Innovation and Green Products
Everybody tells you that thriving in perpetuity  in this global economy demands a continuing series of innovations. Preferably, those innovations should include Green Products. “Everybody”, whoever that is, may have a point.
Coming up with innovative, commercially viable Green Products is tough, and really, really dicey. By “Green Product” I mean a product that has significant ecologically – derived benefits for the intended customer at the core of its value proposition. Green-washers need not apply.
Let’s illustrate with a familiar example — innovative automobiles that offer significantly superior fuel economy. Such automobiles would meet my definition of Green Products because the natural world benefits, humanity at large benefits and the intended customer benefits along with the rest of humanity, plus he enjoys lower per-mile fuel costs.
Note: The discussion that follows is intended as an immediate, real life example of industrial Green Product development. It is not intended as a comprehensive discourse on the technologies involved. It should be clear to the reader that there will be commercial winners and losers as this matter unfolds over the coming years.
This post was triggered by the recent news that Ford will offer eight vehicles rated at 40 miles per gallon or more, by year-end 2012. These eight models offer a rather remarkable assortment of technologies. From an engineer’s point of view, all of these technologies have been amply demonstrated. From a pragmatist’s point of view, there’s a lot of road between technical demonstration and producing vehicles that (1) Americans will buy, (2) will equal or exceed buyers’ expectations (rational or otherwise) over the life of the vehicle, and (3) can be priced such that buyer will accept and Ford will make a reasonable profit. And Ford has able competitors on several continents, each with their own take on Green vehicles.
This tsunami of innovative vehicles is prompted by several (figurative) earthquakes:
- The high price of gasoline in America this year, along with the lingering recession, has cooled the American driver’s ardor for big vehicles, at least for a while.
- Last year, new light vehicle fuel efficiency standards were agreed. The new American standards require vehicle manufacturers to attain a sales weighted average of over 54 miles per gallon by the 2025 model year.
- Automobile production, demand and technology all reflect an increasingly globalized industry. In coming years, most of the growth in automobile sales will be in developing countries, not in developed ones. Product preference in less developed countries favors smaller models, rather than larger.
The CAFE Derby
The 54.5 mpg CAFE (Corporate Average Fuel Economy)  requirement for model year 2025 is roughly twice where we were in 2011. Innovative vehicles for meeting the CAFE challenge are ready for inspection, like horses parading around the paddock before the big race:
Electric Vehicles – EVs are powered by electric motors, which draw from batteries. The batteries are recharged, in part, by energy recovered from the car’s braking system. The rest of the recharge is by plug-in. There is no combustion, hence no environmental emissions from the vehicles themselves. Performance can be impressive: Ford Focus Electric, a four passenger vehicle, claims mileage equivalent to 110 mpg. The larger, jaw-dropping Tesla Model S is a case study in performance.
The drawbacks to electric vehicles include access to recharging facilities, time required to recharge and concerns about battery lifespan. The electricity needed to recharge the electric vehicles usually comes from the grid. If the local electric power generation is from combustion, then there are environmental emissions. Additionally, electric power from combustion power plants requires three energy units of fuel to deliver one energy unit at the point of use. So, the apparent mileage electric vehicles cite may not reflect the actual amount of fuel burned to generate and deliver that power.
Hybrids – Hybrids have electric motors and combustion engines, in a rather bewildering array of configurations. Toyota’s Prius is the current market leader. Hybrids combine electric vehicle fuel economy with extended range and gasoline engine refueling convenience. The newer “plug-in” Hybrids have bigger batteries which can be recharged from external sources. Consequently, a plug-in spends more time on electric power, resulting in better over-all mileage.
The primary downside to Hybrids is the double power trains. Double intrinsically costs more. Double also increases complexity.
Micro Hybrids – Micro Hybrid vehicles are powered by gasoline (or diesel) engines. They include a small auxiliary power unit that allows the primary engine to be shut-off when the vehicle isn’t moving — even at a traffic light. The auxiliary power units offer an inexpensive way to improve mileage by about 10%.
The cost of the auxiliary power unit is, of course, a concern. In the U.S., improved fuel consumption can pay for the auxiliary power unit within a couple of years. In Europe, where the price of gasoline is about double that of the U.S., these units are catching on fast.
Improved Gasoline Engines – Gasoline engines are rapidly improving. Take, for example, Ford’s new turbocharged EcoBoost® line of engines. These engines replace larger displacement engines at about a 20% improvement in fuel consumption and a 15% reduction in CO2 emissions, at comparable or better performance. That is, a six cylinder EcoBoost® replaces an older and considerably larger eight, a four can replace a six and a three cylinder engine can replace a four, all without loss in output horsepower or torque. These engines are smaller and lighter than the engines they replace, and the fuel storage required for comparable vehicle range is correspondingly reduced. The weight and space savings offer vehicle designers opportunities for weight savings elsewhere in the vehicle, further improving fuel consumption.
The EcoBoost® engines are combustion engines, so they do generate environmental emissions, although at reduced levels.
Diesel Engines – Diesel engines are intrinsically more efficient than gasoline engines. Roughly 20% more efficient. Diesels have been around for over a century, so the technology is well known. As of 2007, about half of the cars sold in Europe are diesel powered. Diesels can readily use with new bio-diesel fuels, so they offer a convenient way past fossil fuels.
On the downside, diesels are combustion engines, so environmental emissions are a concern. Diesels are also heavier and noisier than corresponding gasoline engines.
OK. But before you place your bets on the CAFE derby, you might want to look at the Energy Information Administration’s sales projections for 2020 and for 2035. 
The Energy Information Administration, however, isn’t necessarily right. In any event, all of this product innovation offers opportunities for those who supply the automobile industry, through its several tiers.  And the technology will spill over from the automobile industry into other industries, as it always does.
Your thoughtful comments and experience reports are always appreciated. Click on the title of this post to open the comments section.
… Chuck Harrington (Chuck@JeraSustainableDevelopment.com)
P.S: For more on Green Products and Innovation, visit Jera’s resource website for smaller manufacturers at: www.JeraSustainableDevelopment.com
Download a .pdf version of this post at: http://app5.websitetonight.com/projects2/4/9/9/4/2164994/uploads/Blog_Post_-_Shades_of_Green_-_12_July_2012.PDF
Images: The CAFE Fuel Economy chart is from Wikipedia, Creative Commons.
The chart labeled “Fig. 91” is from the Energy Information Administration’s Annual Energy Outlook 2012, p. 85
 Werbach, Adam, Strategy for Sustainability, Harvard Business Press (2009), p. 9
 A good briefing on the CAFE requirements is available on Wikipedia. Note that the CAFE 54.5 mpg figure represents a harmonic mean, not a more familiar sort of average. http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
 This chart is taken from the U.S. Energy Information Administration’s Annual Energy Outlook 2012, p. 85. The text associated with the chart does much to clarify. See http://www.eia.gov/forecasts/aeo/
 These opportunities are discussed in A Mother Lode for Eco – Innovation, an earlier post to this blog. See: