8 Outlook for costs to 2020

The renewable options for road transport are diverse and at different stages of technological and commercial maturity and deployment. The outlook for the costs of each one to 2020 is therefore wide. Conventional bio-fuels are based on mature, commercially proven technologies, but the costs of production are at the mercy of movements in their food-based feedstock world prices. Advanced biofuels and electric road vehicles are only just beginning to be deployed at commercial-scale. Production is only just scaling up so their cost reduction potential is good. Biomethane for transport is somewhere in between these extremes. It benefits from a mature production technology but limited feedstock availability for low cost production (e.g. waste streams) and relatively little deployment of upgrading facilities from biogas to biomethane.

The rate of deployment to 2020 for advanced biofuels as well as PHEVs and EVs will be crucial to the amount of learning cost reductions that will occur by 2020. The analysis in the following sections assumes that deployment accelerates for these technologies sufficiently to reach the goals for cost reduction identified in the literature. It is important to note that these rates of deployment are ambitious and will not be achieved without continued policy and, in some cases, accelerated policy support.