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Future of Fuels Report Calls for Value Chain Engagement

With world energy consumption set to rise by nearly 40 percent by 2030, the sources and structures of transportation fuel systems will radically change—in potentially contradictory ways, according to BSR, a consulting and research firm. That contention inspired BSR’s Future of Fuels initiative, which synthesizes information and researches the sustainability impacts generated through the life cycle of six fuel types: gas/diesel, natural gas, biofuel, hydrogen, electric power (battery-powered vehicles) and the “fuel” represented by greater efficiency.

For this research, BSR consulted leading companies and purchasers of fuel, including Coca-Cola, JP Morgan Chase, Nike, Shell, Suncor, UPS, the U.S. Department of Defense and Walmart. It also worked with non-government organizations, academic, and research institutions.

“Our research addresses a general dearth of analysis on the total life-cycle impacts and trade-offs of both current and emerging fuel sources, which we need in order to make better decisions about our fuel mix now and in the future,” said Eric Olson, BSR’s senior vice president.

Key findings related to the sustainability impacts of fuels:

Our collective knowledge of the total sustainability impacts of fuels has numerous gaps. In particular, the understanding of sustainability impacts related to social and economic issues is less precise than the understanding of fuels’ environmental impacts.

In order to avoid unintended consequences and promote solutions that will have large-scale impact, we need to manage the many sustainability issues associated with fuels more holistically.

Addressing systemic issues requires a long-term perspective that is often at odds with the short-term requirements of business and politics.

Key findings related to the market outlook of fuels:

Advanced technologies for renewable and clean energy will require major investments and policy support to become commercially significant.

Oil will remain a driving force for decades to come but will cede its share to many other technologies. In particular, the economic viability—and secure supply—of unconventional fossil fuels may slow the transition to lower-carbon fuel sources.

The greatest certainty in the future of fuels is the growing diversification of fuels in the marketplace, with oil ceding part of its share to all other fuel types.

Key findings related to sustainability solutions:

Although fuel issues have proven to be controversial, comanies and their stakeholders, such as government, NGOs, scientists, and consumers, have a common cause in scaling up efficiency and best practices in production and fuel and vehicle management—and there remains much to do.

Value chain transparency and engagement presents an opportunity for innovation. Companies need to find more advanced ways to process, share, and make decisions based on the fair analysis of all relevant issues, including information about fuel sustainability.

“These findings require that we face some hard truths,” said Olson. “Actions aimed at enhancing the sustainability of fuels will need to address issues associated with oil and gas, which comprise the most significant and ongoing transportation resources. And companies need to think differently—looking at their entire portfolio of fuel investments.”

BSR will publish two more Future of Fuels papers expanding on the findings in the first brief:

Understanding the options: BSR’s next brief will look at how companies can use the information and frameworks described in the first brief to elevate sustainability within their fuel supply chains.

Highlighting opportunities for collaboration: BSR’s final brief will help companies see how they can engage across the value chain.

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