Volvo ready for E85 in Oz

VOLVO claims it is ready to launch one of world’s largest ethanol-fuelled model ranges in Australia following confirmation earlier this month that GM Holden will release its first locally produced E85-compatible vehicles in 2010.

As Australia’s second most popular new-vehicle brand, Holden’s commitment to E85 is expected to create the demand for more automotive ethanol fuel outlets than the handful that currently exist in the nation’s capital cities.

Holden will follow fellow General Motors brand Saab in offering E85 vehicles here, a move which Volvo Car Australia (VCA) managing director Alan Desselss hopes will attract government support for the development of wider E85 availability.

“What we need is one of the large manufacturers such as Holden to come on board and grab this program and literally force the government and the authorities to start developing a network of E85 petrol stations – and then we as well can assist in that area,” he told GoAuto.

“We’re saying that we’re ready, right now, to bring these cars in. We’ve had them for many years now in Europe and if the infrastructure was there we could bring these cars in.

“I’d like to think that Volvo has very clearly, although Saab may have taken the initiative here in Australia, had this technology for so long that we are, I believe, one of the pioneers of the technology.

“I think we’re very, very well poised to take advantage of that and to play our part in offering a solution. We certainly have quite a large range of cars that are available right now in Europe, so we’re held back only by infrastructure.”

Major petrol retailers Shell, Mobil and BP told GoAuto in July, when Holden managing director Mark Reuss revealed his company could produce an E85 Commodore “in the next two years”, that they had no plans to offer E85 in Australia because their production was already at full capacity to facilitate the rollout of 10 per cent ethanol (E10) fuel in NSW and Queensland, where most ethanol is produced.

NSW is the only state in which automotive ethanol use is mandated, with the state cabinet earlier this month approving legislation triple its ethanol fuel mandate for E10 petrol from two to six per cent by 2010 and to 10 per cent by 2011.

NSW lands minister Tony Kelly said the ethanol mandate will be sourced exclusively from waste by-products, but the move has attracted support from grain growers, who with current technology produce the main feedstock for ethanol production in Australia.

It has also been met with opposition from fuel retailers and well as some in the meat industry, with service station representatives claiming the mandate system gives NSW’s sole ethanol producer a “blank cheque” to set prices, and Australian Pork Limited claiming it will put pressure on food prices by increasing the cost of grain and grain-dependent meat industries such as pork.

Ethanol opponents also say that grain-based bio-fuel production can produce more carbon dioxide than it saves and therefore has a limited impact on reducing greenhouses gases and improving energy security, and has also increased global food crop prices.

E85 is a blended fuel that comprises 15 per cent petrol and 85 per cent bioethanol, a renewable fuel that can be made from most types of biomass including sugar cane, corn, wheat or, in a relatively new process, cellulose – in the form of a wide range of garden waste and even household garbage.

Left: Volvo DRIVe range.

A week ago when he officially committed to having “locally built Holden vehicles running on E85 in the market by 2010”, Mr Reuss also said Holden was in discussions with US bio-fuels company Coskata to establish Australia’s first cellulostic ethanol production facility, which would also be the first outside the US, where construction of a GM-Coskata joint-venture pilot plant will soon be completed.

The establishment of such a plant in Australia could potentially help solve ethanol’s supply problems, as well as answer concerns about increasing food and grain prices due to greater demand for ethanol.

Mr Desselss, who said E85 models accounted for as much as half of Volvo’s sales in Sweden, said the fuel’s environmental friendliness made it worth pursuing and flagged the prospect of increased governmental incentives for E85 vehicle drivers in Australia.

“I think that one of the criticisms (of ethanol-blended fuel) is that you could get third-world countries then taking their very, very meagre food supply and turning it into ethanol because it’s worth more money, impoverishing their populations even further,” he said. “But I think that the development of E85 is such that we must be able to get beyond that.

“Particularly in their home country of Sweden, they (E85 cars) are very, very popular because the governments and the local governments and the city planners have made quite considerable concessions to drivers of E85 cars just to encourage people to go into them.”

If imported, Volvo’s E85 Flexifuel models may not come with a price premium attached due to their popularity in Europe, said Mr Desselss.

“I think it is too early to say because there may not even be a premium on the E85 vehicles. It is something we would have to look at because the volume in Europe is quite significant and therefore that could work in our favour,” he said.

Volvo Cars this year expects to sell 20,000 “Flexifuel” cars, which like Saab’s BioPower models can run on pure E85 or 95 RON premium unleaded petrol or any mixture of both fuels, in countries including Sweden, Great Britain, France, Norway, Italy, Germany, Austria, the Netherlands, Spain, Ireland, Belgium, Switzerland and Thailand.

In Europe, Volvo’s five-model Flexifuel range includes the C30 small hatch, S40 medium sedan, V50 mid-size wagon and, most recently, the large V70 wagon and S80 sedan flagship powered by a new 147kW/300Nm turbocharged 2.5-litre five-cylinder engine.

Both models have been available with a 107kW/190Nm 2.0-litre four-cylinder Flexifuel engine since late 2007, while the C30, S40 and V50 Flexifuel models employ a 92kW/165Nm 1.8-litre E85 engine.

Volvo says fuel consumption increases by between 30 and 40 per cent depending on driving style, because ethanol has a lower energy content than petrol.

The 2.5FT engine returns 10.4L/100km in the V70 auto and 10.1L/100km in the S80 auto on the EU combined cycle. Mated to a manual transmission, the 1.8F engine returns 7.3L/100km in the C30, 7.4L/100km in the S40 and V50, 8.6L/100km in the V70 and 3.3L/100km in the S80.

“They certainly don’t perform badly and I guess that’s one thing I want to make everybody clear on, that this is not a bad performing car and of course you get the other benefit of fuel efficiency and also it is better for the ecology, said Mr Desselss, who stresses that E85 engines are not the only fuel and emissions-reduction technologies Volvo is pursuing.

“There is a raft of fuel-efficient and CO2-reduced emissions actions that Volvo is taking now and in the future. We’ve got E85 or ethanol models, we’ve got the plug-in hybrids coming, we’ve got the GTDi (Gas Turbo Direct injection) technology in the petrol engines, we’ve got really fuel-efficient diesel models, we’ve got DRIVe. There’s just so much that is coming,” he said.

Mr Desselss said VCA was still evaluating the C30 DRIVe clean-diesel, which returns a Prius-matching 4.4L/100km fuel economy figure and 115g/km of CO2, for sale in Australia and that a decision was imminent. The S40 and V50 DRIVe models return 4.5L/100km and a similarly best-in-class 118g/km CO2 output.

Mr said Volvo’s recently announced job cuts in Sweden would have no effect on the Australian operation, despite an 11.4 per cent sales decline to November this year.

“It’s business as usual here. We’ve grown quite significantly since 2006, in fact by about 80 per cent, and although we’ve gone slightly backwards this year we’ve still shown quite significant growth.

“Of course we have the XC60 going forward and so Australia, isolated, has been a very, very good market for Volvo.”

Mr Desselss said he expected between 75 and 90 sales of the XC60 SUV per month from its launch in February, which should increase the company’s 2009 sales forecast from the 4500 vehicles it expects to sell this year – down from 4850 in 2007.

“We’re actually very happy with that, given that we didn’t have any new introductions and the market was extremely aggressive.

“I mean you had the BMW 3 Series launched, the Audi A4 launch, you had the Hummer coming in, you had the BMW X5 launch. There was a huge amount of activity in the market this year. This year was always going to be our consolidation year, because we didn’t have many new products coming through.”

Beyond Flexifuel and DRIVe models, Volvo’s next major eco-technology step will be a diesel-electric hybrid version of the XC60 from 2011, with a plug-in version expected to debut in 2012.

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