Transportationsector is a major contributor to the world’s energy consumption and GreenhouseGas (GHG) emissions. 50% of world oil consumption was consumed for road transportation in 2015 1and in 2014, 35% of world energy was used in the transportation sector (21% of world energy consumption was used in passenger cars) 1.In 2010, about 14% of worldwide GHG emissions wasfrom the transportation sector 2.The share of the transportation sector ina country’s GHG emissions varies among the countries all over the world. For instance, in the US, the transportation sector is a major contributor to GHG emissions andaccounted for 27% of GHG emission in 2015 3.Out of that 27%, 60% of emission is from light-duty vehicles and 23% frommedium and heavy-duty vehicles 4.In China, this share is smaller, andtransportation sector accounted for 6% of emissions in 2012 5.

The important concernregarding the emissions from transportation sector is that the GHG emissionsemitted from combustion in Internal Combustion Engine Vehicles (ICEVs) are emitted in urban areas where a considerablepopulation lives. It should be noted thatemissions from ICEVs are not just limitedto CO2 emissions but these vehicles emit particulates, NOx, CO, and hydrocarbons which are considered as local pollutants 6.These emissions affect the local air pollution and may cause health issues inurban areas. Another reasonfor the focus on reducing emissions inthe transportation sector is the potentialfor GHG emissionreduction available in the transportationsector compared to potential in industrial and electricity sectors. Theresearch and policies in support of renewable energy development in the electricity sector and energy conservationmanagement in the industrial sector havebeen in place for a long time. This meansthat a considerable amount of potential in GHG emission reduction in thosesectors has been already captured.

However, fossil fuels (petroleum and otherliquid fuels such as natural gas plant liquids, biofuels, gas-to-liquids, andcoal-to-liquids) still account for 96 % of energy consumption in transportation sector whichshows a significant potential in reducing GHG emissions 7. Thisis a notable point especially for countries that have a high percent ofemission-free electricitygeneration capacity and can use that emission-free electricity to provide the energy needed in the transportation sector.To cut CO2 emissions by 80% by 2050 (as decided by G8 leadersand the European Union in 2009), a 95% carbon emission reduction shouldhappen in transportation sector 6.

However, based on the expected number of passenger carsby 2050 and knowing the emissions and efficiency of ICEVs, the reduction targetfor transportation sector cannot be achieved through an increase in efficiency of ICEVs alone 6. Knowingthis limit, different countries/jurisdictions all over the world have invested in alternative fuel vehicles. As defined by the US Department of Energy, analternative fuel vehicle is “adedicated, flexible fuel, or dual-fuel vehicle designed to operate on at leastone alternative fuel” 8. Biodiesel,electricity, ethanol, hydrogen, natural gas, and propane are considered as alternative fuels in thisdefinition 8. In this work,we are focusing on reviewing the incentives for vehicles that operate onhydrogen and electricity as an alternative fuel. We are not consideringbiodiesel and ethanol as there is uncertainty about the capability of biofuelsto fuel the transportation sector at large scale 6.We are not also considering natural gas and propane as they are considered asfossil fuels like gasoline and diesel, although they may have lower emissions. The focus ofthis work is then on incentives allocated to electric vehicles (EVs).

By EVs inthis work, we mean the vehicles that fully or partly move by an electric motor 9.EVs may have different technologies. Three EV technologies considered in this work are:·       BEV (Battery ElectricVehicle): BEVs are vehicles that use an electric motor as the powertrainsystem.

The electricity needed to run the motor isstored in a battery. The battery ischarged through electric charging points which may be located in a public or private electric chargingstation. ·       PHEV (Plug-in Hybrid Electric Vehicle): PHEVs have a hybridpowertrain system which includes an ICE (Internal combustion Engine) and anelectric motor. The ICE uses conventional fuel (gasoline, for instance) tooperate while the electric motor uses the electricity stored in the battery tooperate. The battery can be charged viaan electric charging point.

A PHEV then can run inICE mode or electric motor mode.·       FCV (Fuel-Cell Vehicle):FCVs are electric vehicles that operate based on an electric motor. The electricity input to the motor is generated in a fuel cell that uses hydrogenas input. FCVs are fueled in a hydrogen refuelingstations (HRSs) and have tanks on the vehicle to store hydrogen. EVs have less air and noise pollution, emit less GHGemissions and have lower user costs per km compared to ICEVs, and can also leadto an increase in the share of renewable energy in a country/jurisdiction 9.

EVs are also more efficient than ICEVs because of their electricpowertrain system. In that sense, electrification of transportation sector may decreasthe primary energy consumption because of the increase in the well-to-wheelefficiency of an electric powertrain system compared to an ICE system 6.


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