Energy Futures Research Center

This paper compares global transportation/energy models in terms of scope, structure and the types of scenarios that have been developed, with particular emphasis on projections of low-carbon fuels like hydrogen, biofuels, e-fuels and electricity in transportation decarbonization scenarios. Our review of the models and their scenarios indicates that scenarios with deep CO₂ reduction or globally ambitious climate policies tend to show a large increase in the role of electrification, advanced biofuels and in some cases hydrogen in transport energy by 2050 and/or later years. Different transport modes and sectors have different requirements and are projected to adopt different low-carbon fuels. Electricity is projected to play a key role in road and rail, though liquid low-carbon fuels dominate shipping and aviation and are expected to eventually surpass petroleum use. Deep CO2 reduction scenarios tend to assume strong policies that drive reductions. Policies such as efficiency standards, technology requirements, achieving technological innovation, and infrastructure investment are typically important drivers for influencing the adoption and scale-up of low-carbon technologies and fuels across regions.

The savings to California from transitioning to zero-emission cars and trucks by 2050 is about $300 billion.

These savings result mostly from the cost of zero-emission vehicles (ZEVs) dropping close to or below the cost of gasoline and diesel vehicles; additional savings come from operational cost advantages.

Policies at the state and national level, as well as the success of ZEV manufacturers, will affect California’s ability to achieve ZEV adoption targets and realize net economic benefits. However, even in the absence of ZEV-supportive policies, the global embrace of electric vehicles and the resulting cost reductions from innovation and scale economies will lead to substantial benefits and savings for California.

This paper reviews and analyzes the hydrogen-related targets and policies set for 2030 in California and the European Union, particularly related to the transportation sector. Both regions have strongly committed to decarbonizing transportation and transitioning toward clean energy sources, including hydrogen fuel cell vehicle technology. We examine the projected hydrogen demand for light and heavy-duty vehicles, plans for hydrogen production and use, and infrastructure needed, such as refueling stations. We also review announced policy frameworks and strategies driving the transition to clean hydrogen energy in California and the EU. We also consider the impact of US-level policies on California and its hydrogen/fuel cell vehicle efforts. This paper reflects the situation in these jurisdictions as of December 2024. Potential changes in policy given the change in US administration in January of 2025 are not considered.

Our investigation finds that concerning vehicles, both jurisdictions have adopted an ambitious yet largely technology-neutral approach, allowing for the coexistence of battery-electric and fuel-cell electric vehicles. However, each has some policies and targets specific to promoting fuel cell vehicles; support for developing hydrogen systems is also typically fuel-specific in both jurisdictions and includes regulations and incentives. The policies address challenges such as sourcing low-carbon hydrogen, achieving cost competitiveness, and meeting the growing demand for clean electricity. Additionally, based on the targets set by California and the EU for 2030 regarding light and heavy-duty vehicles, buses, and hydrogen refueling stations (HRS), on a per-capita basis, California demonstrates somewhat greater ambition in both vehicles and HRS than the EU, by 2030.

The concept of hydrogen internal combustion engine vehicles (ICEVs) is not new, but has gained renewed interest lately, especially for heavy-duty trucks. Different from hydrogen fuel cell electric vehicles (FCEVs), which represent a novel zero-emission technology, hydrogen engines are modified conventional engines running on hydrogen fuel instead of gasoline or diesel. This study presents a comparative review of hydrogen engines and fuel cells, based on existing reports and discussions with industry. We consider aspects such as vehicle efficiency, greenhouse gas (GHG) and criteria pollutant emissions, hydrogen fuel purity, vehicle attributes, vehicle acquisition costs, total costs of ownership, and new policies. We find that hydrogen ICEVs offer some advantages and disadvantages: advantages include lower production cost and potentially greater reliability; disadvantages include potentially overall lower efficiency (and thus higher fuel cost) and lack of zero-vehicle-emission operation. While the technologies could be complementary (e.g., hydrogen ICEVs serving as a transition technology toward FCEVs), they also may compete, with success for hydrogen ICEVs resulting in setbacks for FCEV market success.

The US and Europe have ambitious plans and targets for light-duty electric vehicle (EV) market growth. This study estimates planned EV production capacity in both regions and investigates whether coordinating their combined production capacity would help them meet targets. We find that, while each region is developing a strong EV production capacity domestically, either may fall short of their targets given investments in EV production announced to-date. Transatlantic trade can serve as a critical “spare capacity” to add assurance. Yet, in scenarios where both regions seek higher EV sales targets, a combined shortfall in annual EV production capacity could reach over 6 million EVs compared to the 20 million needed by 2030. An additional investment of about $42 billion across both regions could address this concern, however, time is getting short to build new plants and bring them online. The capacity shortfall may persist even with planned EV production capacity from other major manufacturing centers such as Canada, Mexico, Japan and South Korea. Additional policies and incentives will be needed to ensure planned capacities are developed in a timely manner. Some options include providing incentives to invest and reducing barriers to trade. Exploring the potential supply of vehicles from other major EV manufacturing countries, such as China and India, is recommended.

In this study, we investigate how potential changes in US light-duty and medium/heavy-duty vehicle technology and fuel mix from 2020 to 2050 may affect the transition to a very low-carbon future in the United States. Given US targets to reach 50% or more zero-emission vehicle sales by 2030, we consider new sales trajectories for battery-electric vehicles and hydrogen fuel cell vehicles, and rates of uptake across the country needed to reach these. We also consider biofuels use (ethanol and renewable diesel) in remaining internal combustion engine cars and trucks to minimize GHG emissions from those vehicles. Costs of all vehicles sold, and their fuel and other operating costs, are calculated and projected. To account for characteristics of specific vehicle types (e.g., weight, application, fuel economy, drive cycle, etc.), we disaggregate light-duty vehicles and medium/heavy-duty vehicles into ten subcategories. Relative to a business-as-usual case, we develop a series of low-carbon scenarios where three regions of the US adopt zero-emission vehicles at different rates. One is California, where the strongest targets and policies have been set. We also consider “Section 177” states that have agreed to adopt at least some California policies, and the third is the remaining states. Our findings suggest that even slower adoption scenarios can reduce greenhouse gas emissions in 2050 by 90% of 2015 levels. Greater reductions can be attained with rapid adoption cases. However, even a case with all US states adopting California-style policies with a five-year delay—for LDVs, essentially the equivalent of the April 2023 regulatory proposals of the US EPA—may not be quite sufficient to reach the apparent US targets. Despite significant upfront investments required to undertake transitions in the near-term, these scenarios all feature large net savings to consumers after 2030 (or sooner) as fuel and maintenance savings exceed higher costs in purchasing vehicles. Overall net savings from 2020 to 2050 (mostly accrued after 2030) are in the range of $1.7 to $4.8 trillion. However, achieving these full benefits could be challenging due to the need for a rapid rate of zero-emission vehicle adoption and possibly high production volumes of low-carbon biofuels.