Beyond the Internal Combustion Engine: The Promise of Methanol Fuel Cell Vehicles

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Executive Summary of The Promise of Methanol Fuel Cell Vehicles

by: The Methanol Institute
Washington, D.C.

Methanol -- a convenient liquid fuel made from natural gas or renewable resources -- is a leading candidate to provide the hydrogen necessary to power fuel cell vehicles (FCVs). In the last few years, much progress has been made in bringing methanol fuel cell technology closer to the marketplace. Also known as wood alcohol, methanol has been in commerce for over 350 years -- since 1648. Methanol's widespread global use has focused primarily on its value as a building block for thousands of consumer products from plastics and paints, to construction materials and windshield washer fluid. The Methanol Institute (MI) has prepared this report to highlight the ongoing advances in methanol's use with emerging fuel cell technology, address economic and environmental issues surrounding the use of methanol fuels, and explore likely paths to achieving a successful market introduction of methanol fuel cell vehicles (MFCVs).

Important Findings

The world's major automakers are racing to introduce FCVs to the market. Many demonstrations, advancements and breakthroughs have been achieved with methanol fuel cells.

On November 9, 2000, Ballard Power Systems and DaimlerChrysler unveiled a direct methanol fuel cell (DMFC) prototype in Stuttgart, Germany. Methanol was used to power a small one-person demonstration vehicle. DMFC allows the use of methanol as fuel without requiring a fuel processor to extract hydrogen from the methanol. It constitutes a zero-emission electric vehicle drive train.

Automotive industry leaders conclude that within two decades, between 7 and 20 percent of new cars sold in the world will be powered by fuel cells. We can envision a global fleet of 40 million FCVs on the road by 2020.

With fuel cell technology now moving out of the laboratory, the research emphasis has shifted to reducing costs in preparation for mass production. A few years ago, the fuel cell stack -- only one part of the whole fuel cell power system -- cost a prohibitive $5,000 per kilowatt, the equivalent of buying an engine for $250,000. The entire fuel cell system cost (fuel cell stack, methanol reformer and associated controls) is now down to $300 per kW, and developers are targeting full power system costs in the range of $50 per kW with high-volume production. A 50-kW fuel cell system for a vehicle would cost, therefore, about $2,500, comparable to the cost for today's internal combustion engine (ICE).

Methanol is one of the safest and most environmentally sound fuels available. In the United States, there are over 180,000 vehicle fires each year in which gasoline is the first material to ignite. According to the Environmental Protection Agency (EPA), a switch to methanol could reduce the incidence of these fires by 90 percent, saving 720 lives, preventing nearly 3,900 serious injuries, and reducing property losses by millions of dollars.

While methanol is used as a feedstock in the production of the gasoline additive methyl tertiary butyl ether (MTBE); methanol and MTBE are two different chemicals with entirely different effects on groundwater and drinking water. Both methanol and MTBE are highly soluble in water and poorly adsorb to subsurface soil, the similarity in the behavior of the two compounds in the environment ends there. Ubiquitous in nature, methanol is easily and quickly degraded in the environment by a diverse range of microorganisms under most environmental conditions that use methanol as a source of carbon and energy. Compared to gasoline, the environmental impacts of methanol are much more benign.

Due to its high rate of biodegradation, more than 100 wastewater treatment plants in the United States add methanol to accelerate the removal of nitrates in the final stages of sewage treatment before the wastewater is discharged into sensitive oceans and rivers.

Full fuel-cycle carbon dioxide emissions and other greenhouse gases -- from a MFCV will be less than half of those for today's gasoline internal combustion vehicle. With an estimated global fleet of 40 million MFCVs by 2020, we expect the total well-to-wheel CO2 emissions from a MFCV to be 243.5 equivalent grams per mile, versus 461.9 equivalent grams per mile for a gasoline ICE car. Assuming that each car is driven 12,000 miles per year, the annual equivalent CO2 emission reductions from the global fleet of MFCVs would reach a staggering 104 million metric tons.

It will cost less than $500 million to adapt 10 percent of the refueling stations in California, New York, Massachusetts, Germany, and Japan to methanol operation. Even converting 25 percent of the stations in these target areas would only amount to $1.2 billion. In 2000, worldwide methanol production capacity stands at 12.5 billion gallons (37.5 million tons) per year, with a utilization rate of just under 80 percent. The world methanol industry has a significant impact on the global economy, generating over $12 billion in annual economic activity while creating over 100,000 direct and indirect jobs.

Under initial market penetration assumptions, estimates reveal that by the year 2010, automakers will have introduced nearly 500,000 MFCVs. If each vehicle travels 12,000 miles annually, using 436 gallons of methanol (achieving 55 miles-per-gasoline equivalent gallon), overall demand would reach 218 million gallons of methanol per annum, or less than 2 percent of current world capacity.

Today, methanol is being produced from otherwise flared or vented natural gas in many other parts of the world. If only 10 percent of the natural gas flared each year was made available for the methanol fuel market; it would be enough to power 9.5 million FCVs annually.

Technology to produce methanol from renewable feedstocks such as wood, municipal solid waste, agricultural feedstocks and sewage has been widely demonstrated.

Establish incentives for the purchase and operation of FCVs. Legislation has been introduced in the U.S. Congress to provide a 25¢ per gasoline-equivalent gallon tax credit for the use of methanol and other natural gas-based fuels. This legislation provides short-term incentives that will be critical in helping to build the market for fuel cell vehicles so that economies of scale can be achieved to reduce vehicle costs.

Use Corporate Average Fuel Economy Credits. The Alternative Motor Fuels Act of 1988 established a Corporate Average Fuel Economy (CAFE) program for vehicles fueled with alcohol or natural gas. By accumulating significant CAFE credits from the sale of MFCVs, automakers can offset the lower mileage ratings from larger vehicles (like SUVs and minivans) that are generally more profitable than smaller, higher mileage vehicles.

Develop specifications for methanol fuel for FCVs. In 1999, representatives of the oil, automotive and methanol industries formed the Methanol Specification Council to develop readily accepted specifications for the safe and effective use of methanol in MFCVs.

Provide credit for MFCVs in regulatory policies encouraging the use of electric vehicles. The State of California requires that 10 percent of the vehicles sold in Model Year 2003 must be zero emission vehicles (ZEVs). MFCVs qualify for the highest level of partial ZEV credits. Direct methanol fuel cell (DMFC) vehicles fully qualify as ZEVs.

Establish a mechanism to monetize the value of CO2 emission reductions. Successful emission trading systems have been established to buy and sell emission reductions achieved by stationary facilities for several pollutants. An emission trading system should be established for CO2 emissions, which would provide a mechanism for the inclusion of emission reductions such as those from MFCVs.

Support the fuel cell work of the Partnership for a New Generation of Vehicles (PNGV). This public/private partnership has identified fuel cell vehicles as one of its technology options for developing highly efficient vehicles.

Encourage the use of aggressive marketing campaigns for FCVs. Automakers have come to realize the significant consumer enthusiasm for clean, advanced technology vehicles. The market introduction of MFCVs will create even broader opportunities for educating consumers to the benefits and availability of this technology.

Increase funding for research in DMFC technologies. DMFCs hold great promise for reducing size, weight, cost, emissions and improving energy efficiency for a broad array of applications. The efforts of national laboratory, university and private researchers should be directed to accelerating the pace of development of this important technology.