The rise in the adoption of vehicles powered by alternative fuels in Israel necessitates investments in infrastructure and technology. To adequately prepare for the widespread adoption of advanced propulsion technologies, it is essential to study consumer behavior and the factors influencing the shift to vehicles with alternative fuel sources, along with their energetic and environmental impacts.

A collaborative research effort between the Archimedes Center and the IIASA Research Institute in Vienna examined the interplay between energy and transportation within the Israeli economy. The study specifically assessed the economic and environmental outcomes of introducing advanced vehicle propulsion technologies into Israel and their effects on the energy sector. The research utilized a distinctive behavior model for consumer preferences, which was incorporated into an advanced techno-economic model in the energy and transportation sector known as MESSAGEix_IL-Transport.

The research results enable the creation and execution of policy initiatives related to energy infrastructure, transportation, and environmental protection. Furthermore, the findings assist in planning policies to promote the adoption of vehicles equipped with advanced propulsion technologies, as well as in setting optimal market entry targets that align with future infrastructure development plans.

The energy sector in Israel is on the crossroad. Traditional energy sources are in process of replacement for natual gas (NG) and renewables in power generation, as well as gasification and electrification of industry and transport. Ultimately, the process is expected to lead to cleaner energy and better environment. However, concerns about energy reliability and security, intermittancy of renewables, and uncertainty about costs of energy transition and required infrustructure, challenge the transition. These developments offer policymakers opportunities to create a sustainable economy and make energy supplies resilient to catastrophic interruptions of supply.

The study aims to analyze the technical and economic impact of alternative paths for energy sector and GHG emission reduction in Israel. The proposed project involves a close cooperation with the Ministry of Energy and other relevant stakeholders. The policy evaluation will be based on a unique database and an up-to-date benchmark policy scenario. Ongoing dialogue with policymakers will be accompanied within a rigorous analytical framework that helps shaping the decision-making process. Policy questions that might be considered are: What would be the consequences of electrifying transportation and industry in varying rates? What would be the cost in terms of economic growth of transitioning to a green energy sector for the Israeli economy? Should a carbon tax be required, or would green standards be more effective in a small economy with regulated energy markets? What should be the optimal storage bundle to comply with the increase in intermittent energy sources? What would be the impact of switching the industry from fuels to Hydrogen? How will closing of domestic refineries impact the energy security and economic development?