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The BMW Group supports the implementation of a Cap and Trade system
for transportation fuels in order to reflect the growing use and
availability of alternative fuels such as biofuels, electricity and
hydrogen. Contrary to the fuel world dominated by gasoline and
diesel today, alternative fuels are produced with extremely
different environmental impacts. The CO2 balance of one kilowatt
hour of electricity that comes e.g. from a coal power station
differs from one that was generated by wind power significantly.
Hence, in order to assess the actual CO2 footprint of a certain
fuel, there is a need for the implementation of a new system.  
This is particularly obvious with electricity: the CO2 emissions of
electricity generated from renewable energies, such as wind, water,
or sun is in contrast to electricity generated from coal or natural
gas. The environmental impacts from biofuels are also defined
mainly by its production. The comparability is missing, when for
example electricity and a mix of fossil diesel and bio-diesel will
be competing in the future for the lowest overall emissions. A
long-term political framework is needed here that will address the
CO2 reduction in the traffic sector comprehensively and in a
transparent way for industry and consumer.  

According to the study „Car Industry, Road Transport and an
International Emission Trading Scheme“ (CITIES) developed under the
direction of Professor Ottmar Edenhofer of the globally renowned
Potsdam Institute for Climate Impact Research (PIK), Cap and Trade
is the instrument that enables a treatment of the upstream
emissions of fuels. The study was commissioned by BMW Group. 

Important Results of the Study:

1. In order to reduce CO2 emissions in the transport sector, all
system participants must live up to their respective
responsibility. Fuel producers must reduce the CO2 content of their
fuels; automobile manufacturers must increase the efficiency of
their products. 

2. The CO2 content varies considerably depending on the production
method, regardless of the type of fuel used.  Automobile
manufacturers have no influence on that. As a result, political
instruments must be created that specifically address fuel
producers and automobile manufacturers in their respective
responsibilities. 

3. The introduction of emission trading for fuels is not supposed
to replace the regulations on CO2 emissions for new cars. Rather it
can bring forward the additional decarbonization of the entire
traffic sector in a comprehensive manner. 

4. Electric cars should be credited with 0 gr/km CO2 within the
context of today's regulations on fleet consumption, since the
automobile manufacturers have no control over the origin of the
electricity. In the longer term, an efficiency factor (i.e. MJ/km)
can be used that rates the car's energy consumption
technology-neutral for all kinds of propulsion systems, regardless
of the respective fuel.   

5. The CO2 content of fuels should be regulated at the level of the
fuel producers, in order to increase the efficiency of the
regulation and provide incentives for CO2 reductions.  

6. In the light of changing conditions on the fuel market and the
related CO2 emissions, Cap and Trade is suitable as an instrument
to holistically realize the CO2 reduction goals in the traffic
sector. 

The study CITIES was authored by scientists of the Technical
University Berlin and the Potsdam Institute for Climate Impact
Research. The department “Economics of Climate Change” at Technical
University Berlin researches the relations between mobility,
economics and climate change. Scientists at the Potsdam Institute
for Climate Impact Research are working interdisciplinarily on
researching climate change and its impacts on ecological, social
and economic systems. Professor Ottmar Edenhofer, as deputy
director and chief economist, heads the field of study Sustainable
Solution Strategies at PIK and has a professorship at TU Berlin. He
is also co-chair of the working group III of IPCC, Dr. Felix
Creutzig is the Team Leader for Sustainability and Transport
Economy at the Technical University Berlin and lead author of the
transportation section of the upcoming IPCC report.