Modelling transport fuel pathways: Achieving cost-effective oil use reduction in passenger cars in Sweden

Several technology and fuel options could be used to lower the strong oil dependence of the transportation sector. To formulate policies and to cost-effectively meet oil reduction objectives, assessments and comparisons of the long-term economic performances of different technology trajectories are essential. In this work, the energy and technology costs associated with reducing oil consumption in passenger cars in Sweden are calculated for a number of possible future transport fuel pathways and for different energy prices and climate policies. An optimisation model is applied in a simulatory multiple-run approach for this purpose. The model encompasses the transportation sector, as well as the stationary energy system. In terms of results, a methanol-based pathway gives incremental system costs in the range of − 0.9–3 billion EUR for a complete phase-out of passenger car oil up to 2030. As compared to the methanol pathway, other biomass gasification-based fuel pathways involve additional incremental system costs in the region of 3 billion EUR, whereas ethanol- and electricity-based pathways give additional incremental system costs of 4–5 billion EUR. At lower oil reduction levels, the cost differences between the pathways are smaller and the electricity-based pathway is significantly more cost-competitive.

► Costs of reducing oil consumption in passenger cars in Sweden to 2030 are calculated. ► Different possible future transport fuel pathways are modelled and compared. ► Costs range from negative values to up to about 25% of current fuel tax revenues. ► Methanol-based pathways give rise to the lowest oil reduction costs. ► Cost differences between pathways increase with higher oil reduction targets.