Race for New Transport Fuels

China Will Scale Faster Than US in Race for New Transport Fuels, Accenture Report Finds

US could surprise with engine efficiency, its natural gas supply and biotechnology breakthroughs

1/18/2011 - (Credit: Accenture: click on graphic for pdf report, 84 pages) China could lead the race to roll out electric vehicles and will deploy new transport technologies at scale more quickly than the United States, according to a report by Accenture (NYSE: ACN) that compares the two countries. But the US could lead a global biotechnology-based agricultural revolution that will generate a greater range of biofuel breakthroughs.

“The US already has a competitive advantage in agriculture and conditions that make it the home of completely new technologies, but China’s policy decisiveness will allow it to scale specific new transport technologies more rapidly”

The report, “The US and China: the race to disruptive transport technologies”, concludes that China’s state-backed focus on electric vehicles (EVs), its domestic supplies of lithium and current battery production capability will give it a competitive advantage over the US in EVs. The US’ market led-approach will result in a more gradual development of new technologies. However, it will be better placed to create new innovations across many platforms (advanced combustion engines, electric and advanced biofuels) that can be integrated into the existing fuel supply infrastructure.

The rise of new fuel technologies and greater fuel efficiency will give both countries greater energy independence. The reduction in gasoline demand in the US could be up to 22 billion gallons per year by 2030 if vehicle miles travelled (VMT) remained roughly the same as today, according to an Accenture scenario analysis. This could cut crude oil imports by 1 billion barrels per year, a 34 percent reduction from the 3.3 billion barrels imported in 2009. China, which imports over half its petroleum demand, could reduce its crude oil imports by 676 million barrels per year by 2020, a drop of 21 percent from today.

Hydrocarbon Winners and Losers {continued}