1. Fuel Demand Modelling in the Transportation Sector
The Road Transport Perspective
Vienna, 20 January 2006
Jens Hügel
Head – Sustainable Development
© International Road Transport Union (IRU) 2005

2. The IRU’s Objective “The objective of the IRU shall be to contribute,
in the interest of society as a whole,
to the development and prosperity, in all countries, of domestic and international road transport…”
Our statutory objectives are clear and havent changed since Thanks to these, the IRU has sucessfully developed into a global organisation
Article 2, IRU Constitution
Laeremans
© International Road Transport Union (IRU) 2005

3. © International Road Transport Union (IRU) 2005

4. Evolution of IRU Membership
Members Countries
(Yemen in process of joining)
Created 1948
8 Founder States:
Belgium
Denmark
France
Netherlands
Norway
Sweden UK
Switzerland
Updated 25 May 05
© International Road Transport Union (IRU) 2005

5. Evolution of IRU Structure
1948
IRU founded in Geneva
1973
IRU Permanent Delegation to the EU established in Brussels
1998
IRU Permanent Delegation to the CIS established in Moscow
2005
IRU Permanent Delegation to the Middle East established in Istanbul
Laeremans
© International Road Transport Union (IRU) 2005

6. IRU Structure General Assembly Passenger Transport Council
Goods Transport Council
Presidential Executive
Secretary General
CIS Delegation (Moscow)
EU Delegation (Brussels)
Secretariat General (Geneva)
IRU Academy (Geneva)
Mid East Delegation (Istanbul)
Task Forces
Commissions
Working Parties
EU Liaison Committee
CIS Liaison Committee
IRU Constitution 1 Aug 2001 updated 1 May 2005
2.2 IRU Structure CGW May 05
© International Road Transport Union (IRU) 2005

7. IRU Priorities 2005 – Overview As per Art. 2 of the IRU Constitution
Sustainable Development
Innovation
Incentives
Infrastructure
Facilitation
Trade
Tourism
Road Transport
These are also the priorities of the IRU Academy
© International Road Transport Union (IRU) 2005

8. IRU Priority: Sustainable Development As per Art
IRU Priority: Sustainable Development As per Art. 2 of the IRU Constitution
IRU Charter for Sustainable Development (1996)
IRU Initiative “Driving Towards Sustainable Development” (1997)
IRU Guide to Sustainable Development (2000)
IRU Reports on Road Transport Best Industry Practices (2002/4)
Industry as a Partner for Sustainable Development UNEP (2002)
© International Road Transport Union (IRU) 2005

9. 3 “i”s for Sustainable Development
1. innovation – to develop ever more effective “at-source” technical measures & operating practices to reduce environmental impact.
2. incentives – to encourage faster introduction of best available technology and practices.
3. infrastructure – without free-flowing traffic, the above measures are useless. Adequate investment in new infrastructure to remove bottlenecks and missing links, plus fullest use of existing infrastructure, are essential.
© International Road Transport Union (IRU) 2005

10. IRU has obligation as per Art
IRU has obligation as per Art. 2 to act in the interest of society as whole
Evolution of Commercial Vehicle Emission Standards in the EU
- 87%
- 81%
- 86%
- 97%
Source: Eur Commission, Auto Oil II
© International Road Transport Union (IRU) 2005

11. Improving Fuel Economy
Evolution of Fuel Consumption of a 40-tonne truck
: -36%
Source: Verband der Automobilindustrie (VDA) e.V., 2004
© International Road Transport Union (IRU) 2005

12. Improving Fuel Economy
IRU modules
Benefits for the environment
Benefits for the road transport operator
Driver training and Well Driven Campaigns
Less accidents
Lower fuel consumption
Less CO2 emissions
Less vehicle downtime
Lower insurance costs
More reliability
Lower fuel costs
Environmental Management Systems (EMS) / increase in load load factor
Less emissions (CO, NOx, HC, particulates)
Less waste
Less consumption of water, fuel and other resources
Lower taxes and charges
Lower water bill
Lower power cost
© International Road Transport Union (IRU) 2005

13. Road Congestion increases Fuel Consumption
(40 tonne truck)
Source: VDA, 2000
© International Road Transport Union (IRU) 2005

14. The congestion bill in US cities
According to the Urban Mobility Report the congestion bill for 68 cities in the US for came to $78 billion in lost productivity, 4.5 billion hours of delay and 6.8 billion gallons of wasted fuel !
*Source : Rexas A&M University 2001
© International Road Transport Union (IRU) 2005

15. Road Transport and Oil Is there really a shortage of oil?
© International Road Transport Union (IRU) 2005

16. Road Transport and Oil in the IRU
IRU has constitutional obligation as per Art. 2 to act in the interest of society as whole
Road transport is a vital production tool
Road transport is 100% dependent of oil
Our duty is to ensure that our children’s children can benefit from black gold through a sustainable energy policy.
© International Road Transport Union (IRU) 2005

17. Road transport is a vital production tool in a global economy
What does it take to have a cup of coffee in a café?
The combined efforts of
29 companies in 18 countries
If to have one cup of coffee at an affordable price, it takes 29 companies in 18 countries, you imagine how much more it would cost if all items came from the country where the end product is consumed?
If we know that it takes 10’000 suppliers, which in turn have their own suppliers, to create an affordable motor car, you can imagine the vital role of road transport in a liberalised economy.
Therefore, to stay in business, we need to see globalisation as an opportunity and not as a threat. To do so, we need to develop together the entrepreneurial spirit currently lacking in Europe.
There is transport between each. Most of it is by road. Road Transport = Production Tool!
Source: IRU
© International Road Transport Union (IRU) 2005

18. Road transport is 100% dependent on oil
Since the first oil crisis in 1973, the IRU has been preoccupied - for our children’s children - with developing a sustainable energy policy, because road transport is 100% dependent on oil.
Opposite: cover of IRU Study, 1980
© International Road Transport Union (IRU) 2005

19. Road transport is 100% dependent on oil - Energy Characteristics of Various Fuels
Weight & volume of fuel tank for same amount of energy
Weight coefficient
Volume coefficient
Petrol / gasoline 1
Diesel Fuel
Propane (C3H3) 8
1.9
Butane (C4H10)
1.4
Hydrogen (H2) - Gas at 200 BAR 25 22
Hydrogen (H2) - Liquid at -253°C 4
5.8
Metal Hydride - Magnesium 5
3.2
Metal Hydride - Vanadium 10
1.7
Metal Hydride - Iron-Titanium 20
Methanol (CH3OH)
2.2
2.1
Ethanol (C2H5OH)
1.62
1.53
Lead Battery 70 12
© International Road Transport Union (IRU) 2005

20. Road transport is 100% dependent on oil - Need to diversify the energy market
© International Road Transport Union (IRU) 2005

21. Road transport is 100% dependent on oil - Who benefits from high fuel prices?
UK Diesel Taxation
Source: UK Energy Institute, 2005 / UK Department of Trade and Industry
© International Road Transport Union (IRU) 2005

22. Road transport is 100% dependent on oil - The Road Racket: a huge source of revenue for government budgets
United Kingdom,
Fuel excise duty and VAT paid: GBP 26.5 bio
HOWEVER…
Total UK Govt. spending on Roads: GBP bio
UK Govt. subsidy to Rail Passengers: GBP bio
EVEN SO…
UK Railway company debts: GBP 4.4 bio
AND…
UK Transport Secretary: “GBP 67.5 bio of public money is needed to upgrade railway system and make railways profitable.”
A Bottomless Pit…
Source: The Economist (Jun 2005)
© International Road Transport Union (IRU) 2005

23. 5 mio tonnes of oil are used for heating (stationary use).*
Road transport is 100% dependent on oil - A Swiss example on how NOT to do it
5 mio tonnes of oil are used for heating (stationary use).*
1.5 mio tonnes of oil are used for diesel fuel (mobile use).*
Only 8% of diesel fuel is used for trucking!
Because we are
100% dependent on oil
We pay the most!
*Source : Union Pétrolier Suisse 2005
© International Road Transport Union (IRU) 2005

24. Road transport is 100% dependent on oil - Long term solutions are needed!
Oil is black gold, so…
Stabilise the market.
Diversify energy sources where alternatives exist, such as heating, electricity, steel, cement, paper production (50% CO2); and reserve oil for truck transportation, for which no alternative energy sources exist.
To obtain this goal…
Governments should introduce taxes where viable alternatives exist and reduce taxes where there are no viable alternatives.
© International Road Transport Union (IRU) 2005

25. It is our duty to ensure that energy policy is sustainable
If the following facts were known, energy policy could be influenced to become sustainable:
High spot price results from speculation by brokers and multinational oil companies and not from oil producing countries price.
Spot price covers less than 10% of the oil purchase on the oil market and should not be systematically applied by the multinational oil companies in all their petrol stations.
Spot price does not correspond with long-term contracts with oil producing countries.
© International Road Transport Union (IRU) 2005

26. It is our duty to ensure that energy policy is sustainable
If the following facts were known, energy policy could be influenced to become sustainable:
Higher fuel price results mainly from government taxation and not from oil producing countries.
75% of fuel price is tax. Only ~10% goes to OPEC member countries.
Wrong governmental taxation policies block diversification where viable alternatives exist.
Taxation on road transport fuel penalises the economy twice because it is a production tool AND because the money is wasted in large subsidies to the totally inefficient rail transport sector.
© International Road Transport Union (IRU) 2005

27. It is our duty to ensure that energy policy is sustainable
If the following facts were known, energy policy could be influenced to become sustainable:
Oil-producing countries should not be blamed for high fuel prices. It is their right to receive an optimal return on sales of black gold and on their investments.
Western governments’ fuel tax revenues are up to 10 times higher than the oil and production costs.
The shortage in supply is mainly fuelled by speculation which: 1) encourages increased storage 2) again increases speculation and 3) increases government revenues…
Therefore the truck industry is penalised twice:
1. It has no storage capacity and
2. It has no economically viable alternative energy source to fossil fuel.
© International Road Transport Union (IRU) 2005

28. Oil is a finite resource but there will be not a shortage of oil if it is used in a sustainable way
© International Road Transport Union (IRU) 2005

29. So what can we do?
© International Road Transport Union (IRU) 2005

30. IRU World Congress 2006: Dubai
United Arab Emirates
Note in your diary: 14 – 16 March 2006!
© International Road Transport Union (IRU) 2005