle End-of Life-Directive (2000/53/EC) that was introduced in 2002 requires 85% of vehicles to be
re-used and recycled by 2006. This will mean that the use of some light-weight materials will be restricted,
as last owners of vehicles are responsible for the disposal costs until 2007 but after that vehicle
manufacturers will be required to meet all or a significant part of the costs of providing free take back if
the car has no value.
Aerodynamics is the area where the shape of a vehicle affects the aerodynamic drag and fuel
consumption. This drag is measured by frontal area and coefficient of drag (CD). The CD of today’s cars is
0.3-0.35, while that of light trucks is 0.4-0.45 (DeCicco et al, 2001). Ongoing work to reduce the drag
coefficient could lead to a reduction by 10-25% in the future (DeCicco and Ross, 1993).
Tyres are another area where fuel efficiency can be gained by changing the characteristics of the tyres
such as improved rubber, increased inflation pressures, and changes in tread design. These improvements
can lower the rolling resistance of the vehicle.
Engine combustion:
Direct injection diesel engines have been introduced since 1998 and paved the way for the widespread
market acceptance of diesel passenger cars as a high performance alternative to petrol cars. These
technically advanced diesel engines include highly efficient unit injector and common rail technology.
Gasoline direct injection technology is becoming available on the market with lean burn combustion that
can result in fuel consumption savings of approximately 15%. Challenges still exist in management of NOx
and particulate emissions.
Other developments have included the development of 2-step variable valve lift, fully variable valve lift,
fully variable intake manifold, 2nd generation of common rail injection (high pressure), application of
advanced diesel technology to small cars, 6-speed automatic gearbox, and integrated starter-generators
Improved transmissions:
Continuous variable transmission (CVT) allows for an infinite number of variations in gear between
minimum and maximum levels so that engine speed and torque can be chosen to maximise the engine
efficiency over the whole engine map. The problem in the past was that it was only suitable for small cars,
however this has now been overcome and is now offered by many manufacturers in larger cars, although
the torque limitations may restrict its use in light trucks. CVT offers a substantial improvement in efficiency
over automatic transmissions, which generally have an efficiency of only 80 percent. It is estimated that 20
percent improvement in fuel economy can be achieved over conventional automatic transmissions.
Another option becoming more popular is the automation of manual transmissions. Manual transmissions
have efficiencies in the mid-90 percent range and automated manual transmissions combine the
convenience of the automatic transmission with the efficiency of the manual transmission. It also allows
the manufacturers to preprogramme the transmission to select the most fuel economic points of
operation on the engine map. The new generation of 120g/km cars are nearly all fitted with this
technology. From ‘Drilling in Detroit- Tapping Automaker Ingenuity to Build Safe and Efficient Automobiles’,
Union of Concerned Scientists, 2001.
Future developments in passenger cars will involve alternative fuels and advanced technologies and these are
discussed in more detail in the next chapter on alternative fuels. Figure 3.3 provides a schematic diagram of the
automobile manufactures view of the path of future propulsion technologies.
Figure 3.3: road map of advanced powertrain technologies (EUCAR, 2002).
Exciting progress in conventional engines that operate on petroleum fuels is being made as a consequence of the
research and development into combined combustion systems (CCS), also called homogeneous charged
compression ignition systems (HCCI). Since direct injection petrol and diesel combustion systems are now a reality,
the combustion processes of both conventional systems have become alike. The concept of combining both
systems in a new combustion process is under development in several companies. The technology involves
premixing the fuel with air, as in a spark-ignition engine, and igniting it through compression, as in a diesel engine.
In some variations of this process, the fuel-air charge is less fully mixed (stratified-charge compression ignition).
These types of combustion can provide high fuel efficiencies, similar to diesel combustion, and very low emissions of
NOx and particulates, up to 45% less than diesel engines. Thus they combine the best of petrol and diesel
combustion systems.
The challenges that remain include control of ignition timing, performance at higher loads, control of hydrocarbon
and carbon monoxide emissions, combustion stability, reliable cold starting, and smooth response in dynamic
operation (OATT, 2002). Some develop these systems basing the hardware on direct injection petrol combustion,
whereas others work on the basis of direct injection diesel combustion. The crucial parameter in the development of
these systems is the fuel characteristics. There is much ongoing work in the development of synthetic fuels that
could fill the special requirements of homogeneous combustion. It is expected by vehicle manufacturers that these
combustion systems will not be widely available for another decade (Steiger, 2002).
Another advanced system with reduced fuel consumption that is being developed is hybrid vehicle technology. The
Japanese have led the way in developing and bringing hybrid vehicles to market over the last few years. Hybrid
vehicles are vehicles that have their internal combustion system complemented by an electric motor. They combine
two or more energy conversion technologies (e.g., heat engines, fuel cells, generators, or motors) with one or more
energy storage technology (e.g., fuel, batteries, ultracapacitors, or flywheels). They have the potential to substantially
reduce fuel consumption by shutting the internal combustion engine down at inefficient engine operation points
and allowing the electric motor to take over. Their use, however, is not without debate among industry experts. This
is because early hybrid vehicles had increased mass due to the combination of engine and battery and hence their
overall energy consumption was not propitious.
The Toyota Prius was the first mass-produced hybrid vehicle, and to date more than 100,000 have been sold
worldwide. Japanese carmaker Toyota Motor Corporation has announced that it will boost production of its second
generation Prius hybrid model following a surge in demand around the world. The global sales target for the Prius
for 2004 has recently been revised from 76,000 to 130,000, which exceeds the total production of the first model
between 1997-2003 (The Age newspaper, 28th January 2004). It is certified in Europe with CO2 emissions of 120g/km,
making it a member of the ultra-low CO2 emitting group of vehicles, although it is neither a small nor diesel vehicle.
Other hybrid technologies on sale in Europe are the Honda Insight and the Honda Civic IMA, although they are
currently not available in Ireland. The price of these vehicles is generally approximately €5,500 higher (SIMI, 2004)
than the equivalent gasoline vehicle and they offer fuel savings in the region of 20 percent. Fuel consumption
reductions are achieved not through the combustion system alone but by recapturing energy during regenerative
braking that can be stored by the electric motor for use as a power supply to accessories when the engine is shut off.
On a well-to-wheel basis it is not clear yet whether hybrid systems will have a long-term future as their systems are
complex and costly. If other advanced systems develop to market maturity, it is likely that vehicle technologies that
only involve one propulsion system will have the advantage. However the experience gained with electric
propulsion technology from hybrid systems is likely to be invaluable for future advanced systems such as fuel cell
3.1.2 Road freight transport:
The energy efficiency of road freight transport in the form of lorries is already comparatively well optimised, since
fuel consumption is a variable cost that determines the competitiveness of a haulage enterprise. Commercial road
transport users are therefore generally much more concerned with fuel efficiency than their private counterparts
and are aware of the amount consumed and potential savings available. Heavy truck fuel efficiency is determined by
several parameters including: basic vehicle design and combustion system, zone of operation, driver technique and
weather factors. Figure 3.4 illustrates an energy audit carried out as part of the U.S. Department of Energy (U.S. DOE)
and industry study called ‘21st Century Truck’ that assesses future road freight technologies. The base data are
estimates of the energy losses with current technology and target values represent goals for energy improvements
to be achieved by the programme. The energy use in a heavy-duty class 8 truck is such that engine losses,
aerodynamic losses and tyre rolling resistance losses account for around 94% of the energy required to sustain a
speed of 104 kph (U.S. DOE, 2000). Driveline friction and engine-based accessories such as compressors and
alternators make up the remaining 6%.
Figure 3.4: Class 8 lorry energy audit, (U.S.DOE, 2000)
Similar to passenger cars, there is potential to reduce fuel consumption by improvement of aerodynamic, engine
and tyre efficiencies. Engine losses utilise approximately 60% of the energy content of the fuel burned and peak
thermal efficiencies are around 45%, which is slightly higher than passenger car diesels. Some of these losses can be
reduced by improvements in the engine system. Table 3.1 contains a summary of engine R&D areas with the
estimates of approximate engine efficiency improvement targets for a 10-year research programme (U.S.DOE, 2000).
In total this would lead to an improvement of up to 20% in engine efficiency and future new engine concepts could
improve engine efficiency by up to 25%. However there remain many barriers to the achievement of these
improvements, mainly in the understanding of thermodynamic limitations. Therefore in the next ten years a realistic
target for the engine thermal efficiency overall appears to be 50-56%, which could translate to a fuel consumption
reduction of approximately 10%.
Development activity
Efficiency gain (%)
Exhaust heat recuperance and improved thermal management
More electric accessories and system optimisation
Peak cylinder pressure
Reduced engine friction
More efficient combustion
New engine concepts
Table 3.1: Engine efficiency projections (USDOE, 2000)
A typical value of the drag coefficient for a tractor semi-trailer is in the range of 0.65-0.7. An aggressive programme
to research and develop improved aerodynamic design could reduce the drag coefficient by 20% (USDOE, 2000).
Reducing aerodynamic drag by 25% can result in fuel savings for steady highway travel by between 10-15%.
Tyre energy losses can be reduced through rolling resistance reduction. The USDOE 21st Century Truck programme
has set targets with industry to aim to reduce tyre rolling resistance of 15% that would bring 4-5% reduction in fuel
Further improvements in fuel consumption can be gained through advancements in driveline losses and auxiliary
loads that could achieve a further 3.5-6.5% reduction in fuel consumption.
Aggregating the achievement in fuel consumption reduction due to improved engine efficiency (10 percent), drag
coefficient (10-15 percent) and reduced driveline and auxiliary load losses (3.5-6.5 percent), the total target for fuel
consumption could be a reduction of 30%.
Rail transport produces greenhouse gas emissions, on the same basis as other modes, by the combustion of fossil
fuels. There are several methods of influencing the energy consumption of rail transport. They are mainly the
amount of energy used and the form of the energy used. In the first category rail transport is one of the most
efficient modes of transport. Only shipping is nearly as efficient. Rail transport of freight uses 4-6 times less direct
energy per tonne-kilometre than transport by road (INFRAS/IWW, 2000).
Although the energy efficiency of rail transport is very favourable, advances are still sought to improve
competitiveness and relative costs compared with other modes. One way is to increase the capacity in order to
increase the energy efficiency per tonne or passenger travelling. To this end double deck trains have been
developed and are widely used for both passengers and freight, in particular in the United States (UIC, 2004). Other
examples are Japan Rail East and SNCF, which increased the number of passenger seats by 40 percent without any
increase in vehicle weight. Furthermore, the size of locomotive engines of German ICE2 trains were dramatically
reduced and this increased the space available for passengers.
A second controllable aspect of energy efficiency in rail transport is the energy form used, whether combustible fuel
or electricity. Electricity can be supplied from renewable energy sources or alternative renewable raw material can
be used for combustion. Worldwide, approximately 60% of passenger transport and 80% of freight transport by rail
uses non-renewable diesel fuel (UIC, 2004). Some rail companies have begun to set criteria for the type of electricity
purchased for use in the trains. For example Swedish rail only uses ‘green electricity’ such as that from renewable
energy sources.
The rail sector continues to search for measures to improve energy efficiency. The International Union of Railways
(UIC) held a second workshop in energy efficiency in 2004 and identified several instruments to achieve this:
Energy efficient driving
Fine tuning diesel engines
Braking with energy recovery- electricity only
Weight-optimised trainsets or wagons
Optimised heating, ventilation and air condition systems.
A database of energy-efficient technologies is now available to the public on the UIC website7 that provides an
overview of energy efficiency technologies, their development status, and the potential efficiency improvements.
There is no estimate made of the overall efficiency gains expected for railways in the medium term.
Shipping & aviation
3.3.1 Aviation
As seen in Chapter 2, air transport makes a significant contribution to worldwide and Irish CO2 emissions. The most
fuel-efficient engines today are high-bypass, high-pressure ratio gas turbine engines. They operate with high
combustion temperatures and pressures that are good for fuel efficiency but that generate favourable conditions for
NOx formation. Table 3.2 below provides an overview of the historic and projected fuel-efficiency improvements.
Time Period
Total Aircraft
45 (40-50)
Table 3.2: Percentage production fuel-efficiency improvements (ASK kg-1 fuel), IPCC, 19998.
Technical advancements that can improve the fuel consumption and hence CO2 emissions of an aircraft generally fall
into two categories: airframe improvements, i.e. weight and drag of the airplane; and improvements in engine
efficiency. Between 1950 and 1997 a 70% improvement in overall fuel efficiency was observed. Aerospace industry
experts (IPCC, 1999) estimate that airframe and engine advancements could improve fuel efficiency by a further 20%
by 2015, whereas technology scenarios assume an efficiency improvement of 40-50% by 2050. Advanced future
technologies include weight reduction technologies, aircraft control systems, airframe concepts such as laminar flow
suction systems, and improvements in thermal and propulsive efficiency. Since the lifetime of an airplane is 25-35
years, any technological changes will require a long time before a significant reduction of emissions is noticed from
the fleet. Considering the time required for technology implementation and stock turnover, potential reductions in
energy intensity are roughly 15 to 25 percent by 2015 and 25 to 40 percent by 2030 (Pew Centre, 2003).
3.3.2 Shipping
Very little data exists on greenhouse gas emissions on a per ship basis. The EU has estimated ship emissions to be
increasing and has asked the International Maritime Organisation (IMO) to devise a strategy to reduce greenhouse
gas emissions from ships. The Assembly of the IMO has adopted resolution on IMO Policies and Practices related to
reduction of Greenhouse Gas Emissions from Ships in November 2003. This resolution requests the Marine
Environment Protection Committee to develop, among others, a greenhouse gas emissions baseline and
methodology for measuring and reporting greenhouse gas emissions from ships.
Energy efficiency improvements can be expected across all modes of transport
The fuel efficiency of passenger cars in Europe is gradually improving- there has been an 11 percent reduction
on average new car CO2 emissions between 1995-2001.
Vehicle manufacturers in Europe are under obligation to meet their Voluntary Agreement target of 140g/km
CO2 emissions on average across their fleets in 2008. This implies a reduction of approximately 15 percent from
the average new car CO2 emissions today. This will be achieved mainly using advancements in conventional
vehicle technology.
Available at
Available at
More advanced technologies such as hybrid vehicles and combined combustion systems are at various stages
of development. Hybrid vehicles are becoming commercial with increasing sales, however many of the
advanced technologies will not achieve high market penetration until after 2008. Advanced vehicle
technologies have potential to further reduce fuel consumption by approximately 20 percent.
Road freight transport manufacturers in Europe do not have CO2 emissions targets to meet. Although the
technology is better optimised for fuel consumption than passenger cars, there has been little improvement in
recent years.
The CO2 emissions of rail transport vary greatly depending on the technology employed.
More and more modern trains are operated on electricity. The potential exists to run them on ‘green electricity’
thereby reducing operational CO2 emissions to nearly zero.
Estimates of improvements in aviation energy efficiency lie at around 15-25 percent by 2015, however large
uncertainties exist.
A summary of potential greenhouse gas emissions savings due to technological improvements in 2015 is
presented in Table3.3.
GHG emissions reduction potential by
Passenger car
Road freight
Table 3.3: Summary of potential reductions in greenhouse gas emissions due to technology
advancements in 2015.
Technological response- Alternative fuels and technologies
The second part of the technology strand as a measure to reduce greenhouse gas emissions from transport involves
the diversification away from petroleum fuels to alternative fuels and technologies. Since transport demand
continues to grow and is likely to do so in the future, while oil production in the EU is expected to decline, alternative
fuels represent a way to achieve several goals simultaneously. They can provide an opportunity to reduce
greenhouse gases and other pollutant emissions, create new employment prospects, improve security of energy
supply and even support rural economies. The European Commission adopted the Green Paper on energy ‘Towards
a European Strategy for the Security of Energy Supply’ in 2000, which proposed a target of 20% substitution of fossil
fuel by alternative fuels in the road transport sector by the year 2020 in order to reduce greenhouse gases and
improve energy security of energy supply. Alternative technologies that have been under consideration by industry
and policymakers are hydrogen, natural gas, biofuels, and synthetic fuels as well as electricity (although the latter is
not a fuel as such).
Alternative fuels and powertrain technologies that are intended to replace conventional petroleum fuels face
multiple challenges before gaining market acceptance and penetration. The predominant use of petroleum fuels
with internal combustion engines in private transport is a result of the many advantages that these systems offer to
customers. The public is used to vehicles that are flexible and cheap. Although petroleum fuels are highly flammable,
fuel containment systems are sufficiently developed that vehicles can be safely driven and parked anywhere. The
fuelling range has also improved greatly with refuelling required for passenger cars on average only every 400-600
km or even up to 1000 km for diesel vehicles. The infrastructure for petroleum is standardised and there is extensive
The alternative fuels that are viewed as capable of meeting most of these needs, and are indeed already on the
market, are biofuels and natural gas. There is much associated discussion of the potential of hydrogen to fill the
requirements of transport and the shift to a so-called hydrogen economy. However due to infrastructural, cost and
technical challenges, it is likely to be a medium, or long, rather than short -term solution. Electric vehicles are another
option under consideration as a solution to local air quality problems, but that may not reduce greenhouse gas
emissions necessarily.
Under the European Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for
transport (European Parliament and European Council, 2003), Member States are recommended to substitute a
minimum of 2%, by 2005, and 5.75%, by 2010, of transport fuels with biofuels and other alternative fuels. These
targets are indicative rather than mandatory but failure to meet them requires Member States to explain the
discrepancy in their annual biofuels progress reports.
One motivation given by the Directive for its conception is to reduce the EU’s dependency on oil and to find a way to
reduce global greenhouse gas emissions in order to comply with the Kyoto Protocol commitments. The
Communication from the Commission in 2001 on alternative fuels for road transportation and on a set of measures
to promote the use of biofuels stated that the Commission sees potential for three main alternative fuels: biofuels,
natural gas and hydrogen, to each replace mineral automotive fuels by 5% by 2020. Since the infrastructure is not
yet widely available for natural gas and hydrogen as transport fuels and vehicle technologies are not yet mature for
hydrogen fuel, biofuels are seen as the first step that can be taken in this process. It is also appropriate in the context
of the reforms of the Common Agricultural Policy that there is a focus on supporting rural economies, while
decoupling subsidies from food production (Commission of the European Communities, 2003a).
Since Ireland is a technology-taker, the development of advanced alternatively powered vehicles will not be an
option that can be influenced greatly, if at all. Biofuels on the other hand provide a means to use low carbon fuels
while remaining with conventional powertrain technology. This chapter will therefore mainly deal with biofuels and
provide an estimate of the greenhouse gas savings that can be achieved through this measure. It will also describe
more briefly the potential and timeframe of other alternative systems that can be expected in the future.
Biofuels are alternative motor vehicle fuels that are produced from biological material. There are four categories of
Plant oils, such as rape seed, soybean, palm, etc., which can be used directly with a modified diesel engine
or processed to produce biodiesel that can be used in a conventional diesel engine.
Bioalcohol, such as methanol and ethanol, can be produced from cereal crops such as corn, wheat, grasses
etc., and sugar beet. Modified petrol engines can be operated on it.
Organic waste material can be used as biofuels- cooking oils into biodiesel, animal manure and organic
household waste into biogas, plant waste into bioethanol.
In the medium term, technological advances in the thermochemical processing of biomass could produce
biodimethylether, synthetic fuels and hydrogen to take a few examples.
These fuels can be used in their pure forms or alternatively biodiesel and bioethanol can be blended with diesel and
petrol respectively and employed in the operation of engines without modification.
Biodiesel, bioethanol and vegetable oils have so far received the most attention in Ireland since they are obtained
either from natural and waste products that are available for recovery or are appropriate for agricultural production
in Ireland (SEI, 2003). The other possibilities are either prohibitively expensive or energy intensive in their production,
or else not available in Ireland. Even vegetable oil, biodiesel and bioethanol are significantly more expensive to
produce than petroleum fuels based on current oil prices of around €30/ barrel. Biofuel crops can be grown on setaside land.
Vegetable oil for use as biofuel can be made from any oil plants. Rapeseed oil is probably the most suitable plant oil
for production in Ireland as it can be grown on Irish set-aside and arable land (SEI, 2003). The extraction process can
be carried out by cold pressing and filtering that does not involve substantial capital costs relative to biodiesel
production or by industrial extraction using solvents. Fuel processing and industry start-up costs are low compared
with processes that are more production-intensive (such as biodiesel, for example). Vegetable oil production plants
require low capital investment and the by-product cake can be used locally. It is possible to start at a small scale and
expand later. A cheaper method of producing vegetable oil is by recovering recycled waste vegetable oil mainly
from caterers or by using tallow from the rendering industry. These are both readily available since their markets
have been disrupted as a result of the chicken dioxin and BSE crises. They are suitable on a small scale and are not
foreseen to play a large part in continental biofuel production.
Vegetable oils
Animal fats
Use Options
Convert to
•Any engine
•Any burner
Use in
•Pre-heat fuel
•Fit extra fuel filter
•Increase injection
•Change injectors
•Fit lift pump
Use for
•Big burners only
•Increase pressure
•Pre-heat fuel
•Change nozzles
Figure 4.1: Schematic diagram of production of biofuel from vegetable oil and animal fats (SEI,
Further processing of the oil produces biodiesel. Vegetable oil is reacted with methanol in the presence of a catalyst
to produce a so-called fatty acid methyl ester (FAME) and glycerine. FAME is the generic term given to biodiesel and
it can be made from any oils. The rapeseed version is called rape methyl ester or RME, for example. Large refineries in
Europe perform this process, and construction is underway in Scotland of a plant to produce biodiesel from tallow.
there is none in operation that carries out the final step to produce biodiesel in either Ireland or the UK. Both pure
oils and biodiesels are produced as substitutes for motor diesel fuel.
About 1.2 million tonnes of biodiesel was produced in the EU in 2002 and production is rapidly increasing with
capacity in Germany alone reaching over one million tonnes in 2003 (Commission of the European Communities,
2003b). An EU biodiesel standard (prEN14214) is in the final stages of being formally adopted (European Committee
for Standardization, 2001).
Figure 4.2: Biodiesel production in EU, in thousands (CEC, 2003b)
The third biofuel under consideration in Ireland is bioethanol, which can be used as a substitute for petrol.
Bioethanol is produced from a range of arable crops; wheat and sugar beet are currently the most relevant but grass
and other cellulose crops are under investigation and are considered to hold high potential for the future. Some of
the bioethanol is converted to ETBE (ethyl-tertio-butyl-ether) that can be easily blended with conventional gasoline.
Fuel utilisation and vehicle technologies
In general the high level of fuel quality required by present and future vehicles must be maintained even when
biofuels are used as blending components. Fuel quality is extremely important, especially in conjunction with
sophisticated exhaust after-treatment systems. Biofuels should not lead to the deterioration of the quality of the final
blended fuel (Faucon and Leport, 2002). Specific quality standards for biofuels for automotive application must be
developed where they are not yet available, as for example vegetable oils. There are issues with the quality and
stability of these fuels and therefore specification standards for both rapeseed oil and the biodiesel derivatives are
being developed in Europe and at a Member State level (Remmele et al., 2003). There have been some complaints of
inferior quality biofuel on the market, with the result that, for example, some of Volkswagen’s latest models are now
only certified to operate on 100% biodiesel after a minor adaptation to the engine. Previously all Volkswagen diesels
were certified to operate on 100% biodiesel fuel. Although biodiesel should be produced according to forthcoming
standards (prEN14214 is in the process of being finalised), in practice there is as yet insufficient standardisation of
the fuels. The direct blending of waste residue (such as used fried oil) is not recommended at any time with nonmodified engines.
Vegetable oils can be used in their unprocessed form to fuel diesel engines, but only with some modifications to the
engine. The engine conversion consists of some combination of fuel pre-heating, extra filtration, increased injection
pressure and replacement injectors. The cost of conversion can range between €800-2500 (ELSBETT, 2003). ELSBETT
Technologie GmbH has designed and optimised combustion engines in Germany since 1945. In 1980 the company
began converting prechamber diesel engines to run on pure vegetable oil commercially. The conversion kit includes
new injectors, glow plugs, heat exchangers and filters that adapt the engine to handle the higher viscosity of
vegetable oil. The ELSBETT conversion technology does not run well on waste vegetable oil but prefers pure (virgin)
vegetable oil. The system is most suited to heavy-duty prechamber engines. ELSBETT acknowledges that they have
had less experience with the conversion of direct injection engines.
Direct injection diesel technologies that use unit injector systems such as Volkswagen TDI engines can be converted
to operate on vegetable oil using the ELSBETT system. The conversion technology is still being refined, however.
Another passenger car engine technology for which the conversion technology is not yet mature is common rail
systems, mainly because the electronics of the Engine Control Unit (ECU) are difficult to adjust. Since most new
diesel passenger cars contain direct injection diesel engines, either using unit injectors or common rain (although
common rail is more widespread), the conversion of modern passenger cars to run on pure vegetable oil is less
established. ELSBETT supplies a warranty of 1 year for converted vehicles, as no vehicle manufacturer retains their
warranty, once the combustion system has been altered.
The market penetration of vegetable oil in its purest form may be limited due to the reluctance of customers to
undertake widespread conversion of engines for the use of an alternative fuel.
Once vegetable oil has been processed to biodiesel, it can be used as a blend or unmixed in conventional diesel
engines. Blends between 2 and 30 percent can be utilised in most engines without modification9. Some
manufacturers require minor modifications for use with 100% pure but many diesel engines can operate on
biodiesel without modification.
In France biodiesel is used as a minor ingredient (5 percent) in blends with mineral diesel, which is sold to the
general public and as a 30 percent blend in fleets monitored for evaluation of environmental advantage
(Commission of the European Communities, 2003b). In Germany and Austria it is mainly used in undiluted form.
Production capacity in Germany alone in 2003 is estimated to reach 940,000t with 550,000 t sold in Germany in 2002.
There are now 14 biodiesel plants in operation.
Bioethanol can be used in several ways as a vehicle fuel substitute both for petrol and diesel- as a high or low blend,
or in its pure form. Sweden operates hundreds of diesel buses on pure ethanol with ignition additives. In most other
cases in Europe ethanol is blended with petrol or transformed to ETBE as an additive to petrol. France is the EU’s
largest ethanol producer. Ethanol is also used in Flexible-Fuel-Vehicles (FFV)- E85: 85 percent EtOH or gasoline or any
combination thereof, especially in the US where they represent about 1% of the passenger vehicle population
(Kohler, 2003).
Vehicle manufacturers accept the blending of bioethanol with petrol up to 5% as this means that the oxygen
content of petrol remains within the upper limits of petrol specified in 98/70/EC. Manufacturers prefer, however, the
conversion of ethanol to ETBE for blending, and this can then be added to 15%. Biofuels have different
characteristics (calorific power, density and air/fuel ratio) from conventional fuels. Therefore, the maximum
concentration of biofuels needs to be limited to a level that can be tolerated by the engine without creating
variations in the engine calibration as it could penalise the driveability and the emissions of the vehicles.
To date, commercial operators have not operated with biofuels since their prices are too high. However
technologically the same constraints apply as to passenger vehicles.
Greenhouse gas and energy balances of biofuels
Since an overriding justification of the promulgation of biofuels in Europe is to reduce greenhouse gases from
transport, the energy and greenhouse gas balances of these fuels are of paramount importance in a discussion of the
merits of biofuels as a measure. In the last 10 years there have been an increasing number of studies on this subject
and a wide range of data is now available.
The estimation of greenhouse gas and energy balances of biofuels is complex. Not only the direct emissions during
combustion are relevant, rather the full fuel cycle must be assessed for comparison with fossil fuels. While the
combustion of biofuels is considered to be CO2-neutral, according to the recommendations made by IPCC, the
production processes require energy input that can distort the positive energy and greenhouse gas balance. Many
studies use the Life Cycle Analysis as standardised by ISO 14040-14043. In particular the European Liquid Biofuel
Network EUBIONET (Commission of the European Communities, 2003b) has published a compilation of studies
carried out by a number of countries on environmental balances of liquid biofuels. It is clear that the overall
environmental balance is a function of the raw material cultivated, the utilisation of by- and co-products, and the
agricultural yield. Table 4.1 provides an overview of the estimates available in the literature. Energy balances are
estimated as a ratio between the energy required to produce and distribute the fuel, and the energy content of the
final fuel product. The data has been averaged from estimates provided by countries in the EUBIONET network
(where possible a range is given). The CO2 savings are relative to the CO2 emissions from petroleum-based diesel or
petrol fuel (energy) equivalent.
An example from Table 4.1 is demonstrated with rapeseed oil- 4.68 times the amount of energy is produced from a
kg of vegetable oil than is input in the production process. The inverse of this is that 0.21 or 21% of the total fuel
energy available for utilisation in the final product is required to produce a kg of the fuel. The total production
energy required to produce a kg of vegetable oil is 7.95 MJ. The CO2 emissions from production and operation of a
vehicle on a kg of vegetable oil represent only 19% of an equivalent kg of diesel or in other words 81% of the CO2
emissions from the use and production of a kg of diesel fuel are saved.
Energy balance
Production energy
CO2 ratio
CO2 savings
Rapeseed oil
52%- 74%
Wheat ethanol
Sugarbeet ethanol
Table 4.1: Overview of energy balance, based on EUBIONET compilation (CEC, 2003b).
Vegetable oil requires less energy to produce than its derivative biodiesel, which necessitates further refining and
processing. Both have a positive energy balance, however, when compared with conventional diesel fuel. Efficient
and cost-effective production of biodiesel requires a central refinery processing large volumes. From Table 4.1, CO2
equivalent savings from biodiesel operation range between 52-74% compared with conventional diesel. The range
in values represents not only the variation as a result of different assumptions and methodologies in studies but also
because of the parameters in the production process that are not always included. Some researchers in the network
estimate the CO2 savings with biofuel and include credits for use of the by-products as animal feedstuffs and fuel in
the production process. Other often disputed factors include the estimation of the cultivation process including the
manufacture of pesticides and the N2O emissions that must be taken into account in the greenhouse gas savings. All
these factors are assumed included in the values given in Table 4.1 above.
The energy balance of bioethanol is controversial, as some studies (mainly older) have found that more energy is
needed to produce the bioethanol than the net energy in the bioethanol produced. Net energy balance calculations
are complex and the efficient (or not) utilization of by-products as production fuel or animal feeds often determines
whether the net energy balance is positive (Henke et al., 2003; Shapouri et al., 2002).
Effective use of waste by-products in the production of biofuels is crucial. However the EU directive on the
promotion of biofuels does not manage this aspect. Modern bioethanol production may have a more positive
energy balance than previously realised. The latest studies indicate lower costs for bioethanol produced from sugar
beet than from wheat (Armstrong et al., 2002; Henke et al., 2003). While some studies are sceptical about the benefits
to be gained from bioethanol, others estimate significant environmental, social and economic benefits from its
production and use (Urbanchuk, 2001).
Biofuels in Ireland
Vegetable oil: To date rapeseed is a crop that has not been grown much in Ireland, since returns are not as
favourable as that of cereals. Studies carried out by Teagasc indicate that satisfactory yields of summer and organic
winter rapeseed (more than 1 t/ha) can be achieved. There is already a small amount of rapeseed oil produced and
increasing interest from farmers, mainly from Wexford, Kilkenny and Wicklow, in growing rapeseed for the
production of vegetable oil. Some vehicles have been converted to operate on the fuel with the ELSBETT conversion
kit and more are planned.
As with all biofuels, the price of seed and the utilisation of the by-product fodder cake, as animal feed, determine the
commercial viability of these projects. Animal feed produced from rapeseed would represent a native source of
animal protein that could replace imported fodder cakes that are typically based on soy. There are 30,000 hectares of
set-aside land in Ireland; two thirds could potentially be used for the production of rapeseed, with a yield of 1.3 t/h
(Armstrong et al., 2002). This would result in the production of 26,000t of vegetable oil.
Cork City Council is carrying out a project whereby a portion of the Council’s fleet is fuelled with vegetable oil. The
project is part of the EU programme CIVITAS I that focuses on strategies to achieve Clean Urban Transport. Cork
considered various cleaner vehicle options including LPG and electric vehicles before concluding that vegetable oil
offered the greatest potential to reduce CO2 emissions economically, which was appropriate to Ireland. The German
ELSBETT conversion kit was used to modify the engines of 17 light commercial vehicles to run on pure rapeseed oil.
The process cost approximately €1000 per engine and involved inserting extra electric fuel heaters and filters to
ensure the injectors don’t become coked.
The fleet refuels at the Cork city depot where an old tank for leaded petrol was available for conversion to hold the
rapeseed oil. Eilish Oils Ltd. from County Wicklow supplies the rapeseed oil at a price of €0.52/litre. When VAT and
excise duty is added to this the price rises to €1.12/litre. This means that the biofuel costs on average 33% more than
conventional diesel fuel, which is prohibitive for widespread use. Cork plans to convert several more vehicles to
vegetable oil operation and the CIVITAS I programme will continue for another 2 years approximately (Miracles
Project Report, 2003).
Biodiesel: So far none of the rapeseed oil produced in Ireland is further processed to produce biodiesel, as there is no
such plant in operation in Ireland. There has been some interest expressed in collecting cooking oil for process to
biodiesel. This is the situation in the UK also, although as mentioned above a plant is under construction in Scotland.
Study is required to assess the viability of biodiesel refineries to which producers could send their vegetable oil or
waste oils and fats. Biodiesel plants in Germany for example are operated by vegetable oil companies, whose main
business is the production of vegetable oil for food consumption, on a large scale. Preliminary studies have
examined the feasibility of establishing a biodiesel plant in order to process vegetable oil and tallow to be suitable
for all diesel engines in Ireland. There is no data available on the economic scale required to be a profitable process
operation. However it is estimated that the cost of biodiesel would be in the range of €0.55-0.65/L in Ireland (Rice,
Recovered vegetable oil (RVO) from the food and restaurant industries and beef tallow from the rendering industry
could also be used as raw materials for the production of biodiesel. It is estimated that up to 10,000t/year of RVO
could be collected and 60,000t/year of tallow is produced, of which two thirds is used as animal feed. The disposal of
3,000t of this as specified risk material (SRM), that is made up of animal parts that are most likely to contain BSE, has
been resolved by using it in the boilers of rendering plants. However the long-term future for the use of tallow as
animal feed is doubtful and therefore an alternative use would be welcomed.
From an infrastructural point of view, biodiesel would be a practical option as it could be blended by oil refiners and
distributed as part of the regular consignment of diesel. Since 40% of Irish fuel is produced at the Whitegate
refinery10, it would seem appropriate that blending would be carried out there. The approach of the UK towards
biofuels will be very important in determining Ireland’s strategy. If the UK begins to blend biodiesel with
conventional diesel fuel, then it may be most practical for Ireland to follow suit since much of our oil is imported
from the UK.
There is no significant production of bioethanol in Ireland at present. However the production of bioethanol from
sugarbeet and molasses is of potential interest, as a result of the synergy with Irish sugar production. It is estimated
by Irish Sugar that the gross cost of producing bioethanol is approximately €0.75/L before V.A.T. and excise duty and
therefore will only be viable with the remission of excise duty.
Compressed natural gas (CNG) and liquefied petroleum gas (LPG)
The widespread utilisation of CNG for transport would double the utilisable amount of fossil fuel energy resources in
the world and could provide a significant reduction in CO2 emissions compared with petrol engines (Green and
Schafer, 2003). It is estimated that engines designed to run on one of these fuels can achieve tank to wheel
reductions of CO2 emissions of up to 30 percent with CNG and nearly 20 percent with LPG. Petrol engines can be
converted to run on LPG or CNG although vehicle manufacturers do not condone the conversion and therefore the
original vehicle guarantee no longer holds after conversion. Some vehicle manufacturers sell dedicated CNG and
LPG vehicles, while others sell dual CNG/LPG with petrol fuelled vehicles. However, if the amount of CNG used in the
EU were to increase significantly then it is estimated that the energy requirement to pump significant amounts of
natural gas from Russia would reduce the CO2 benefits (Steiger, 2003). Another issue is that although CO2 emissions
from vehicles that operate on CNG are lower, the emission of methane is substantial and compensates for the CO2
reduction in terms of global warming potential. In fact in terms of global warming potential CNG vehicles emit levels
of greenhouse gases approximately equal to a gasoline vehicle. Some vehicle manufacturers are investing significant
amounts in CNG technology as an alternative tool to CO2 emissions from petrol vehicles using current technology
(Rovera and Volpi, 2003). Disadvantages also include the inefficient storage on board the vehicle that leads to a
shorter tank operating range. The employment of CNG engines in buses has become popular due to the larger space
and hence tank capacity. The difference in infrastructure required at filling stations is also another barrier to market
LPG technology is popular with some because of its practical storage capability. LPG is the most widely used
alternative transportation fuel in the United States (Greene and Schafer, 2003). However its application is limited due
to its small-scale reserves compared with CNG and crude oil. It occurs naturally as a by-product in natural gas and oil
production. UK government has supported the use of LPG as an alternative fuel since 1996. In 1999 the duty was
reduced by 29 percent and in 2001 by 40 percent. This has cost the government £50 million in lost revenue in 2002.
Conversion of petrol engines for use with LPG has been funded through the PowerShift programme (£8 million
spent) and it is estimated that there are now nearly 100,000 vehicles using LPG. There are now 1,200 filling stations in
the UK that offer LPG fuel. Some are beginning to call for a review of this strategy since the greenhouse gas
reductions are not lower than diesel and diesel vehicles have become a lot cleaner as regards the emissions of other
pollutants (Foley, 2003).
In Ireland, there were 152 road vehicles listed in 2002 as operating on LPG in the Irish Bulletin of Vehicle and Driver
Statistics; of these 90 were private cars.
Synthetic fuels
Although there are huge resources of natural gas worldwide11, there are limitations and barriers to its direct use as a
transport fuel. Synthetic hydrocarbon liquid (Gas-To-Liquid or GTL) fuels can be manufactured from natural gas and
have been gaining popularity in recent years. They provide a practical alternative to petroleum fuels as they can be
used by conventional combustion technologies. Several automobile manufacturers and oil companies have
presented synthetic fuels as their strategy for the future and as a stepping stone to the hydrogen economy, which is
increasingly seen by policymakers and industry as a long-term energy solution.
Synthetic fuels, or synfuels as some manufacturers have begun to call them, could be made from natural gas that is
currently squandered by flaring. The process consists of steam-reforming the gas to a synthetic gas, which is a
mixture of hydrogen and carbon. This is further synthesised using the Fischer–Tropf process to a diesel-type fuel.
Shell markets this fuel as SMDS and has produced it for seven years in Malaysia. According to Shell, the GTL
production process, which the company employs, is similar to conventional diesel production in terms of CO2
emissions (Clark et al., 2002). It is more cost effective than the production of hydrogen, which can use the same
process. It is also more practical as the final product is in liquid form, which is better because of the available
infrastructure for transportation fuel distribution.
Synthetic fuel has the advantage that the production process can be controlled to yield fuel properties as desired.
This means that fuel can be produced with ultra-low sulphur, aromatics, and olefins content, which are all limited in
the EU. The fuels are unique in that the composition can be designed to meet the requirements of the powertrain. It
is with these fuels that manufacturers are planning to develop advanced combustion powertrains such as the CCS
system described in Chapter 2 (Steiger, 2002). Even when used with conventional powertrains, tests have shown
substantial savings of pollutant emissions and, combined with advanced technologies, CO2 emissions can be also
reduced. Some data indicate that 1-2 million barrels per day could be produced globally by 2010, which would
correspond to 29-58% of the projected European diesel fuel consumption (Kohler, 2003). These fuels can also be
blended with pure diesel to improve the composition and properties of the fuel. It is expected that synfuel will make
it quickly to the marketplace, in spite of slightly higher CO2 emissions from its production, as it can use current
infrastructure for distribution. It holds potential also to be developed as a liquid fuel for reformation in fuel cell
While synthetic fuels produced from natural gas possess advantages over natural gas and conventional diesel and
petrol fuels, their real potential is realised when they are produced from renewable energy sources. Volkswagen has
named these fuels sun-fuels©, a term given to synthetic fuels produced from sources such as biomass, energy plants
or biowaste. Alternatively, the synthetic gas can be produced from natural gas but renewable energies such as wind
or solar power are used in the production process. Volkswagen estimate that up to 40% of Europe’s transport fuel
needs could be met with sunfuels (assuming a 50% process efficiency). This process is not commercially viable at
present, since there is a difference of about 25 cent/litre in production cost between sunfuels and petroleum fuels
(Steiger, 2002). If sunfuels were produced from renewable energy sources they would be CO2-neutral while
remaining an ultra-low emission vehicle for other pollutants, if operated on a CCS engine.
There has been much enthusiasm for the idea of hydrogen as the new fuel of the future that will solve greenhouse
gas and energy supply problems. Figure 4.3 represents a schematic diagram of the options that are available with
the use of hydrogen as a transport fuel. However there are many technological issues that remain to be solved both
in the vehicles utilisation of the fuel and its production, before hydrogen’s potential can be realised.
Hydrogen can be burned in hydrogen combustion engines, with the advantage of zero CO2 tank to wheel emissions
and low emissions of other pollutants, except perhaps NOx. Some vehicle manufacturers have demonstrated
concept models in recent years12. This technology is favoured by BMW and they have announced their intention to
begin to sell hydrogen vehicles in the next year in Europe. The real energy reduction is approximately 15 percent
over a lean burn petrol engine producing the same power (Green and Schafer, 2003).
The International Energy Agency forecasts that natural gas will make up 23% of world Total Primary Energy Supply (TPES) in 2010 and 26% in 2030.
Adescription of the Ford concept car and the merits of hydrogen combustion are available at:
The more well-known and discussed use of hydrogen is in fuel cells. A fuel cell is a device that produces an electric
current from an electro-chemical reaction between hydrogen and air. Currently fuel cells are under development,
which obtain hydrogen from hydrocarbon fuels such as natural gas, biogas and methanol or pure hydrogen gas.
Systems that use hydrocarbon fuels as a source of hydrogen contain a reformer to generate hydrogen and have the
advantage that their storage and the distribution infrastructure is already available. The disadvantage is that there is
an extra stage in the procedure that bears losses and the reaction will produces not just water vapour but also CO,
CO2 and hydrocarbon emissions. The operation of fuel cells on pure hydrogen (from a renewable source) would be
the optimal configuration, as this could provide greenhouse gas neutral energy.
Figure 4.3: Elemental hydrogen economy based on the natural cycle of water (Bossel et al., 2003)
It should always be noted that hydrogen is an energy carrier rather than an energy source in itself. Energy is
produced from the reaction between hydrogen and oxygen and as such the energy lies within the bonds between
the molecules of the element. Hydrogen molecules can be transported and transformed into various hydrocarbon
compounds but the energy-producing reaction occurs when the hydrogen molecules at the final step break the
electrochemical bonds to form new molecules with oxygen, thus releasing energy.
Although hydrogen is the most abundant element on the planet, it does not exist in nature in its elemental form. It
has to be separated from chemical compounds using energy intensive processes such as electrolysis, from water, or
chemical processes, from hydrocarbons. In Iceland where 55TWh per year of electrical energy is economically
harnessable from geothermal and hydroelectric sources, electricity costs only $0.02/kWh. Even with these
advantages, it is estimated that the production of hydrogen costs 2-3 times the price it costs to import oil when
compared on an energy content basis (Jonsson, 2003). In Iceland it is clear that hydrogen acts as an energy carrier
between geothermal sources and mobility. There is a European project ECTOS underway with demonstration buses
operating on hydrogen and fuel cells. The goal is to achieve a ‘hydrogen economy’ within a few decades.
It is not just the cost of production of hydrogen gas that provides a challenge to the development of fuel cells for use
in transportation; the on-board storage of hydrogen gas is also problematic. Hydrogen must be pressurised or
liquefied before it can be stored on board a vehicle. Hydrogen can be stored in tanks as a hydrogen gas or liquid,
alternatively it could be stored in liquid form in a hydrocarbon fuel such as petrol or a synthetic fuel. The energy
losses associated with pressurising it to 20Mpa are 7 percent and 30 percent for liquefying it in plants with a capacity
of 10,000kg/hr. As the plant size decreases, the losses increase and can reach 60 percent for a 10kg/hr plant. Gaseous
hydrogen is more suitable for mobile applications than liquefied hydrogen due to the lower energy needed for its
production and the high boil-off losses associated with liquid hydrogen when the vehicle is stationary. However
even the storage of gaseous hydrogen is prohibitive with 1.08 unit of energy required in compression to obtain 1
unit of hydrogen at 20Mpa (Bossel et al., 2003).
Fuel cells are essentially like batteries in that they produce electrical energy from a chemical reaction. The main fuel
cell research in Europe is focussing on improving the efficiency and durability of fuel cells and reducing their costs.
The long-term cost target is to achieve €50/Kw for road transport use. The EU has identified an ideal solution to be
the production of hydrogen from renewable sources, assuming cost-effective solutions to hydrogen storage can be
found (European Commission, 2003b).
Electric vehicles
Electric vehicles have been in development and discussion for decades without any great market penetration. Many
studies on future sustainable transport strategies no longer include electric vehicles, as they are not seen to hold
much potential unless combined with a combustion engine in a hybrid vehicle. As the emissions performance of
conventional powertrain vehicles (or internal combustion engine, ICE, vehicles) has improved, mainly due to tighter
emissions standards, the priority for sustainable transport has become greenhouse gas reduction. Electric vehicles
do not produce tank to wheel emissions. However the well (or rather electricity plant) to tank (or battery)
greenhouse gas emissions can be substantial. Although the efficiency of electric vehicles is much higher than ICE
vehicles with a 90 percent efficiency compared with an average of 25-30 percent for ICE’s, the increased weight of
electric vehicles due to the heavy batteries used in the past has not shown much improvement in total energy
Battery technologies are critical to the success of electric vehicles and present large challenges technically and
commercially. There has been no breakthrough of any one technology that demonstrates an economical
combination of energy efficiency and density, power and life-cycle characteristics suitable for the mass production of
vehicles (Pelkmans et al., 2003).
The main desirable properties of high-power batteries for Hybrid and electric vehicle applications according to a
recent study completed for the Department of Transport in the UK (Owen and Gordon, 2002) are
Energy density – A higher energy density results in a battery that is lighter but can still store the same
amount of charge
Power density – The torque assist and regenerative braking functionality of Hybrid vehicles implies that the
battery must be able to rapidly provide/store energy to/from the electric machines
Operating temperature – The battery must be able to operate in all climatic conditions
Charge retention – The life of the charged battery if left unused (finite as the charge leaks from the cell)
Memory effect – The reduction in charge capacity as a result of charging the battery before it was
completely discharged (caused by chemical reactions occurring within the cell)
Cycle life – This is the number of charge-discharge cycles that the battery can withstand before charge
capacity becomes too small and the battery needs replacing’
To date lead acid batteries have been mainly used in electric vehicles. They are the most inexpensive but have low
specific power and poor performance in cold temperatures. Nickel-metal hydride and lithium-ion batteries are more
advanced and offer significant improvements in terms of life cycle and specific energy. All remain expensive,
The development of electric vehicles worldwide has been driven by the Zero-Emission-Vehicle (ZEV) legislation since
1998 in California. Although the legislation has changed somewhat since its initial inception due to litigation by
manufacturers, vehicle manufacturers are still required to sell a certain percentage of their passenger vehicles as
electric and advanced technology vehicles. Since most vehicle manufacturers sell vehicles in California, nearly all
have been forced to develop some electric vehicles in order to comply. The legislation has also spurred on the
development of other advanced technologies that qualify for partial credits under the ZEV-rule (CARB, 2003). There
are now several electric vehicles available in California, which are competitive in terms of price and performance
with conventional petrol cars. Electric vehicles in Europe have in recent years found more use as public service
delivery vehicles in urban transport programmes such as CUTE (Clean Urban Transport for Europe).
Pure electric vehicles are not viewed by the automobile industry as presenting an attractive option for sustainable
mass transport in the future except for niche applications, for example where there is a need to solve local air quality
problems. The focus has shifted to hybrid vehicles and alternative fuels, such as biofuels and natural gas for the short
term, synthetic fuels for the medium term and hydrogen fuel cells in the long-term. Table 4.2 provides numbers of
electric and hybrid vehicles in use in many industrial countries in 1998/1999.
Austria (1998)
Belgium (1998)
Canada (1998)
Finland (1998)
France (1998)
Germany (1998)
Italy (1998)
Japan (1997)
Korea (1999)
Netherlands (1996)
Sweden (1999)
Switzerland (1998)
United Kingdom (1998)
United States (1999)
Passenger Multiple
vehicle passenger
Table 4.2: Absolute numbers of Electric and Hybrid Vehicles, by country and type of vehicle (IEA,
Although worldwide sales of electric and hybrid vehicles appear low from this table, hybrid vehicle sales are
currently experiencing record growth and many of the numbers listed no longer reflect the market. For example,
Japanese carmaker Toyota Motor Corporation is to boost production of its second generation Prius hybrid model
following a surge in demand around the world. Toyota has just announced that the global sales target for the Prius
for 2004 had recently been revised from 76,000 to 130,000, which exceeds the total production of the first model
between 1997-2003 (The Age newspaper, 28th January 2004).
In conclusion, it is again noted that any evaluation of sustainable transport strategies must consider the full life-cycle
of greenhouse gas emissions of future vehicle and fuels technologies. Since many of these technologies are still in
development, it can be difficult to obtain data and the full life-cycle calculation may be very complex with many
choices. The research centre of Fiat has performed a powertrain and fuel ranking for the potential in 2010 of some of
the technologies. This is illustrated in Figure 4.4 to give an overview of the approximate reduction in greenhouse
gases that can be expected in 2010 due to advanced and alternative road fuels and technologies.
The three columns represent the current, advanced and hybrid versions of each technology. They are shaded
differently to represent the tank-to-wheel (TTW) emissions and the well-to-tank (WTT) CO2 emissions. The sum of the
emissions gives the total well-to-wheel emissions. Their results show that hybrid technologies have significant
potential to reduce CO2 emissions in 2010. Electric-fuel cell hybrid vehicles – emitting just under 10% of current
petrol technology CO2 emissions - produce the lowest well-to-wheel CO2 emissions.
Figure 4.4: Well-to-Wheel CO2 ranking by Fiat of powerwtrain technologies relative to the CO2
emissions from current petrol technology - NEDC test cycle. The three columns represent the
current, advanced and hybrid versions of each technology. (Rovera and Volpi, 2003)
Biofuels represent a growing niche product as a replacement to fossil fuels. The EU Biofuels Directive has set a
target for biofuels to achieve a 5.75 percent share of transport fuels by 2010.
From the literature it is estimated that biofuels could reduce CO2 emissions by between 0-80 percent compared
with the energy-equivalent fossil fuel, depending on the biofuel, utilisation of co- and waste products, and how
much societies and consumers are willing to pay.
Natural gas and liquid petroleum gas are regarded as intermediate fuels until fuel cell technology has matured.
Compressed natural gas can be used to produce synthetic liquid fuels for future combustion technologies.
Pure electric vehicles are not viewed to be very relevant for the future mainstream fleet. They will remain useful
as a local air quality solution.
Hydrogen is regarded as the fuel of the future but only if the many technical challenges such as the energy
intensity of its production and storage can be resolved. It will be used ideally with fuel cells but will probably
not become widespread before 2015.
The European Policy framework
The previous chapters have provided an overview of the composition, modes and trends of the transport sector,
particularly in Ireland, and the technologies and fuels either available or under development for all modes of
transport. These represent the driving forces behind transport in Ireland and its impacts with regard to the issue of
climate change. The previous chapter described the technological response to the emissions of greenhouse gases
from transport. This and the next chapter will continue this theme and focus on the policy framework in Europe for
transport and finally on the policy response in Ireland to greenhouse gas emissions from transport.
The EU has identified transport activity as a source of numerous externalities that cause damage to people and the
environment, to which policymakers must respond. Greenhouse gas emissions are but one of the externalities
coupled with transport. The main negative effects normally associated with transport are air pollution, climate
change, accidents, noise, and congestion. Methodologies are used to quantify the cost of the damages and some
results from the European ExternE programme for freight transport are presented in Figure 5.1 below. It serves as an
indication of the relative contribution of each externality to the overall costs for some modes of freight transport.
Figure 5.1: External costs due to freight transport, TEU= twenty feet equivalent unit. (European
Commission, 2003c)
The EU Commission has provided a shared legislative and policy structure for the reduction of greenhouse gas
emissions from transport by all Member States to aid in the achievement the Kyoto targets. Table 5.1 presents these
measures and their status.
Status of Implementation
Shifting the balance between modes of transport
Package of actions, in accordance with the
White Paper on a Common Transport Policy
Promotion of the use of bio-fuels for transport
Commission Communication (2001) and
implementing Directive adopted by the
Commission (2003), another under discussion
ACEA/JAMA/KAMA voluntary agreement (1999) to reduce
fleet average CO2 emissions to 140g/km by 2008/2009 (pre Monitored through yearly report
Communication from the Commission regarding taxation
Adopted by the Commission (2002)
of passenger cars
Passenger car fuel economy labelling
Directive 1999/94/EC, in force since 2001.
Proposal on special tax arrangements for diesel fuel used
for commercial purposes and on the alignment of excise Adopted by the Commission (2002)
duties on petrol and diesel fuel
Proposal on a regulation on the granting of Community
financial assistance to improve the environmental
performance of the freight transport system
Adopted by the Commission (2003)
Proposal for improvements in infrastructure use and Directive produced for heavy goods vehicles
2003. Working paper in preparation
Table 5.1: Progress in Common and Co-ordinated Policies and Measures for transport and climate
change in the EU (European Commission, 2002).
An objective of this document is to identify suitable strategies to reduce greenhouse gas emissions from transport in
Ireland. Since this is only one of the external effects of transport any methods found to reduce greenhouse gas
emissions from transport should not exacerbate the other effects. For example, technological measures could
reduce engine fuel consumption but cause other air emissions such as NOx to increase. In such cases, a careful
assessment of costs, benefits and tradeoffs will be needed. A holistic perspective is required to achieve sustainable
transport, even when the scope of the study is limited to greenhouse gases.
Some of the European measures will be described more fully since they provide the framework for Irish legislation
and action.
The European White Paper: European Transport Policy for 2010- Time to decide, was published in 2000. It set out
policy guidelines for transport based on the environmental, social and economic performance of the status quo and
future trends. The Paper reports that some challenges remain in several environmental and social dimensions of
transport. It provides a framework for sustainable transport development, while also listing 60 specific
recommendations to halt the unfavourable current trends. Due to the lack of harmonious development of transport
policy in Europe, challenges remain mainly in regard to congestion, unequal growth between the modes, and
environmental and health damage. The emission of greenhouse gases is a side effect of all three of these issues and
hence some of the recommendations in the White Paper are relevant to greenhouse gas mitigation. At the same
time, national policy measures taken to reduce greenhouse gases from transport should fit within the framework of
the policy guidelines of the White Paper to promote harmonious transport policy across Europe.
The White Paper points out that since economic growth almost automatically generates greater mobility it must be
ensured that this additional mobility is not automatically translated into road transport. Consequentially the main
goal of the White Paper on transport policy is to increase the market share of more sustainable transport modes, in
particular rail and short-sea shipping. Three approaches to reduce road transport while sustaining economic growth
are considered. The first uses road pricing alone as a restraint to road transport; the second accompanies road
pricing with measures to increase the efficiency of the other modes; and the third method consists of a range of
measures that include pricing, revitalising alternative modes of transport and investment in the trans-European
network. The third approach would strive to restore the 1998 market share level of all modes.
Specifically, a package of proposals to achieve the following main measures are recommended in the White Paper:
Revitalising the railways- deregulating the sector, dedicating a network of railway lines to freight transport in
order that companies realise the importance of freight as well as passenger transport.
Improving quality in the road sector
Promoting transport by sea and inland waterways
Striking a balance between growth in air transport and the environment
Turning intermodality into reality
Building the trans-European transport network
Improving road safety
Adopting a policy on effective charging for transport
Recognising the rights and obligations of users
Developing high-quality urban transport
Putting research and development into clean, efficient transport
Managing the effects of globalisation
Developing medium- and long-term environmental objectives for a sustainable transport system
The measures written in italic font are those measures that reduce greenhouse gases.
Biofuels Directive: Another relevant European framework in the context of measures to reduce greenhouse gases
from transport is the European biofuels Directive 2003/30/EC (European Parliament and European Council, 2003) on
the promotion of the use of biofuels or other renewable fuels for transport. This Directive aims to promote ‘the use of
biofuels or other renewable fuels to replace diesel or petrol for transport purposes in each member state, with a view to
contributing to objectives such as meeting climate change commitments, environmentally friendly security of supply and
promoting renewable energy sources.’
The Directive has been described in more detail in Chapter 4 and it requires Member States to ensure that biofuels
and other renewable fuels are placed on the markets and set indicative targets for their market share at the end of
2005 and 2010. The reference value for these targets is 2% and 5.75% respectively. The impetus for this Directive
came from the White Paper on transport policy as described above, which recommended a reduction of the
dependence of the transport sector on oil as a means to reducing CO2 emissions. An additional motive is to improve
the security of energy supply in Europe. This Directive is now in force and Member States must present their first
report to the Commission before July 1st 2004 describing the measures taken to promote biofuels and renewable
fuels to replace diesel and petrol, the national resources allocated to the production of biomass for uses other than
transport, and the value of the total sales of transport fuel and the share of biofuels. If the level of biofuels sales is less
than the reference value then an explanation should be given.
Voluntary agreement: The three pillars of the EU Commission strategy to reduce CO2 emissions from passenger cars
1) Agreements committing the automobile manufacturers to reduce CO2 emissions from passenger cars by 25
percent between 1995-2008 mainly by means of improved vehicle technology.
2) Market-orientated measures to influence motorists’ choice towards more fuel-efficient cars
3) Improvements of consumer information on the fuel-economy of cars
The European automobile manufacturers (ACEA) reached an agreement with the European Commission in 1999 to
reduce the amount of CO2 emissions from new cars by 25%, from 1995, to 140g/km on average by 2008. This was
recognised in the Recommendation of 5 February 1999 published by the European Commission (1999/125/EC).
ACEA also committed to bring to the market individual car models with CO2 emissions of 120g/km or less by 2000;
achieve an intermediate target range of 165 – 170 g CO2 g/km in 2003; review in 2003 the potential for additional
improvements with a view to moving the new car fleet average further towards 120 gCO2 g/km by 2012; and finally a
joint ACEA/Commission monitoring of all the relevant factors related to the commitments (ACEA and the
Commission Services, 2002). The US manufacturers are covered by this Commitment and the Japanese
manufacturers have reached an identical Commitment with the Commission also. If the manufacturers do not reach
their targets, there is the threat that the Commission may introduce mandatory limits.
The agreement is still on track with the following achieved to date:
ACEA commitment
120g/km or less models by 2000
140g/km fleet average by 2008
Ongoing delivery
164-170g/km fleet average in 2003
Additional reduction by 2012
Joint monitoring research
in 2000, more than 20 models brought to
market of 120g/km or less
in 2001, sales of 120g/km or less cars doubled
to over 306,500 units
164g/km new car average achieved in 2001
in 2001, sales of 140g/km or below vehicles
rose by almost 40%, accounted for 23% of
164g/km average achieved in 2001
R&D underway into longer-term technologies
Undertaken for 1995-2001 (to be undertaken
for 2002-2008 as figures become available)
Achieved (in part)
Table 5.2: Scorecard of achievements to date by automobile industry as art of voluntary
agreement between ACEA and the European Commission (ACEA, 2002)
Taxation of vehicles in the EU: As the second pillar of the EU Commission strategy to reduce CO2 emissions from
passenger car, the European Commission presented a comprehensive strategy on the taxation of passenger cars in
the EU in its Communication in 2002. This states that there is a need to harmonise taxes on passenger cars in the EU
in order to ‘remove tax obstacles and distortions to free movement of passenger cars within the internal market’ and
also in order to restructure ‘existing vehicles taxes to put more emphasis on environmental objectives in line with
Community policy and Kyoto Protocol’. The Communication recommends abolishing registration taxes across the EU
and relating vehicle taxes directly to their CO2 emissions. To date, it has not been possible to find a common position
within the Community on this subject and there are 25 different tax regimes in existence in the EU for passenger
cars. The UK is the only Member State with vehicle taxes differentiated according to CO2 emissions.
The Commission has launched a Consultation on proposals for passenger car taxation13. This includes a request for
stakeholders to choose between the following four options proposed on vehicle taxation within the EU:
The "do-nothing" option;
Retaining existing taxation systems but introducing a refund system to avoid double taxation problems
when cars transfer to another Member State;
The gradual phasing out of registration tax, with a refund system to apply in the meantime, and the
introduction of a new tax structure linked to CO2 emissions; and
Similar to option (3) but rather than a phasing out of registration tax, merely reducing it to a level that does
not exceed 10% of the pre-tax price of the car.
Initial discussions with industry and consumer associations indicate a preference for the third option. The
Consultation process ends the 10th September 2004 and subsequently the Commission will make a legislative
Vehicle fuel economy labeling: The third pillar of the European strategy to reduce greenhouse gas emissions from
passenger cars was introduced with Directive 1999/94/EC, which requires the fuel economy labelling of cars. Since
18th January 2001 all European points of sale of passenger cars - car showrooms, forecourts and trade fairs - are
obliged to present information in the form of labels, guides and promotional literature on the fuel consumption and
CO2 emissions of new vehicles sold.
European Commission Consultation on proposals for passenger car taxation, launched 14 July 2004.
The car dealer is required to ensure that a label on fuel economy and CO2 emissions is attached on or displayed near
each new passenger vehicle on sale. The car showroom should contain a poster listing and ranking all the vehicles
sold at that outlet according to fuel consumption and CO2 emissions. Additionally, a complete guide to the fuel
consumption and CO2 emissions from all passenger vehicles offered on sale in that Member State must be available
in the form of a portable booklet free of charge to customers.
The Commission has issued general guidelines on the design of the CO2 labels, requiring the presentation of values
of the fuel economy, CO2 emissions and the model and fuel type of the passenger car. This information permits
customers to take greenhouse gas emissions and fuel consumption into consideration in making purchase choices.
State aid of environmental freight transport systems: A new regulation that creates a programme to provide for the
granting of Community financial assistance to improve the environmental performance of the freight transport
systems in Europe was passed in July 2003 (European Commission 2003d). The programme is called Marco Polo and
the objective is to support commercial actions in freight transport services to encourage modal shift projects in all
segments of the freight market. Marco Polo will also be able to fund actions involving accession countries to the
European Union. Due to the principle of subsidiarity, it will focus on international, rather than national, projects.
Three main devices are planned:
Start-up support for new non-road freight transport services, which should be viable in the mid-term
“modal shift actions”);
Support for launching freight services or facilities of strategic European interest (“catalyst actions”);
Stimulating co-operative behaviour in the freight logistics market (“common learning actions”).
The main objective of Marco Polo is to help achieve a modal switch from road transport for an amount of cargo
corresponding to the anticipated growth of international road haulage. The programme will support the major
policy initiatives in the freight sector foreseen for the horizon 2010, and will therefore run until then.
Infrastructure charging: In 2003 an amendment to Directive 1999/62/EC was proposed to endorse the charging of
heavy goods vehicles (vehicles over 3.5 tonnes gross laden weight) for the use of certain infrastructures. This should
readdress the inequality in transport charging between different modes. Users of road transport in particular do not
always pay the costs for which they are responsible. Charging for the use of road infrastructure should not attempt
solely to compensate for all of road transport sectors externalities but rather comprise one tool among others. There
are uncertainties in the method of calculating the costs of certain of these impacts, although some progress has
been made on this as a result of several European projects such as ExternE, and SCENES. In this context it is proposed
that the following should be included in road charges:
The costs of constructing, operating, maintaining, and developing the network
The uncovered costs of accidents
The estimation of some costs, such as building, operating and maintaining infrastructure is relatively straightforward,
whereas accident costs are measured using monetary values based on studies. This Directive proposes a common
methodology for calculating the cost elements and average values for situations where there are no data available.
The benefits of charging for infrastructure are to create a more efficient market as a result of fairer prices. A more
rational use of infrastructure should be the consequence and the European economy should benefit. The revenue
won can be used to finance new infrastructure either by cross-financing other modes or improving capacity and the
trans-European network. Although this Directive only affects commercial vehicles, it could serve as a model for
charges for passenger cars. This Directive envisages that Member States will be obliged to vary tolls on roads in the
network by 2008 (European Commission, 2003e).
European transport policy provides a framework for Irish transport policy to mitigate the externalities caused by
transport. In particular, this document is concerned with greenhouse gas emissions.
The European white Paper on European transport policy for 2010 recommends 60 measures to improve the
sustainability of transport. Many of these are actions to reduce greenhouse gas emissions.
The main greenhouse gas reduction measures in the EU for road transport are:
To shift the balance between the modes of transport
To promote alternative transport fuels
To require the automobile industry to commit to reducing average passenger cars by 25 percent between
To introduce fiscal measures to encourage consumer behaviour that supports the reduction of greenhouse
gas emissions from passenger cars
To provide assistance to environmentally-friendly infrastructure investment.
Irish Policy Response
The question remains, what are the policies that Ireland can implement to reduce greenhouse gas emissions from
transport and how effective can they be? As stated previously, Ireland can have little influence on the transport
technologies developed in the future as there is no indigenous vehicle manufacturing industry. The policy options
available to reduce greenhouse gases from the transport sector in Ireland are fiscal and information instruments.
These policy instruments generally have two objectives:
Influence behaviour or the utilisation of public and private transport so that the energy intensity of
transport activity is reduced
Affect purchasing decisions in order to encourage increased market penetration of low carbon
technologies (fuels and vehicles) and hence affect the fleet composition by lowering the energy intensity
of transport.
There is also potential to reduce greenhouse gas emissions by instigating programmes that introduce alternative
fuels and technologies into the public transport fleet. There are some policy measures already in place in Ireland
related to transport that support the reduction in greenhouse gas emissions from transport. Ireland had the fourth
highest share of total revenue raised by environmental taxes in 1997 (EEA, 1999a). These are taxes that include
transport, pollution and resources, and energy taxes. Ireland raised approximately 9 percent of its total tax revenue
by these environmental taxes. Although this appears to indicate the progressive use of economic instruments to
reduce greenhouse gas emissions, the primary objective of the fiscal measures is to raise revenue, not to influence
transport demand. Therefore they have not been designed to deliver as efficient a reduction of greenhouse gases as
perhaps otherwise possible.
Existing transport policy measures in Ireland
Vehicle registration tax on new passenger cars
Vehicle registration tax in Ireland lies between 22.5-30% of the open market selling price (OMSP) of the vehicle. The
rate increases with engine capacity up to its maximum rate at 1900cc. Hybrid electric vehicle technologies are
eligible for a 50% reduction. There is only one hybrid currently available for purchase in Ireland, the Toyota Prius.
Nine were sold in 2002 and 19 the previous year14. These numbers are very low compared to total new passenger
car sales, due probably to the prohibitive price (for a midsize car) of just over €30,000 in spite of the reduction in
vehicle registration tax. The Honda Insight was imported by some dealers and offered at approximately the same
price but only one was sold last year and Honda has withdrawn it from the product range15. A launch of a new
hybrid model, the Civic IMA, is expected soon, however it appears unlikely that any great uptake will occur, given the
experience of other hybrid vehicles in the Irish market.
The differentiation of Vehicle Registration tax according to greenhouse gas or other environmental criteria has been
discussed at the Department of the Environment, however no proposal has been published to date.
Motor tax
Motor tax is the annual tax paid in Ireland in order to operate a vehicle on the road. It is differentiated according to
engine capacity for passenger vehicles and by weight (unladen) for commercial vehicles. The tax on vehicles that
have a larger engine is higher and so, since fuel consumption does generally increase with engine size and vehicle
weight for a given engine technology, this means that vehicles with a higher fuel consumption are charged a higher
tax. However, the tax does not differentiate between technologies so a vehicle with a larger engine or heavier
weight that consumes less fuel due to improved efficiency will not be credited with a lower tax rate compared with
another more fuel-consuming vehicle with the same engine size.
Available from Society of the Irish Motor Industry
From personal discussion with Society of the Irish Motor Industry, 2004
The annual motor tax on electric vehicles in Ireland is less than that on petroleum-fuelled cars. The rate is €139
annually for electrical passenger cars and €76 for goods vehicles (less than 1500kg). This compares with €144- €1279
for passenger vehicles and €241- €3760 for goods vehicles that operate on any other fuel.
Some countries in Europe, such as the UK, are now beginning to tax vehicles directly according to the greenhouse
gas emissions. The criteria for vehicle ownership taxes still varies considerably across the EU and an overview is
provided in Table 6.1 below.
The Netherlands
United Kingdom
Passenger car characteristic
Fuel consumption, weight
CC, pollution
Deadweight, province, fuel
CC + age
CO2 emissions
Commercial vehicle characteristic
Max. authorised gross weight
Permissible total weight, pollution, noise
Axles + suspension + weight
Payload (<12t), weight & no. of axles (>12t)
Gross weight, axles
Weight, axles, fuel
Laden weight
Table 6.1: Basis of vehicle ownership taxes in Europe (ACEA 2003)
Vehicle labelling- Directive 99/94/EC and Irish transposition in August 2001
All Irish car dealer showrooms are obliged since 2001 to label new vehicles that are for sale with their CO2 emissions
and fuel consumption. This information permits customers to make purchase choices that take these metrics into
consideration. The Society of the Irish Motor Industry produces the ‘Guide to Passenger Vehicles Fuel Economy and
CO2 emissions’ annually, which contains the full list of vehicles on sale in Ireland and their associated CO2 emissions
and fuel consumption. This guide is required to be available on request in each dealer showroom, however the
dealer is not obliged to display it. It can also be downloaded from the SIMI website. The guide provides an
opportunity for customers to compare CO2 emissions and fuel consumption of vehicles across all makes and size
classes and hopefully encourage a shift to more fuel efficient vehicles. The government assumes that the transparent
labelling of vehicles according to their fuel consumption will reduce greenhouse gas emissions by 380,000t annually
(Department of the Environment and Local Government, 2000).
Tax exemption for public transport commuting
Dublin Bus and Iarnrod Eireann run the ‘Taxsavers Commuter Ticket’ programme. This allows employers to purchase
bus and rail tickets for their employees and deduct payment for them from their gross salary. The result is a tax and
PRSI saving for the employee of 26 or 48 percent depending on the income tax band, and employers can achieve
PRSI savings of up to 10.75%.
Road charges and tolling
Charging for roads and infrastructure is carried out where there has been public-private financing of new
infrastructure. Well known examples are the Dublin East and West Link bridges with on average 20,000 and 80,000
vehicles, respectively, crossing daily. The consequence of the bridges has been to lower centre city traffic by 11%,
however M50 traffic has increased by 65%. It is expected that congestion will deteriorate and construction of
additional capacity is underway to mitigate this. Since the opening of the East Link toll bridge in 1984, the Dublin
bridges have contributed €120 million to State revenue16.
NTR press release 21st September 2003.
Fuel excise duty
Fuel excise duty in Ireland is one of the lowest in Europe for petrol and is around the average for diesel compared to
other EU members, see Table 6.2. It is considerably lower than the UK and this encourages significant ‘fuel tank
tourism’ with motorists from Northern Ireland travelling over the border to the Republic to purchase petrol that is
approximately 25% cheaper. It is estimated that at least 10 percent of fuel sold in filling stations in the Republic of
Ireland is destined for Northern Ireland (Goodbody Economic Consultants, 2001; Department of the Environment
and Local Government, 2000). European fuel taxes vary greatly and are largely a result of political preference, for
example some countries regard diesel as a positive measure against climate change, whereas others perceive diesel
particulate emissions as a health risk and tax accordingly.
Excise duties on fuels in E/1000 litres
Unleaded petrol
EU minimum rate
Table 6.2: Overview of excise duty on fuel in Europe, ACEA 2004, status December 2003
There is not a large difference between Irish diesel and petrol fuel prices but diesel vehicles are more expensive and
had a reputation for poor performance in the past. This has led to diesel sales in Ireland well below the European
average, (in some EU countries diesel cars make up 50 percent of new vehicles sold). Figure 6.1 shows that the share
of new diesel cars in Ireland has risen from 10 to 18 percent between 2000 and 2003. Commercial vehicles in Ireland
are nearly 100 percent diesel.
Figure 6.1: New passenger car sales by fuel type (SIMI 2003)
In summary, there are fiscal instruments currently applied to road transport in Ireland. Although they are not
designed with greenhouse gas emission reduction as the main objective, they already influence purchasing and
driving behaviour and have the potential to achieve more greenhouse gas-focused results with some refinement.
Some suggestions for this will be discussed later in this chapter.
The National Climate Change Strategy (NCCS)
The NCCS was released in October 2000 to provide an official strategy to meet Ireland’s legally binding commitment
in the EU to limit the net increase of Irelands greenhouse gas emissions to 13% above the 1990 level of emissions. It
represents the ‘with additional measures’ that the Irish government was required to identify as part of the
monitoring and reporting mechanism of greenhouse gas emissions to the European Environment Agency annually
by Ireland. It outlines the measures that will be undertaken to achieve greenhouse gas targets in the first
commitment period of the Kyoto Protocol (2008-2012).
Transport sector specific actions were listed under three headings:
- Fuel efficiency measures
- Modal shift, and
- Demand management
Overall CO2 reduction targets for transport were set by the Department of the Environment and Local Government
for 2010, given here in Table 6.3, through aggregation of the effect of the full range of measures.
CO2 savings
Vehicle efficiency improvements
0.77 Mt
Fuel measures (displace bunkering)
0.90 Mt
VRT taxes
0.50 Mt
0.10 Mt
Public transport measures
0.15 Mt
Traffic management
0.20 Mt
0.05 Mt
2.67 Mt
Table 6.3: NCCS transport CO2 emissions reduction targets for 2010, (DOELG, 2000).
Alternative fuels are not mentioned explicitly as a transport measure. The proposed measures are predicted to
reduce the projected baseline CO2 emissions of 14.2Mt (see Figure 2.5) by 2.67Mt, representing a reduction of 18.8
percent and to achieve a target of 11.5Mt CO2 emissions from transport. (The background calculations to the
achievement of these targets have not been published and therefore it is difficult to assess the measures needed.)
This is an ambitious plan, since many of the measures have not yet been implemented.
Are there other policy measures in use elsewhere that could be further considered for inclusion? Which policy
measures promulgated or recommended by European Directives have not been included in the NCCS for transport
in Ireland?
A comparison of the NCCS with the EU White Paper recommended policy measures shows that not all of the main
White Paper policies are included in the NCCS. Some others have been included but are not yet being implemented,
for example:
Striking a balance between air transport and the environment- no steps have been taken in this area, aviation
fuels remain exempt from taxes.
Charging has been used in Ireland to regain revenues from expensive pieces of infrastructure, e.g. road tolling
schemes, but it has not been used for environmental goals.
Research and Development has not been undertaken in vehicle technologies in Ireland since there is no vehicle
industry, however there are some domestic software providers for telematic and intelligent transport systems
involved in research.
There have been greenhouse gas emissions targets developed for the medium-term future. These targets have
been based on the amount of greenhouse gas reduction Ireland will be required to achieve in the transport
sector under the EU burden-sharing agreement rather than what it was thought likely that measures could
actually achieve. Very little cost benefit analysis has been carried out in the estimation of optimal reduction
targets for the transport sector.
Irish Policy options to further reduce greenhouse gas emissions from
As discussed in the previous section, the NCCS has set ambitious reduction targets for the transport sector. The NCCS
has not been updated since its publication in 2000, although a review is expected in the coming months. A progress
report was published in 2002, which documented some of the measures that have been implemented to date. Based
on the progress report in 2002, it appears that more policy measures will most likely be needed to achieve the NCCS
The most current Irish greenhouse gas sectoral data is collected in the recent Byrne-Ó Cléirigh- ICF Consulting
report17 on the share of greenhouse gas emissions for emissions trading in Ireland (ICF -BOC, 2004). This report was
commissioned by the Department of the Environment, Heritage and Local Government (DoEHLG) as a consultation
report to aid in the development of the National Allocation Plan for the EU emissions trading scheme, due to begin
in 2005. The study estimated baseline greenhouse gas emissions that included policy measures that are planned or
already being implemented to reduce greenhouse gas emissions in Ireland. These values represent an update of the
NCCS target values from 2000 and are likely to be provide the basis for the NCCS review forthcoming this year18.
The business-as-usual estimate (without additional measures) published in the NCCS for CO2 emissions from Irish
transport in 2010 was 14.2Mt, as discussed in Chapter 2. The NCCS planned with additional measures to reach a
target of 11.5Mt of CO2 emissions from transport by 2010. However many of the measures indicated in the NCCS
have not materialised or have not been as effective as foreseen. The ICF-BOC consultation report has included the
estimated reductions caused by measures implemented and planned and generates a new estimate for baseline CO2
emissions of 13.2 in 2010 and 13.8Mt in 2012. These values are substantially higher than that foreseen by the NCCS.
This section will discuss further policy measures to reduce greenhouse gas emissions and estimate the associated
potential greenhouse gas emissions reductions from the NCCS business-as-usual level. Some of the assumptions and
data from the IFC-BOC report are included and discussed here.
The OECD has published a catalogue of recommended measures to reduce greenhouse gases from road transport
(OECD, 2002a). It can serve as a useful checklist and indicate gaps in packages of measures implemented. Table 6.4
presents the catalogue of OECD measures and includes in the table the NCCS measures that correspond. No single
policy instrument can internalise or reduce all externalities caused by transport simultaneously; a portfolio of policy
measures is required in a well-designed policy package to tackle greenhouse gas emissions. A second point that is
also emerging clearly from international literature is that an increasing utilisation of economic instruments is
necessary to influence transport demand and behaviour. Instruments specifically designed to reduce greenhouse
gas emissions from transport include direct measures such as; fuel taxes, differentiated vehicle taxes, demand
management instruments, including road pricing - mileage taxes and road tolls- and indirect measures such as
parking fees, subsidy of public transport and indirect demand management instruments (Sterner, 2003; DeBorger
and Proost, 2001).
OECD Catalogue of existing measures
Improvement of fuel efficiency
National legislation
Voluntary agreements
Fiscal measures
Other measures
Traffic demand management
Improvement of road traffic flow
Reduction in transport demand
Switch in transport modes
Alternative fuels and technologies
Fiscal incentives
Support for research and development
Purchase requirements of alternatively fuelled vehicles
NCCS measures
Yes, Europe-wide
VRT taxes planned
Labelling (EU-directive)
Traffic management schemes in place
Public transport measures
For pilot projects only
Table 6.4: Catalogue of existing measures to reduce greenhouse gases from road transport (OECD,
OECD member countries implement these measures with various degrees of success. In most cases a combination of
measures is applied as part of a wide-ranging strategy to reduce CO2 emissions across numerous sectors. Although
the presented measures are designed for road transport, some measures can be applied across all modes such as
improvements in fuel efficiency and the introduction of alternative fuels and technologies. Other measures that are
specifically applied to road transport are also practically synonymous with measures to reduce greenhouse gases
from the wider transport sector, since road transport is the main cause of greenhouse gases and congestion in the
transport sector in Ireland.
Available at
Personal communication with DoEHLG
In this report we have identified five types of policy measures that Ireland could implement or improve to reduce
greenhouse gas emissions from transport that are included in the three categories of OECD measures. They are:
Consumer information (Improvement of fuel efficiency)
Encouraging modal shift (Traffic demand management)
• Vehicle (Improvement of fuel efficiency)
• Fuel (Traffic demand management)
Road charges and tolls (Traffic demand management)
Alternative fuels incentives (Alternative fuels and technologies)
This section will evaluate what potential exists to implement any of these measures and, if carried out, the resulting
CO2 emissions savings that could occur. An economic analysis has not been carried out to compare the relative
merits of these measures and indeed there is a need to estimate the costs and benefits (such as the cost per tonne of
greenhouse gas emissions saved) before any specific measure can be recommended.
Consumer information can be a powerful tool and is used to influence consumer behaviour by informing consumers
to make a environmentally benign choice. As already described, fuel economy labelling is underway in Ireland since
2001, as a result of the European Directive 1999/94/EC. All new passenger vehicles are furnished with a label that lists
the CO2 emissions and fuel economy of the vehicle.
The original target included in the NCCS in 2000 as a result of this measure was 100,000 tonnes of CO2 emissions
savings. The NCCS progress report in 2002 modified this value and assumed that fuel and energy labelling on all new
passenger vehicles will lead to a reduction in CO2 emissions of 4-5% over the next 10 years, which is equivalent to
380,000 tonnes per annum CO2 emissions until 2010. There is no basis provided for the new calculation. The ICF-BOC
report states that, based on calculations made by SEI (SEI, 2003a) and a low price elasticity of private car fuel
consumption, the potential CO2 emissions savings from the combined measures of labelling, and changes in VRT and
taxes together is approximately 50,000 tonnes annually. This estimate is much lower than the Department estimate
in the NCCS and is discussed further later in this chapter under taxes.
The desired effect of car labelling for fuel consumption and CO2 emissions is for customers to become more aware of
fuel consumption and as a result choose more efficient models. An estimate of new car CO2 emissions is obtained by
multiplying the CO2 emissions published in the SIMI fuel economy guide for each make and model of car by the
number of those models sold, and assuming an average distance travelled per year of 20,345km19 per vehicle. The
average CO2 emissions of new cars sold in Ireland in 2002 was 163.1g/km20, which represents a drop of 16.9g/km
since 1990. An approximate estimate of CO2 emissions from the new cars sold in 2002 (150,485 vehicles) in Ireland
using this method is 0.5Mt. If purchasers of new vehicles had made the decision to purchase vehicles with 10 % less
fuel consumption and CO2 emissions, for example, this would have resulted in a saving of 0.05Mt of CO2 emissions.
Although this is a small amount the savings are per year and are cumulative if each year people purchased new
vehicles with 10% less CO2 emissions. Thus, in the longer term if the whole fleet (approximately 1.5 million vehicles)
were replaced, a savings of 0.5 Mt of CO2 emissions could be reached.
Upon examination of the fuel economy guide, it is clear that there is a considerable range of fuel consumption and
CO2 emissions values within a particular vehicle model class. For example, in the subcompact petrol vehicle size class
(Ford Focus, Volkswagen Golf etc. size), CO2 emissions range from approximately 140g/km to over 200g/km,
measured with the standard driving test cycle (called the New European Driving Cycle or NEDC). There is therefore
scope for consumers to make choices for more fuel-efficient vehicles, even if they remain within the same vehicle
size class.
How can labelling be made more effective? Is it likely that the current passenger car labelling will achieve a 10
percent reduction? To date, it appears that there has been no review carried out of the European car-labelling
scheme and its effectiveness. The European Commission will publish a study at the end of 2004 on the potential for
CO2 emissions reductions as a result of the European car-labelling scheme. A modelling study carried out in 2002 by
The average vehicle-kilometres travelled in Ireland was estimated at 20,345km in the TRL report ‘Vehicle Kilometres of Travel in Ireland 2001’ for the
National Roads Authority
Provided by EU DG Environment, 2004
COWI on fiscal instruments to reduce greenhouse gas emissions from passenger cars showed that average
greenhouse gas emissions of new passenger cars in the EU could be reduced by a maximum of 5% without an
increase of the proportion of diesel cars and/or downsizing of vehicle sales, keeping vehicle and fuel taxes constant.
The study recommends coordinating taxes and labeling for efficiency.
A recent review of energy-labelling programmes in the U.S. (Banerjee et al., 2003) has proposed seven criteria for the
success of such programmes that are relevant to car CO2 labelling. They are:
Government support and credibility
Publicity and partnerships
Label clarity
Targeted product category
Legislative mandates
Some of these criteria provide clues as to where improvements could be made to the Irish passenger car labelling
scheme. The Irish labelling scheme is given credibility by the fact that new car labelling is mandatory and required by
the government. However, there appears to be very little support or publicity given by government to promoting
the purchase of vehicles with reduced fuel consumption or CO2 emissions. Responsibility is granted to the Irish
automobile industry (SIMI) to manage the labelling scheme and the availability of information on fuel consumption
of cars in Ireland. There is no requirement on them to promote the information, nor may there necessarily be an
incentive to do so. There appears to be scope here for government involvement and budget, if information as a
measure is to be effective.
In the UK, for example, not only does the automobile industry (SMMT- the Society of Motor Manufacturers and
Traders Limited) provide fuel economy and CO2 emissions data to consumers but a government agency, the Vehicle
Certification Agency (VCA), is responsible for the promotion and dissemination of information on fuel-efficient
vehicles. There could be a role for Irish government to play in promoting public awareness of the issues regarding
more fuel-efficient, and perhaps alternative fuel, vehicles.
The style of a label is also important as it can simplify the vehicle information. European Member States are free to
choose the style of fuel economy label, provided that the fuel economy and CO2 emissions values are included.
While the UK and Ireland have used classic tabular style to portray the information, the Netherlands has used a form
more akin to the labelling of electric devices such as washing machines, shown in Figure 6.2. Although this style of
label has several disadvantages such as lack of transparency of grading system and over-simplicity, it can create a
strong impression on consumers. Given the current lack of awareness on the subject of CO2 emissions from
passenger vehicles in Ireland, consideration could be given to a simplistic washing machine-style label in the initial
years of the vehicle labelling programme, until there is a general understanding among the public of the issues.
Figure 6.2: Dutch fuel consumption and CO2
emissions vehicle label
In summary, studies show that people are generally not
aware of the amount of fuel consumed while driving their
vehicle (OECD, 2002b). While this remains a reality, it is
difficult to influence driving behaviour. Improved
information and transparent labelling could be used in
conjunction with fuel-efficiency awareness campaigns to
raise consciousness on this issue. The labels used currently in
showrooms could be modified to suit Irish consumers so that
they are better understood. An example is the washing
machine style label that is used in the Netherlands. Fuel
efficiency awareness campaigns could be undertaken similar
to the current energy awareness campaigns executed by SEI.
It appears that there has been no research on the
relationship between car labelling in Europe and the
potential for CO2 emissions savings from passenger cars to
date. The estimates made for Ireland for reduction of CO2
emissions from passenger cars from the introduction of car
labelling, and changes in VRT and taxes range from 0.050.38Mt CO2 emissions per year (BOC-ICF, 2004 and NCCS
progress report- DoEHLG, 2002). Compared with other more
fiscal policy instruments the costs of implementing vehicle
labelling are likely to be low, however the effectiveness in
reducing vehicle greenhouse gas emissions is not known.
Encouraging modal shift with public transport
A modal shift from road to other modes of transport is one of the most vehement recommendations made in the
White Paper on European Transport Policy and in Ireland, especially in Dublin, this is being implemented for
passengers. The Strategic Rail review concluded that rail freight is not a priority in Ireland, see Box 6.1 (Booz et al.,
2003). Perhaps the Marco Polo programme21 on the granting of Community financial assistance to improve the
environmental performance of the freight transport system will provide a route to the government for state aid in
this area.
Until all the external costs of transport are included in transport prices, rail (freight) will struggle to be competitive
with road freight transport. Marginal congestion costs of road freight are not covered during peak hours, for
example. However, not all measures suit all countries and in the case of rail freight in Ireland there are some
indications that road transport is perhaps more suitable to Irish freight transport where 60 percent of freight by
weight is transported distances less than 49 km, see Table 1.1a. A review of external costing of freight transport in
Ireland could be useful in order to assess areas where rail could acquire a larger share of freight transport. Freight
intermodality between shipping and lorry is widespread for transport between Ireland and abroad. The NCCS
predicted that a freight transport modal switch from road to rail would reduce by 50,000t CO2 emissions in 2010.
Since the freight sector accounts for approximately 40% of transport CO2 emissions (Chapter 2), it should not be
neglected in policy measures to reduce emissions.
Significant investment has been undertaken in public transport, especially in Dublin. The Dublin Transportation
Office (DTO) published its integrated transport strategy for Dublin City and the surrounding hinterland in ‘A Platform
for Change’ (DTO, 2001). It outlines the development of a new metro and light rail networks, and improved bus,
suburban rail cyclist and pedestrian systems, as well as limited road construction and traffic management measures.
Corridors that provide priority bus lanes and make bus travel more attractive to commuters. 125 additional buses
were introduced by 2002 to the fleet and this was planned to increase by a further 80 in 2003 and 70 in 2004, which
will increase the capacity by 28% in 2006. A new state-of-the-art light rail transit system (named LUAS) consisting of
two lines commence operation in Dublin in 2004. It has the capacity to carry 15,000 passengers during peak hours.
Regulation (EC) No 1382/2003 of the European Parliament and of the Council of 22 July 2003 on the granting of Community financial assistance to
improve the environmental performance of the freight transport system (Marco Polo Programme), amending Directive 1999/62/EC, Brussels, July 2003
Box 6.1: The Strategic Rail Review (Booz, Allen and Hamilton, 2003)
The Strategic Rail Review was published in April 2003 and its objective was to assess the existing railway to
determine what is needed to modernise and develop a sustainable railway that can make a significant contribution
to the socio-economic development of the State. Three development scenarios were developed:
‘Do nothing’
‘Staying in the Game’
‘Going for Growth’
Historically, railways in Ireland have been under-funded and it is only in recent years that significant investment,
mainly in capital expenditure related to safety and increases in capacity, has been made. The investment to date will
not be sufficient to maintain the railways in a stable, well-functioning state. However if the present levels of capital
investment continue, then the capital requirements of the ‘Staying in the Game’ scenario would be met.
Currently there is a low level of passenger satisfaction with the rail services provided in Ireland. The Consultants view
this market as one with a high potential to attract custom and therefore worth the investment in terms of resulting
socio-economic benefits.
Rail freight transport in Ireland, on the other hand, has been declining continuously and rail freight volumes are now
at their lowest level with a decrease in volume of nearly 30% since 1985 (ECMT, 2003). The market share of rail freight
of national freight activity is declining and hence the contribution of freight business to total railway income is also
decreasing. Much of the rolling stock is near its life-end and significant investment is required in the short term if
services are to continue. However operations are generally of low frequency and traffic density and hence decisions
are already being made at Iarnrod Eireann to lower the level of commitment to the rail freight business.
Although passenger numbers are at their highest level for many years, Iarnród Éireann recorded a loss of €22.5
million in 2002. A plan has been drafted in order to return Iarnród Éireann to profitability (CIE, 2003). The relationship
between Government and Iarnród Éireann is not defined and there have been few strategic objectives set for the
railway with a government mandate. There is a great necessity to do this so that the railway decisions are in line with
Government integrated transport policies and Government can indicate the level of long-term support to the
railway available to meet its objectives.
The Strategic Railway Review recommends that in the future Irish Rail should focus on passenger rail transport and
only compete in the freight sector with services that are commercially viable and those where net societal gains have
been determined using a transparent methodology and are supported by a State grant scheme.
Turning intermodality into reality has been made more difficult in passenger transport due to the lack of availability
of integrated tickets between different modes, i.e. bus and train. The connections between various stages of the
journey are not always straightforward and this is one reason for the high use of passenger cars. Iarnrod Eireann and
Bus Eireann are upgrading and augmenting their fleets of trains and buses respectively. Iarnrod Eireann, in particular,
is undergoing considerable capital investment with 120km of new track laid and 80 new diesel rail cars acquired in
2002 both to replace old rolling stock and increase the frequency of the service.
160km of cycle paths have been provided in the Dublin Area and an additional 130km is planned in the next 1-2
years. In the same time the construction of 1500 cycle parking spaces are planned (DTO, 2001).
Traffic Management Guidelines were published in May this year by the DTO with the purpose to ‘provide guidance on
a variety of issues including traffic planning, traffic calming and management, incorporation of speed restraint measures
in new residential designs and the provision of suitably designed facilities for public transport users and for vulnerable
road users such as cyclists, motorcyclists and pedestrians (including those with mobility/sensory impairments). It also
focuses on how these issues must be examined and implemented in the context of overall transportation and land use
policies.’ A transport demand management study is underway that should propose measures to reduce growth in
private motorized travel. Investigation is also underway into the use of telematic tools in traffic management and
information systems on large roads such as the M50. No estimates have been published on the reductions that are
expected as a result of these measures. International experience has shown that free-flowing traffic uses
substantially less fuel than congested.
The NCCS estimated that public transport programmes would reduce CO2 emissions in total by 0.15Mt CO2 per
annum by 2010 and 1 million tonnes per annum by 2016. It is not clear on what basis the estimates were made.
Furthermore there are indications that some of the investment in rail infrastructure and the metro may only come on
line after 2010.
The Dublin Transportation Office (DTO) commissioned a study by Motherway Begley Ltd. on the environmental
implications of the various transport scenarios and measures under consideration in Dublin. The project modelled
the baseline scenario in 2002 and travel patterns for 2006, based on transport measures already planned in 2002.
These measures included the Northern Motorway, the South Eastern Motorway, the Dublin Port Tunnel, two Luas
lines and expanded Quality Bus Corridors and cycle lanes. The report estimated that 270,000 tonnes of equivalent
CO2 emissions (the combination of all greenhouse gas emissions converted to CO2 equivalent emissions, see Chapter
2 for details) would be reduced by these measures already underway in the Dublin area.
6.2.3 Taxes - Vehicle and Fuels
Taxes have gained in popularity as a measure to reduce greenhouse gas emissions from transport. Economic theory
shows that if greenhouse gas emissions are taxed the right amount, then the efficient outcome will result- that the
sector will reduce greenhouse gases to the optimal level. The optimal level is a function of the damage costs and the
abatement costs of the pollution, which include the competitiveness effects on the sector, the health and
environmental effects of the pollution and other related issues. Price sensitivity tends to increase if alternative
destinations and modes are available and good quality. For example car drivers are not likely to reduce driving as a
response to an increase in vehicle or fuel price if there is no alternative available (Victoria Transport Policy Institute,
2004). Box 6.2 describes the environmental economics theory behind greenhouse gas taxes. Vehicle Taxes
Section 6.1 provided an overview of the vehicle taxes that are currently applied in Ireland. There are generally three
types of taxes applied to passenger cars- purchasing, circulation and ownership taxes. All three exist in Ireland, if
ownership taxes include fuel taxes. As already mentioned, these taxes have been designed generally similar to most
other countries with the objective of raising revenue rather than any with any particular target planned. Therefore
there is scope for redesign of the taxes in order to promote vehicle purchase and operation with specific
environmental targets taken into account. It should be noted that this does not always mean raising the current
taxes but ‘greening’ them to prioritise certain goals to be achieved by them.
Box 6.2: Environmental economics theory on the use of greenhouse gas taxes
The reason that greenhouse gas emissions become a problem is that some of the marginal damage costs of
transport in the form of greenhouse gases are not paid for by the sector. These costs decrease as the greenhouse
emissions are abated. Similarly the marginal abatement costs of reducing the greenhouse gas emissions often
increase as more abatement is carried out. In general, this is because it becomes more difficult to find low cost
methods to reduce greenhouse gas emissions as the amount of emissions to be abated decreases. At the point
where the marginal abatement cost is equal to the marginal damage cost, environmental economics literature tells
us that this is the optimal level of greenhouse gas emissions abatement, as seen by point O in the Figure.
Optimal abatement
GHG emissions abated
If a tax is set at t* then the theory is that if marginal abatement costs are lower than the tax, then the transport firm
will prefer to abate the greenhouse gas emissions, whereas if the marginal abatement costs are higher than the tax,
then the company will prefer to pay the tax.
So what can taxes achieve and what type of taxes are needed to reduce greenhouse gas emissions? The second pillar
of measures to reduce greenhouse gas emissions from passenger cars by the EU Commission consists of fiscal
measures, mainly in the form of a carbon tax. The European Commission established the Expert Group in Fiscal
Framework Measures, who commissioned a study by COWI to assist the Commission in considering the potentials of
fiscal measures in achieving a target of 120g/km on average per vehicle. The study was completed in 200222 and it
modelled scenarios with the implications of different changes to the current vehicle tax systems in nine Member
States (COWI A/S, 2002). The analysis results led to several conclusions that have been paraphrased here:
It is essential to apply a tax scheme, which is directly or indirectly CO2 related in order to provide for
significant reductions in the average CO2 emissions from new cars.
Differentiation of the taxes is necessary in such a way that promotes energy efficient cars over cars with
poor energy efficiency.
The largest reductions are achieved when the existing vehicle taxes are replaced with purely and directly
CO2-related taxes that are sufficiently differentiated.
Adding a differentiated CO2 element to existing taxes provides smaller, yet significant, CO2 reductions.
The level of the potential CO2 reductions does not depend on whether the tax is a circulation or
registration tax, but rather on the CO2 emissions and the level of tax differentiation.
Simple increases of tax that do not change the parameters upon which they are based do not have much
impact on CO2 emissions.
Fuel tax increases lead to very small reductions in average new vehicle CO2 emissions, compared to vehicle
taxes. They may however be effective at reducing the CO2 emissions from the overall passenger car fleet.
Available at
Some of these findings are significant for the design of taxes to Ireland and merit consideration, since Ireland was
not one of the nine Member States evaluated in the COWI report. Their model estimates the levels of differentiation
required to achieve a one percent reduction in CO2 emissions for both replacing the existing registration and
circulation taxes with CO2 dependent taxes, and adding a CO2 dependent tax to the existing taxes. In both cases, the
tax differentiation required to achieve a reduction of CO2 emissions through circulation tax is significantly lower than
using registration taxes. This is perhaps not surprising, considering that a circulation tax is applied annually and a
registration tax is only applied once at the time of purchase.
The COWI report estimated the adjustment to vehicle taxes required to achieve an average 120g/km CO2 emissions
target by 2008. They assume vehicle CO2 emissions have already decreased to 140g/km on average due to
technological improvements by then and modelled the use of circulation and registration taxes to reduce average
emissions by a further 10 percent split equally between the two taxes. The study found that the largest CO2
reductions could be achieved when the existing vehicle tax systems were replaced with CO2 dependent registration
and circulation taxes. Tables 6.5 and 6.6 show the results of this study for the modification of circulation taxes on
petrol and diesel vehicles. They illustrate the taxes that would have to be applied on new diesel and petrol cars
taking the current and future circulation tax systems in each country into consideration in order to achieve a CO2
emissions reduction of approximately 5 percent overall. The vehicle taxes can be restructured either by enhancing
the existing taxes by adding a CO2 element or by replacing the existing taxes with another completely CO2dependent tax. Both concepts are compared with the reference scenario in 2008 of continuation of the current
system of circulation taxes.
The results below show the effect of replacing current circulation tax systems with CO2 dependent circulation taxes
on the level of tax levied per year. Across the 9 countries studied, changing the taxes in order to achieve on average
4.4 percent CO2 emissions reduction, would mean that average circulation taxes would increase between 29-169%
for petrol cars and change by 0–50% for diesel cars. The UK values are deemed unreliable; since the UK already
applies CO2 differentiated vehicle taxes, and therefore are not included in these ranges. The base scenario represents
average circulation taxes in existence in 1999 and their projected values in 2008.
Scenario calculations 2008
Base scenario values
Adding a CO2 element to existing taxes
% CO2
Replacing existing taxes with CO2 dependent
circulation tax € % CO2 reduction
Average circulation taxes
tax € 1999
tax € 2008
Table 6.5: Estimated CO2 dependent circulation tax on petrol vehicles compared with reference
circulation taxes for 2008 (COWI A/S, 2002)
Scenario calculations 2008
Base scenario values
Adding a CO2 element to existing taxes
€ / g CO2 per
% CO2
Replacing existing taxes with CO2 dependent
€/gCO2 per
circulation tax € % CO2 reduction
Average circulation taxes
tax € 1999
tax € 2008
Table 6.6: Estimated CO2 dependent circulation tax on diesel vehicles compared with reference
circulation taxes for 2008 (COWI A/S, 2002)
In Ireland the vehicle registration tax is calculated according to engine size rather than directly on the fuel consumed
or CO2 emissions. Although the NCCS stated that this would be changed to impact CO2 emissions directly, there has
been as yet no change.
An analysis by SEI of registrations of new cars in Ireland and their CO2 emissions grouped new vehicle sales in 2000
according to engine size bands and calculated average CO2 emissions for each size band (SEI, 2003a). The analysis
does not consider the policy measures that could cause such a shift but solely the effect of a shift in purchasing
behaviour on CO2 emissions. The report evaluated the impact on CO2 emissions if the new vehicle engine size profile
for 2000 was shifted down one engine size band lower. New vehicles are added to the total fleet and the assessment
if continued for a shift in the total fleet engine size profile down an energy size band. The impact of the engine
downsizing would be to reduce CO2 emissions annually by 30kt.
If the same calculation is made with the assumption that the overall fleet is made up of vehicles with the same
engine size distribution as the new vehicles purchased in 2000, then the impact of a downward shift in engine size
for the total fleet would produce an annual emissions reduction of 53kt. The effect is larger as the profile of engine
size of new vehicles in 2000 shows that engines in 2000 are larger than the current overall fleet profile, and so
downsizing has a greater effect on the emissions. Policy instruments such as CO2-differentiated circulation taxes, or
car labelling or a combination of both could achieve such a purchasing shift.
The car industry has repeatedly stated that it does not favour downsizing as a strategy to achieve CO2 emissions
reductions. The voluntary commitment between the auto manufacturers and the Commission states that the
Automobile Manufacturers Associations (ACEA, JAMA and KAMA) should ‘achieve the target of 140g/km mainly by
technological developments and market changes linked to these developments for the average of their new cars
sold in the Community by 2008.’23 However, the four Joint Reports on the Commitment published to date have not
addressed any further the complex question of recommended market changes that were mentioned as part of the
Voluntary Agreement.
The COWI data shows that either registration or circulation taxes can be used to reduce CO2 emissions from
transport, although the respective taxes increase by a reasonable amount. The additional costs to consumers are
lower for circulation taxes than registration taxes for the countries modelled in the COWI study but this needs to be
investigated for the Irish tax system.
The European Commission proposes in its Consultation on vehicle taxation24 to harmonise vehicle taxation in the EU
and transfer revenues from registration to circulation taxes. This would involve phasing out registration taxes and
restructuring circulation taxes to allow tax differentiation in favour of low CO2-emitting cars. If vehicle tax revenue
were to be kept constant, they estimate that this would raise annual circulation taxes in Ireland by 100% by 2015,
since the registration taxes in Ireland are high. Ireland has one of the highest levels of budgetary dependencies on
vehicle and fuel-related taxes in the EU, at 10.2% of total budget revenue in 1999 (Commission of the European
Commission Recommendation of 5 February 1999 on the reduction of CO2 emissions from passenger cars (notified under document number C(1999)
107) (1999/125/EC)
Launched 14 July 2004, see Chapter 5.
Communities, 2002). It is therefore expedient that these revenues would not be lost in any restructuring of vehicle
taxation. The Commission therefore recommends that strict budget neutrality be observed and that the overall tax
burden on passenger cars should not increase.
The COWI study modelled scenarios whereby 10 percent reduction of CO2 emissions is achieved through CO2differentiated registration and circulation taxes. If only restructuring of circulation taxes were undertaken, a
reduction of 5 percent of passenger car CO2 emissions compared to projected 2010 emissions could potentially be
achieved. This could lead to a reduction of 0.26 Mt/year CO2 emissions on top of any technological improvements
already accomplished. Fuel Taxes
Fuel taxes that are associated with the carbon content of the fuel (i.e. and therefore the related CO2 emissions that
will be emitted when the fuel is combusted), or carbon taxes, were identified in the NCCS as a potential instrument
to reduce greenhouse gas. However carbon taxes have yet to be implemented and Irish fuel prices remain lower
than most comparable countries in the EU.
Fossil fuel consumption is directly related to the production of greenhouse gas emissions. The idea is that by
increasing fuel taxes, consumers embark on strategies that will allow them to consume less fuel, such as buying a
more fuel-efficient vehicle, driving less, or switching mode. Often it is thought that fuel taxes have little or no effect
on fuel consumption demand (there is a low price elasticity of demand), since people may be unable to change their
consumption pattern. Although this may be true in the very short run, there is evidence that people change their
consumption of fuel in the long run (Sterner, 2003). This can occur because they buy a less fuel-consuming car, or
they change the mode of transport to work, or they move job or house and so reduce the distance travelled or
change their driving behaviour.
There is a large literature on estimated price elasticities of transport fuel demand. Sterner (2003) has summarised the
results from some studies in OECD countries to estimate the elasticities of fuel demand with price and income and
these are presented in Table 6.7. In this table it is shown that the elasticity in the short run is in fact quite low for both
price and income effect by most methods of estimation. The long-run elasticity values are much larger indicating
that a change in price does affect the demand for fuel.
Price elasticity
Income elasticity
Calculation method
Pooled OLS
Pooled (fixed effects: ‘within’)
Cross-section (‘between’)
Mean group estimates
Aggregate time-series
Table 6.7: Elasticity estimates in OECD Countries (1963-1985) (Sterner, 2003); SR = short run, LR =
long run.
Another large review published in 2003 found the short run price elasticity of fuel demand to be 0.25 and the long
run value to be 0.6 (Goodwin et al., 2003). The ESRI have studied the use of fiscal measures to reduce greenhouse gas
emissions in Ireland using the HERMES model (Bergin et al., 2002). The value of the long-run price elasticity of
demand for transport fuel utilised in their model is –0.27. This is significantly lower than the estimates of long-run
price elasticity of transport fuel demand shown in Table 6.7 that are based on historical OECD estimates. The ESRI
study also calculates that a carbon tax of €20 per tonne CO2 emissions would result in a reduction of transport fuel
consumption of 1.7 percent in 2010.
Box 6.3: Methods to estimate fuel demand elasticities
Fuel demand can be modelled in its simplest form using the equation
Git = c + αPit + β Yit + µ it
where G is
fuel consumption, P is price, and Y is income; the subscripts i and t refer to countries and years respectively, c, α
and β are parameters and µ is an error term. (Sterner, 2003)
Econometric models allow the parameters α and β to be estimated from the dataset. These parameters are called
elasticities and define the sensitivity of fuel consumption to a change in price or income level. More complex
models take into account the time lag associated with the impact of a policy measure due to adjustments in
vehicle use and vehicle stock. The estimation of elasticities is a research field in itself and results can vary
significantly with the model chosen.
There could be three distinct effects from a policy of changing fuel taxes in Ireland in proportion with carbon
content in order to reduce consumption and reduce greenhouse gas emissions.
The first is that more fuel-efficient cars could be purchased. In the immediate future perhaps this would most likely
mean a higher share of diesel passenger cars. In 2002 the average fuel consumption of diesel cars in Ireland was
5.8L/100km, compared with 6.8L/100km for petrol cars. Average new fleet CO2 emissions were estimated at
163.1g/km (CEC, 2004).
The COWI report estimates the effect of increasing diesel share on CO2 emissions. It is estimated that in the nine
countries the effect of doubling the diesel passenger vehicle share would reduce CO2 emissions from 5-9.4 percent.
Increasing the diesel share to 50 percent of the total passenger vehicle stock would reduce CO2 emissions between
6-11.8 percent (for Ireland this would translate to 0.32-0.62Mt CO2 emissions saved in 2010). The total cost to society
of increasing the diesel share of the passenger car fleet is not clear, since although conventional diesel technologies
generate lower CO2 emissions than petrol cars, they produce relatively higher NOx and particulate emissions
(Mayeres and Proost, 2001). However, the new vehicle emissions standard for 2008 (EURO 5) will most likely be so
stringent that diesel vehicles will need to be equipped with particulate traps and NOx storage devices in order to
meet the emissions limits. This should eliminate this problem.
The second effect could be that less vehicle miles would be travelled. The SEI study previously mentioned estimated
that a reduction in 2,000km travelled per year would reduce the CO2 emissions of vehicle stock on the road for the
year 2000 by 440 kt CO2. This would represent 10% of the total estimated CO2 emissions from passenger cars in 2001.
This is significantly higher than the CO2 emissions saved by vehicle purchasers downsizing by one engine band
(estimated at only 30kt).
The COWI study (COWI A/S, 2002), however, has found that an increase in fuel tax by as much as 25 percent has very
little effect on CO2 emissions reduction caused by a reduction in transport demand. They estimate that a 25 percent
increase in fuel price would only decrease CO2 emissions by 0.2-2 percent as a result of a reduction in vehicle miles
across the nine countries modelled. They postulate that fuel taxes are ineffective as they apply equally to both fuel
efficient and fuel-inefficient vehicles, therefore providing no incentive for consumers to switch to more advanced
technologies. If this is accurate, then it would most likely be very difficult to reduce driving by 2000km per year by
means of fuel taxes as contemplated in the SEI calculation.
However, the elasticities from the literature suggest that an increase in the price of fuel of 10 percent would lead to a
reduction in fuel consumption from passenger cars of approximately 2.5 percent in the short run (within a year) or 6
percent in the long run as a result of the two effects described above.
A third effect could be that less fuel tourism would occur. The EPA estimates that approximately 10 percent of all
transport fuel sold in the Republic of Ireland leaves the country for Northern Ireland25. The CO2 emissions from the
combustion of that fuel in road transport are attributed to the greenhouse gas inventory of Ireland. The CO2
emissions from all road transport in 2010 are projected to be 13.2 Mt/year, i.e. 93% of all domestic transport
emissions. If fuel taxes were raised on a par with the UK (there is approximately 40c/L difference for both petrol and
diesel), there would be no reason for fuel tourism to continue. Then CO2 emissions from the fuel sold to Northern
Ireland would no longer be attributed to the Republic- a further saving of approximately 1.32Mt/year. Although
revenue would be lost from the Northern sales, the increase in tax would be more than 10 percent and could thus
Ireland’s 3rd National Communication under the UNFCCC available at
compensate for any loss in revenue. The ICF-BOC report assumes that this increase in fuel tax in the Republic is
highly unlikely and therefore does not attribute any future savings in CO2 emissions from transport to this measure.
Since the objective of this study is to illustrate the measures that could produce a CO2 emissions saving from
transport without evaluation of the probability of implementation, this measure is included here. It is also feasible
that the gap may be diminished by excise duty in the UK being reduced in the future.
In summary this section shows that there remains considerable potential in Ireland for the introduction of taxes that
could be effective at reducing greenhouse gas emissions from passenger cars. The COWI work has illustrated how
the replacement of existing vehicle circulation and registration taxes with vehicle taxes that are CO2-dependent can
reduce CO2 emissions from passenger cars by up to 10 percent, from a reference level of 140g/km in 2008 otherwise.
The taxes involve significant increases for consumers compared with existing vehicle taxes, however, so a tax high
enough to achieve 10 percent may not be possible nor desirable. A conservative estimate is therefore hypothesised
at 5 percent, or a reduction of 0.26 Mt CO2 emissions per year, which is considerably higher than the 0.05Mt CO2
emissions per year assumed in the ICF-BOC report. CO2-dependent circulation taxes appear to be more efficient than
CO2-dependent registration taxes and the restructuring of circulation taxes alone is the recommendation of the
Commission Consultation launched in July 2004 on vehicle taxation in the EU (see Chapter 5).
Fuel taxes could mainly be effective if used to arrest fuel tourism between the Ireland and the North of Ireland,
currently estimated at 10 percent of all road transport. If this situation was discontinued, an estimated 1.3 Mt CO2
emissions from road transport could be saved instantaneously. Fuel taxes could also be used to increase the diesel
share of passenger cars in Ireland. The COWI study has shown that an increase of the diesel share could reduce CO2
emissions from passenger cars by 6-11.8 percent in 2008 (0.32-0.62 Mt in Ireland in 2008). The CO2 emissions savings
attributed to a switch from petrol to diesel vehicle could theoretically be added to the savings due to the elimination
of fuel bunkering from Northern Ireland as the two measures are distinct from each other.
6.2.4 Road charges and tolls26
Road charges and tolls are widely documented in the literature as effective instruments in transport demand
management (TDM). Although most TDM schemes target congestion as the externality to be controlled, they can
also serve the dual purpose of reducing greenhouse gas emissions from transport. Some researchers (Button and
Verhoef, 1998) show that while road prices can be a method of restricting total vehicle numbers and also that
transaction and administration costs are low, fixed taxes such as vehicle registration tax or annual road tax are a very
poor form of transport demand management. As with any fixed cost that does not vary with usage, in both cases
once paid, the incentive remains to use the car as often as possible to ‘recoup’ the investment made (Kelly, 2003).
Road pricing is often cited in academic TDM literature as a first best approach to transport demand management.
Two, thus far, successful implementations include Singapore and London, which are described in Box 6.4. There may
be more road pricing schemes implemented in the UK in the future as the current transport act in the UK enables
local authorities to introduce road use charging and workplace parking levies independently of government
(Bonsall, 2000). In Ireland there is no such legislation at present, however, comments by the Fine Gael (opposition
party) spokesman Brian Hayes in the Irish Times27 have indicated that based on the success of the system thus far in
London, his party would be drafting a Transport policy document for Dublin that would include congestion pricing
(Kelly, 2003).
Common problems relating to road pricing lie in the implementation and public acceptability for such a programme.
An example is the media reaction in Ireland to proposed measure by the National Road Authority28 to introduce
tolling on more routes in Ireland. Road users tend to prefer other methods of TDM employed, such as public
transport improvements.
Another type of road charging in TDM is the use of parking pricing to reduce the use of passenger cars. A study
carried out by the UK Dept. of Transport in 200229, which questioned users as to the factor most likely to change their
behaviour away from private car to using a bus service found that although frequency, availability and speed of the
public transport mode were significant, the largest contributing factors to change were if “parking were difficult to
find” and if “parking was more expensive” (UK Dept. of Transport 2002). Overall, 56% of car users said they would use
the bus more if parking were more expensive, and 64% said that they would also use the bus more if parking were
difficult to find.
Acknowledgement is due to Andrew Kelly, Department of Environmental Studies, UCD, for this section. Much of the material was sourced from his
PhD thesis (2003).
Wednesday July 2nd 2003 Irish Times Opinions and Analysis "Anti-congestion fees would benefit Dublin"
Thursday April 15th 2004, Irish times ‘NRA aims to raise €2bn from new toll charges’, Tim O'Brien, Regional Development Correspondent
July 2002 Omnibus survey samples 1,850 adults representative of the British adult population
Box 6.4: Road pricing in Singapore and London
Perhaps the most successful of the early implementations of this policy occurred in 1998 with the ERP (Electronic
Road Pricing) system in Singapore. This system operated by fitting vehicles with an ICU (in car unit) from which
payment is deducted via a smart card debiting system as the vehicle passes under an overhead gantry on a route.
The advantage of this system, once cars were fitted, was the fact that the vehicle’s journey would not be interrupted.
In addition the tolls are both time and congestion sensitive, thus the charge adapts more accurately in sync with
traffic so as to influence demand levels in the direction the policy desires. Non-payment is tracked by examining the
photographs of vehicles that passed through without a valid card or ICU. Goh (2002) highlights the success of the
Singapore road pricing scheme as being dependent on the provision of sufficient alternatives, and also the
education and involvement of those affected, with the former being an essential means of redressing the equity
imbalance for road users/commuters that such a policy can generate. Indeed it is no coincidence that the success of
the scheme elsewhere, notably London, is in an area where prior to the scheme, 85% of the populace used public
transport anyway.
As regards the specific setup of the charge in London, it applies only to an 8 square mile area of central London. The
charge itself is set since introduction at £5 per day between 7am and 6.30pm Monday to Friday, and takes no
account of journey distance or approximated vehicle emission levels.
Since this there have been other examples such as the toll road scheme in Trondheim, Norway and the GPS charging
system in Switzerland which offers great potential for more accurate and structured charging that takes account of
distance travelled and prior routing.30 Indeed the technological developments such as GPS tracking and vehicle
registration in the system should allow future developments of road pricing to become even more capable of
adjusting the charge on a more individual and accurate level. This could mean that the complex damage function
discussed by Sterner (2003) might be better accounted for by weight of individual damage done. Thus enabling a
charging system to account for the emissions level of your particular vehicle by the distance you travelled. This
progresses the ability to implement a Pigovian tax - at the source of the cost and at the value of the damage.
There has been much academic work examining the price level and structural possibilities of parking pricing policies.
Indeed, appropriate pricing of parking is crucial to its effectiveness as a policy tool. Cheap parking has been shown in
research to be a significant influencing factor with regard to trip generation decisions and modal shift (Higgins 1992,
UK Dept. of Transport 2002). An important note with regard to the structure and pricing discussion is enforcement.
As Cullinane (1992) highlighted, the policy must include a deterrent to non-compliance. If there is no enforcement of
a given parking policy, there is no policy. However, given enforcement and appropriately structured pricing, Button
and Verhoef (1998) note the strengths of parking policy as follows:
On-street parking affects road capacity
The cost of parking (for those who pay themselves) is a large and often the largest monetary component of a car
Parking pricing is an important part of urban policy and crucial where congestion pricing is not enforced
Cruising for parking (search time) is a major contributor to city traffic congestion.
Some have considered the potential of parking policy if used in tandem with other policy tools. Specifically Calthrop
et al. (2000) show that the second best means of pricing urban travel is that of pricing parking spaces, and that
parking pricing measures can yield greater welfare gains than road pricing alone if combined.
However, parking pricing policy is not without flaws or concerns. As a means of affecting traffic within a city, it is
clear that parking pricing policy will have no effect whatsoever on “through traffic” (vehicles which pass through a
city but are not looking to park) and may in fact encourage this type of traffic if the pricing policy itself impacts
positively on overall congestion levels. There are also a number of equity concerns, in that it will bear more heavily
upon those traveling short distances as, for these individuals, the parking cost will form a greater proportion of their
total trip cost (Button, 1993). Another aspect is that if a parking policy cannot encompass all private vehicle use, then
the incidence of the charging will rest upon those who have no alternative (given an unchanging mode of travel) but
to use those parking spaces under regulation.
As a further limitation to the scope of parking policy, it is noted that generally a city can have a significant amount of
private non residential (PNR) parking facilities over which policy-makers have no direct control (Higgins, 1992).
While, in recent years in Dublin, policy has tried to encourage employers to convert parking facilities and has asked
new buildings to be constructed in such a manner that would facilitate conversion of parking spaces to other use at
a later date, at present the local situation in Dublin leaves a large and unquantified number of PNR spaces outside of
A link page of discussions on the various road pricing implementations can be found at
policy control. The potential for a parking policy to affect congestion or charge for road use externalities is directly
proportional to the percentage of the city’s parking spaces over which it has control.
However the equity concern can be addressed somewhat by seeking to either spread the influence of the pricing
mechanism to include PNR parking, and/or by ring fencing revenue into improvements in modal alternatives and
the traffic network, to make alternatives better for those who cannot afford to pay and travel better for those who do
have to pay.
As with many TDM pricing policies, there are also acceptance and implementation measures to be considered. In this
regard, while parking pricing is generally considered more easily implemented than road pricing, due to the fact it is
a recognised and established system of charging in many facilities and countries across the world (Arnott and Rowse,
1998), people unsurprisingly would rather see improvements in public transport as a means of effecting modal
choice than a new charging system (Verhoef 1996 and Thorpe et al. 2000). But this aside, people have come to
accept parking as a reasonable request of payment for a scarce commodity. Whereas with respect to road pricing,
individuals may consider they have already paid for roads with road taxes and so further costs on road usage are less
With any pricing measure the degree of price sensitivity of the consumers is paramount to understanding how they
will react to the given price level. A study (Clinch and Kelly, 2003) was carried out in Dublin that examined the
sensitivity of parking behaviour and modal choice to the price of on-street parking in the city of Dublin, Ireland. It
utilised contingent valuation data sets from two large-scale surveys of on-street parkers in a prime area for parking in
the centre of the city. Revealed preference parking trend data were used from parking meters ex ante and ex post of
a general 50% price increase in the hourly cost of on-street parking to estimate the price elasticity of demand in this
market for Dublin, Ireland. The case study area was a central on-street parking area with a 3-hour parking limit, which
attracted an even mix of business and non-business use. In terms of simply reduced parking frequency, the average
price elasticity of demand was -0.11. When a notable drop in average parking duration was factored in, a more
responsive value of -0.2 was produced. Daily average estimates remained consistent, with one notable exception
being Thursday, a ‘late night shopping’ day where a lower price sensitivity was noted. Morning periods were also
noted to be more responsive than other time periods in the test area, indicating some potential for influencing the
morning inbound peak traffic levels. The results also showed a progressively widening gap in price sensitivity
between business and non-business users as the pricing scenarios scale upwards. Ordered probit regression analysis
results revealed, that at a price increase of IR£1.50 to IR£4 (€1.90 to €5.08) per hour, non-business users were over
20% more likely than business users to cease all parking in the area, whereas at a price increase of IR£1.50 to IR£2
(€1.90 to €2.54) per hour, the corresponding percentage showed that business users were just under 5% more likely
to cease all parking in the area as a result.
Results indicate that the most likely impact of the localised price increase amongst those who reacted is parking
relocation, with 75% on aggregate over the two surveys choosing this option (Clinch and Kelly, 2004). Such
relocation was predominantly to a multistory facility. The remainder of the reactions were accounted for by modal
alternatives at 15% of users on aggregate over the two surveys, and trip cancellation at 6%. The balance were
indecisive about their reaction, other than to stop parking in the newly higher priced area. Although quality of
modal substitutes and the scale of parking price change are clear factors, results show significant potential for
parking policy to cause a modal shift, especially were a more widespread approach taken to the price increases.
The effect of pricing measures has yet to be assessed for their impact on greenhouse gas emissions. It is clear from
the study carried out for Dublin that parking pricing has had an effect on the behaviour of drivers. Road and parking
pricing have the advantage that they influence the use of road transport, not just vehicle purchasing behaviour.
Thus, if this could be linked to other measures such as taxes and improvements in public transport then the total
kilometres driven as well as the greenhouse gas emissions produced per kilometre would be affected, leading to an
absolute reduction in greenhouse gas emissions from road transport. It is difficult to quantify the amount of
greenhouse gas emissions that could be saved nationally as a result of pricing measures. Parking pricing is really only
relevant in urban areas, whereas road pricing could influence driving behaviour over longer routes. The effectiveness
of road and parking pricing is strongly linked to other measures such as public transport and fuel taxes. Separate
estimates for the quantity of greenhouse gas emissions that could be saved as a result of pricing measures are not
calculated but assumed here to be included as part of the range of estimates given for savings through public
transport and taxes.
6.2.5 Alternative fuels incentives
Chapter 4 discussed the technological issues associated with alternative fuels as a measure to reduce greenhouse
gas emissions from transport. European legislation has recommended substitution targets for biofuels in 2005 and
2010 in the EU. In the medium term compressed natural gas (CNG) is viewed as a transitional fuel until fuel cell and
synthetic fuel technology are mature, when hydrogen will be utilised. Other advanced technologies, which have
significant environmental advantages include electric and hybrid vehicles.
From a greenhouse gas reduction perspective and within the Kyoto Protocol timeframe, biofuels have considerable
potential to reduce greenhouse gas emissions from road transport. The combustion of biofuels, according to IPCC
guidelines is estimated as CO2-neutral, however energy is required to produce them and this can distort the
greenhouse gas and energy balances. From studies reviewed, it appears that the range of CO2 emissions savings on a
life-cycle basis varies significantly depending on the biofuel and raw material cultivated, utilisation of co- and waste
products, and the agricultural yield. Overall, it is estimated that the CO2 emissions savings can be between 0-80
percent compared with fossil fuel such as diesel and petrol (CEC, 2003b; IEA, 2004).
AEA technology carried out a study in 2002 for the U.K. Department of Transport (UK DfT, 2002), which estimated the
cost of biofuels in 2002 and 2020. The estimated resource costs are shown in Table 6.9 and are defined as the costs
before taxation of liquid transport fuels delivered to the car driver at a UK filling station. They include costs
associated with raw materials, processing, distribution and supply of fuels, and take account of any income from the
sale of co-products. The energy content of bioethanol and biodiesel is not equal to that of petrol and diesel and
therefore the total costs are divided by the ratio of the energy contents (0.61 and 0.84 for bioethanol and biodiesel
respectively) so that the costs are given per energy-equivalent litre.
Option & Fuel type
Oil seeds
Oil seeds - UK
Wood - Acid
Straw - Acid
Sugar cane
Sugar cane UK production
Sugar beet
Costs, €cent/litre
Total (energy eq.)
Table 6.9: Resource costs of bioethanol and biodiesel estimated for 2002, (U.K. Department of
Transport, 2002)
If the resource costs given above were translated into cost per tonne CO2 emissions saved (€/CO2eq saved), then the
cost to reduce CO2 emissions using biodiesel in the UK would be approximately €442/CO2eq and that of bioethanol
from sugarbeet produced in the EU would be €636/CO2eq. these values are significantly less than the ICF-BOC
report, which calculated a cost of €5,000 per tonne CO2eq. saved through implementation of the biofuels directive.
Unfortunately no detailed calculations are provided for comparison.
The total costs on this basis are much higher than the current cost of production and distribution of petrol and
diesel. The prices of unleaded petrol and diesel (after tax) in Dublin in April 2004 are currently high at approximately
98 and 88 cents per litre31, respectively. Approximately half of these prices are made up of the fuel excise duty, which
stands at 44.3 and 36.8 cents per litre in Ireland since December 4th 2003. If this excise duty were applied to the costs
From the AA Ireland website, 15/7/2004.
of biofuels given in Table 6.9, the price would become uncompetitive with that of fossil fuels, resulting in little
incentive for customers to purchase biofuels.
Recognising this, the Minister amended the 1999 Finance Act to grant:
‘Where the Minister, after consultation with the Minister for Communications, Marine and Natural Resources, is
satisfied that any biofuel is essential to a pilot project undertaken in the State which is designed either—
(a) to produce biofuel, or
(b) to test the technical viability of biofuel for use as motor fuel,
a relief from mineral oil tax shall, subject to such conditions as the Commissioners may impose, apply to such
Therefore, pilot projects to produce and test biofuels are exempt from fuel excise duty in Ireland, making the prices
of bioethanol and biodiesel at 90 and 83.3 cents/energy-eq. litre commercially viable. If this exemption were
extended to commercially produced biofuels, perhaps the 2 percent target in 2005 would be feasible in Ireland. If 2
percent of the energy produced by transport fossil fuels were substituted with bioethanol and biodiesel and
assuming a somewhat conservative 50 percent CO2 emissions reduction per tonne of fossil fuel substituted, an
estimated 0.12 Mt of CO2 emissions could be saved per year. If the 2010 target of 5.75 percent of biofuels
substitution were met in 2010, 0.43 Mt of CO2 emissions could be saved.
An exemption of biofuels from excise duty represents a subsidy at the level of the excise duty forgone. The cost of
this measure is high, as with all greenhouse gas mitigation measures from transport, and ranges between €210-270
per tonne of CO2 equivalent emissions saved32. The implementation of this measure may therefore not be justifiable
based on cost-effectiveness in mitigating CO2 emissions alone, but only when other societal factors are taken into
account such as encouraging rural development and improving energy security of supply.
Other alternative technologies such as hybrid vehicles could be incentivised. These vehicles are currently available
for purchase in Ireland but the uptake has been low (9 hybrid vehicles sold in Ireland in 2003), perhaps due to the
higher purchase price compared with equivalent vehicles in the size class. A carbon tax would reduce this price
difference, since hybrid vehicles can produce 20 percent less CO2 emissions than the equivalent vehicles of its size.
6.3 Conclusions
This chapter has presented the current and potential Irish response to greenhouse gas emissions from transport. The
transport policy measures currently in place such as vehicle and fuel taxes, public transport measures and road
charges have not been designed with the reduction of greenhouse gas emissions as their primary function. Many of
the measures described in the National Climate Change Strategy to reduce greenhouse gas emissions from transport
have yet to be implemented and the latest projections of CO2 emissions per year from transport in 2010 are at 14.2
Mt per year. This is significantly higher than the target set in the National Climate Change strategy at 11.4 Mt CO2
emissions per year from transport.
A detailed economic analysis of each of the measures discussed in this chapter has not been carried out. In general,
the cost of mitigating greenhouse gas emissions from the transport sector is significantly higher than other sectors,
especially when technical measures are utilised. A study carried out by ECOFYS estimated the sectoral costs of
greenhouse gas emissions mitigation in the EU. The study estimated the cost of technical measures to reduce
greenhouse gas emissions from transport range between -€9972 - 327/tCO2-eq. Therefore, the estimates of
implementing biofuels, for example, as a measure to reduce greenhouse gas emissions from transport calculated in
section 6.2.5 are within the range of estimates in the ECOFYS study. The ECOFYS data show, however, that there
could be other lower cost options available.
The same ECOFYS data demonstrates, using a least cost allocation methodology, that some sectors should reduce
their emissions more than 8% (compared with 2010 baseline) in order to meet the EU Kyoto target in 2010, while
others should reduce their emissions by less. They identify transport as a sector that should reduce its emissions by
less than 4%. The overall marginal abatement cost for all sectors is calculated to be €9920/tCO2eq. for a ‘full flexibility
Assuming a saving of 1.7kg CO2 per energy-equivalent litre of biodiesel and 2.4 and 1.7kg CO2 per energy-equivalent litre of bioethanol from wheat
and sugar beet respectively (Elsayed et al., 2003 and NOVEM, 2003).
case’ and €9942/CO2eq. for the ‘burden-sharing case’33. Compared with the cost of mitigating CO2 emissions in other
sectors, the cost of mitigation of greenhouse gas emissions from transport are high.
The advent of the EU emissions trading scheme in 2005 has created a futures trading market in CO2 allowances. The
recent trading price of CO2 has been at approximately €8/tCO2–eq. Although the transport sector is not included in
the EU emissions trading scheme, research has shown the price of carbon emissions is likely to be lower within the
regime than outside it (Convery and Redmond, 2004). This provides another value of the marginal abatement costs
in other sectors with which to compare marginal abatement costs in the transport sector.
These examples serve to highlight the significant costs associated with reducing CO2 emissions from transport sector
through technology improvements compared with other sectors. However, mitigation of CO2 emissions from
transport by means of transport demand measures can incur lower costs than technical measures. The literature
(Proost et al., 2002) suggests that the marginal external costs of peak private passenger and peak private freight
transport are considerably larger than the current tax levels, whereas in off-peak periods this is not always the case. It
is estimated that significant increases in the money prices of peak private transport are required (between 35% and
233%), which would result in decreases in volumes between 10 and 33%. The same study found that a reform of
public transport subsidies to reflect the variable costs of off-peak public would achieve important welfare gains for
society. Therefore it appears that there is scope to reduce greenhouse gas emissions from transport by means of ‘soft
Based on the latest available data for Ireland and literature estimates, this work has assessed which additional policy
measures could be applied in Ireland and what is the range of CO2 emissions reductions that could be achieved with
their implementation. The measures selected were fiscal and information measures that can influence transport
demand and purchasing behaviour. Table 6.10 summarises the estimate CO2 reductions associated with the policy
measures discussed here. The calculations were made based on the projection of 14.2 Mt CO2 emissions from
transport in 2010, of which passenger cars make up approximately 40 percent and road freight and public transport
make up 42 percent.
Mt CO2eq saved annually
Information – car labelling
0.05 - 0.38
Public transport measures
0.20 - 0.27
Vehicle taxes
0 - 0.26
Fuels taxes
0.32 - 1.32
Pricing (Road and parking)
Biofuels incentives
0.12 - 0.43
0.69 – 2.66
Table 6.10 summary of potential CO2 emissions savings through possible policy measures
The policy measures presented in Table 6.10 are further clarified as the following:
Increased government support and promotion of the purchase of fuel-efficient passenger cars could make
vehicle labelling more effective. An independent agency responsible for the management and the
distribution of information on fuel efficiency of cars from the motoring industry would provide credibility
and potency to the measure.
The public transport measures are those already planned for Dublin by the DTO.
Current vehicle registration and circulation taxes would be replaced with CO2-dependent taxes that are
sufficiently differentiated to induce consumers to choose more fuel-efficient vehicles.
An increase in fuel taxes to UK levels could eliminate fuel tourism between Northern Ireland and the
Republic of Ireland, currently estimated at approximately 10 percent. This could have a significant impact
on CO2 emissions from Irish transport. Although fuel taxes are not considered to be very effective in the
literature for the reduction of greenhouse gas emissions from passenger cars, in Ireland there is a unique
Full flexibility means the EU-wide application of least cost sectoral objectives
Burden sharing case means the allocation of least cost sectoral objectives in each Member State.
situation caused by fuel tourism, which provides scope for large reductions in CO2 emissions attributed to
Irish transport.
Road and parking pricing could be useful in controlling transport demand but the impact is not quantified.
The reductions achieved using this measure are assumed included in the quantities estimated through
taxes, vehicle labelling and public transport improvements.
Commercially produced biofuels as well as pilot projects would require fuel excise duty exemption in order
to make them commercially viable.
The CO2 savings estimated in this report show that the implementation of the policy measures discussed above
could be effective in reducing the gap between the current CO2 emissions projections from transport for 2010 and
the NCCS target. Interestingly, the upper end of the range is nearly exactly the reduction planned for transport in the
NCCS, even though technical measures are not included in the estimates here. Unfortunately the calculations for the
NCCS section on transport were not published and therefore a comparison cannot be undertaken.
A cost-benefit analysis has not been carried out to compare the measures considered in this study and therefore the
cost of implementation remains to be investigated in future work.
6.4 Areas for future work
International guidelines and methodologies have been devised in Europe and by the OECD to (a) set
greenhouse gas reduction targets; and (b) evaluate the effects of proposed policy measures (OECD, 2002a,
2002c). An overview of some existing methods is given in Annex A. Criteria and evaluation methodologies are
included, which are used to assess and select suitable policy measures. The background calculations to many of
the reports cited here, which estimated the greenhouse gas reductions that would result from mitigation
measures, were not published. Future work could use these international frameworks to provide a transparent
methodology in setting transport greenhouse gas emissions targets and discuss the impact of policy measures.
Most countries use forecasting models to assess the effect of integrated packages of measures on transport
emissions and societal welfare. There is some capacity in Ireland, especially in the Dublin Transportation Office
and Trinity College, to model transport and the effect of policy measures. However, there has been little
integration of transport models with energy and macroeconomic models used for the whole country. Models
require a wide spread of good quality, comprehensive, disaggregated data. Currently data is collected by
several different sources and it can be difficult to gain an overview of Irish transport. A centre for transport data
collection providing detailed statistics and databases across all modes would be extremely useful in this regard.
A task group could be set up to devise an integrated strategy for sustainable transport in Ireland. This could use
the OECD guidelines on achieving environmentally sustainable transport and would take not only greenhouse
gas emissions, but also the other transport externalities, into account (OECD, 2002a) and could make
recommendations for policy across all modes of transport.
A socio-economic assessment of Irish transport could be carried out (perhaps for the task group mentioned
above). This would include quantification of the external costs of different modes of Irish transport. A costbenefit analysis of the transport policy measures for Ireland discussed here, and elsewhere, would be invaluable
to advance the implementation of cost-effective measures to reduce greenhouse gas emissions from the
transport sector in Ireland.
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EUROSTAT, 2003: Transport statistics available on EUROSTAT website, 2003.
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Annex A
International methods for target-setting and policy evaluations in transport
The OECD list guidelines for sustainable transport target indicators and as an initial step these could be used to
compare. They use the ‘backcasting’ method that involves setting a target for future greenhouse gas emissions and
working back to devise policy measures to get there (OECD, 2002). Benchmarking can also be undertaken to set
targets based on the experiences of other countries. Often countries will have different weaknesses and strengths
and the European Commission at an aggregate level has compiled a list of possible benchmarks (Dom, 1999)
An analytical method is required to select the most appropriate policy measures to reach the targets. There are many
criteria that should be taken into consideration so that actions achieve environmental and societal objectives while
remaining cost-effective. The OECD provides an evaluation framework with which to assess policy measures.
‘Strategies to Reduce Greenhouse Gas Emissions from Road Transport: Analytical Methods’, (OECD 2002)
Greenhouse gas reduction
Analytical considerations
- Tonnes of carbon equivalent reduction achieved
Synergistic benefits
Negative impacts
Temporal scope
Monetary cost
Other environmental benefits, i.e.
pollutant reductions, congestion
- Negative environmental effects
- Impacts across: population
- Time to develop/ implement
- Direct vs. indirect economic costs
- Ease of implementation
- Scope
- Enforceability
Economic growth
Energy security
Macro and microeconomic shifts
Time to achieve results
Table A.1: Evaluation framework of policy measures to reduce greenhouse gases from transport
(OECD, 2002).
These criteria could be included in any evaluation methodology used to select suitable reduction measures. Most
countries use forecasting models to assess the effect of integrated packages of measures. These models generally
have a ‘bottom-up’ or ‘top-down’ nature. The fist type are built up from disaggregated data at a micro level whereas
the second type, top-down models, depend on equations that describe future relationships based on historical data.
Both models require a wide spread of good quality, comprehensive disaggregated data. Many different models exist
that fulfil these functions and many countries have developed their own national model specific to their
requirements and characteristics. Ireland performs its reporting requirements for the transport sector using bother
the bottom-up model COPERT, that estimates the emissions from vehicle stock and top-down equations based on
the overall fuel consumption of the transport sector. The Auto-Oil II study group used TREMOVE in 1999 to estimate
the base case for Ireland that forecasted traffic demand and prices until 2020. Trinity and DTO use TRENEN and other
programmes to model the effect of transport policies on traffic.
When quantitative analysis is not feasible, another method has been devised by the Transport and Environment
Reporting Mechanism to help policymakers determine whether existing policy measures and instruments are
influencing transport and environment interactions in a sustainable direction. This is a more qualitative analysis and
involves answering 7 questions with key indicators.
Integration questions:
Key Indicator
Is the environmental performance of the transport sector improving?
Transport emissions
Are we getting better at managing transport demand and at improving
modal split?
Passenger and freight
transport demand;
Modal share of pax and
freight demand
Are spatial planning and transport planning becoming better
coordinated so as to match transport demand to access needs?
Average journey lengths for
different activities
Are we improving the use of transport infrastructure capacity and
moving towards a better-balanced intermodal transport system?
Investments in transport
Are we moving towards a fairer and more efficient pricing system, which
ensures that external costs are minimised and recovered?
Real changes in price of
public and private transport
How rapidly are improved technologies being implemented and how
efficiently are vehicles being used?
Energy intensity of passenger
and freight transport
How effectively are environmental management and monitoring tools
being used to support policy and decision-making?
Public opinion regarding
solutions to transport
Table A.2: Key indicators of sustainable transport
A significant step for Ireland could be to collect the data necessary to answer the Integration Questions. They require
substantial data, with each key indicator generally consisting of a number of other indicators that feed into them.
Annex B- Existing Diesel Vehicle Warranties for 100% Biodiesel Operation34
Passenger cars
All TDI models since 1996
Passenger cars
Model 525 tds/1997 onwards,
3 + 5 series diesel since 2001
All models since 1971
MMT, Industrial, marine
All engines except
some Perkins
Combines, Tractors
Warranties exist
Faryman Diesel
Warranties exist
For new models
AG Tractors
For new models
Warranties exist
Series 3000 and 5000
Cursor since 2000
John Deere
Combines, tractors
Warranties since 1987
Warranties exist
Series OC, Super Mini, 05,03
Series 1000
Engine numbers 8953591
to 8953001
Passenger cars
Series C and E 220, C200 and C220, a.o.
Lorry, bus
Series BR300, 400, Unimog 1988 a.o.
Passenger car
Type Primera since 2001
Passenger car
All Hdi up to 30% biodiesel Blend*,
Tractors Since 1990
Passenger cars
All TDI since 1996
Passenger cars
All TDI since 1996
Since 1988
Series M16, TCAM and M14 TCAM
Since 1991
Passenger cars
All TDI series since 1996, new Sdi series (EURO-3).
Supplementary fee charged on latest models.
Passenger cars
Series S80-D, S70-TDI,
Taken from Rix biodiesel website:
Dublin 9
+353 1 836 9080
+353 1 837 2848
[email protected]
Sustainable Energy Ireland is funded by the Irish Government
under the National Development Plan 2000-2006 with
programmes part financed by the European Union
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