How does accelerating or decelerating transportation electrification impact achieving net-zero emissions by 2050 in the Northwest?
Transportation is the number one source of greenhouse gas emissions in the Northwest today, and achieving net-zero emissions will require the use of clean fuel—clean electricity, biofuels, and synthetic fuels including hydrogen—to power vehicles.
The NZNW Energy Pathways analysis shows that electrification of vehicle fleets results in significant cost savings when relative to other net-zero emission options. In addition to lowering emissions, switching to clean vehicles would decrease local air pollution and provide some health benefits to communities living near highways, ports, and railways.
Not all segments of the transportation sector can be electrified, such as freight trucks, some off-road vehicles, and long-distance rail, shipping, and aviation. To provide fuel for these remaining vehicles while achieving net-zero emissions requires either decarbonized liquid fuels or offsetting emissions from continued fossil fuel use, both of which will likely cost more than electrifying.
The NZNW Energy Pathways analysis explored two transportation scenarios that would either slow down or speed up the pace of transportation electrification as described in this table:
The key takeaways include:
Rapid action to move away from internal combustion engine (ICE) vehicles is imperative to lowering energy costs during the transition to net-zero.
Although more rapid clean vehicle adoption relative to the Core Case has some economic benefit, implementation challenges may outweigh the benefits.
Delaying action on vehicle electrification has significant economic repercussions because it requires more production of clean drop-in fuels.
Please see NZNW Transportation Results for a full discussion of the assumptions, modeling, and impact of accelerating or decelerating transportation electrification on achieving net-zero emissions by 2050 in the Northwest.
Delaying Action on Vehicle Electrification has Economic Repercussions
If EV sales are delayed past 2035—whether due to policy delays or other challenges—there is greater demand for high-cost clean transportation fuels to meet net-zero emissions in 2050. If ICE sales remain at 50% by 2050, Northwest costs increase by $7.3 billion per year in 2050 compared to the Core Case, where 100% of sales are zero-emission vehicles by 2035. This economic consequence confirms the imperative for successful electric vehicle policymaking and infrastructure development.
As seen in the visualization below, overall economy-wide energy demand drops by 30% from 2021 to 2050 in the Core Case, despite a 105% increase in end-use demand for electricity. This overall decrease in energy demand is driven by efficiency gains in all sectors and fuel switching to electricity. (Electricity is more efficient in many applications in the economy, notably in vehicle drivetrains and heating in buildings.) In comparison, slowing transportation electrification results in only a 21% reduction by 2050, with significantly higher energy use in interim years.
Pace of Transportation Electrification Directly Impacts Clean Fuels Demand
Most vehicles that do not get replaced with electric vehicles (EVs) or fuel cell vehicles (FCVs) will use clean liquid hydrocarbon fuels by 2050 to meet a net-zero emissions target. Therefore, the more EVs or FCVs in the vehicle stock, the less high-cost clean liquid fuel is needed.
The visualization below shows the economy-wide fuel supply, which includes but is not limited to vehicles.
On the gaseous fuels side, hydrogen is used directly in end uses, such as industrial demand and hydrogen fuel cells in heavy-duty FCVs. On the liquid fuels side, existing ICE vehicles can replace liquid hydrocarbons (diesel, gasoline, and jet fuel) with clean drop-in fuels: either biofuels or electrofuels (synthetic hydrocarbon liquids produced by combining hydrogen with carbon via the Fischer-Tropsch process). The ammonia that shows up in the liquid fuels supply is used for long-haul shipping, not on-road vehicles.
Accelerating adoption of EVs in the near term lowers the regional liquid clean fuels demand by 29% in 2030 compared to the Core Case. On the other hand, deceleration significantly increases liquid fuel demand in 2030 and all following years because with fewer EVs and FCVs, more vehicles will rely on liquid fuels. By 2050, clean electrofuels meet all liquid fuel demand for vehicles in all scenarios.
Before 2050, to accommodate the greater liquid fuels demand with slower adoption of EVs and FCVs and achieve emissions targets, either more clean liquid fuels must be produced, or emissions reductions must come from elsewhere to compensate for greater emissions from liquid fossil fuels.
Slower Transportation Electrification Costs the Northwest Economy
As the visualization below shows, slower transportation electrification causes relatively small cost impacts through 2030, largely due to hydrogen incentives from the Inflation Reduction Act (IRA) that control clean fuel costs. After 2030, the savings from vehicle costs and avoided distribution system upgrades are not enough to offset other growing costs from the increasing numbers of electric vehicles purchased, expiration of the IRA incentives, and the increased demand for clean fuels.
Clean fuels demand causes greater West-wide electricity demand and incremental renewable energy build, reflected in the increased cost of electricity generators, particularly in 2050. The overall cost continues to rise and reaches $7.3 billion per year in 2050, relative to the Core Case. The figure below shows that vehicle electrification is necessary for cost containment when achieving net-zero emissions.
Cost Savings for Faster Transportation Electrification May Not Justify Acceleration
With more electrified vehicles by 2030, there is less demand for clean fuel and therefore lower clean fuel costs, shown on the negative side of the axis in the visualization below. There are higher costs from the demand side and distribution system due to accelerated EV adoption and growth in customer loads, but on balance costs are lower in 2030.
Clean fuel costs are lower with accelerated transportation electrification, particularly in 2025 and 2030, when greater EV adoption avoids as much need for clean fuels to meet Washington's 2030 emissions reduction target.
Overall, accelerating transportation electrification costs less, but the primary difference relative to the Core Case is that the timing of costs is shifted. Demand-side costs, such as for electric vehicles, are higher and incurred earlier with a mass adoption of electric vehicles occurs earlier when the capital cost premium is larger. In the Core Case, there is more time for electric vehicle costs to decrease.
A slower transition to clean vehicles means greater reliance on clean fuels in 2030 and beyond as well as larger investments in electrolysis and Fischer-Tropsch fuel production. This, in turn, drives larger electricity loads and more investment in the bulk electricity sector. Slower transition also means savings on investment in vehicles and distribution, but overall would cost the Northwest $8.2 billion more per year than the rapid clean vehicle transition modeled in the Core Case.
Delayed action on transportation electrification requires a larger renewable energy buildout across the West, which means less wind from Montana and Wyoming would be available to supply Northwest electricity demand as more of that valuable wind resource is used for electrofuels production and transported as fuels. Impacts due to delayed action in the Northwest would be experienced elsewhere in the West because the Northwest’s increased demand for clean fuels is mostly met with imports.
Accelerating the transition to clean vehicles means less need for clean fuels early, particularly in 2030; a smaller overall electricity sector that is producing less hydrogen; and increased near-term investment in vehicles and distribution. However, while more rapid clean vehicle adoption has some economic benefit, several important potential risks and challenges exist. While the modeling shows that the Core Case assumptions lead to a cost-effective and potentially more achievable middle ground than faster adoption rates, it will be up to policymakers to weigh the trade-offs between cost and risk.