Integrating Carbon Pricing Mechanism in Use-Stage Life Cycle Costs for Automotive Sector and Green Heavy-Duty Vehicles
DOI:
https://doi.org/10.56532/mjsat.v5i1.377Keywords:
Carbon Pricing , Life Cycle Costing (LCC) , Initial Cost , Operation & Maintenance, SustainabilityAbstract
The automotive industry is undergoing a significant transformation towards environmental sustainability, driven by the urgent need to mitigate climate change. Green heavy-duty vehicles have emerged as a promising solution to reduce the environmental impact of transportation, particularly in the freight and logistics sectors. Life cycle costing is a well-established method for assessing the total cost of ownership of assets, but it traditionally overlooks environmental externalities. This paper investigates the integration of carbon pricing into LCC analysis, focusing on its implications for GHDVs. The study examines the impact of carbon pricing on three key cost components during the use phase of GHDVs: initial costs, operation and maintenance costs, and salvage value. By incorporating carbon costs across all stages of the vehicle lifecycle—manufacturing, operation, maintenance, and disposal—the research develops a comprehensive framework for evaluating the financial viability of GHDVs in a carbon-constrained environment. The findings of this study provide valuable insights for policymakers and industry stakeholders in Malaysia, supporting the nation's transition towards a low-carbon transportation system and its ambitious net-zero targets. Integrating carbon pricing into LCC analysis can incentivize the adoption of low-emission technologies and contribute to a more sustainable and environmentally responsible automotive industry.
References
V. Arulnathan, M. D. Heidari, M. Doyon, E. P. H. Li, and N. Pelletier, "Economic Indicators for Life Cycle Sustainability Assessment: Going beyond Life Cycle Costing," Sustainability, vol. 15, no. 1, 2022, doi: https://doi.org/10.3390/su15010013.
K. M. Raini and H. S. Hamzah, "Green Financial Model for Heavy-Duty Commercial Vehicle," International Journal of Academic Research in Business and Social Sciences, vol. 14, no. 1, 2024, doi: https://doi.org/10.6007/IJARBSS/v14-i1/20570.
M. Pichler, Krenmayr, Nora Schneider, Etienne Brand, Ulrich, "EU industrial policy: Between modernization and transformation of the automotive industry," Environmental Innovation and Societal Transitions, vol. 38, pp. 140-152, 2021, doi: https://doi.org/10.1016/j.eist.2020.12.002.
J. F. Lampón, "Efficiency in design and production to achieve sustainable development challenges in the automobile industry: Modular electric vehicle platforms," Sustainable Development, vol. 31, no. 1, pp. 26-38, 2022, doi: https://doi.org/10.1002/sd.2370.
S. B. Ian Parry, and Karlygash Zhunussova, Carbon Taxes or Emissions Trading Systems? Instrument Choice and Design (IMF | Staff Climate Notes). 2022.
L. F. Yuaningsih, R. Adjeng Mariana Ahmad, Munawar Javed, "Examining the Factors Affecting Co2 Emissions from Road Transportation in Malaysia," International Journal of Energy Economics and Policy, vol. 11, no. 6, pp. 152-159, 2021, doi: https://doi.org/10.32479/ijeep.10957.
I. International Energy Agency. "Global CO2 emissions by sector,2019-2022, IEA, Paris." https://www.iea.org/data-and-statistics/charts/global-co2-emissions-by-sector-2019-2022 (accessed.
J. Li, L. Gao, X. Hu, J. Jia, and S. Wang, "Effects of personal carbon trading scheme on consumers' new energy vehicles replacement decision: An economic trade-off analysis," Environmental Impact Assessment Review, vol. 101, 2023, doi: https://doi.org/10.1016/j.eiar.2023.107108.
J. Furch, V. Konecny, and Z. Krobot, "Modelling of life cycle cost of conventional and alternative vehicles," Sci Rep, vol. 12, no. 1, p. 10661, Jun 23 2022, doi: https://doi.org/10.1038/s41598-022-14715-8.
State and Trends of Carbon Pricing 2023.
E. Environmental Protection Agency. "Fast Facts on Transportation Greenhouse Gas Emissions. Green Vehicle Guide." https://www.epa.gov/greenvehicles/fast-facts-transportation-greenhouse-gas-emissions (accessed.
T. M. Bachmann, J. van der Kamp, M. Bianchi, H. Pihkola, and M. Saavedra del Oso, "Life cycle costing as part of a life cycle sustainability assessment of products: methodology and case studies," The International Journal of Life Cycle Assessment, 2024, doi: https://doi.org/10.1007/s11367-024-02347-1.
E. A. Alasmari, Abdulaziz Martinez-Vazquez, Pedro Baniotopoulos, Charalampos, "Enhancing Life Cycle Costing (LCC) in Circular Construction of Buildings by Applying BIM: A Literature Review," in Creating a Roadmap Towards Circularity in the Built Environment, (Springer Tracts in Civil Engineering, 2024, ch. Chapter 33, pp. 407-417.
The European Commission's proposed CO2 standards for heavy-duty vehicles (2018)
A. Alonso-Villar, B. Davíðsdóttir, H. Stefánsson, E. I. Ásgeirsson, and R. Kristjánsson, "Technical, economic, and environmental feasibility of alternative fuel heavy-duty vehicles in Iceland," Journal of Cleaner Production, vol. 369, 2022, doi: https://doi.org/10.1016/j.jclepro.2022.133249.
D. Department of Energy and Climate Change. "Definition and Specifications." https://afdc.energy.gov/laws/9218#:~:text=An%20alternative%20fuel%20is%20defined,or%20a%20synthetic%20transportation%20fuel.
M. S. Endiz, "A Comparison of Battery and Hydrogen Fuel Cell Electric Vehicles for Clean Transportation," Orclever Proceedings of Research and Development, vol. 2, no. 1, pp. 10-17, 2023, doi: https://doi.org/10.56038/oprd.v2i1.230.
R. V. J.Marcinkoski, J.Kast, A.Duran, "Driving an Industry: Medium and Heavy Duty Fuel Cell Electric Truck Component Sizing," World Electric Vehicle Journal, vol. 8, no. ISSN 2032-6653, 2016.
L. K. Huang, Guri Johansen, Fred Liu, Yongping Zhang, Xiaoling, "Carbon emission of global construction sector," Renewable and Sustainable Energy Reviews, vol. 81, pp. 1906-1916, 2018, doi: https://doi.org/10.1016/j.rser.2017.06.001.
L. D. Cui, Ruxue Mu, Yunguo Shen, Zhiyang Xu, Jiatong, "How policy preferences affect the carbon shadow price in the OECD," Applied Energy, vol. 311, 2022, doi: https://doi.org/10.1016/j.apenergy.2022.118686.
J. Ali, "Road map for sustainable and effective carbon pricing: bridging the gap of realities and ambitions," Environ Sci Pollut Res Int, vol. 30, no. 41, pp. 94070-94080, Sep 2023, doi: https://doi.org/10.1007/s11356-023-29034-2.
T. C. N. Princz-Jakovics, Noémi Pálvölgyi, Tamás, "Comprehensive assessment of the carbon neutrality actions from the automotive sector," Environment, Development and Sustainability, 2023, doi: https://doi.org/10.1007/s10668-023-04274-x.
S. W. Nakano, Ayu, "A Study on Energy Tax Reform for Carbon Pricing Using an Input-Output Table for the Analysis of a Next-Generation Energy System," Energies, vol. 15, no. 6, 2022, doi: https://doi.org/10.3390/en15062162.
Y. I. Nurhayati, Said, M. Yasir and M. H. Yanova, "Carbon Pricing Policy to Support Net Zero Emission: A Comparative Study of Indonesia, Finland and Sweden," Environmental Policy and Law, vol. 54, no. 1, pp. 53-63, 2024, doi: https://doi.org/10.3233/epl-230047.
X. R. Zhu, Minglun Wu, Guangdong Pei, Jun Pardalos, Panos M., "Promoting new energy vehicles consumption: The effect of implementing carbon regulation on automobile industry in China," Computers & Industrial Engineering, vol. 135, pp. 211-226, 2019, doi: https://doi.org/10.1016/j.cie.2019.06.004.
Á. F. Jose L. Arroyo, M. Teresa Ortuño Gregorio Tirado, "Effectiveness of carbon pricing policies for promoting urban freight electrification: analysis of last mile delivery in Madrid," Cent Eur J Oper Res 28, 1417–1440 (2020), 2020, doi: https://doi.org/10.1007/s10100-019-00627-y.
H. L. Yuanyuan Liu, Huihui Wang, Yuanqing Wang and Shuang Han, "Integrated Life Cycle Analysis of Cost and CO2 Emissions from Vehicles and Construction Work Activities in Highway Pavement Service Life," atmosphere, 2023, doi: https://doi.org/10.3390/atmos14020194.
P. Yadav, K. Kanjilal, A. Dutta, and S. Ghosh, "Fuel demand, carbon tax and electric vehicle adoption in India's road transport," Transportation Research Part D: Transport and Environment, vol. 127, 2024, doi: https://doi.org/10.1016/j.trd.2023.104010.
D. M. Muhammad Saad Amjada, Sohan Nagaraja, and Nancy Diaz-Elsayeda, "Integrating Carbon Credits with Life Cycle Costing for Economic Sustainability in SMEs," Procedia CIRP 116 (2023) 672–677, 2023.
L. L. P. Kjær, Aris Hauschild, Michael Birkved, Morten Schmidt, Jannick H. McAloone, Tim C. , "From LCC to LCA Using a Hybrid Input Output Model – A Maritime Case Study," Procedia CIRP, vol. 29, pp. 474-479, 2015, doi: https://doi.org/10.1016/j.procir.2015.02.004.
A. S. Ključnikov, Dominika & Pacana, Andrzej & Lacko, Ján., "Life cycle assessment (LCA) of heavy vehicles used in the mining industry," Acta Montanistica Slovaca, vol. 28, no. v28/i3, pp. 553-565, 2023, doi: https://doi.org/10.46544/AMS.v28i3.03.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 K.M. Raini, H.S. Hamzah
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
