By John Eichberger

I find myself thinking globally again, and as we enter the waning days of 2017, I encourage you to join me. My motivation to take this mental journey is easy to identify. In early November, I traveled to Buenos Aires to help deliver the inaugural NACS Fuels Summit Latin America. If you have not been to Buenos Aires, I strongly recommend it. It’s a beautiful city, wonderful people, great food and entertainment, and if you are lucky you just might stumble upon a tango show in the middle of an outdoor café on a Thursday afternoon. 

At the NACS Fuels Summit, we were joined by 75 individuals hailing from 10 counties and representing fueling operations in more than 15 nations. For me, it was an eye-opening experience. My entire career has been focused on retailing fueling in the United States, which makes it easy to adopt a U.S.-centric philosophy. But, after engaging with others around the world, my perspective began to change and I realized how interconnected we all are. The Fuels Summit helped do this for me, and it’s my hope that the event inspired attendees to also look beyond their markets and consider global developments that may affect them long-term.

Another factor that is motivating me to think globally is our most recent publication: “Global Initiatives: Assessing Current and Future Global Initiatives on Fuels and Vehicles.” This report, authored by Tammy Klein of Future Fuel Strategies, is a comprehensive assessment of international, national and local regulatory initiatives that seek to shape the future structure of the transportation sector. She also joined us in Buenos Aires and delivered a compelling presentation summarizing the many initiatives that are under development around the world, setting the tone for the remainder of the conference.

Recent headlines have led many to consider what impact regulatory initiatives in other countries might have on local markets. Most often, people ask, “Can that happen in my country?” For example, recent announcements by France, the United Kingdom, California and China to ban internal combustion engines after a certain date in the future. These are shocking announcements that may or may not have long-term consequences for global markets.

Both France and the U.K. seem to exempt hybrids from their bans, which means that internal combustion engines paired with a battery propulsion system and running on liquid fuels will remain viable even after implementation of the proposed programs. Further, these two markets combined do not wield much influence over the global auto market. (See my August 2017 blog, “Dog Parks and the Global Transportation Market.”)

China, however, is another issue all together. In 2016, China accounted for more than 30% of global light-duty vehicle sales. Should this country transition from internal combustion engines to electric drivetrains, the automobile manufacturing industry might be financially compelled to accelerate the production of EVs—not just for China but for other markets as well.These are just some of the latest developments in the global effort to address transport-related greenhouse gas emissions, local air pollution and congestion. Klein’s report dives into a variety of other topics. For example:

• Almost 60 countries have developed or will be developing biofuels programs such as blend mandates and fiscal incentives.
• More than 40 countries have implemented or plan to implement mandatory GHG emission/fuel economy standards.
• More than 20 cities and/or countries have taken actions to ban or limit the use of internal combustion engines.
• At least 13 countries have programs to support zero emission vehicle markets.
• Many countries have mandated a reduction in the sulfur content of diesel fuels and implemented light duty vehicle emissions reduction programs.

As various countries consider how to address transport-related issues, they will look to other nations for examples of regulations that might work for their markets. NACS has a philosophy regarding global engagement: There are no unique issues, but at any given time nations are in different stages of an issue’s lifecycle.

The Fuels Institute looks at global regulatory initiatives and trends because they can be good indicators of where the market may be heading. It is clear from “Global Initiatives” that biofuels programs remain the most popular tool for nations to address their transport-related issues, but as these come under attack, governments are looking at alternatives. Clearly, not every initiative will address each issue, but as we prepare to welcome nearly 2 billion more people by 2040, the pressure to take action is mounting.Of course, not all factors affect all markets equally. Population growth will not be consistent across the globe. Africa’s population is projected to double by 2050 while Europe may contract by nearly 5%. Will these population shifts have a major impact on where cars are sold? Will the distribution of light-duty vehicle sales be different in 2050 compared with 2016? Will Africa be the growth market of the future, and if so, will the regulatory initiatives of more developed economies find homes within the African continent, or will they evolve along more traditional lines of mobility?

These are factors that will help shape the future of the transportation market. To prepare for tomorrow, we have to look beyond our own borders. By understanding the motivations behind and implications of regulatory initiatives throughout the world, we are better able to anticipate what might happen tomorrow.

Please join me and start thinking about the world around us. A great place to start is with our latest “Global Initiatives” report.

The future will be shaped by the complex relationship between governments and markets. If they can work together, the result could be a beautiful tango that ushers in a more effective transportation sector. If they remain at odds, this tango will quickly erode to resemble a high school dance party.

John Eichberger is the executive director of the Fuels Institute. He can be reached at jeichberger@fuelsinstitute.org.

The Fuels Institute was founded in 2013 by NACS. Through recurring financial contributions and daily operational support, NACS helps the Fuels Institute to invest in and carry out its work to foster collaboration among the various stakeholders with interests in the trans¬portation energy market and to promote a comprehensive and objective evaluation of issues affecting that market and its customers both today and in the future.