The Alternate Fuel Transition:
Results from the TAFV Model of Alternate Fuel Use in Light-Duty Vehicles 1996-2000

September 2000

Paul Leiby

Jonathan Rubin

Section 502(b) of the Energy Policy Act of 1992 (EPACT) requires that the Secretary of Energy estimate the technical and economic feasibility producing sufficient replacement fuels to replace, on an energy equivalent basis, at least 10 percent of gasoline use by the year 2000; and at least 30 percent by the year 2010. This research project helps provides DOE with the Transitional Alternative Fuels and Vehicles (TAFV) Model to simulate the use and cost of alternative fuels and vehicles over the time period of 1996 to 2010. Various policy cases are considered including fleet vehicle purchase mandates, fuel subsidies, and tax incentives for low greenhouse gas emitting fuels.

Earlier analysis using a single-period equilibrium model demonstrated the feasibility of EPACT's goals. This earlier analysis assumed mature markets: large-scale vehicle production and the widespread availability of alternative fuels at retail stations. These conditions are not currently attained by the market for alternative fuels and vehicles.

To better characterize the introduction of alternative fuels and vehicles, the Transitional Alternative Fuels and Vehicles (TAFV) Model simulates the use and cost of alternative fuels and vehicles over the time period of 1996 to 2010. It is designed to examine the transitional period of alternative fuel and vehicle use, considering possible barriers related to infrastructural needs and production scale. It accounts for dynamic linkages between investments and vehicle and fuel production capacity, tracks vehicle stock evolution, and represents the effects of increasing scale and expanding retail fuel availability on the effective costs to consumers. Fuel and vehicle prices and choices are endogenous. As a dynamic transitional model, it can help to assess what may be necessary to achieve mature, large scale, alternative fuel and vehicle markets, and what it may cost. Various policy cases are considered including fleet vehicle purchase mandates, fuel subsidies, and tax incentives for low greenhouse gas emitting fuel.

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For more information, please contact Jonathan Rubin (jonathan.rubin@umit.maine.edu)