Transportation on reducing emissions in transportation sector is

sector contributes to a considerable share of energy consumption and Greenhouse
Gas (GHG) emissions worldwide. In 2015, 50% of world oil consumption was
consumed for road transportation 1.
In 2014, 35% of energy was used in transportation sector (21% of world energy
consumption was used in passenger cars) 1.
In 2010, about 14% of worldwide GHG emissions was from transportation sector 2.

However, the
share of transportation sector in a country’s GHG emissions varies among the
countries all over the world. For instance in the US, transportation sector is
major contributor to GHG emissions and accounts for 27% of GHG emission in 2015
Out of that 27%, 60% of emission is from light-duty vehicles and 23% from
medium and heavy-duty vehicles 4.
In China, this share is smaller and transportation sector accounted for 6% of
emissions in 2012 5.

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The important
issue regarding the emissions from transportation sector is that the GHG
emission emitted from combustion in Internal Combustion Engine Vehicles (ICEVs)
is emitted in urban areas where a considerable population lives. It should be
noted that emission accompanied with ICEVs is not just limited to CO2
emissions but these vehicles emit particulates and also NOx, CO and
hydrocarbons which are considered as local pollutants 6.
These emissions affect the local air pollution and may cause health issues in
urban areas.

Another reason
for focus on reducing emissions in transportation sector is the potential available in transportation sector for reducing emission
compared to potential in industrial and electricity sectors. The research and
policies in support of renewable energy development in electricity sector and
energy conservation management in industrial sector have been in place for a
long time. This means that a considerable amount of potential in GHG emission
reduction in those sectors have been already captured.

However, fossil fuels (petroleum and other liquid fuels such as natural gas
plant liquids, biofuels, gas-to-liquids, and coal-to-liquids) account for 96 % of energy consumption in transportation sector 7.

This is a notable point especially for countries that have a high percent
of emission-free electricity generation capacity and can use that emission-free
electricity to provide energy needed in transportation sector.

To cut CO2 emissions by 80% by 2050 (as decided by G8
leaders and the European Union in 2009), a 95% carbon emission reduction should
happen in transport sector 6. However, based on the expected number of passenger cars
by 2050 and knowing the emissions and efficiency of ICEVs, the reduction target
for transportation sector cannot be achieved through increase in efficiency of
ICEVs alone.

Knowing this limit, different countries/jurisdictions all
over the world have invested on alternative fuel vehicles. As defined by the US
Department of Energy, an alternative fuel vehicle is “a dedicated, flexible fuel, or dual-fuel vehicle designed to operate on
at least one alternative fuel” 8. Biodiesel, electricity, ethanol, hydrogen,
natural gas, or propane are considered as alternative fuels 8.

In this work,
we are focusing on vehicles that operate on hydrogen and electricity as an
alternative fuel. We are not considering biodiesel and ethanol as there is
uncertainty about the capability of biofuels to fuel the transportation sector
at large scale 6.
We are not also considering natural gas and propane as they are considered as
fossil fuels like gasoline and diesel although they may have lower emissions.

The focus of
this work is then on incentives allocated to electric vehicles (EVs). By EVs in
this work, we mean the vehicles that fully or partly move by an electric motor 9.
EVs have different technologies. In this work we are considering three EV