Importance of Life Cycle Emissions Considerations in Vehicle Regulations Jody N. Hall, PhD Vice President, Automotive Market

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1 A business unit of AISI Importance of Life Cycle Emissions Considerations in Vehicle Regulations Jody N. Hall, PhD Vice President, Automotive Market

2 Steel Market Development Institute (SMDI) SMDI is a business unit of the American Iron and Steel Institute (AISI). SMDI s member companies jointly fund pre-competitive steel applications research, development and advanced engineering. SMDI works with automotive manufacturers, suppliers, universities and government agencies to promote steel-intensive automotive solutions.

3 Fuel Economy Regulations History and New CAFE Standards Fixed MPG Period Initial CAFE Law

4 CAFE and Joint EPA NHTSA Regulations NHTSA has finalized CAFE standards for model years and and has issued augural standards for model years under the Energy Policy and Conservation Act, as amended by the Energy Independence and Security Act. NHTSA will set final standards for model years in a future rulemaking. EPA has finalized greenhouse gas emissions standards for model years and under the Clean Air Act

5 Tailpipe Emissions Standards More Stringent Globally

6 Energy Losses in a Typical Sedan Vehicle Mass 11% Electrical Loads 3% Aerodynamic Drag 17% Engine Mechanical & Pumping Friction 37% Driveline and Chassis 2% Transmission and Final Drive 18% Tire Rolling Resistance 12%

7 Vehicle Mass Breakdown Source: WorldSteelDynamics

8 What is Life Cycle Assessment (LCA)? Emissions to Air, Land, Water Raw Materials Any Process Product Water, Energy, Waste, Other Materials

9 LCA Importance of Entire Life Cycle

10 Three Basic Phases of Product Life Cycle

11 Production Phase: Comparing Lightweighting Alternatives Material production greenhouse gas emissions: Greenhouse Gas from Production (in kg CO 2 e/kg of material) Steel Aluminum Current Average Greenhouse Gas Emissions Primary Production Magnesium Carbon FRP Source: WorldAutoSteel

12 Production Phase: Accounting for Mass Reduction

13 Use Phase If comparing lightweight options only, there will be small differences in the emissions over time (slope of curve) However, achieving CAFE equates the slope of the curve CAFE is not material dependent, automakers must achieve fuel economy target based on footprint, no benefit to over achieving Cumulative GHG emissions Use phase emissions Vehicle production & recycling emissions End of vehicle life Total driven distance

14 Recycling Steel is continuously recycled It s physical properties allow products to be recycled into any steel product without loss of quality; no downcycling / loss of performance More than 80 million tons of recycled steel available annually to be remanufactured into new steel products Only around 200,000 tons available currently of recycled automotive aluminum sheet

15 UCSB Automotive LCA Model Model commissioned by WorldAutoSteel Compares candidate vehicles to a base vehicle Calculates life cycle GHG emissions and energy consumption changes due to vehicle lightweighting Initial release in 2007; 4th version released in 2013 Peer-reviewed by independent panel, including an aluminum industry representative

16 WorldAutoSteel Light SUV Study Aluminum vs. Steel Intensive Body Structure, Closures, Suspension & Sub-frames Baseline Conventional Steel = 930 kg 630 kg 698 kg

17 SUV Study Comparison of Total Carbon Footprint 5,000 iterations were compared based on lifetime driving distance and powertrain resizing AHSS-intensive SUV showed the lowest CO 2 emissions in every iteration

18 For Some Cases Aluminum is Worse than Baseline Worsened Emissions Improved Emissions

19 AHSS Improved over Baseline for Each Iteration Worsened Emissions Improved Emissions

20 SUV Study by Life Cycle Phase Production Use End of Life Total Baseline 13,743 36,891-4,111 46,524 AHSS-Intensive 12,968 33,752-3,793 42,927 Aluminum-Intensive 22,852 32,842-9,794 45,899 Difference (AHSS-Al) -9, ,001-2,972

21 Use Phase: Very Little Difference in Fuel Economy mpg MPG Increase with Lightweighting Decrease in Fuel Tank Fill-ups over Life of Vehicle

22 Difference Between AHSS and Aluminum over Time 60,000 Cumulative GHG Prodcution (kg CO2e) 50,000 40,000 30,000 20,000 10, kg Co 2 e/vehicle 89 kg Co 2 e/vehicle per year Baseline AHSS Aluminum Year

23 Difference Between AHSS and Aluminum over Time 60,000 Cumulative GHG Prodcution (kg CO2e) 50,000 40,000 30,000 20,000 10,000 Need 12 years to begin to recover increased aluminum volume at end-of-life Baseline AHSS Aluminum Year

24 Additional Studies Comparing AHSS and Aluminum Project AHSS Average GHG Improvement over Baseline Aluminum Average GHG Improvement over Baseline FLCA 4 kg CO 2 e (per FLCA) - 4 kg CO 2 e (per FLCA) Door 66 kg CO 2 e (per door) -13 kg CO 2 e (per door) SUV BIW 2,964 kg CO 2 e 2,138 kg CO 2 e D-Segment BIW 1,145 kg CO 2 e 668 kg CO 2 e

25 Powertrain Comparisons of GHG Emissions Production phase as compared to use phase emissions of different vehicle powertrains

26 Summary: Complete Carbon Footprint LCA Need to account for all phases of the vehicle s life to accurately state the carbon footprint of the vehicle. Greenhouse Gases Fuel Production Materials Production Vehicle Production Vehicle Use Vehicle Disposal

27 Summary: Current CO 2 Regulation Ignores Critical Manufacturing Phase Current regulation: Corporate Average Fuel Economy (CAFE) = 54.5 mpg by 2025 Focused only on tailpipe emissions Mid-term CAFE review Finalize CAFE requirements EPA and NHTSA By April 1, 2018

28 Strong Business and Environmental Case for Steel Lightweighting Existing and emerging grades will extend steel s lightweighting capability and drive value higher With very few exceptions, automakers can meet their weight reduction goals with steel and without increased use of alternative materials Regulators should consider life cycle emissions to avoid unintended consequences For example, voluntary credit options, such as alternative fuel, air conditioning and off-cycle, would offer more responsible material selection for lightweighting at higher value to the consumer

29 For More Information Contacts: Jody N. Hall, Ph.D. Jennifer Greenfelder Vice President Director, Communications Automotive Market Automotive Market Website: Facebook: YouTube:

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