Successful transition from old to new technology

The transition from leaded to unleaded transport fuels begun in 1981 with a target end-date of 2002 is a good example of how the adoption of a long-term policy simplifies the making of investment decisions of stakeholders for new plant and equipment.

From a paper by Troy Whitford, Fuel Mandates have a History of Success and a Lesson for Bio Fuels Implementation. Australian Policy and History, April 2010.
URL: http://www.aph.org.au/fuel-mandates-have-a-history

"In 1981, Australian state and federal transport ministers met to address pollution problems. Driving the shift towards unleaded petrol were vast environmental and health concerns.

During the 1980s, automobile associations were critical of the introduction of unleaded fuel. The RACV opposed the implementation believing it was too costly. The oil industry was cynical, too, arguing the introduction of unleaded fuel did not follow from a technological breakthrough but rather a decision by ministers. Without doubt, the position taken by oil companies, automobile associations and other stakeholders regarding unleaded fuel changed over time.

Despite opposition to unleaded fuel, the Transportation Council adopted a program to mandate unleaded petrol by 1985. The implementation policy for unleaded fuel was undertaken in stages. Initially, regulations were made calling for all new motor vehicles made after January 1986 (manufactured within Australia or imported) to meet the new fuel requirements. The policy then called for a complete phase out of unleaded fuel by 2002. Prior to the national mandate, states had led the way on unleaded fuel of which NSW took the lead. The decision to mandate was essential for implementing unleaded fuel. It forced car manufacturers, oil producers and consumers to make the transition."

Both renewable and fossil fuel investments for generating and distributing electricity can be utilised at close to full capacity to provide electricity for recharging electric battery powered vehicles.

Both of these investments can also be used to manufacture hydrogen for fuel-cell powered electric vehicles.

Vehicle manufacturers at present face considerable uncertainty in predicting which of the emerging clean fuel transport systems will win out in the long run.

Fuel cell electric vehicle with battery for short trips

Adopting a policy for the introduction of electric vehicles would reduce that uncertainy. Allowance can still be made for competing technologies that are quickly evolving. Fuel cells for instance that produce electric power from, say, hydrogen, are not that dissimilar from batteries that store and recharge electrolyte in situ. Vehicles using either, or both, of these energy supply systems are powered by electric motors regardless of which these two evolving technologies provides the electricity. One version of electric vehicles might use a battery for short trips and activate a hydrogen fuel cell on longer trips after the battery charge is depleted.

This plan would encourage continuing expansion and technological advances in renewable energy without the need to immediately write off substantial capital invested in fossil fuel power plants.