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Chrysler Group LLC James Frusti Manager, Fuels & Energy Affairs Alternative Fuels (Ethanol, Biodiesel, et al) 8 th Annual Iowa Renewable Fuels Summit Altoona,

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Presentation on theme: "Chrysler Group LLC James Frusti Manager, Fuels & Energy Affairs Alternative Fuels (Ethanol, Biodiesel, et al) 8 th Annual Iowa Renewable Fuels Summit Altoona,"— Presentation transcript:

1 Chrysler Group LLC James Frusti Manager, Fuels & Energy Affairs Alternative Fuels (Ethanol, Biodiesel, et al) 8 th Annual Iowa Renewable Fuels Summit Altoona, Iowa January 28, 2014

2 CHRYSLER GROUP LLC The U.S. long-term goal of an 80% reduction in GHG by 2050 will require a comprehensive program consisting of vehicle efficiency improvements, fuel de-carbonization, customer acceptance, and government support. Efficiency improvements will require higher quality fuels, especially octane. Carbon content of fuel, including that used to generate electricity and produce hydrogen, must be correspondingly reduced. Customers must embrace the new technologies and fuels. Government policies targeted at fuels, infrastructure and customer acceptance must be coordinated. Long Term Objectives & Alt. Fuels

3 CHRYSLER GROUP LLC 3 Alternative Fuels Principles Alternative Fuels and Sustainability Objectives Economic Sustainability o Cost-effective regulatory compliance – GHG/CAFE, ZEV Mandate and Tier 3/LEV III o Products that provide customer value: utility and cost of ownership Social Responsibility o Protect the environment: less GHG emissions, improved air quality o Energy security: reduce petroleum use - increase the use of renewables o Jobs Across America: powered by an expanding alternative energy industry

4 CHRYSLER GROUP LLC 4 Key Enablers To Achieve Long Term Objectives Emphasize a systems approach – vehicle and fuel Concentrate on total life cycle effect Increase attention paid to carbon in fuel, equal to that paid to vehicles Alternative Fuel Drivers Creation Research to enable production of commercially viable alternatives Distribution Availability of adequate infrastructure Use Affordable (cheaper than gasoline/diesel) Consumer education

5 CHRYSLER GROUP LLC 5 Alternative Fuels – Major Obstacles Big Rocks to overcome with any Alternative Fuel Overcoming resistance of existing energy providers Providing enough/strategic incentives to enable sustainability for the alternative Government policy actions that are transparent, direct use of performance based standards and treat alternatives equally

6 CHRYSLER GROUP LLC 6 Big Rocks for Renewables/Biofuels Demise of Ethanol Incentives Fuel Producers/Providers RFS designed to drive higher ethanol volumes. However, EPA proposed significant reduction in 2014 RVOs. Volumetric Ethanol Tax Credit (VEETC) – expired 12/31/11 Small Ethanol Producer Credit – expired 12/31/11 2 nd Generation (Cellulosic) Producer Tax Credit – expired 12/31/13 Alternative Fuel Infrastructure Tax Credit – Expired 12/31/13 Special Depreciation Allowance for Cellulosic Biofuel Plant Property – set to expire 12/31/14 Vehicle Manufacturers CAFE FFV credits are scheduled to phase out at the end of 2019 CO 2 FFV credits & related Usage Factor will reduce the incentive for auto manufacturers to continue the production of FFVs Key Challenge - Maintaining the current renewable fuels momentum with rising political uncertainty & fading incentives

7 CHRYSLER GROUP LLC 7 Renewable/Biofuels – Opportunities Opportunities NAS comments on vehicles with biofuels o Cellulosic biomass most promising o Drop-in Biofuels can be produced from cellulosic biomass w/o major change in delivery infrastructure and vehicles o Drop-in biofuels coupled with high efficiency ICEs/HEVs could be a major contributor to reducing petrol use and GHG emissions DOE – is bullish on alternative fuels o Alternative fuels (H 2 – Electric – CNG – alternative liquid fuels) o Biofuels emphasis – EERE reorganized to include emphasis on bioenergy o Opportune time to expand/focus on cooperative govt/industry research and funding for low carbon fuel research Political support can be useful: There has been 1½ years of negative policy on renewable fuels There is a need to get the right story in front of Congress Leverage NAS & DOE positive view/actions on biofuels and encourage the call for DOE to do research

8 CHRYSLER GROUP LLC 8 Alternative Fuel Target for Autos Lowest emissions and best performance in future engines – supported by a call for action on both product and fuels Vehicle: o Elements of a well-designed fuel which enables improved efficiency through downsizing, boosting and higher compression ratio Fuels: o High-octane, renewable and low carbon o Higher octane ratings by any possible new/alternative fuel To measure the alternative fuel impact for creation, distribution and use, we focus on full life cycle effects

9 CHRYSLER GROUP LLC Life Cycle Outline – Using GREET Well-to-Tank + Creation & Distribution Tank-to-Wheels = Use – engine efficiency Well-to-Wheels

10 CHRYSLER GROUP LLC 10 Life Cycle for an Alternative Fuel Our directional performance requires high octane/low carbon fuels. An example for achieving this goal for liquid transportation - ethanol In examining the life cycle effects for creation and use, we find: Refinery crude oil use and CO 2 emissions o Decrease with higher ethanol content o Increase with higher Octane (but only by 1-2% for mid-level ethanol) Engine effects o Fuel knock resistance and evaporative cooling improve with increasing ethanol and corresponding octane increase o Higher ethanol/octane: Enables higher engine compressions Increases engine efficiency Decreases tailpipe CO 2 emissions

11 CHRYSLER GROUP LLC 11 Life Cycle Recap A systems approach (vehicle + fuel) is needed to obtain optimal solutions for reducing CO 2 emissions The primary reduction in CO 2 emissions and petroleum use comes from renewable, low-carbon fuel (ethanol) displacing fossil fuel (gasoline). This requires fuel capability in vehicles and infrastructure and a comprehensive implementation plan. Win-Win-Win solutions (low cost, lower CO2 emissions, lower petroleum use) are possible for higher-octane fuel (from hydrocarbons, ethanol or their combination or other new fuels) in optimized engines

12 CHRYSLER GROUP LLC 12 Summary Points for Policy Makers Talking points to get alternative fuels back on track at the federal and state levels Following what weve done to date, the science and research all point to the need for alternative fuels We are pressing the energy carrier (the vehicle) to its physical limit – low carbon energy sources are now required Key messages of alternative fuels o Decrease Carbon o Improve Fuel Quality Those to engage or collaborate with include: Alternative Fuel Industry people OEMs Energy providers

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