Chapter 6 - Transportation Sector Energy Consumption
In the IEO2008 reference case, transportation energy use in the non-OECD
countries
increases by an average of 3.0 percent per year from 2005 to
2030, as compared with
an average of 0.7 percent per year for the OECD
countries. |
Over the next 25 years, world demand for liquids fuels and other petroleum
is expected to increase more rapidly in the transportation sector than
in any other end-use sector. In the IEO2008 reference case, the transportation
share of total liquids consumption increases from 52 percent in 2005 to
58 percent in 2030. Much of the growth in transportation energy use is
projected for the non-OECD nations, where many rapidly expanding economies
are expected to see strong growth in energy consumption as transportation
systems are modernized and rising standards of living increase the demand
for personal motor vehicle ownership. Non-OECD transportation energy use
increases by an average of 3.0 percent per year from 2005 to 2030, as compared
with an average of 0.7 percent per year for transportation energy consumption
in the OECD countries, where transportation systems are generally well
established (Table 11).
In the transportation sector, energy use provides mobility for people and
goods. For people, mobility provides access to employment opportunities,
friends and family, grocery and clothing stores, entertainment and leisure
activities, and medical and financial services, to name a few. For businesses,
mobility provides access to the means of production (raw materials, human
resources, and the output of other businesses), as well as access to markets
for their products. Understanding the reasons behind the demand for mobility
is important for evaluating future transportation fuel consumption and
policies, which may alter historical trends in transportation energy use.
Because access (rather than mobility per se) is the prime consideration
for assessing demand growth in the transportation sector, factors that
have nothing to do with transportation equipment can have a profound effect
on the amount of energy consumed. For example, advances in communication
technologies have made it possible for consumers to have unprecedented
levels of access to financial services without traveling to a financial
institution. Similarly, high-speed internet communication has increased
the productivity of telecommuters, reducing traffic congestion, air pollution,
and transportation energy demand.
The difference between mobility and access is particularly important for
the analysis of transportation systems in todays rapidly developing economies.
The levels and types of mobility and transportation fuel consumption required
in the future will depend on infrastructure decisions evolving today. How
far will people live from their places of employment and from friends and
family? Will rapid urbanization in developing Asia follow the U.S. pattern
of roads surrounding central cities, or will smaller cities, where people
live and work, be increasingly more important? Such questions, which remain
to be answered, indicate that projections of future transportation energy
use in todays developing regions are far less certain than the projections
for regions with mature transportation systems.
The IEO2008 reference case assumes that, as personal income grows in the
developing non-OECD nations, demand for personal motor vehicles will also
grow but that major urban areas will address the accompanying congestion
and strains on infrastructure with a variety of solutions, including development
of mass transit (bus and/or rail), urban planning to reduce road congestion,
and general improvements of the transportation network that will facilitate
travel. In non-OECD Asia, for example, the reference case projects that
energy use for personal motor vehicles (light-duty cars and trucks, as
well as two- and three-wheel vehicles) will increase by 4.0 percent per
year from 2005 to 2030, while energy use for passenger rail increases nearly
as quickly, by 3.7 percent per year.
In the projections, the transportation sector continues to rely heavily
on liquids to meet demand for travel. Total world liquids consumption increased
by 35 percent from 2005 to 2030, and the transportation sector accounts
for three-fourths of the increase. Given the world oil price environment
projected in the IEO2008 reference case, economic incentives will prompt
consumers to find substitutes for liquids. In the OECD nations, liquids
consumption in other sectors declines as electricity generation from liquid
fuels is reduced. Transportation use accounts for virtually all the increase
in liquids consumption in the OECD nations and 67 percent of the increase
in the non-OECD nations. Liquids used for feedstocks in the chemical industry
account for most of the rest. The non-OECD nations are expected to account
for four-fifths of the global increase in transportation energy use (Figure
66).
Currently, the term liquids is largely synonymous with oil products.
Liquids produced from renewable sources and from nonpetroleum fossil fuels
are receiving a great deal of attention worldwide, given todays high oil
prices and concerns over the political stability of some oil supply regions.
The United States, for instance, has passed legislation to increase the
amount of ethanol in the U.S. liquids mix and has increased funding for
research on cellulosic biofuels. In OECD Europe, there has been a major
push to increase the use of alternative fuels for transportation, including
natural gas; however, barring any widespread increase in the penetration
of new supply technologies, whether driven by policy changes or other factors,
the worlds use of alternative fuels in the transportation sector is expected
to have only a modest impact on total liquids supply through 2030. In the
IEO2008 reference case, alternative fuels account for only 9 percent of
total world liquids use in 2030, despite an average annual increase of
5.6 percent per year, from 2.5 million barrels per day in 2005 to 9.7 million
barrels per day in 2030.
Projected world oil prices in the IEO2008 reference case are 16 percent
higher in 2015 and nearly 20 percent higher in 2030 than those projected
in IEO2007. As a result, consumers in end-use sectors other than transportation
(notably, the electric power and industrial sectors) are expected to switch
to other fuels where possible. In the transportation sector, however, liquid
fuels remain the most widely used energy source, and the impact of high
prices on demand for liquid fuels is comparatively modest. World demand
for liquid fuels in the transportation sector increases by 1.6 percent
per year on average from 2005 to 2030only 0.1 percentage point below the
average increase in the IEO2007 reference case.
Growing demand for transportation services in the non-OECD countries is
the most important factor affecting the projections for world liquids consumption.
In 2005, the OECD nations consumed 85 percent more transportation fuel
than the non-OECD nations. The discrepancy narrows substantially over the
projection period, however, and in 2030 total non-OECD energy consumption
for transportation is less than 5 percent below the OECD total (Figure
67). For the OECD countries, the transportation share of total energy consumption
increases from 58 percent in 2005 to 63 percent in 2030. For the non-OECD
countries, the transportation share of total energy consumption increases
from 43 percent in 2005 to 54 percent in 2030.
High economic growth rates for the non-OECD nations as a whole in the IEO2008
reference case are the most important reason for the projected strong growth
in their demand for transportation (personal and freight). In addition,
the governments of many emerging countries, like China and India, have
been reluctant to relax price controls for motor vehicle fuels, for fear
that such a move might raise inflation rates and slow their progress toward
greater economic prosperity [1]. As a result, consumers in the non-OECD
countries are not likely to reduce their consumption of motor fuels. Further,
most of the worlds largest net oil exporters are among the non-OECD nations,
and they have the capacity to supply their own populations with transportation
fuels at substantially lower prices than market-based economics would allow,
funded with revenues from the oil they export.
The IEO2008 projection for growth in demand for liquid fuels in the OECD
nations is slightly lower than the corresponding projection in IEO2007.
There is evidence that the sustained high world oil prices of the past
several years have begun to affect consumers in the OECD. Recent legislation
aimed at improving the efficiency of motor vehicles (such as the U.S. Governments
move to raise motor vehicle efficiency standards) and consumers choosing
to drive less or purchase high-efficiency vehicles are expected to continue
dampening the rate of demand growth in the future. In North America, for
instance, transportation energy demand is expected to increase by an annual
average of 0.8 percent in the reference case, substantially lower than
the average of 1.3 percent per year in IEO2007.
Economic growth (as measured by GDP) is associated with growth in fuel
consumption to move both freight and people in the OECD and non-OECD countries.
In the more service-oriented OECD economies, the link between economic
growth and transportation energy use is weaker than in the developing non-OECD
economies. From 2005 to 2030, the rate of increase in total OECD transportation
energy consumption is 28 percent of the projected GDP growth rate, whereas
the rate of increase in total non-OECD transportation energy consumption
is about 58 percent of the GDP growth rate for the those countries (Figure
68).
In the non-OECD nations, sustained high rates of economic growth probably
would be impossible without rapid modernization of national transportation
systems to move raw materials and finished products. For much of the developing
world animal power still is a prime means of freight transport, and walking
is a prime means of personal transport. As a result, particularly in rural
developing regions, growth in transportation services and energy use does
not follow economic growth but, rather, enables it. Products and services
are not produced if they cannot reach consumers, and without modern transportation
systems economic growth may be severely limited.
Freight transportation energy use includes fuels used by large trucks,
freight trains, and both domestic and international marine vessels.17 Passenger
transportation energy use includes fuels used in light-duty vehicles, buses,
aircraft, and passenger trains. In 2005, about two-thirds of transportation
energy use in the OECD countries was for passenger travel; that share declines
slightly from 2005 to 2030. For the non-OECD nations, passenger travel
accounted for less than one-half of total transportation energy use in
2005, and the share remains below 50 percent through 2030. Although energy
consumption for passenger transportation grows more than 3 times faster
in the non-OECD than in the OECD countries, passenger-related energy use
in the developing world remains far below levels in the OECD on a per capita
basis.
OECD Countries
Transportation infrastructure in the OECD countries generally is well established.
Roads and highways connect most population centers, and motorization levels
(vehicles per 1,000 people), which already are fairly high, probably will
reach saturation over the course of the projection period (Figure 69).
As the OECD economies have become more service-oriented, the link between
income and the transportation of goods has weakened. The established transportation
sectors and relatively slow rates of GDP growth and population growth among
the OECD economies lead to the expectation that transportation energy demand
will increase only modestly from 2005 to 2030. It is projected to grow
at an average annual rate of 0.7 percent in the IEO2008 reference case,
from 58.5 quadrillion Btu in 2005 to 63.8 quadrillion Btu in 2015 and 68.8
quadrillion Btu in 2030.
North America accounts for about one-half of the increase in OECD consumption
of liquids and other petroleum for transportation in the reference case
(Figure 70), and the United States accounts for about 70 percent of that
increase (even though the rate of increase in U.S. transportation fuel
use is less than one-third the corresponding rate for Mexico). Transportation
energy demand in the United States grow from 27.9 quadrillion Btu in 2005
to 30.4 quadrillion Btu in 2015 and 33.0 quadrillion Btu in 2030, accounting
for all the increase in U.S. liquids consumption over the period.
Transportation energy use, which accounted for 67 percent of total U.S.
liquid fuels demand in 2005, increases to 73 percent of the total in 2030.
Improvements in the efficiency of vehicles, aircraft, and ships in the
projection period are more than offset by growth in travel. The Energy
Independence and Security Act 2007 (EISA2007), enacted by the U.S. Government
in December 2007, requires new light-duty vehicles (including both cars
and light trucks) to reach an average fuel economy of 35 miles per gallon
by 2020. EISA2007 significantly improves the fuel economy of the stock
of more heavily used light-duty vehicles. In the reference case, the average
in-use fuel economy for the stock of light-duty vehicles in 2030 increases
to 28.0 miles per gallon, 41 percent above the 2005 level, resulting in
a shift in the mix of transportation vehicle fuels [2].
Another impact of EISA2007 on projected energy use in the U.S. transportation
sector is a large increase in biofuel consumption. Total U.S. biofuel consumption
rises from 0.3 quadrillion Btu (3.7 billion gallons) in 2005 to 2.8 quadrillion
Btu (29.7 billion gallons) in 2030, when it represents about 11.3 percent
of total U.S. motor vehicle fuel on a Btu basis. U.S. ethanol use grows
from 4.0 billion gallons in 2005 to 24.3 billion gallons in 2030 (more
than 16 percent of total gasoline consumption by volume). Biodiesel use
reaches 1.3 billion gallons in 2030 (about 1.6 percent of total diesel
consumption by volume). Consumption of diesel liquids produced from biomass
grows to 4.2 billion gallons, or 4.9 percent of total diesel consumption
by volume, in 2030.
Canadas current mix of transportation energy use is similar to that in
the United States (personal motor vehicles are fueled largely by motor
gasoline rather than diesel or alternative fuels) and is expected to remain
so in the IEO2008 reference case. The markets of the two countries are
largely interconnected, not only because of their proximity but also because
of similar geography and demographics. As in the United States, the fastest
growth in Canadas transportation fuel use is expected to be in the form
of jet fuel and distillate fuel. For both countries, growth in total demand
for transportation fuels averages less than 1.0 percent per year in the
reference case from 2005 to 2030 [3].
Also similar to developments in the U.S. transportation sector is Canadas
growing interest in increasing the role of biofuels in its domestic liquids
supply. In 2006, Canadas federal government announced its intention to
achieve a 5-percent share of renewable fuels blended into the national
motor gasoline supply by 2010 and a 2-percent share of renewable fuels
blended into diesel supplies by 2012 [4]. In addition, several provinces
have enacted legislation or set goals to exceed the national goals.
In November 2004, Ontario enacted the Regulation 535/05, Renewable Fuel
Standard, which required an average 5-percent ethanol blend share in the
motor gasoline sold in the province, to be achieved by January 1, 2007
[5]. British Columbia has passed Bill 16 The 2008 Greenhouse Gas Reduction
(Renewable and Low Carbon Fuel Requirements) Act, which will require a
5-percent share of biodiesel blend in the diesel supply by 2010 [6]. In
2005, Saskatchewan set a goal to achieve a 7.5-percent ethanol share of
motor gasoline 2005 [7]. Manitoba has passed legislation requiring that,
as of January 1, 2008, fuel suppliers replace at least 8.5 percent of
their motor gasoline available for sale with ethanol [8]. Finally, Quebec
has set a goal to achieve a 5-percent share of ethanol blend in its gasoline
supply by 2012, stipulating in addition that the target be met by cellulosic
ethanol [9]. It is difficult to assess how effective these laws and initiatives
may be in increasing domestic supplies of biofuels, but they demonstrate
the considerable interest that biofuels have garnered in recent years,
both as a result of high world oil prices and for environmental reasons.
In Mexico, strong GDP growth (3.9 percent per year) is projected to increase
energy consumption in the transportation sector at an average rate of 2.4
percent per year, from 1.9 quadrillion Btu in 2005 to 2.5 quadrillion Btu
in 2015 and 3.5 quadrillion Btu in 2030. The projected increase in transportation
fuel use is based on expected growth in trade with the United States and
overall improvement in the countrys standard of living.
In OECD Europe, slow population growth, high transportation fuel costs,
and environmental policies contribute to slow growth in transportation
energy use in the IEO2008 reference case. OECD Europes population increases
by 0.2 percent per year; the countries of OECD Europe already have mature
transportation systems; and improvements in energy efficiency over the
course of the projection dampen growth in passenger transportation energy
use. Despite the slow growth projected for OECD Europes population, national
economic growth continues to expand, as does energy use for freight transportation.
In total, however, OECD Europes transportation energy consumption increases
by only 0.3 percent per year on average, from 18.7 quadrillion Btu in 2005
to 19.8 quadrillion Btu in 2015 and 20.3 quadrillion Btu in 2030 (Figure
71). The transportation share of total energy use in OECD Europe remains
essentially stable at 22 percent through 2030.
OECD Asia, like OECD Europe, generally has well-established transportation
infrastructures; and with population in the region as a whole projected
to contract (averaging -0.1 percent per year from 2005 to 2030), fairly
slow growth in transportation energy demand is expected. Total demand for
transportation fuels in OECD Asia increases by 0.7 percent per year, with
the largest increases in South Korea, Australia, and New Zealand. For OECD
Asia as a whole, energy use for passenger transportation grows by about
0.2 percent per year from 2005 to 2030.
In Japan, transportation energy use declines by 0.1 percent per year on
average, as the population declines by a total of 7.5 percent (10 million
people) from 2005 to 2030. As a result, energy use in the countrys passenger
transportation sector in 2030 is projected to be 9 percent below the 2005
level, although with GDP growth averaging 1.1 percent per year, its energy
use for freight transportation increases on average by 0.4 percent per
year.
South Korea is the fastest-growing economy in the region, and its transportation
energy use is projected to grow by 1.9 percent per year in the IEO2008
reference case. The country has the regions strongest projected GDP growth,
averaging 3.5 percent per year from 2005 to 2030, and its transportation
infrastructure is still relatively young compared with those in Japan and
Australia/New Zealand. South Korea accounts for about one-fourth of OECD
Asias total population, and its share of OECD Asias transportation energy
use is projected to increase from 24 percent in 2005 to 32 percent in 2030.
Energy use for freight transportation in South Korea is projected to increase
by an average of 2.5 percent per year, and its share of OECD Asias total
energy use for freight movement increases from 31 percent in 2005 to 40
percent in 2030, reflecting an increase in its share of OECD Asias total
GDP from 15 percent to 22 percent.
In Australia/New Zealand, transportation energy use is projected to grow
by average of 1.1 percent per year, based on modest population growth and
average annual GDP growth of 3.0 percent. As in South Korea, freight transportation
is the key factor behind the projected increase in transportation fuel
demand for Australia/New Zealand in the IEO2008 reference case, rising
from 0.4 quadrillion Btu in 2005 to 0.7 quadrillion Btu in 2030, at an
average annual rate of 2.3 percent. Air travel is also expected to count
for a substantial part of the growth in Australia/New Zealands transportation
fuel demand, as income growth raises standards of living and the demand
for business and vacation travel. Passenger air travel in Australia/New
Zealand nearly doubles in the reference case, from 0.2 quadrillion Btu
in 2005 to 0.4 quadrillion Btu in 2030.
Non-OECD Countries
The projected average growth rate of transportation energy use in the non-OECD
countries from 2005 to 2030, at 3.0 percent per year, is more than quadruple
the projected rate for OECD countries, and their use of liquids in the
transportation sector is expected to double over the period. Transportation
energy consumption for both passenger and freight transportation in non-OECD
Asia is projected to increase at a much greater rate than in the other
non-OECD countries (Figure 72). Combined, China, India, and other developing
countries in Asia (non-OECD Asia) are expected to sustain high rates of
economic growth over the forecast, accounting for 54 percent of the increase
in world GDP between 2005 and 2030. In 2030 they represent 45 percent of
the world economy, up from 29 percent in 2005. Over the same period, non-OECD
Asias share of world transportation liquids consumption increases from
12.6 percent to 34.5 percent (Figure 73).
The high rate of economic growth projected for the non-OECD countries will
be realized only if their transportation infrastructures keep pace with
economic growth. China has been, and is projected to continue to be, the
fastest growing economy among non-OECD countries. From 2005 to 2030, Chinas
GDP is projected to increase by an average of 6.4 percent per year, and
its use of liquid fuels for passenger and freight transportation increases
by 5.0 and 5.5 percent, respectively. Between 1995 and 2005, growth in
the combined length of Chinas highways averaged 5.3 percent per year [10].
Over the same period, highway passenger travel (measured in passenger-miles)
and highway freight travel (measured in ton-miles) increased at annual
rates of 7.3 and 6.4 percent, respectively. India, similarly, has been
expanding its road infrastructure to keep pace with economic growth.
The IEO2008 projections assume that the pace of infrastructure expansion
will not significantly hinder economic growth in the rapidly expanding
economies of non-OECD Asia. They also assume that the type of infrastructure
developed largely will mirror the transportation infrastructure of todays
developed economies. Given the increasing scale of needed infrastructure
and the very different fuel price regimes in the economies of non-OECD
Asia, these assumptions are a source of considerable uncertainty in the
projections.
Both China and India have become major vehicle manufacturers. In 2006,
China produced nearly 7.2 million motor vehicles, the third-highest production
level in the world after Japan and the United States and more than one-tenth
of the worlds total production [11]. In 2007, motor vehicle production
in China grew by another 22 percent, to 8.9 million vehicles [12]. Within
the next several years, Chinas production of motor vehicles may reach
10 million vehicles. Domestic demand for motor vehicles has advanced strongly
since the accession of China into the World Trade Organization in December
2001, which has promoted increased economic activity. Between 2005 and
2006, for instance, personal vehicle ownership increased by nearly 24 percent,
making China the worlds second-largest consumer of automobiles (the United
States is the largest).
India produces a much smaller number of motor vehicles than China does,
but the number has grown substantially over the past several years. In
2000, India produced 0.8 million motor vehicles; in 2007, production had
increased to 2.3 million vehicles [13], and India had become the worlds
tenth-largest motor vehicle producer and Asias fourth largest (after Japan,
China, and South Korea). Indias motor vehicle manufacturers aspire to
improve their penetration of the worlds automotive sector. In 2008, Tata
MotorsIndias largest manufacturer of passenger and commercial vehicles
has launched the worlds cheapest mass-produced car (the $3,116 Nano) and
agreed to purchase Land Rover and Jaguar from U.S. Ford Motor Company [14].
Indias government has estimated that the countrys production of passenger
carslargely supported by anticipated robust economic growthwill increase
from 1.7 million vehicles in 2007 to 3.0 million vehicles in 2015 [15].
Small and relatively inexpensive vehicles are being produced in China and
India to meet the personal transportation needs of an expanding middle
class. Motorization in both countries more than triples over the projection
period, although their motorization levels remain far below those in most
OECD nations in 2030 (Figure 74). The personal transportation service provided
by motor vehicles, along with an expanding road infrastructure, greatly
increases the mobility of the labor force and helps support continued high
rates of economic growth. Although the new vehicles are expected to achieve
high levels of fuel efficiency per mile, the growing fleet of automobiles
will replace even more fuel-efficient motorcycles.
As an alternative to light-duty automobiles and trucks, public transport
may play an increasingly important role in China, India, and the other
rapidly developing economies of non-OECD Asia. This is especially true
for large, densely populated urban areas, where traffic congestion will
require a government response to ensure that goods and people can be transported
effectively. The IEO2008 reference case projection assumes robust growth
in both personal motorization and public transportationnamely, buses and
light railfor China and India. In China, for instance, while transportation
energy use by light-duty vehicles (including automobiles, light-duty trucks,
and two- and three-wheel vehicles) increases by 5.4 percent per year from
2005 to 2030, energy consumption for passenger rail also grows strongly,
by a projected 4.4 percent per year, and energy use for passenger bus increases
by 2.7 percent per year. In India, transportation energy use increases
by an average of 4.4 percent per year for light-duty vehicles, 2.9 percent
per year for passenger rail, and 3.4 percent per year for buses.
In Russia, energy consumption for passenger transportation increases at
an average rate of 0.6 percent per year from 2005 to 2030 in the reference
case, even as the Russian population declines by an average of 0.6 percent
per year (for a total population reduction of 20 million). Russias automobile
market has been particularly strong in the past several years, with 1.5
million vehicles sold in 2005 and expectations by some analysts that sales
may expand by 7.0 percent per year until 2010 [16]. Thus, passenger energy
use per capita is projected to increase by an average of 1.2 percent per
year. Strong economic growth, fueled by sustained high prices for Russias
exports of oil and natural gas, increases the demand for personal motorization.
The population in the rest of non-OECD Europe and Eurasia is expected to
be virtually unchanged between 2005 and 2030, and energy consumption for
passenger transportation per capita is projected to increase at a yearly
rate of 2.8 percent, compared with 4.8-percent annual growth in income
per capita. Based on economic growth averaging 4.4 percent per year in
non-OECD Europe and Eurasia, energy use for freight transportation is projected
to grow by an average of 3.2 percent per year, reflecting improvements
in standards of living among countries that have continued to prosper since
the fall of the Soviet Union. Rising standards of living fuel the demand
for merchandise and appliances and the need to ship those goods to market.
The Middle East has a relatively small population and is not a major energy-consuming
region but rather an exporter; however, rapid population growth in the
region is expected to result in increased demand for transportation. Transportation
energy use has been expanding quickly in several key nations of the Middle
East, at a rate greatly exceeding the world average.
From 2000 to 2005, transportation energy use increased by 4.2 percent per
year in Saudi Arabia; by 6.8 percent per year in Iran; by 7.0 percent per
year in Kuwait; and by an impressive 15.5 percent per year in Qatar. In
comparison, the world average was 2.3 percent per year [17]. Saudi Arabia,
Kuwait, and Iran, among other Middle Eastern nations, subsidize transportation
fuels for their citizens, discouraging conservation or efficiency of use [18]. Further, personal motor vehicle sales in many countries of the region
have posted double-digit growth rates in recent years, as the economies
of oil-exporting countries have prospered in the current high price environment
[19]. In the IEO2008 reference case, energy consumption for transportation
in the Middle East grows by an average of 1.9 percent per year from 2005
to 2030, to a total of 8.0 quadrillion Btu in 2030.
Transportation energy use in Central and South America is projected to
increase by 2.0 percent per year from 2005 to 2030. Brazil, the regions
largest economy, is experiencing particularly strong growth in its transportation
sector following its success in achieving economic stability, which has
bolstered consumer confidence and improved consumer access to credit, allowing
vehicle sales to increase strongly [20]. Total vehicle sales in Brazil
(including light-duty vehicles, heavy-duty trucks, and buses) rose by 28
percent in 2007, following a 12-percent increase in 2006. Indications are
that robust domestic sales will continue [21]. In the IEO2008 reference
case, energy use by light-duty vehicles in Brazil increases by an average
of 2.6 percent per year from 2005 to 2015, before slowing substantially
to 1.6 percent per year from 2015 to 2030.
In 1975, the Brazilian government launched its National Alcohol Program
to increase the penetration of ethanol in the transportation fuel mix [22].
Subsequently, ethanol production in Brazil rose from 0.1 billion gallons
in 1975 to 2.5 billion gallons per year in the early 1980s; and in 2005,
ethanol accounted for about 40 percent of total fuel consumption in the
countrys passenger vehicles. Its reliance on biofuels (and ethanol in
particular) to fuel its transportation sector has focused attention on
Brazil, as other nations of the world have begun to increase the penetration
of alternative fuels in the face of sustained high world oil prices over
recent years.
With a sharp upswing in sales of flexible-fuel vehicles (FFVs),18 coupled
with ethanol prices that are currently about one-half the price of gasoline,
the ethanol share of Brazils transportation fuel market is poised to increase
even further [23]. FFV production in Brazil began in March 2003, when 49,000
vehicles were sold. By March 2007 sales of FFVs had risen to 3 million,
and in 2008 more than 5 million have been sold [24]. FFVs now account for
more than 80 percent of new automobile sales in Brazil. The country also
is intent on increasing biodiesel supplies. Beginning in January 2008,
Brazilian distributors are required to blend 2 percent biodiesel into their
regular diesel supplies [25]. Further, national legislation requires an
increase in the biodiesel share to 5 percent of the diesel mix by 2013.
Notes and Sources
References
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