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Toyota's most significant environmental impact is energy consumption. Our manufacturing plants consume electricity and natural gas to produce vehicles. The logistics operation consumes diesel to transport vehicles and parts across North America. And customers consume gasoline to drive Toyota, Lexus and Scion vehicles millions of miles a year.

Energy in all its forms is expensive—and getting more so every year—and its generation and use can be major contributors to greenhouse gas emissions. Toyota established targets five years ago in our environmental action plan to reduce energy consumption at all stages of the vehicle life cycle. While we missed some of these targets, we still found ways to reduce energy use throughout the business.

Toyota's employees implemented numerous kaizens, or continuous improvement opportunities, to reduce energy use at manufacturing plants and logistics sites. They also went into their communities to help local governments and others find ways to reduce energy use. For example, Toyota formed community partnerships with Scott County and the city of Georgetown in Kentucky to help develop energy management plans; please see the Environmental Vision and Action chapter for more information.

We moved our advanced technology vehicle programs forward by continuing our demonstration programs for fuel cell, electric and plug-in hybrid vehicles. One of our partners, Portland State University, is featured below. Our partnership with the university illustrates the broad range of issues that needs to be addressed to achieve sustainable mobility. The university is helping us gather information on the performance of our advanced technology vehicles; they are also using these vehicles to create coursework around urban planning and integrated transportation modes and fostering discussion in the broader community through seminars and conferences. It is this holistic approach that will lead to solutions for achieving sustainable mobility in North America.

Toyota's performance in the areas of fuel efficiency, advanced vehicle technologies, energy use and greenhouse gas emissions is described in this chapter.

PARTNERSHIP:
PORTLAND STATE UNIVERSITY
Portland State University (PSU) has a small but growing teaching curriculum focused on electric vehicles through their College of Engineering and Computer Science, along with a Smart Grid course offered by the College of Urban and Public Affairs. PSU's Urban Center has served as a launch site for vehicles from Toyota and some of our competitors. The Urban Center is in the heart of Portland's transportation electrification triangle, showcasing the integration of urban design and urban planning with integrated transportation modes involving streetcars, light rail trains, buses, passenger vehicles, bicycles and wide pedestrian boulevards.

In 2008, PSU co-produced Toyota's Meeting of the Minds: Transportation at the Crossroads, a three-day executive colloquium in Portland. Shortly thereafter, Toyota loaned four first-generation RAV4 EV vehicles to PSU for university use. PSU is also one of Toyota's program partners for its Prius plug-in demonstration program. The University deployed eight vehicles to demonstration drivers in Portland, Salem, Corvallis, Eugene and Ashland, as well as two vehicles to the car sharing service Zipcar.

FUEL EFFICIENCY
Fuel efficiency is the distance a vehicle can be driven on a certain amount of fuel, measured in the U.S. as miles per gallon (mpg). Fuel consumption is the quantity of fuel burned over a defined distance, and in Canada is measured as liters of fuel burned per 100 kilometers traveled (L/100 km). The amount of fuel burned is directly related to emissions of carbon dioxide (CO2), a greenhouse gas: The more fuel burned, the more CO2 emitted.

Through the 2011 model year, fuel efficiency of new vehicles has been regulated by Corporate Average Fuel Economy (CAFE) standards in the U.S. In Canada, voluntary Company Average Fuel Consumption (CAFC) targets were in place through the 2010 model year. (Beginning with the 2011 model year, mandatory regulations are in place. See the discussion on New Fuel Economy and GHG Emissions Standards below.) Both CAFE and CAFC are sales-weighted averages of the fuel economy of a manufacturer's fleet.

Toyota offers the most fuel-efficient fleet of any full-line manufacturer. As seen in Figure E, Toyota has been performing better than CAFE standards and CAFC targets for both passenger cars and light trucks, and better than the industry average. (Target 1.1) Our CAFE and CAFC performance is driven by higher volume sales of our most fuel-efficient vehicles, such as Prius and Corolla. Since it was introduced in the U.S. in 2000, Prius, when compared to the average car, has saved American consumers more than an estimated 900 million gallons of gas, $2.5 billion in fuel costs and 14 million tons of CO2 emissions.

Figure E CAFE and CAFC charts

To achieve these results, we are continuing with the development and deployment of fuel-efficient technologies. (Target 1.2) Toyota's engineers evaluate body design, engines, transmissions, vehicle weight and other factors to find ways to improve fuel efficiency. For example, over 50% of the vehicles offered in North America use low viscosity SAE 0W-20 multigrade engine oil. This low viscosity oil enables increased fuel economy over higher viscosity oils by reducing friction while maintaining necessary lubrication in the engine. These fuel-efficient technologies also help to reduce CO2 emissions from Toyota's fleet (please see Figure F).

Figure F Annual CO2 per Kilometer

New Fuel Economy and GHG Emissions Standards
For nearly 30 years, new vehicle fuel economy standards in the U.S. have been established by the National Highway Traffic Safety Administration (NHTSA). These standards also have been adopted in Canada, with minor adjustments to fit the Canadian market. Beginning with the 2009 model year, the regulatory landscape became more complex, as the California Air Resources Board (ARB) began regulating greenhouse gas (GHG) emissions from new vehicles sold in California. Over a dozen other U.S. states subsequently adopted the California GHG standards. And finally, as a result of the Supreme Court decision in Massachusetts vs. EPA, the U.S. Environmental Protection Agency (EPA) began developing GHG regulations for new motor vehicles at the federal level. The result was an inefficient and complicated set of overlapping regulations at the federal and state level.

In April 2010, as a result of an agreement between regulators and auto makers, EPA, NHTSA and ARB finalized a coordinated national program for fuel economy and GHG emissions standards for passenger cars and light trucks in the U.S. This agreement greatly reduced the complexity of the regulations while preserving environmental benefits. These requirements cover the 2012 through 2016 model years. By 2016, the new vehicle fleet must meet a GHG standard of 250 grams of CO2 per mile (equivalent to a CAFE standard of 35.5 miles per gallon).

Toyota in Canada supports a harmonized approach with the U.S. to setting fuel consumption standards. The Canadian federal government introduced a fuel consumption regulation under the Canadian Environmental Protection Act for the 2011 through 2016 model years that contains requirements similar to the CAFE standards adopted in the U.S.

The process of developing these standards is an example of how government and industry can work together. It illustrates one of the cornerstones of how Toyota approaches public policy—through partnerships. EPA and NHTSA have worked closely with auto manufacturers, the state of California, environmental groups and other stakeholders to craft a national approach that will achieve significant reductions in energy consumption and GHG emissions.

Toyota supports the agencies' commitment to maintaining a single national framework for fuel economy and vehicle GHG regulation beyond 2016. In fact, in August 2011, Toyota joined other auto makers in support of extending the strong national fuel economy and GHG program to cover the 2017 to 2025 model years. Final standards for this time period are expected to be finalized by mid-2012. Toyota in Canada continues to support harmonization between the two national programs. Toyota's approach to advanced technology and the work done through partnerships on alternative transportation fuels—both discussed later in this chapter—will be instrumental to our success in meeting these new standards.

FUELS DIVERSITY
The diversity of transportation fuels plays a key role in helping countries realize their energy security and greenhouse gas reduction goals. Alternatives to traditional gasoline and diesel fuels, such as ethanol, biodiesel, natural gas and electricity, are already in the marketplace in many parts of the world. Others, like hydrogen, cellulosic ethanol, biohydrocarbons and various synthetic fuels, are on the horizon. Although beneficial in many ways, fuels diversity challenges global auto manufacturers to design and build competitive vehicles with vastly different powertrains and operating characteristics. A number of Toyota's advanced technology vehicles are designed to use alternative fuels such as electricity and hydrogen (please see Figure G).

Figure G Energy Sources for Toyota's Adv Tech Vehicles

To help stakeholders better understand the benefits and challenges of fuels diversity, Toyota is participating in a National Petroleum Council study that will result in a report on the prospects of future transportation fuels through 2035, with views to 2050, for auto, truck, air, rail and waterborne transport. The study, requested by the Secretary of the Department of Energy, has four main objectives:

• Address fuel demand, supply, infrastructure and technology in the context of U.S. objectives to protect the environment, promote economic growth and competitiveness, and support energy security.
• Describe accelerated technology pathways to improved fuel efficiency, reduced environmental impact and deployment of alternative fuels at scale.
• Deliver insights into potential policy options and investments that industry and government can take to accelerate the acceptance of alternative fuels, engines and vehicles.
• Describe actions that industry and government can take to stimulate the technological advances and market conditions needed to reduce life-cycle GHG emissions in the U.S. transportation sector by 50% by 2050 relative to 2005 levels, while enhancing the nation's energy security and economic prosperity.

Biofuels
Toyota is also monitoring biofuel R&D and production scale up (Target 2.1). Last year, approximately 13 billion gallons of corn ethanol were blended with gasoline in the U.S., reducing gasoline consumption by about nine percent. This is a significant accomplishment, but raises concerns about using a food crop for fuel. Developing processes that can produce fuels from nonedible plants or agricultural residue avoids these concerns and is the goal of researchers around the world. Researchers are working on producing alcohols from cellulose, and gasoline or diesel from biomass, sugars or algae. Currently, a number of these biofuel processes have been shown to work on a small scale. The challenge has been to demonstrate economic viability at a commercial-scale fuel facility (over 100 million gallons per year). Toyota believes initial commercial application for these processes will be biochemicals or bioproducts, because they are more profitable and require lower cost production facilities than fuels. As a result, ethanol from corn and sugar cane will continue to account for the majority of the world's biofuel production.

Toyota strongly supports the development of alternative fuels to help reduce dependence on foreign oil and potentially reduce vehicle emissions. However, along with many other automobile manufacturers, Toyota is concerned about the U.S. Environmental Protection Agency (EPA) waivers approving use of E15 for model year 2001 and newer vehicles that were not designed to operate on this level of ethanol. This is why Toyota, as a member of the Alliance of Automobile Manufacturers, has joined with other engine producers to oppose EPA's E15 waiver decisions.

Toyota recognizes that ethanol and other renewable fuels will continue to play an important role in U.S. energy policy. But, rather than pursue a retrospective solution that carries substantial risks for consumers, automakers, equipment makers and fuel providers, we need a prospective solution that provides adequate lead time for vehicle development, fueling infrastructure modifications and misfueling prevention measures. In support of this notion, and to avoid a continually moving target, Toyota stands ready and willing to develop vehicles capable of operating on higher levels of ethanol, provided the issues of lead time, infrastructure and misfueling are addressed.

We welcome the opportunity to work with key stakeholders in Congress, the regulatory agencies, the auto industry, the fuel industry and others to examine a practical pathway forward that would introduce midlevel ethanol blends into the market, while being mindful of vehicle and infrastructure compatibility.

ADVANCED TECHNOLOGY VEHICLES
Toyota's approach to sustainable mobility focuses on the world's future reliance on mobility systems tailored to specific regions or markets, rather than individual models or technologies. We acknowledge that one technology will not be the "winner" and that a mobility system in Los Angeles will probably look very different from systems in Dallas, New York, London or Shanghai. That's why Toyota is investing in a number of advanced technology vehicles and is rolling out conventional hybrids across our entire lineup, as well as plug-in hybrids, electric vehicles and fuel cell hybrid vehicles. Please see Figure H for significant milestones in the development of advanced technology vehicles.

Figure H Advanced Technology Vehicle Milestones

We continue to work with government agencies and other partners to address a number of key challenges associated with full-scale commercialization of advanced technology vehicles. (Target 2.2) Toyota also continues to participate in and support SAE's Committee on Safety Standards and SAE's Fuel Cell Safety Working Group. We contributed to the drafting of two technical papers on FCHV safety. The first paper, SAE J2578 (Recommended Practice for General Fuel Cell Vehicle Safety, January 2009), provides introductory mechanical and electrical system safety guidelines that should be considered when designing fuel cell vehicles for use on public roads. The second paper, SAE J2579 (Technical Information Report for Fuel Systems in Fuel Cell and Other Hydrogen Vehicles, January 2009), defines design, construction, operational and maintenance requirements for hydrogen storage and handling systems in on-road vehicles.

Toyota views the current lack of infrastructure for both fuel cell and electric vehicles as one of the greatest obstacles to commercialization. Without convenient places to recharge or refuel, the main stream consumer will be less willing to adopt these advanced technologies. Through the California Fuel Cell Partnership (CaFCP), Toyota is working with government agencies, other auto manufacturers, utilities and other key stakeholders to support the development of necessary infrastructure for these vehicles. Our demonstration programs in North America play a key role in supporting infrastructure development by educating the public and stimulating the development of infrastructure to support deployment of our advanced technology vehicles. (Target 3.1)

Electric Vehicles
Toyota engineers have been studying electric vehicles (EVs) for nearly 40 years. Since the early 1970's, Toyota has made enormous strides in creating a consumer- and environmentally-accepted electric vehicle. To date, Toyota has developed the TownAce EV (van) and the Crown Majesta EV (sedan) in the Japanese market, the Toyota e-com (a two passenger concept EV) and two generations of the RAV4 EV in the U.S. market. Alongside the company's ground-breaking hybrid, plug-in hybrid and fuel cell vehicles, EV technology represents another component of the company's long-term vision for sustainable mobility.

Toyota debuted the second-generation RAV4 EV, the RAV4 EV Prototype-Phase Zero, at the Los Angeles Auto Show in November 2010. This vehicle was built as part of a collaboration between Toyota and Tesla Motors, Inc. on the development of electric vehicles, parts, production systems and engineering support.

Photo of RAV4 electric vehicle
Toyota is collaborating with Tesla Motors, Inc. on the development of a RAV 4 electric vehicle. The fully-engineered vehicles will be built at our facility in Woodstock, Ontario, and will be brought to market in the U.S. in 2012.

A total of 31 RAV4 EV Prototype-Phase Zeros were built for a demonstration and evaluation program running through 2011. These demonstration vehicles utilize the current RAV4 vehicle built in Woodstock, Ontario, and integrate a lithium metal oxide battery pack and additional components built by Tesla at its facility in Palo Alto, California.

The purpose of the EV demonstration program is to educate the public about electric vehicle technology and promote the development of electric vehicle charging infrastructure. The customer experience has been a major focus from the beginning. In April 2011, Toyota held a "ride and drive" event at its annual Sustainable Mobility Seminar in La Jolla, California, providing the media with its first opportunity to drive these prototype vehicles.

Toyota's end goal for the RAV4 EV has been a vehicle with driveability characteristics as close to the conventional RAV4 as possible. The fully-engineered vehicle will target a real world driving range of 100 miles in a wide range of climates and conditions, produce zero emissions and is planned for launch in 2012.

EV limitations, such as recharging time and limited range, continue to be barriers for consumers' willingness to consider the technology. While some consumers are willing to accept these limitations for the vehicle's smooth electric drivetrain and zero tailpipe emissions, this is only a small percentage of the market. EVs will be one option in our portfolio of advanced technologies, but not the solution for every customer.

Hybrid Vehicles
Toyota introduced Prius, the first mass-produced gasoline-electric hybrid powertrain vehicle, to the global market in 1997. Toyota sees hybrid technology as a stepping stone to minimizing the environmental impacts of gasoline-powered vehicles. Ultimately, we believe hybrid technology is the foundation of future powertrains that can utilize a wide variety of energy sources and fuels, including hydrogen, biofuel, natural gas and electricity.

Toyota celebrated the sale of the one millionth Prius in the United States in April 2011. This is the third milestone for Toyota's hybrid lineup in the last year that started with the announcement of worldwide Prius sales topping two million in October 2010, and overall global Toyota hybrid sales passing three million in March 2011.

Prius topped both the U.S. EPA's and Natural Resources Canada's lists of the most fuel-efficient vehicles for 2011, and was named the best overall value of the year for the last nine years in a row by IntelliChoice. It has the highest owner loyalty of any midsize vehicle for four of the last five years, according to R.L. Polk.

Toyota debuted the Prius v in January 2011 at the North American International Auto Show in Detroit. Prius v, which goes on sale in the fall of 2011, was the first vehicle to be debuted as part of the Prius Family. It is a midsize vehicle that provides more than 50% additional interior cargo space than the current Prius.

List of hybrid vehicles in Toyota and Lexus fleets.

Plug-In Hybrid Vehicles
As the global leader in hybrid vehicles, it is vital that Toyota expand our hybrid drive technology. A pathway that shows promise to reduce fuel consumption and emissions (including CO2) is the plug-in hybrid vehicle (PHV).

Toyota's PHV offers all the advantages and utility of a conventional hybrid vehicle, plus gives the consumer the ability to drive all electrically and recharge the on-board battery pack from home or any location with an electrical outlet. Depending on the driving profile, regular recharging can reduce gasoline consumption by up to one-third over a conventional Prius, which in turn reduces both mobile source GHGs and criteria pollutants. This is accomplished by adding a modestly larger battery pack to a conventional Prius platform. Drivers can commute to work and complete shorter trips using only electricity, while enjoying the benefits of an efficient hybrid and unlimited driving range for longer trips. The smaller battery approach avoids the additional cost and potential underutilization associated with larger PHV battery systems.

The second-generation PHV is based on the third-generation Prius. With the introduction of a lithium-ion drive battery, the demonstration program vehicle can operate in electric-only mode at higher speeds and for longer distances than the conventional Prius hybrid. This Prius PHV achieves a maximum electric-only range of approximately 13 miles and can reach highway speeds in electric-only mode. For longer distances and higher speeds, the PHV reverts to "hybrid mode" and operates like a regular Prius.

The lithium-ion (Li-ion) batteries powering the second-generation PHVs are built in conjunction with PEVE (Panasonic EV Energy Company, LTD), a joint venture with Toyota. Because of its superior energy density compared to NiMH chemistry, Li-ion technology is a leading contender for the PHV application. But the PHV duty cycle (regular deep discharges) is much harder on a battery than the frequent mild discharges traditional hybrid batteries must endure. In addition, Li-ion batteries have shown sensitivity to extreme hot and cold temperatures. Consumers have come to expect their hybrid vehicle battery will last the life of the vehicle, and Toyota will only bring a PHV to market that will live up to that expectation. Confirmation of the durability of the lithium-ion battery pack is just one of the many aspects that was exhibited during the PHV demonstration program.

Photo of Prius Plug-in Hybrid at charging station
Portland State University is tracking the percentage of time the PHV s are operating in all electric mode. One key benefit of the Prius Plug-in is that the alternative to the electric mode is a conventional hybrid, which is high on fuel economy and low on tailpipe emissions.

PHV Demonstration Program
In late 2009, Toyota began delivery of 600 second-generation PHVs to participants in a global demonstration program. Toyota has placed more than 160 of these vehicles with North American program partners in regional clusters in the U.S. in Colorado, California, New York, Oregon, Massachusetts and Washington, D.C., and in Canada in British Columbia, Manitoba, Ontario and Quebec. Each placement scenario has a variety of "use cases" or driving conditions (e.g., commute length, usage type, access to charging) to gain maximum input on vehicle performance and customer needs.

The goals of the program are to demonstrate plug-in hybrid technology, educate and inform the public, evaluate performance and better understand the technology's benefits to future customers. On the consumer side, this program allows Toyota to gather in-use driving feedback and understand customer expectations for plug-in technology. On the technical side, the program aims to confirm the overall performance of Toyota's first-generation lithium-ion battery technology in a wide variety of real world applications, and encourage further development of public-access charging station infrastructure. This demonstration program will help prepare the market and provide Toyota the opportunity to inform, educate and prepare customers for the electrification of the automobile in general and the introduction of plug-in hybrid technology in particular.

Participants in the demonstration program include,
among others, the British Columbia Institute of Technology, the University of California at Berkeley, Georgetown University,
the California Center for Sustainable Energy, the Port Authority of New York and New Jersey, California's South Coast Air Quality Management District, and Zipcar locations in Boston, San Francisco and Portland. For more information on PHV demonstration program partners, please visit www.toyota.com/esq.

In the spring of 2010, Toyota placed 18 Prius PHVs with Xcel Energy's SmartGridCity™ project in Boulder, Colorado. The vehicles are the focus of an interdisciplinary research project coordinated by the Renewable and Sustainable Energy Institute (RASEI), a joint venture between the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) and the University of Colorado at Boulder. RASEI, Xcel and Toyota are using the program to gather data on vehicle performance and charging patterns, consumer behavior and preferences, and electric utility/customer interactions. The location offers the additional benefit of monitoring high altitude, cold climate performance of Toyota's first-generation lithium-ion battery.

In mid-2011, data from U.S. demonstration program vehicles began streaming to www.toyota.com/esq. As the vehicles gather miles, data such as fuel economy, miles driven, charge incidents and additional content is viewable online. In addition, demonstration partners are sharing data amongst themselves and comparing usage and performance of the vehicles. A sample of the data collected by the California Center for Sustainable Energy is shown in Figure I.

Figure I Plug-in HybridVehicle Usage Data

This in-use, readily available data helps consumers understand how the plug-in hybrid vehicles are being used, how they are performing and if a plug-in is the right vehicle for them. One key benefit of the Prius Plug-in is that the alternative to the electric mode is a conventional hybrid, which is high on fuel economy and low on tailpipe emissions.

Fuel Cell Hybrid Vehicles
Toyota's fuel cell hybrid vehicles (FCHVs) are powered by fuel cells that generate electricity from hydrogen. Hydrogen gas is fed into the fuel cell stack where it is combined with oxygen from air. The electricity produced by this chemical reaction is used to power the vehicle's electric motor and charge the battery. A fuel cell vehicle emits only water vapor; the exhaust contains no particulate matter, hydrocarbons or other pollutants.

Toyota began a lease program for FCHVs in the U.S. and Japan in 2002 with universities and corporate customers. Currently, over 60 FCHVs are in service in California, New York and Connecticut with universities, corporations and government agencies. Toyota has gathered millions of miles of on-the-road information about our FCHVs. For example, we carried out a road test in September 2007 along the Alaska-Canadian (ALCAN) Highway. Driving 2,300 miles (3,700 kilometers) between Fairbanks, Alaska, and Vancouver, British Columbia, the FCHV proved its ability to maintain consistent performance under demanding conditions.

Photo of FCHV on ALCAN Highway
Toyota completed a 2,300-mile trek in an advanced prototype of the new Toyota FCHV along the Alaska–Canadian (ALCAN ) highway. As you can see, the vehicle withstood rough road conditions and severe weather, and performed perfectly.

Since the 2002 introduction of the first-generation FCHV, Toyota engineers have continued to improve the vehicle range, durability and efficiency through advances in the fuel cell stack and the high-pressure hydrogen storage system, while achieving significant cost reductions in materials and manufacturing. The latest FCHV iteration, the FCHV-advanced (FCHV-adv), was introduced in 2008 and boasts an estimated range increase of more than 150% over the first-generation FCHV. The FCHV-adv fuel cell system features four compressed hydrogen fuel tanks, an electric motor, a nickel-metal hydride battery and a power control unit.

Fuel cell vehicles have faced a challenge in cold regions because the water produced in fuel cell operation tends to freeze in the fuel cell stack and auxiliary parts. Toyota has consistently worked to improve cold weather performance of the fuel cell, and the FCHV-adv can start in temperatures as low as -30 degrees Celsius.

Toyota began delivering our latest-generation FCHV-adv to limited test customers in late 2008. To demonstrate the in-use driving range of this vehicle, Toyota conducted a driving range and fuel economy evaluation with engineers from the National Renewable Energy Laboratory and the Savannah River National Laboratory. Two FCHV-adv vehicles were instrumented, filled with hydrogen fuel and driven during a variety of driving conditions on a weekday from Torrance, California, to San Diego, then to Santa Monica and back. Both FCHVs completed the 332-mile (534-kilometer) trip with enough hydrogen left in the tanks to keep going an estimated 100 miles (160 kilometers). Fuel economy on the journey was approximately 68 miles per kilogram of hydrogen (109 kilometers per kilogram). (A kilogram of hydrogen is roughly the same energy equivalent as a gallon of gasoline.)

Photo of FCHV in San Diego
The FCHV –adv was certified in a government field evaluation as having a range of approximately 431 miles on a single tank of hydrogen.

Toyota is deploying more than 100 FCHV-adv vehicles by 2013 with universities, private companies and government agencies in both California and New York as part of a nationwide demonstration program. During this period, additional regions and partners will be added as new hydrogen stations come online. The demonstration program aims to increase awareness of fuel cell technology and spur development of much-needed infrastructure prior to the planned market introduction of the FCHV in 2015.

Development of Hydrogen Infrastructure
Before manufacturers can begin selling fuel cell vehicles in a given region, there must be adequate and convenient hydrogen refueling infrastructure. Japan has committed to building 100 and Germany 500 hydrogen refueling stations by 2015. Hydrogen infrastructure is also growing in the U.S., but additional stations are needed before mass market introduction in 2015.

Ten new fueling stations are planned in California, funded by the California Energy Commission. Through the California Fuel Cell Partnership, Toyota worked jointly with other automakers on recommendations for fuel demand and locations of these stations.

Toyota placed 10 FCHV-adv vehicles in the Connecticut area in the fall of 2010. The vehicles are supporting the new SunHydro solar-powered hydrogen fueling station located at Proton Energy Systems' headquarters in Wallingford, Connecticut. SunHydro is leading the development of hydrogen fueling stations along the East Coast that will make it possible to drive a fuel cell vehicle from Maine to Florida. When completed, the series of SunHydro stations will be the world's first privately-funded network of hydrogen fueling stations.

Photo of two FCHV's
Toyota deployed 12 FCHV s to New York's Port Authority to be used at John F. Kennedy and LaGuardia airports. These vehicles are supported by a hydrogen station at John F. Kennedy Airport.

In May 2011, the first hydrogen fueling station in the U.S. fed directly from an active industrial hydrogen pipeline was opened in Torrance, California. Located adjacent to Toyota's U.S. sales and marketing headquarters campus, the station is a collaborative effort between Toyota, Air Products and Shell, and received funding assistance from the South Coast Air Quality Management District and the Department of Energy. Shell operates the facility, and Air Products provides onsite equipment, station maintenance and hydrogen gas through a pipeline from its plants in Wilmington and Carson, California. The station will be used by Toyota and other manufacturers to fuel hydrogen fuel cell vehicles.

Photo of people with FCHV's
The hydrogen fueling station adjacent to Toyota's U.S. sales and marketing headquarters is fed by an active industrial hydrogen pipeline. The station is used by Toyota and other auto manufacturers to fuel hydrogen fuel cell vehicles.

Shell and Toyota are also working together to establish a learning center at the facility to provide hydrogen and station information to local students and the general public. The opening of the station serves as another landmark in the California Hydrogen Highway initiative, aiming to create clean air solutions and develop new technology jobs across the state.

To further utilize the hydrogen pipeline, Toyota is partnering with Ballard Power Systems to install a one-megawatt hydrogen fuel cell generator to offset peak electricity demand on its Torrance campus. The fuel cell is scheduled for installation in 2012 and is estimated to reduce annual CO2 emissions by 10,000 tons.

Toyota's partnerships with Shell, Air Products and Ballard on hydrogen infrastructure and stationary fuel cell technology illustrate our commitment to innovation, sustainability and our communities. It is only by working with others that we are able to accomplish these milestones.

ADVANCED TRANSPORTATION SOLUTIONS
There has been steady progress in the development of technology that allows vehicles to communicate with one another and with roadway infrastructure. Toyota engineers in Ann Arbor, Michigan, designed an application of this technology called the Green Wave Advisor. This device enables traffic signals to communicate directly with the vehicle. The signals send information to the vehicle that is translated and displayed for the driver. The device shows the driver suggested speed ranges that, if followed, allow the driver to pass through a series of green traffic lights. Toyota's engineers are continuing to develop and demonstrate advanced transportation solutions for our vehicles that will work in concert with public infrastructure technologies. (Target 4.1)

ENERGY CONSUMPTION
Toyota facilities across North America closely track and manage energy consumption. Energy use is a major factor in the generation of greenhouse gas (GHG) emissions. In addition, the rising cost of energy provides incentive for reducing energy consumption. Targets to reduce energy use cover all of our facilities and are described below.

Manufacturing
Toyota's North American manufacturing facilities set a target to reduce energy use by 27% per vehicle produced by FY2011, from a FY2002 baseline with a projected production volume of 2.05 million vehicles. In FY2011, energy consumption decreased slightly from FY2010 to 7.47 MMBTUs per vehicle, with production at 1.31 million vehicles (please see Figure J). This was not enough to meet the target of 6.3 MMBTUs per vehicle. (Target 5.1) The North American plants have run as much as 60% below capacity in the last three years, while the minimum amount of energy (fixed load) needed to run the plants has remained fairly constant. At the same time, Toyota added almost 11 million square feet of manufacturing capacity in North America, including one new engine plant and one new casting plant. Combined, these challenges severely impacted per vehicle energy performance.

Figure J Energy Consumed per Vehicle Produced

Despite these challenges, total energy use has been reduced over the last five years. In 2011 Toyota's North American manufacturing affiliate (Toyota Motor Engineering & Manufacturing North America, Inc.) received an ENERGY STAR® Sustained Excellence Award for the seventh consecutive year. U.S. EPA selects organizations for this award that have exhibited exceptional leadership year after year in the ENERGY STAR program.

Toyota's North American manufacturing operations have a strategic goal to become the regional leader in energy performance in North America. They are focusing on:

  • Benchmarking buildings and processes, both internal and external, to identify opportunities for reducing energy consumption.
  • Use of kaizen, yokoten (or transfer of knowledge) and innovative technology.
  • Implementation of major projects to achieve energy reductions.
  • Development of renewable resources.
  • Standards development (ISO 14001, Enterprise Management).

Toyota's newest plant in Blue Springs, Mississippi, has implemented a combination of innovative and operational kaizens that have resulted in energy savings of approximately 50,000 MMBTUs. Many of these kaizens were implemented after construction to address internal feedback and Toyota's strategic goal. Some additional examples of activities that have helped the plants in North America reduce energy consumption are described below.

Annual Energy Challenges
The Georgetown, Kentucky, plant has held an annual President's Shutdown Energy Challenge since 2005. This contest encourages the different shops to compete to achieve the highest reduction in energy consumption during the December shutdown, based on a comparison of energy use from the previous shutdown. The Plastics Shop won the 2010 contest with a 37% energy reduction. Reduction efforts were particularly challenging this shutdown because of necessary model change work that had to be done in several shops. Since the inception of the program, the Kentucky plant has reduced CO2 by more than 11,000 metric tons. Summer and Winter Shutdown Challenges are now held across Toyota's North American plants.

HVAC Variable Frequency Drives
Toyota's plant in Buffalo, West Virginia, led the way in demonstrating the benefits of variable frequency drive (VFD) installation on HVAC systems. VFDs allow motors to run at a level needed to meet demand, rather than at full power. Installing VFDs reduces the electrical consumption of motors and the gas consumption of burners resulting in annual savings of over 30,000 MMBTUs. VFDs in the HVAC system will be retrofitted at the Blue Springs, Mississippi, plant as a yokoten activity, and installation at other locations is being studied.

Lighting Retrofits
In 2003, Toyota began investigating the energy reduction potential of high-bay fluorescent lighting through small-scale projects implemented at four plants. Based on the results of these projects, high-bay fluorescent lights were added to the specifications for new plant construction, and their installation was recommended to all North American plants. Now all of our North American plants use fluorescent lighting.

Lighting can represent four percent or more of a plant's energy use. We have replaced more than 40,000 400-watt HIDs with 220-watt fluorescent fixtures. Fluorescent lighting has reduced high-bay energy consumption by more than 50%.

Steam Elimination
Since 2002, Toyota has been investigating, piloting and developing the infrastructure needed to eliminate the need for steam generated from central boilers at North American plants. Steam is used to condition air to control temperature and humidity. A significant amount of natural gas is required to generate steam that must be transferred throughout the plant. By measuring energy use at individual processes, we discovered significant steam loss through the many miles of pipes used to generate steam. The losses from the miles of piping can be eliminated by installing smaller boilers at point of use, which places the heat delivery system right at the process where it is needed. Doing so eliminates steam losses and reduces energy consumption and, therefore, greenhouse gas emissions.

The process of eliminating steam must work around the manufacturing schedule. This means we only work on these projects during the two week-long shutdowns per year and non-production days.

By taking advantage of the additional non-production days over the last two years, Toyota's plant in Georgetown, Kentucky, made significant progress on steam elimination projects. They removed direct injection steam systems and now use nozzles to spray de-ionized water to produce humidity. They also removed steam coils and installed direct fire burners, which provide very efficient heat transfer. They have eliminated the use of steam in two top-coat booths and in one primer booth, and are now working in the plastics shop. They recently began design and implementation in the second paint shop. Once implementation is complete, they will be able to shut down the centralized boilers and eliminate the need for natural gas to generate steam.

Because steam generation requires natural gas, it contributes to greenhouse gas (GHG) emissions. Prior to FY2003, the Kentucky plant's average GHG emissions attributed to steam consumption totaled 49,700 metric tons. It was 11,500 metric tons in FY2011, a reduction of 77%. GHGs from steam consumption will be further reduced once the project is completed.

Toyota's assembly plant in Princeton, Indiana, is also installing point-of-use boilers to eliminate the need for central steam generation. The Kentucky and Indiana plants are sharing information about the project and learning from each other. This allows the projects to progress at a faster pace and fosters communication between the facilities. Toyota's Texas and Canadian plants are considering similar projects to eliminate steam, and will benefit from the learning done at the Kentucky and Indiana facilities.

Sales and Logistics
Toyota's sales and logistics operations in the U.S. and Canada each set energy reduction targets that cover their headquarters campus, sales offices and logistics facilities. In Canada, the target was to reduce energy consumption 10% by 2010, from a 2004 baseline. While they missed this target due to growth in operations between 2004 and 2007, they were able to reduce energy consumption by approximately one percent over the course of the action plan. (Target 5.4)

In the U.S., the initial target was to reduce energy consumption 18% from an FY2001 baseline by FY2011. Energy consumption is measured in BTUs per building square foot (BTU/ft2). The target was achieved early in FY2007, and a new target was set to reduce energy consumption 26% by FY2011. This target was achieved in FY2010, and another new target was set to reduce energy 32.6% by FY2011. They missed this target, achieving 28.2% (please see Figure K). (Target 5.3)

Figure K Energy Use at U.S. Sales and Distribution

Even though they missed the most recent target, Toyota's U.S. sales and logistics sites are constantly looking for ways to save energy. Over the course of this five-year action plan, their energy performance has been recognized by the ENERGY STAR program, which is administered by the U.S. EPA and Department of Energy. Six buildings were certified as ENERGY STAR buildings in 2008, meaning they met strict energy performance standards and used less energy, were less expensive to operate and caused fewer greenhouse gas emissions than their peers. One building, Toyota Plaza in Torrance, California, was awarded this certification each year between 2005 and 2009. The last building to be certified was the North American Parts Center in Hebron, Kentucky, in early 2010. This certification must be updated annually, and due to the downward shifts in the economy over the last year, Toyota did not allocate resources to apply for these certifications in 2010, but expects to do so again in future years.

In FY2011, Toyota's vehicle distribution center in Long Beach, California, installed task lighting using fluorescent fixtures with high-output lamps and eliminated 80 unnecessary light fixtures. Insufficient light was making clear film installations difficult and defects were not being identified. With the new lighting, damage and defects are clearly visible, reducing excess vehicle movement and rework. In addition to lowering energy consumption, a major benefit was to overall efficiency and quality.

In FY2011, Toyota's U.S. sales and marketing division installed a new media wall at one of their data centers. By using two projectors instead of eight 50-inch LCD monitors, they reduced energy consumption by over 12,200 BTUs per hour, or almost 8.8 million BTUs per month.

RENEWABLE ENERGY
Toyota supports the development of renewable energy sources and has been expanding the use of renewable energy. Renewable energy sources decrease dependence on petroleum and reduce greenhouse gas emissions associated with energy generation. Our first distributed generation project began in 2002 when a 536-kilowatt photovoltaic (PV) system was installed at the U.S. sales headquarters South Campus in Torrance, California. Since going online, this system has generated over 4.6 million kilowatt-hours of electricity. We also have PV systems at two parts distribution facilities that generate a total of 3.8 megawatts of electricity, and a five-kilowatt PV system at our plant in Huntsville, Alabama.

Photo of man on PV roof
Our parts center in Ontario, California, installed a photovoltaic array that is expected to produce more than 3.7 million kilowatthours per year. This provides almost 58% of the electricity needed at the facility

Toyota's North American manufacturing plants have been experimenting with different applications of PV systems since 2008. The Blue Springs, Mississippi, facility installed a 50-kilowatt array to light one of the parking areas. The plant in Georgetown, Kentucky, also experimented with a solar panel and wind turbine. When these did not work out as planned, they were moved to the plant's Environmental Education Center and Nature Trail. They power a fountain on the trail and provide an opportunity to educate visitors about solar power and renewable energy.

In addition to solar power, Toyota supports the expansion of renewable power through direct purchase and through the purchase of renewable energy credits (RECs). RECs are tradable commodities that represent proof that a certain amount of electricity was generated from an eligible renewable energy resource. The vehicle distribution center in Portland, Oregon, and the Lexus Training Center in Dallas, Texas, purchase renewable energy directly from a green power utility. We also purchase RECs for our regulatory affairs office in Washington, D.C., and training centers in Florida, Arizona and California. Not including RECs, approximately eight percent of the total electricity needs of Toyota's U.S. sales, distribution and government relations buildings is generated by a renewable power source.

GREENHOUSE GAS EMISSIONS
Toyota has been compiling a North America-wide greenhouse gas (GHG) inventory for the last three years. The North American inventory measures GHG emissions from the consumption of electricity and natural gas at plants, logistics facilities and owned and leased office space, as well as from fuel consumption by in-house trucking operations and third-party carriers, employee commuting and business travel. The process of preparing this consolidated inventory has helped us better understand where GHG emissions occur, and has facilitated information sharing across our affiliate companies.

Toyota's U.S. sales and logistics operation has been compiling its own annual GHG inventory for over a decade. The inventory accounts for GHG emissions from electricity and natural gas consumption, parts and vehicle transportation, business travel and employee commuting. The methodology used to calculate emissions is based on The GHG Protocol® developed by the World Resources Institute and the World Business Council for Sustainable Development. Over the years, Toyota has made a number of incremental improvements to the process, such as:

  • Developing more accurate emission factors.
  • Estimating emissions of methane, nitrous oxide and hydrofluorocarbons.
  • Creating procedures to describe how each portion of the inventory is developed, such as data collection, quality checks and emissions calculations.
  • Gathering data from additional business units.
  • Defining a baseline year for target setting.
  • Establishing a policy for recalculations.
  • Improving data capture.
  • Calculating emissions for activities once categorized as de minimis.
  • Working with third-party carriers to obtain more accurate information.

These improvements have resulted in better data accuracy and a more complete and robust inventory. The results are now rolled up to the North America-wide GHG inventory.

Energy use at Toyota's assembly plants is the main source of GHG emissions. As described in the Energy Consumption section, our plants carefully manage energy use and have found innovative ways to reduce consumption and corresponding GHG emissions. In the U.S., as part of a voluntary program with the Department of Energy, Toyota and other auto manufacturers committed to reducing GHG emissions from manufacturing by 10% per vehicle produced by the end of 2012, compared to a 2002 baseline. We met this target, having reduced CO2 emissions at U.S. plants 17% to 0.90 metric tons per vehicle (please see Figure L). (Target 5.2)

Figure L CO2 per Vehicle Produced in U.S.

Fuel consumption from the transport of parts and vehicles is another major source of GHG emissions. Much of our parts and vehicle transport activity is conducted by third parties. Because our activities influence the GHG emissions of these third parties, our U.S. sales and logistics operation tracks these emissions and has been working with both in-house and third-party carriers to reduce GHG emissions from transportation activities. (Target 5.5)

From our in-house service parts and vehicle logistics trucking operations, initiatives such as driver education, idling reduction and the installation of various aerodynamic equipment have contributed to a combined annual fuel savings of almost 160,000 gallons per year. This translates to over 3.6 million pounds of GHG emissions avoided per year (please see Figure M).

Figure M Parts and Logistics Trucking data

We have also been working with third-party carriers—both rail and trucking—to improve fuel economy. We conducted research with third-party trucking companies on how aerodynamic equipment installed on trucks could improve fuel economy. We began testing this equipment in 2008, and have since installed the equipment on a number of Toyota's logistics trucks. As a result, there has been a five percent improvement overall in fuel economy. A number of our third-party carriers have also implemented this equipment on their fleet.