John Goodwin: You could be a farmer in a field where literally the fuel has to follow the machine. If you've got a hundred acre field, then what are you going to do if you need to recharge? It's just not really as simple as that.
Fred Warner: regardless of getting the electric to such large vehicles, the battery mass sort of destroys the payload and field efficiency of these vehicles. Because what's often required is such high power batteries. I mean, we see BEVs being significantly heavier than their internal combustion counterparts. you can imagine tractors just being stuck in fields. Sunk because the the battery's so heavy and they can't get out of it.
John Goodwin: All of those things add up to, in my view, at the very best, some difficult bottlenecks or at the worst, shortcomings in supply. And if you have different technologies to play a role, it takes the pressure off. I call it a pressure release valve of those critical raw materials because they don't have as big a demand, but they can still help you decarbonise. So it's moving together in a more strategic... way forward in terms of looking at those metals and getting them to the right places for what we need to decarbonise, yes transport but other sectors too.
Fred Warner: We all see enough lorries on the road to think it would be great to see them being cleaner. But if they were a battery-electric vehicle, not only would the upfront cost be very prohibitive for logistics firms, but the the downtime piece of lorries sat around in service stations, assuming that you could get enough. electricity from the grid to recharge all of the queues of lorries that would be there waiting for a recharge. As an engineer it boggles the brain in terms of comparing that to hybridising, Alright, hello everybody, and welcome to another episode of Future Engineering Bets, where we talk about advanced engineering, capital allocation, and where things are going in the future. Today I'm very excited to be joined by John Goodwin, who is the regulatory affairs director at Johnson Matthey. His background covers automotive, heavy-duty trucks, non-mobile machinery. And John, welcome to the show.
John Goodwin: Thanks, Fred. It's great to be here enjoying the discussion.
Fred Warner: we're both very interested in technology neutrality. Do you want to give us a bit about Johnson Matthey and what they are interested in, what they're vested in and your role there?
John Goodwin: Yeah, so I think you described my role at Johnson Matthey already, but my career has been over 20 years and I've meandered from a scientist and a technical job all the way through into government affairs. I help carry our positions to government, predominantly in the UK and in Europe. And Johnson Matthey is a company over 200 years old. We started in precious metals. all that time ago and it's still core to what we do today. We're the world's biggest recycler of platinum group metals and they find themselves into everyday products of all sorts from the electronics in your smartphone through to life-saving pharmaceuticals. We're talking about automotive and the key things which we use platinum group metals for in automotive is the catalytic converter. We pioneered that technology back in the 1970s and it's very much a large part of our business today. And that's been a wonderful technology that has provided cleaner air for billions of people across the globe during that time and is still doing a great job today. And then further downstream, I guess in terms of decarbonising transport, we also make membrane. materials, catalyst coated membranes that go into electrolysers to make green hydrogen and also into fuel cell stacks that use that hydrogen for transport, for example, in long haul trucks.
Fred Warner: Johnson Matthey are vested in hydrogen fuel cell applications. You're vested in internal combustion applications. So for the viewers watching and listening, we know that Johnson Matthey is in that area. Do you want to talk about the current position on the zero emissions vehicle mandate going on at the moment?
John Goodwin: Yes, sure, we'll start with light duty, I guess. mean that mandates very much UK-based thing at the moment, which is under review. And our position is quite simple. We believe across the globe that there should be a range of options available to help decarbonise transportation. So yes to batteries and batteries are going to play a very critical role. They're playing a very critical role and making great progress in the goals of reaching zero carbon across transport, but they shouldn't necessarily be the only option. And there's a lot of reasons for that in terms of consumer choice and whether it best suits someone's needs or a manufacturer's needs or the needs of passenger car consumers, but also those who operate fleets. And also there are lots of other things to consider in terms of raw materials, supply chains, that all come into play, that if you have a more open approach, we believe that it stands to make a much more successful story in terms of bringing people on the decarbonisation pathway and doing it in the most effective way.
Fred Warner: So recently you did a a video about yourself when you're in Greece and looking at how the average car is around fifteen to twenty years old and a lot of the people there live in apartments and they don't have access to the kind of on drive charging opportunities that people often visualise with BEV's. It was really interesting.
John Goodwin: Yeah, thanks. I enjoyed doing that one. I was actually on holiday. We have family in Greece and I was just looking around and it really struck me that for the European situation where we're looking to get across all member states to a situation at the moment, it is under a new proposal and debate, but at the moment 2035 is effectively an ice ban. that's going to be very difficult to meet across all the different member states. Even the targets in 2030 when we have a 55 % CO2 reduction is going to rely more on the Eastern and Southern European states to play their part. And if you look at some of the figures today in terms of the BEV share across those countries, I think there's some... Stats on that from ACEA, who are effectively the representation of the automotive manufacturers in Europe. If you look at France, they've got something like 28 % BEV share, but Greece has about 6.5%. So they're lagging quite a bit. And in order to meet those future targets, they're going to have to up the pace. But as you've pointed out, it's not quite as simple as that. It depends on people's driving habits and... The type of accommodation that people live in as well. There's a lot of high-rise living and apartment living and the practicalities of owning a battery electric vehicle might be quite different to people who live in France and Germany and Western Europe. So you're quite right to point that out. And it's a really interesting observation and a big challenge for the Commission to overcome in terms of infrastructure and incentives and everything else.
Fred Warner: It's a huge challenge really. And when you talk about that kind of low percentage pickup in eastern and southern countries in Europe, and then you imagine that the infrastructure is probably in a similar position. I can't imagine there's gazillions of empty chargers sitting around waiting for people to buy vehicles because tends not to be the case. So the overall transition is going to be a challenge. When you look at the the driveway divide, as we call it, and even in the UK, 40% of people don't have a charger. One of things I'm quite passionate about is the people that don't have driveways generally have a lower income than those that do on proportion. And therefore the people without the driveways end up paying many times more for their fuel than those with, which seems a disproportionate society, particularly when if they're unregulated private charges available to the public, which Most of them currently are, and even with the levy fund, the the estimates position around one third of them would be levy and around two thirds would be private charges in order to facilitate the the the amounts. You go into Europe, it really leaves a situation where you feel that people don't have many options if they were to go into electric.
John Goodwin: Yeah, and I think it's just that, it's about... having a fair transition, not leaving people behind, making sure that there are options available for personal mobility. And yes, I imagine it would be a lot more difficult if you don't have access to driveway or overnight home charging, whereas it's incredibly good value perhaps, especially when you look at the price of the pump of petrol and diesel today. But with a charger that's not at home, it can vary quite wildly and you can get caught out. So there's an infrastructure question there, there's a fairness about infrastructure there, but also general accessibility. If someone is coming from an old combustion engine vehicle and they move into a brand new hybrid or a plug-in hybrid electric vehicle, not only might that better suit their needs in terms of where they live and the type of commute they do, but it's actually a big step in the right direction for air quality and decarbonisation. So what's wrong with that? The mix of technologies all moving in the right direction is only a positive thing.
Fred Warner: Yeah, and I think I think this comes up into one of the questions that does having too strict a regulation where politics is choosing the technology, does that mean that the older vehicles get even older? the the private fleets stay getting older because people try and maintain and I totally agree that you only have to go to some of the southern countries in Europe to feel the difference in air quality in terms of the very old diesels particularly. Out there causing all kinds of fumes, which we'd all like to see the back of, and we know it's going to be good for the environment if they're gone. But does it make it difficult for people to get into BEV without the choice of low emission alternatives, such as hybrids with synthetic fuels, the e-fuels in the future, hydrogen fuel cells? I suppose I'd argue it does, and I think you'd probably echo that.
John Goodwin: Yeah, I think so. I think you've mentioned quite a lot of options there and they all can play a role to varying degrees and I think battery electric vehicles, yeah, they're going to play a really big role. They've got a good share at the moment. The SMMT figures out, I think today, about some really good record numbers in terms of BEV car sales for September. There's a stat now they've got something like... think it's five cars every minute on the road for a BEV within September. So that's actually a success. But when you stack it in terms of the regulatory ambition and the ZEV mandate, it's still falling short. I think we're about 26 % year to date, whereas the target for this year is 33%. So there's still some way to go. And those other technologies that you just mentioned. the hybrids, the plug-in hybrids, could actually act as a funnel for users to move on a decarbonisation journey. So they move from an older ICE vehicle to a hybrid or a plug-in hybrid. And then maybe their next choice, when the conditions are better for them, would be a battery electric vehicle. But in the meantime, they've actually made a good progress in terms of air quality and decarbonisation. And then beyond the later years of... decarbonisation pathway, so 2030, 2035, maybe the types of fuels you mentioned, so carbon neutral fuels, electroph fuels will play a role as well in terms of having this net zero carbon coming from that particular vehicle.
Fred Warner: And I suppose we're not there with all those technologies is the is the point of this at this time. But it it's being tested, it's being used in motorsport, which is a great test ground for such fuels. And I suppose having a way that people can maintain options that cover all people's needs rather than it being just a one-size-fits-all for everybody, because it doesn't really fit, does it, in reality? What we can achieve in the UK. with battery electric vehicles isn't the same as what Greece or some of the other EU states can achieve easily.
John Goodwin: Yeah, that's right. those fuels... Okay, we need to bring volume to enable those fuels to become more affordable and accessible, just like we had to develop the infrastructure for battery electric vehicles, right? So that could come over time if there was serious push to consider it. And the amazing thing about those fuels is you mentioned aging fleets, people are holding on to their cars for longer. The statistics show that time after time, SMMT and ACEA data, even in Western Europe, the average age the vehicle is increasing. And those fuels are drop-in. So they could be dropped into an assisting car that's on the street now and instantly bring decarbonisation benefits to it. So it addresses the existing fleet as well as the new vehicles, which is a neat thing.
Fred Warner: I mean, we won't we won't get too lost in that part today in terms of e fuels and synthetic fuels and fuels that can create a closed carbon loop. And for those that don't know a closed carbon loop means that in theory the fuel that gets burnt puts out no more carbon than it was used to capture it and create it in the first place. So you you effectively don't increase the amount of carbon in the atmosphere, you keep it neutral. Which is different to a zero emission vehicle, which in theory puts out none, apart from the manufacture of the vehicle and the manufacture of the electricity that goes into it. So if we go into where you're really, really interested in Johnson Matthey and yourself, John, the sometimes called the soft underbelly, the non-road mobile machinery
John Goodwin: Right.
Fred Warner: heavy haulage. Do you want to talk a bit about that and its application?
John Goodwin: Yeah, well, at Johnson Matthey we're interested in the full suite. So from cars, vans, trucks, all the way through to non-road and even stationary source emissions. So the rise of AI and data centres needs to be addressed as well. Well, let's take that discussion on another day. For non-road mobile machinery. Yeah, I've used that term before, the soft underbelly of technology neutrality, because quite frankly, what else are you going to do? I mean, you have so many different... applications, everything from a chainsaw to a huge pile driver. They've got so many different jobs to do, different cycles. Could be in different locations where some have infrastructure, grid connectivity, some don't. You could be a farmer in a field where literally the fuel has to follow the machine. If you've got a hundred acre field, then what are you going to do if you need to recharge? It's just not really as simple as that. So The complexity of that sector really lends itself to having to think about technology neutrality and having a range of options open for people to do the jobs that need to be done.
Fred Warner: And I think there's a real consideration, even practically, regardless of getting the electric to such large vehicles, the battery mass sort of destroys the payload and field efficiency of these vehicles. Because what's often required is such high power batteries. I mean, we see BEVs being significantly heavier than their internal combustion counterparts. you can imagine tractors just being stuck in fields. Sunk because the the battery's so heavy and they can't get out of it. is this sort of an area where you think that policymakers understand that the the passenger car and legislation for that is different to transport heavy duty applications. Do you think it's well considered at the moment?
John Goodwin: I certainly hope that they're beginning to understand it better and I think looking at the non-road mobile machinery it's not really on the table just yet because let's say the European Commission have got a plateful at the moment with light duty cars and vans, next up will be trucks and then NRMM. will follow. I think there's definitely lessons that will be learned from cars and vans and the need for flexibilities and adjustments which we've seen there and hopefully will mean getting it right or better first time around when we start to look at NRMM. I think from the people that I've spoken to across the industry and policymakers it is a better understood story. But we need to keep up the message that it's not as simple as cars and vans. There is that complexity there. And we need to listen to the end users in terms of what technologies they need to do the job. Because it's all about getting the job done effectively, sustainably at the right cost. And if there's hang-ups because your machine isn't operating as it should, then that's just going to be a nightmare for anyone who's involved in construction or farming or any other job that you've got to do. So I like to think that they're listening better this time around because of lessons learned on what should be easier to do, cars and vans, but also appreciating the broadness of that sector and the different types of work we have to take on.
Fred Warner: and I suppose again for people listening, you're not on about things like hand tools that can have batteries in them and things like that, which are fairly straightforward. We're talking heavy duty, often involved in construction or farming machines. Some of them can be many, many times my height to all those some of those machines. as an engineer myself, just the sheer complexity of getting enough grid power into the right locations to be able to recharge such devices would be quite a minefield.
John Goodwin: Yeah, and it's potential downtime as well, which is obviously not what we need in areas like construction. There are options, for example, battery swapping and things like that, which might work in some situations. But I would ask questions about the, again, looking back at the critical raw materials demand, for example, if you've got spare battery sitting around to swap so you don't have to stay idle and charge, then that's lot of tied up material as well. could be going into electrifying cars.
Fred Warner: It brings up a project I worked on many years ago, material handling. And that was when I was in hydrogen fuel cell. the end client was let's say one of the large supermarket chains, and we were looking at one of their warehouses, and they have material handlers, so pickers that run around warehouses and they run on battery. And so it's an indoor application, so you wouldn't want to have an internal combustion engine for clean air
John Goodwin: Sure.
Fred Warner: reasons. But in order to keep order pickers running, they had to have this extensive battery you talk about spare batteries and even running material handler pickers around a a warehouse, it was quite an extensive spare battery facility that came with quite a number of challenges and complexities to manage them. And you talk about extra raw
John Goodwin: you
Fred Warner: materials all required to create the products to just keep one thing running. Instead of recharging it, you're not, you're changing batteries and you might have several batteries per item. When you looked at it to say, well, if we could put a at the time it was a hydrogen fuel cell solution in place and change that unit for a hydrogen fuel cell power unit and you drop hydrogen gas on the outside, then the picker can refuel in the same time it takes to swap a battery. But there's no need for quite extensive battery capabilities, the area it takes up and the cost of maintaining all the batteries.
John Goodwin: Absolutely, I'm glad you've mentioned that because it's a really nice case study of how hydrogen fuel cells can be really effective. Sometimes a battery solution might work but for the reasons that you've pointed out, hydrogen fuel cell solution could be really effective in materials handling and we've seen really good examples of where we've even supplied into that.
Fred Warner: sometimes you have to go and see these things with your own eyes to really understand it. so we move out of the the non-road mobile machinery, which I can completely imagine is very difficult to imagine it all being battery electric vehicle. Then you move into haulage and logistics, and I've had enough exposure to it to know that they run on very fine margins. It's a very very volume driven industry. And I do worry that unthought legislation if it's not thought through for logistics in haulage which we know there's loads of it on the road. We all see enough lorries on the road to think it would be great to see them being cleaner. But if they were a battery-electric vehicle, not only would the upfront cost be very prohibitive for logistics firms, but the the downtime piece of lorries sat around in service stations, assuming that you could get enough. electricity from the grid to recharge all of the queues of lorries that would be there waiting for a recharge. As an engineer it boggles the brain in terms of comparing that to hybridising,
John Goodwin: Yeah.
Fred Warner: diesel hybrids with batteries to take on, regenerative braking, all the kinds of things that we see in the passenger cars being applied to trucks.
John Goodwin: Yeah, absolutely. I don't think either of us are saying that there isn't a place for battery electric trucks. I think there definitely will be. But at the moment, yes, they are limited in a number of ways, as you've just pointed out. Potentially on range as well, if you've got a long haulage delivery mission that's got a very heavy payload, perhaps that's not quite the right technology option for you today, or perhaps not even for some years. looking at other options and embracing them in terms of the renewable fuels aspect again, where the clean hybrid truck would be a way around that, and also hydrogen fuel cell trucks as well. mean, going back to hydrogen again, the main issue about that, especially comparing Europe and the UK, is the commitment to actually have refueling stations for hydrogen. Europe I think there's a couple hundred maybe 300 or so which is helped by the AFIR the alternative fuels infrastructure regulation. In the UK I think I count them probably on one hand or two hands if I'm being generous. So what's going to happen if we have a hydrogen truck in Europe that wants to deliver to the UK it's going to be an extremely difficult thing. to do and again in terms of technology neutrality and making it work across where you want to deliver and export things that's another dimension to think about. But I think with trucks this is being looked at a little bit more sensibly we see in Europe that the original legislation got to 2040 and it stopped at a sort of 90 % CO2 reduction so it still had a role to play for traditional combustion engine trucks and hybrids. It's likely that that's going to get reviewed in my view. So after we've got through the light duty review on CO2, there will be a call or there are calls actually to bring forward the review for trucks as well. So it will be interesting to see how the commission would look to reshape that. And then in the UK, there was a consultation which closed earlier this year and we're still waiting for the government response to it. but they're looking at how to best decarbonise the heavy goods vehicle sector as well. And there's a range of things that they're looking at. One is another zero emissions vehicle mandate, for example, and another is potentially looking at other options and a more CO2-based approach, which would match up quite nicely with the European Union, actually.
Fred Warner: it's interesting that you you've got all the information on that, John. And I know when I saw the SMMT conference the the CEO of Ford was very much talking about the vans and saying that round town, battery electric vehicles work perfect and they're very easy for people to adopt. But users that go further afield really struggle with range on vans and it becomes a real issue having regular downtime during the day, the working day, assuming they can
John Goodwin: Yeah.
Fred Warner: get a charger And and then it means people just don't adopt it because why would you when you could and I know if I was running a company that had vans driving around everywhere and I had to have continuous half an hour down times, I would probably not choose it. So it makes it awkward.
John Goodwin: Yeah, that's an issue. We were speaking about that just the other day with some other OEMs as well. Vans are not just large cars, right? They do very different jobs and downtime is a big deal.
Fred Warner: And of course, payload compromise because the battery's so heavy the vehicle payload is then reduced often as well, which impacts it too. So moving on then. let's talk about this last 10% problem. So you know, even if our mandates get to sort of 80-90% CO2 reduction, and we've got some difference between the EU where they're at and where they're thinking of going and where the UK is at, and we don't know quite what's going to happen. the last ten to twenty percent normally becomes the hardest. It's it becomes the impossible. And is it realistic to even debate getting in there?
John Goodwin: Well, that's why I think the EU is taking a bit more of a pragmatic approach here in terms of cars and vans CO2. The new proposal is a 90 % reduction by 2035 instead of 100. But that 90 % doesn't come for free in terms of the proposal. You have to make up for the difference in terms of green steel and low carbon renewable fuels, which actually points to the beginnings of a embracing a life cycle type approach, is a good thing. So I think there's recognition there that yes, that last squeeze to decarbonise is going to be tricky and we need to really open up the options in terms of how we achieve it. In the UK, it's not quite the same story. So the ZEV mandate is up for review. But what isn't being reviewed is effectively the ambition dates. So the 2030 dates to move away from pure ICE, I think is still pretty rigid. And the 2035 ambition, although the actual legal legislation doesn't go out to 2035, the ambition is still there to move away from all ICE and go ZEV only from 2035. So... That's quite a big difference between the UK and the EU's direction at the moment. And if you look at the UK, if we do hold on to that ambition in 2035 and don't bring in any flexibility for other technologies beyond that date, it does put the UK in a bit of a standalone position globally. Compare it to other key auto manufacturing nations, the US, for example, have an open approach. Chinese, they have what we call a new energy vehicle approach, yes, led by BEVs, but also embracing hybrids and plug-in hybrids. And then Japan, Korea also are taking hybrids on the journey as well. And then what I've just said about the EU, so it puts the UK in a bit of isolation. And potentially with the battery electric vehicle story as well, a bit of a risk in terms of the supply chains, which we might talk about. a little bit later on, it's, put your supply chains in a bit of a geographically concentrated or geopolitically exposed potentially situation.
Fred Warner: we'll go into the supply chains now actually because we're gonna go into talk about this whole well to wheel life cycle of a vehicle, which you you just mentioned a moment ago. And let's talk about the supply chains in terms of how you see it for the UK and the threat of the 100% ZEV mandate versus the EU and the global picture here, because it's very easy for people to sit in a world where they think, well, it's only it only my own country matters and everyone else. it it doesn't matter what's going on, but we're all affected by what other places are doing, either in the prices we pay, what's available to us. So when we talk about supply chain, what what do you really see happening?
John Goodwin: Sure. So I think in terms of the supply chains, comes back to the benefits of technology neutrality. And the one that I like to talk about is on critical raw materials. So if we talk about on a battery electric vehicle, the basket of lithium, cobalt, nickel, for example, and more metals within, there's about, according to a study we did with the... International Energy Agency and FVV, about 145 kilograms for an average passenger car of those types of materials for a BEV. If you look at a combustion engine vehicle, it's 33. So you've got 145 kilograms of that basket of metal vs 33. So there's quite a big demand there. And if we look beyond... cars and vans because it's not just automotive that we need batteries for, We need it for the infrastructure. We need it for grid upgrades and connectivity. We need it for storage solutions, backup power. We need it for the rise of data centres and AI. So there's all of this international need for the growth of needing batching materials. And it's going to provide some potential shortcomings. or certainly bottlenecks of those materials. If we look at a battery electric truck, I understand there's about half a tonne of copper needed for a battery electric truck. And there's going to be huge demands on copper as well. I think it's estimated that by 2035, there's going to be about a 30 % shortfall in the demand versus the supply of copper. So... All of those things add up to, in my view, at the very best, some difficult bottlenecks or at the worst, shortcomings in supply. And if you have different technologies to play a role, it takes the pressure off. I call it a pressure release valve of those critical raw materials because they don't have as big a demand, but they can still help you decarbonise. So it's moving together in a more strategic... way forward in terms of looking at those metals and getting them to the right places for what we need to decarbonise, yes transport but other sectors too.
Fred Warner: and would you say you're seeing that potential shortfall being well considered and plugged, or at this point you would say it's it's a shortfall, plain and simple in your view?
John Goodwin: Yeah, there's different views on it. I don't think there's an argument that there's not enough stuff in the ground. But opening up a new copper mine is going to be, 15 to 17 years? It doesn't happen overnight. So perhaps in terms of the geology globally, we could get there. But it's the pace of the demand versus what can be supplied, which is why I say bottlenecks at best, shortcomings at worst.
Fred Warner: when you speak to the amount of precious metals and precious earth minerals used in battery electric vehicles versus ice counterparts or hybrid counterparts, it is quite alarming. It doesn't mean much to probably the lay person. It they probably if they heard that they'd probably think, you know, it it doesn't matter. But when you're talking at scale and then you're talking globally, it is quite a significant difference in more difficult to process and get hold of minerals and and items that you can see a supply chain being either a bottleneck if if everybody achieves their goals or the costs going through the roof and creating another knock-on effect in terms of does it just help people stay in their older cars even longer? you just get into the point where this used car market just becomes a bit like Cuba, you know, where they couldn't get any new cars and they've kept all the cars running for the last sixty years, you know, you do wonder sometimes if that's where we're heading towards, which would be a terrible thing. so I'm really interested to talk a bit then about the well to wheel. as much as people talk about a BEV being better for the environment after around about ten to twelve thousand miles on the road, or they're the numbers I've I've heard, they're maybe more refined ones than that. do people consider the hybrid and the neutral technologies and the e fuels and the synthetic fuels out there? And I've not seen huge amounts of it. People compare an internal combustion engine or a diesel or a petrol car to B E
John Goodwin: Yeah.
Fred Warner: V, but where's the other comparisons?
John Goodwin: Yeah, mean life cycle analysis is really important but also pretty difficult because your version of it might be very different to mine. Did you consider clean electricity or grey electricity and so on? it also depends on where you begin the analysis from cradle to grave. You mentioned as the vehicle or are you just looking at it from a little bit broader than just tailpipe? I think looking beyond tailpipe is important. for us to do. And there are some good studies out there. The Association for Emissions Control and Climate, of which Johnson Matthey are members have put out some studies there, which compare battery electric vehicle to a hybrid vehicle running on sustainable neutral fuels. And we can see a good sense of parity there when you look at it over that sort of life cycle view. So you can get a study which will show you with reasonable considerations that they're not actually too far apart sometimes when you look at some of the technologies if you put the right fuel into a hybrid vehicle.
Fred Warner: I'd be interested to see that study Is that available publicly? Yeah,
John Goodwin: Yeah, is.
Fred Warner: I'll have to look that one up. I'll remember that one. Thank you, John. So so there is some parity that can be drawn from a supply chain point of view as well as life cycle on the e-fuels. how do we get it being considered more widely that it's not just what comes out of the tailpipe, it's the whole ecosystem that goes to creating the car, which includes all the minerals and materials that come out of the ground to be in process to being supplied, right through to then the recycling and the post-life effects, which we all know in Europe. we turn a little bit of a blind eye to any recycling done not in Europe doesn't count. Or it certainly feels like that, and it can go to another country and I won't mention any countries' names, but and whatever the hell they do with them, it doesn't matter to Europe because we've managed to offload it to a recycler.
John Goodwin: Yeah, I mean that is a thing but I think in terms of recycling Recycling of battery materials is still relatively nascent, for example, compared to what I can definitely speak to, the platinum group metals, which has been well established over decades. It's entrusted supply chains and we've now got this really good above ground source of platinum group metals. We have what we call urban mines that have really good circularity as well. About 60 % of... all products made with platinum group metals are from recycled metal. So that's a really positive story. when we have those metals available and we can use them in hybrid vehicles, can use them in fuel cell electric vehicles where you don't have the same dependency of the battery electric vehicles and the battery material demand. So again, it comes back to the story as if you have optionality. in terms of the tech neutrality story. You have optionality on the types of products that people are still allowed to use into the future. It also gives you options in terms of the supply chains and the risk management as you get into more and more demands across the world, across different sectors beyond automotive.
Fred Warner: so as we as we round up this episode, John, and I'd like to think about the dependency on battery electric vehicles if the UK sticks with its mandate and what that means for jobs in Europe, dependency on places like China for the materials. Some people would argue that actually being totally dependent on other nations for your products is concerning, especially at a time it's The world looks a little uncertain compared to what it did ten years ago. what do you think to all that?
John Goodwin: Yeah, well, that's a big question to finish on, Fred. And I think, yeah, recent news stories haven't been too positive, have they, about jobs and job cuts in the automotive sector, unfortunately. I do know that when this has been looked at by some organisations, there's an organisation called CLEPA in Europe. They are effectively Automotive Supplier Network, the voice of the automotive suppliers in Europe. They have done studies in the past that show specifically that if you have a technology neutral approach, it does preserve, if not even create more jobs in the EU versus moving towards a zero emissions vehicle only approach. So maybe that's another study I should flag to you after this.
Fred Warner: Yeah, indeed. Indeed. Well, John, thank you so much for joining me on Future Engineering Bets. It's been an absolute pleasure. how can people find you if or find out what Johnson Matthey do?
John Goodwin: Yeah, look me upon LinkedIn personally I'm reasonably active on there about most of the things we've talked about and to find out more about Johnson Matthey Yeah, contact me personally or look at matthey.com everything you need is there
Fred Warner: Fantastic. Well thank you so much for joining me. You've been listening to Future Engineering Bets where we talk about advanced engineering and capital allocation. And I'll see you all in the future.
Fred Warner: regardless of getting the electric to such large vehicles, the battery mass sort of destroys the payload and field efficiency of these vehicles. Because what's often required is such high power batteries. I mean, we see BEVs being significantly heavier than their internal combustion counterparts. you can imagine tractors just being stuck in fields. Sunk because the the battery's so heavy and they can't get out of it.
John Goodwin: All of those things add up to, in my view, at the very best, some difficult bottlenecks or at the worst, shortcomings in supply. And if you have different technologies to play a role, it takes the pressure off. I call it a pressure release valve of those critical raw materials because they don't have as big a demand, but they can still help you decarbonise. So it's moving together in a more strategic... way forward in terms of looking at those metals and getting them to the right places for what we need to decarbonise, yes transport but other sectors too.
Fred Warner: We all see enough lorries on the road to think it would be great to see them being cleaner. But if they were a battery-electric vehicle, not only would the upfront cost be very prohibitive for logistics firms, but the the downtime piece of lorries sat around in service stations, assuming that you could get enough. electricity from the grid to recharge all of the queues of lorries that would be there waiting for a recharge. As an engineer it boggles the brain in terms of comparing that to hybridising, Alright, hello everybody, and welcome to another episode of Future Engineering Bets, where we talk about advanced engineering, capital allocation, and where things are going in the future. Today I'm very excited to be joined by John Goodwin, who is the regulatory affairs director at Johnson Matthey. His background covers automotive, heavy-duty trucks, non-mobile machinery. And John, welcome to the show.
John Goodwin: Thanks, Fred. It's great to be here enjoying the discussion.
Fred Warner: we're both very interested in technology neutrality. Do you want to give us a bit about Johnson Matthey and what they are interested in, what they're vested in and your role there?
John Goodwin: Yeah, so I think you described my role at Johnson Matthey already, but my career has been over 20 years and I've meandered from a scientist and a technical job all the way through into government affairs. I help carry our positions to government, predominantly in the UK and in Europe. And Johnson Matthey is a company over 200 years old. We started in precious metals. all that time ago and it's still core to what we do today. We're the world's biggest recycler of platinum group metals and they find themselves into everyday products of all sorts from the electronics in your smartphone through to life-saving pharmaceuticals. We're talking about automotive and the key things which we use platinum group metals for in automotive is the catalytic converter. We pioneered that technology back in the 1970s and it's very much a large part of our business today. And that's been a wonderful technology that has provided cleaner air for billions of people across the globe during that time and is still doing a great job today. And then further downstream, I guess in terms of decarbonising transport, we also make membrane. materials, catalyst coated membranes that go into electrolysers to make green hydrogen and also into fuel cell stacks that use that hydrogen for transport, for example, in long haul trucks.
Fred Warner: Johnson Matthey are vested in hydrogen fuel cell applications. You're vested in internal combustion applications. So for the viewers watching and listening, we know that Johnson Matthey is in that area. Do you want to talk about the current position on the zero emissions vehicle mandate going on at the moment?
John Goodwin: Yes, sure, we'll start with light duty, I guess. mean that mandates very much UK-based thing at the moment, which is under review. And our position is quite simple. We believe across the globe that there should be a range of options available to help decarbonise transportation. So yes to batteries and batteries are going to play a very critical role. They're playing a very critical role and making great progress in the goals of reaching zero carbon across transport, but they shouldn't necessarily be the only option. And there's a lot of reasons for that in terms of consumer choice and whether it best suits someone's needs or a manufacturer's needs or the needs of passenger car consumers, but also those who operate fleets. And also there are lots of other things to consider in terms of raw materials, supply chains, that all come into play, that if you have a more open approach, we believe that it stands to make a much more successful story in terms of bringing people on the decarbonisation pathway and doing it in the most effective way.
Fred Warner: So recently you did a a video about yourself when you're in Greece and looking at how the average car is around fifteen to twenty years old and a lot of the people there live in apartments and they don't have access to the kind of on drive charging opportunities that people often visualise with BEV's. It was really interesting.
John Goodwin: Yeah, thanks. I enjoyed doing that one. I was actually on holiday. We have family in Greece and I was just looking around and it really struck me that for the European situation where we're looking to get across all member states to a situation at the moment, it is under a new proposal and debate, but at the moment 2035 is effectively an ice ban. that's going to be very difficult to meet across all the different member states. Even the targets in 2030 when we have a 55 % CO2 reduction is going to rely more on the Eastern and Southern European states to play their part. And if you look at some of the figures today in terms of the BEV share across those countries, I think there's some... Stats on that from ACEA, who are effectively the representation of the automotive manufacturers in Europe. If you look at France, they've got something like 28 % BEV share, but Greece has about 6.5%. So they're lagging quite a bit. And in order to meet those future targets, they're going to have to up the pace. But as you've pointed out, it's not quite as simple as that. It depends on people's driving habits and... The type of accommodation that people live in as well. There's a lot of high-rise living and apartment living and the practicalities of owning a battery electric vehicle might be quite different to people who live in France and Germany and Western Europe. So you're quite right to point that out. And it's a really interesting observation and a big challenge for the Commission to overcome in terms of infrastructure and incentives and everything else.
Fred Warner: It's a huge challenge really. And when you talk about that kind of low percentage pickup in eastern and southern countries in Europe, and then you imagine that the infrastructure is probably in a similar position. I can't imagine there's gazillions of empty chargers sitting around waiting for people to buy vehicles because tends not to be the case. So the overall transition is going to be a challenge. When you look at the the driveway divide, as we call it, and even in the UK, 40% of people don't have a charger. One of things I'm quite passionate about is the people that don't have driveways generally have a lower income than those that do on proportion. And therefore the people without the driveways end up paying many times more for their fuel than those with, which seems a disproportionate society, particularly when if they're unregulated private charges available to the public, which Most of them currently are, and even with the levy fund, the the estimates position around one third of them would be levy and around two thirds would be private charges in order to facilitate the the the amounts. You go into Europe, it really leaves a situation where you feel that people don't have many options if they were to go into electric.
John Goodwin: Yeah, and I think it's just that, it's about... having a fair transition, not leaving people behind, making sure that there are options available for personal mobility. And yes, I imagine it would be a lot more difficult if you don't have access to driveway or overnight home charging, whereas it's incredibly good value perhaps, especially when you look at the price of the pump of petrol and diesel today. But with a charger that's not at home, it can vary quite wildly and you can get caught out. So there's an infrastructure question there, there's a fairness about infrastructure there, but also general accessibility. If someone is coming from an old combustion engine vehicle and they move into a brand new hybrid or a plug-in hybrid electric vehicle, not only might that better suit their needs in terms of where they live and the type of commute they do, but it's actually a big step in the right direction for air quality and decarbonisation. So what's wrong with that? The mix of technologies all moving in the right direction is only a positive thing.
Fred Warner: Yeah, and I think I think this comes up into one of the questions that does having too strict a regulation where politics is choosing the technology, does that mean that the older vehicles get even older? the the private fleets stay getting older because people try and maintain and I totally agree that you only have to go to some of the southern countries in Europe to feel the difference in air quality in terms of the very old diesels particularly. Out there causing all kinds of fumes, which we'd all like to see the back of, and we know it's going to be good for the environment if they're gone. But does it make it difficult for people to get into BEV without the choice of low emission alternatives, such as hybrids with synthetic fuels, the e-fuels in the future, hydrogen fuel cells? I suppose I'd argue it does, and I think you'd probably echo that.
John Goodwin: Yeah, I think so. I think you've mentioned quite a lot of options there and they all can play a role to varying degrees and I think battery electric vehicles, yeah, they're going to play a really big role. They've got a good share at the moment. The SMMT figures out, I think today, about some really good record numbers in terms of BEV car sales for September. There's a stat now they've got something like... think it's five cars every minute on the road for a BEV within September. So that's actually a success. But when you stack it in terms of the regulatory ambition and the ZEV mandate, it's still falling short. I think we're about 26 % year to date, whereas the target for this year is 33%. So there's still some way to go. And those other technologies that you just mentioned. the hybrids, the plug-in hybrids, could actually act as a funnel for users to move on a decarbonisation journey. So they move from an older ICE vehicle to a hybrid or a plug-in hybrid. And then maybe their next choice, when the conditions are better for them, would be a battery electric vehicle. But in the meantime, they've actually made a good progress in terms of air quality and decarbonisation. And then beyond the later years of... decarbonisation pathway, so 2030, 2035, maybe the types of fuels you mentioned, so carbon neutral fuels, electroph fuels will play a role as well in terms of having this net zero carbon coming from that particular vehicle.
Fred Warner: And I suppose we're not there with all those technologies is the is the point of this at this time. But it it's being tested, it's being used in motorsport, which is a great test ground for such fuels. And I suppose having a way that people can maintain options that cover all people's needs rather than it being just a one-size-fits-all for everybody, because it doesn't really fit, does it, in reality? What we can achieve in the UK. with battery electric vehicles isn't the same as what Greece or some of the other EU states can achieve easily.
John Goodwin: Yeah, that's right. those fuels... Okay, we need to bring volume to enable those fuels to become more affordable and accessible, just like we had to develop the infrastructure for battery electric vehicles, right? So that could come over time if there was serious push to consider it. And the amazing thing about those fuels is you mentioned aging fleets, people are holding on to their cars for longer. The statistics show that time after time, SMMT and ACEA data, even in Western Europe, the average age the vehicle is increasing. And those fuels are drop-in. So they could be dropped into an assisting car that's on the street now and instantly bring decarbonisation benefits to it. So it addresses the existing fleet as well as the new vehicles, which is a neat thing.
Fred Warner: I mean, we won't we won't get too lost in that part today in terms of e fuels and synthetic fuels and fuels that can create a closed carbon loop. And for those that don't know a closed carbon loop means that in theory the fuel that gets burnt puts out no more carbon than it was used to capture it and create it in the first place. So you you effectively don't increase the amount of carbon in the atmosphere, you keep it neutral. Which is different to a zero emission vehicle, which in theory puts out none, apart from the manufacture of the vehicle and the manufacture of the electricity that goes into it. So if we go into where you're really, really interested in Johnson Matthey and yourself, John, the sometimes called the soft underbelly, the non-road mobile machinery
John Goodwin: Right.
Fred Warner: heavy haulage. Do you want to talk a bit about that and its application?
John Goodwin: Yeah, well, at Johnson Matthey we're interested in the full suite. So from cars, vans, trucks, all the way through to non-road and even stationary source emissions. So the rise of AI and data centres needs to be addressed as well. Well, let's take that discussion on another day. For non-road mobile machinery. Yeah, I've used that term before, the soft underbelly of technology neutrality, because quite frankly, what else are you going to do? I mean, you have so many different... applications, everything from a chainsaw to a huge pile driver. They've got so many different jobs to do, different cycles. Could be in different locations where some have infrastructure, grid connectivity, some don't. You could be a farmer in a field where literally the fuel has to follow the machine. If you've got a hundred acre field, then what are you going to do if you need to recharge? It's just not really as simple as that. So The complexity of that sector really lends itself to having to think about technology neutrality and having a range of options open for people to do the jobs that need to be done.
Fred Warner: And I think there's a real consideration, even practically, regardless of getting the electric to such large vehicles, the battery mass sort of destroys the payload and field efficiency of these vehicles. Because what's often required is such high power batteries. I mean, we see BEVs being significantly heavier than their internal combustion counterparts. you can imagine tractors just being stuck in fields. Sunk because the the battery's so heavy and they can't get out of it. is this sort of an area where you think that policymakers understand that the the passenger car and legislation for that is different to transport heavy duty applications. Do you think it's well considered at the moment?
John Goodwin: I certainly hope that they're beginning to understand it better and I think looking at the non-road mobile machinery it's not really on the table just yet because let's say the European Commission have got a plateful at the moment with light duty cars and vans, next up will be trucks and then NRMM. will follow. I think there's definitely lessons that will be learned from cars and vans and the need for flexibilities and adjustments which we've seen there and hopefully will mean getting it right or better first time around when we start to look at NRMM. I think from the people that I've spoken to across the industry and policymakers it is a better understood story. But we need to keep up the message that it's not as simple as cars and vans. There is that complexity there. And we need to listen to the end users in terms of what technologies they need to do the job. Because it's all about getting the job done effectively, sustainably at the right cost. And if there's hang-ups because your machine isn't operating as it should, then that's just going to be a nightmare for anyone who's involved in construction or farming or any other job that you've got to do. So I like to think that they're listening better this time around because of lessons learned on what should be easier to do, cars and vans, but also appreciating the broadness of that sector and the different types of work we have to take on.
Fred Warner: and I suppose again for people listening, you're not on about things like hand tools that can have batteries in them and things like that, which are fairly straightforward. We're talking heavy duty, often involved in construction or farming machines. Some of them can be many, many times my height to all those some of those machines. as an engineer myself, just the sheer complexity of getting enough grid power into the right locations to be able to recharge such devices would be quite a minefield.
John Goodwin: Yeah, and it's potential downtime as well, which is obviously not what we need in areas like construction. There are options, for example, battery swapping and things like that, which might work in some situations. But I would ask questions about the, again, looking back at the critical raw materials demand, for example, if you've got spare battery sitting around to swap so you don't have to stay idle and charge, then that's lot of tied up material as well. could be going into electrifying cars.
Fred Warner: It brings up a project I worked on many years ago, material handling. And that was when I was in hydrogen fuel cell. the end client was let's say one of the large supermarket chains, and we were looking at one of their warehouses, and they have material handlers, so pickers that run around warehouses and they run on battery. And so it's an indoor application, so you wouldn't want to have an internal combustion engine for clean air
John Goodwin: Sure.
Fred Warner: reasons. But in order to keep order pickers running, they had to have this extensive battery you talk about spare batteries and even running material handler pickers around a a warehouse, it was quite an extensive spare battery facility that came with quite a number of challenges and complexities to manage them. And you talk about extra raw
John Goodwin: you
Fred Warner: materials all required to create the products to just keep one thing running. Instead of recharging it, you're not, you're changing batteries and you might have several batteries per item. When you looked at it to say, well, if we could put a at the time it was a hydrogen fuel cell solution in place and change that unit for a hydrogen fuel cell power unit and you drop hydrogen gas on the outside, then the picker can refuel in the same time it takes to swap a battery. But there's no need for quite extensive battery capabilities, the area it takes up and the cost of maintaining all the batteries.
John Goodwin: Absolutely, I'm glad you've mentioned that because it's a really nice case study of how hydrogen fuel cells can be really effective. Sometimes a battery solution might work but for the reasons that you've pointed out, hydrogen fuel cell solution could be really effective in materials handling and we've seen really good examples of where we've even supplied into that.
Fred Warner: sometimes you have to go and see these things with your own eyes to really understand it. so we move out of the the non-road mobile machinery, which I can completely imagine is very difficult to imagine it all being battery electric vehicle. Then you move into haulage and logistics, and I've had enough exposure to it to know that they run on very fine margins. It's a very very volume driven industry. And I do worry that unthought legislation if it's not thought through for logistics in haulage which we know there's loads of it on the road. We all see enough lorries on the road to think it would be great to see them being cleaner. But if they were a battery-electric vehicle, not only would the upfront cost be very prohibitive for logistics firms, but the the downtime piece of lorries sat around in service stations, assuming that you could get enough. electricity from the grid to recharge all of the queues of lorries that would be there waiting for a recharge. As an engineer it boggles the brain in terms of comparing that to hybridising,
John Goodwin: Yeah.
Fred Warner: diesel hybrids with batteries to take on, regenerative braking, all the kinds of things that we see in the passenger cars being applied to trucks.
John Goodwin: Yeah, absolutely. I don't think either of us are saying that there isn't a place for battery electric trucks. I think there definitely will be. But at the moment, yes, they are limited in a number of ways, as you've just pointed out. Potentially on range as well, if you've got a long haulage delivery mission that's got a very heavy payload, perhaps that's not quite the right technology option for you today, or perhaps not even for some years. looking at other options and embracing them in terms of the renewable fuels aspect again, where the clean hybrid truck would be a way around that, and also hydrogen fuel cell trucks as well. mean, going back to hydrogen again, the main issue about that, especially comparing Europe and the UK, is the commitment to actually have refueling stations for hydrogen. Europe I think there's a couple hundred maybe 300 or so which is helped by the AFIR the alternative fuels infrastructure regulation. In the UK I think I count them probably on one hand or two hands if I'm being generous. So what's going to happen if we have a hydrogen truck in Europe that wants to deliver to the UK it's going to be an extremely difficult thing. to do and again in terms of technology neutrality and making it work across where you want to deliver and export things that's another dimension to think about. But I think with trucks this is being looked at a little bit more sensibly we see in Europe that the original legislation got to 2040 and it stopped at a sort of 90 % CO2 reduction so it still had a role to play for traditional combustion engine trucks and hybrids. It's likely that that's going to get reviewed in my view. So after we've got through the light duty review on CO2, there will be a call or there are calls actually to bring forward the review for trucks as well. So it will be interesting to see how the commission would look to reshape that. And then in the UK, there was a consultation which closed earlier this year and we're still waiting for the government response to it. but they're looking at how to best decarbonise the heavy goods vehicle sector as well. And there's a range of things that they're looking at. One is another zero emissions vehicle mandate, for example, and another is potentially looking at other options and a more CO2-based approach, which would match up quite nicely with the European Union, actually.
Fred Warner: it's interesting that you you've got all the information on that, John. And I know when I saw the SMMT conference the the CEO of Ford was very much talking about the vans and saying that round town, battery electric vehicles work perfect and they're very easy for people to adopt. But users that go further afield really struggle with range on vans and it becomes a real issue having regular downtime during the day, the working day, assuming they can
John Goodwin: Yeah.
Fred Warner: get a charger And and then it means people just don't adopt it because why would you when you could and I know if I was running a company that had vans driving around everywhere and I had to have continuous half an hour down times, I would probably not choose it. So it makes it awkward.
John Goodwin: Yeah, that's an issue. We were speaking about that just the other day with some other OEMs as well. Vans are not just large cars, right? They do very different jobs and downtime is a big deal.
Fred Warner: And of course, payload compromise because the battery's so heavy the vehicle payload is then reduced often as well, which impacts it too. So moving on then. let's talk about this last 10% problem. So you know, even if our mandates get to sort of 80-90% CO2 reduction, and we've got some difference between the EU where they're at and where they're thinking of going and where the UK is at, and we don't know quite what's going to happen. the last ten to twenty percent normally becomes the hardest. It's it becomes the impossible. And is it realistic to even debate getting in there?
John Goodwin: Well, that's why I think the EU is taking a bit more of a pragmatic approach here in terms of cars and vans CO2. The new proposal is a 90 % reduction by 2035 instead of 100. But that 90 % doesn't come for free in terms of the proposal. You have to make up for the difference in terms of green steel and low carbon renewable fuels, which actually points to the beginnings of a embracing a life cycle type approach, is a good thing. So I think there's recognition there that yes, that last squeeze to decarbonise is going to be tricky and we need to really open up the options in terms of how we achieve it. In the UK, it's not quite the same story. So the ZEV mandate is up for review. But what isn't being reviewed is effectively the ambition dates. So the 2030 dates to move away from pure ICE, I think is still pretty rigid. And the 2035 ambition, although the actual legal legislation doesn't go out to 2035, the ambition is still there to move away from all ICE and go ZEV only from 2035. So... That's quite a big difference between the UK and the EU's direction at the moment. And if you look at the UK, if we do hold on to that ambition in 2035 and don't bring in any flexibility for other technologies beyond that date, it does put the UK in a bit of a standalone position globally. Compare it to other key auto manufacturing nations, the US, for example, have an open approach. Chinese, they have what we call a new energy vehicle approach, yes, led by BEVs, but also embracing hybrids and plug-in hybrids. And then Japan, Korea also are taking hybrids on the journey as well. And then what I've just said about the EU, so it puts the UK in a bit of isolation. And potentially with the battery electric vehicle story as well, a bit of a risk in terms of the supply chains, which we might talk about. a little bit later on, it's, put your supply chains in a bit of a geographically concentrated or geopolitically exposed potentially situation.
Fred Warner: we'll go into the supply chains now actually because we're gonna go into talk about this whole well to wheel life cycle of a vehicle, which you you just mentioned a moment ago. And let's talk about the supply chains in terms of how you see it for the UK and the threat of the 100% ZEV mandate versus the EU and the global picture here, because it's very easy for people to sit in a world where they think, well, it's only it only my own country matters and everyone else. it it doesn't matter what's going on, but we're all affected by what other places are doing, either in the prices we pay, what's available to us. So when we talk about supply chain, what what do you really see happening?
John Goodwin: Sure. So I think in terms of the supply chains, comes back to the benefits of technology neutrality. And the one that I like to talk about is on critical raw materials. So if we talk about on a battery electric vehicle, the basket of lithium, cobalt, nickel, for example, and more metals within, there's about, according to a study we did with the... International Energy Agency and FVV, about 145 kilograms for an average passenger car of those types of materials for a BEV. If you look at a combustion engine vehicle, it's 33. So you've got 145 kilograms of that basket of metal vs 33. So there's quite a big demand there. And if we look beyond... cars and vans because it's not just automotive that we need batteries for, We need it for the infrastructure. We need it for grid upgrades and connectivity. We need it for storage solutions, backup power. We need it for the rise of data centres and AI. So there's all of this international need for the growth of needing batching materials. And it's going to provide some potential shortcomings. or certainly bottlenecks of those materials. If we look at a battery electric truck, I understand there's about half a tonne of copper needed for a battery electric truck. And there's going to be huge demands on copper as well. I think it's estimated that by 2035, there's going to be about a 30 % shortfall in the demand versus the supply of copper. So... All of those things add up to, in my view, at the very best, some difficult bottlenecks or at the worst, shortcomings in supply. And if you have different technologies to play a role, it takes the pressure off. I call it a pressure release valve of those critical raw materials because they don't have as big a demand, but they can still help you decarbonise. So it's moving together in a more strategic... way forward in terms of looking at those metals and getting them to the right places for what we need to decarbonise, yes transport but other sectors too.
Fred Warner: and would you say you're seeing that potential shortfall being well considered and plugged, or at this point you would say it's it's a shortfall, plain and simple in your view?
John Goodwin: Yeah, there's different views on it. I don't think there's an argument that there's not enough stuff in the ground. But opening up a new copper mine is going to be, 15 to 17 years? It doesn't happen overnight. So perhaps in terms of the geology globally, we could get there. But it's the pace of the demand versus what can be supplied, which is why I say bottlenecks at best, shortcomings at worst.
Fred Warner: when you speak to the amount of precious metals and precious earth minerals used in battery electric vehicles versus ice counterparts or hybrid counterparts, it is quite alarming. It doesn't mean much to probably the lay person. It they probably if they heard that they'd probably think, you know, it it doesn't matter. But when you're talking at scale and then you're talking globally, it is quite a significant difference in more difficult to process and get hold of minerals and and items that you can see a supply chain being either a bottleneck if if everybody achieves their goals or the costs going through the roof and creating another knock-on effect in terms of does it just help people stay in their older cars even longer? you just get into the point where this used car market just becomes a bit like Cuba, you know, where they couldn't get any new cars and they've kept all the cars running for the last sixty years, you know, you do wonder sometimes if that's where we're heading towards, which would be a terrible thing. so I'm really interested to talk a bit then about the well to wheel. as much as people talk about a BEV being better for the environment after around about ten to twelve thousand miles on the road, or they're the numbers I've I've heard, they're maybe more refined ones than that. do people consider the hybrid and the neutral technologies and the e fuels and the synthetic fuels out there? And I've not seen huge amounts of it. People compare an internal combustion engine or a diesel or a petrol car to B E
John Goodwin: Yeah.
Fred Warner: V, but where's the other comparisons?
John Goodwin: Yeah, mean life cycle analysis is really important but also pretty difficult because your version of it might be very different to mine. Did you consider clean electricity or grey electricity and so on? it also depends on where you begin the analysis from cradle to grave. You mentioned as the vehicle or are you just looking at it from a little bit broader than just tailpipe? I think looking beyond tailpipe is important. for us to do. And there are some good studies out there. The Association for Emissions Control and Climate, of which Johnson Matthey are members have put out some studies there, which compare battery electric vehicle to a hybrid vehicle running on sustainable neutral fuels. And we can see a good sense of parity there when you look at it over that sort of life cycle view. So you can get a study which will show you with reasonable considerations that they're not actually too far apart sometimes when you look at some of the technologies if you put the right fuel into a hybrid vehicle.
Fred Warner: I'd be interested to see that study Is that available publicly? Yeah,
John Goodwin: Yeah, is.
Fred Warner: I'll have to look that one up. I'll remember that one. Thank you, John. So so there is some parity that can be drawn from a supply chain point of view as well as life cycle on the e-fuels. how do we get it being considered more widely that it's not just what comes out of the tailpipe, it's the whole ecosystem that goes to creating the car, which includes all the minerals and materials that come out of the ground to be in process to being supplied, right through to then the recycling and the post-life effects, which we all know in Europe. we turn a little bit of a blind eye to any recycling done not in Europe doesn't count. Or it certainly feels like that, and it can go to another country and I won't mention any countries' names, but and whatever the hell they do with them, it doesn't matter to Europe because we've managed to offload it to a recycler.
John Goodwin: Yeah, I mean that is a thing but I think in terms of recycling Recycling of battery materials is still relatively nascent, for example, compared to what I can definitely speak to, the platinum group metals, which has been well established over decades. It's entrusted supply chains and we've now got this really good above ground source of platinum group metals. We have what we call urban mines that have really good circularity as well. About 60 % of... all products made with platinum group metals are from recycled metal. So that's a really positive story. when we have those metals available and we can use them in hybrid vehicles, can use them in fuel cell electric vehicles where you don't have the same dependency of the battery electric vehicles and the battery material demand. So again, it comes back to the story as if you have optionality. in terms of the tech neutrality story. You have optionality on the types of products that people are still allowed to use into the future. It also gives you options in terms of the supply chains and the risk management as you get into more and more demands across the world, across different sectors beyond automotive.
Fred Warner: so as we as we round up this episode, John, and I'd like to think about the dependency on battery electric vehicles if the UK sticks with its mandate and what that means for jobs in Europe, dependency on places like China for the materials. Some people would argue that actually being totally dependent on other nations for your products is concerning, especially at a time it's The world looks a little uncertain compared to what it did ten years ago. what do you think to all that?
John Goodwin: Yeah, well, that's a big question to finish on, Fred. And I think, yeah, recent news stories haven't been too positive, have they, about jobs and job cuts in the automotive sector, unfortunately. I do know that when this has been looked at by some organisations, there's an organisation called CLEPA in Europe. They are effectively Automotive Supplier Network, the voice of the automotive suppliers in Europe. They have done studies in the past that show specifically that if you have a technology neutral approach, it does preserve, if not even create more jobs in the EU versus moving towards a zero emissions vehicle only approach. So maybe that's another study I should flag to you after this.
Fred Warner: Yeah, indeed. Indeed. Well, John, thank you so much for joining me on Future Engineering Bets. It's been an absolute pleasure. how can people find you if or find out what Johnson Matthey do?
John Goodwin: Yeah, look me upon LinkedIn personally I'm reasonably active on there about most of the things we've talked about and to find out more about Johnson Matthey Yeah, contact me personally or look at matthey.com everything you need is there
Fred Warner: Fantastic. Well thank you so much for joining me. You've been listening to Future Engineering Bets where we talk about advanced engineering and capital allocation. And I'll see you all in the future.
