Phinia’s Twin Focus: Efficiency Today and a Carbon-Free Future
Based in Auburn Hills, Mich., Phinia (NYSE: PHIN) is a publicly traded company spun off from BorgWarner in July 2023 that is dedicated to advancing sustainable mobility solutions. It specializes in fuel systems, electrical systems, alternative fuel technologies, and aftermarket products, Phinia aims to enhance fuel efficiency, reduce emissions, and help drive the transition to cleaner, low-carbon fuels. SBN Detroit interviewed Todd Anderson, Phinia’s Chief Technology Officer, to explore the implementation of alternative fuel systems and their real-world applications. Q: Phinia has allocated 78% of its research and development to fuel efficiency and alternative fuel technologies and 30% of that to zero- and low-carbon fuel systems. Can you tell us more about this initiative? A: We are committed to driving efficiencies today while moving toward a carbon-neutral and ultimately carbon-free future. It’s important not to focus solely on future technologies when there is a clear need to improve our current energy systems. By allocating 78% of our budget to fuel efficiency and alternative fuel technologies, we are addressing both immediate and long-term needs. This investment allows us to work on improving the systems that our customers currently use and are ordering while also investing in alternative fuels that will help us achieve decarbonization over time. Our funding applies to all aspects of our business. The research and development aspect, mentioned above, but also investing in other business functions, including manufacturing, supply chain, and quality to ensure that as a business we are ready to move forward into a new era. Q: Describe the different alternative fuel systems and what they are used to power today. A: Each of these fuel systems serves specific purposes and applications, providing a range of options for different vehicle types and needs. Advanced Gasoline Direct Injection (GDi) Systems are primarily used to power lighter vehicles, from passenger cars to medium-duty vehicles. Recently, we released a 500-bar GDi system with this higher pressure, designed to improve fuel economy and reduce emissions for passenger cars and light commercial vehicles. Hydrogen fuel cell technology powers electric vehicles (EVs) using an onboard fuel cell that uses hydrogen as fuel. This system is suitable for a range of vehicles, from lighter passenger cars to medium-duty vehicles, and could be particularly efficient for delivery vehicles in controlled environmental settings. Hydrogen Internal Combustion Engine (ICE) technology is well-suited for heavier applications where high loads, continuous operation, and challenging environments are common, such as heavy commercial vehicles and medium commercial vehicles. Hydrogen ICE provides the power and performance expected from traditional diesel or gasoline systems but without harmful emissions to the environment. Q: How is developing technologies for alternative fuels different from working on traditional combustion engines? A: Interestingly, it’s quite similar in many ways. The ways in which we develop liquid fuel systems for gasoline or diesel engines are directly applicable as we move toward alternative fuels. The basic physical principles, such as combustion and fluid metering, remain the same. The difference lies in adapting and refining the elements of these systems to work with alternative fuels. For example, in a hydrogen internal combustion engine, hydrogen gas is injected into the combustion chamber instead of gasoline. While the core technology remains similar, we need materials that can seal and respond appropriately to hydrogen gas, along with some design refinements. Q: What are the main challenges in creating and adopting alternative fuel technologies? A: The technology to use alternative fuels in vehicles is already well understood and has been proven effective. However, the challenge lies in the ecosystem needed to support these fuels. Take hydrogen internal combustion engines (ICE) as an example. While we have vehicles running effectively with this technology, faster market adoption requires sustainable hydrogen production at a scale that isn’t currently available. The infrastructure to deliver this sustainable alternative fuel to the point of use also needs to be in place. Currently, the cost of hydrogen is higher than will be acceptable for a broad market adoption. In my discussions with government officials in the U.S., Europe, and Asia, my call to action has been clear: ensure sufficient production of renewable hydrogen while developing the infrastructure needed to deliver it. This will help reduce costs and support wider adoption. Q: What do you see as the biggest opportunities for growth and innovation in alternative fuels? A: We see significant growth opportunities in the transportation sector, whether in passenger cars or commercial vehicles. In the shorter term, there is substantial interest in commercial vehicles due to their specific operating conditions. For example, there is great potential with captive fleets operating on fixed routes, where we can achieve significant progress without needing to rely on widespread public infrastructure for hydrogen deployment. This allows us to make meaningful advancements in those areas. Additionally, there is interest in alternative fuels beyond just transportation. We’re seeing opportunities in industrial applications, marine sectors, and stationary power generation. Industries like marine shipping, especially large vessels, are actively exploring alternative fuels. So, while there are significant opportunities in transportation, they extend far beyond that sector. Q: How does Phinia work with partners in the alternative fuel industry? Can you share any recent partnerships? A: Partnerships are critical for us — no company can operate as an island. We partner with government bodies such as the U.S. Department of Energy, the Environmental Protection Agency (EPA), the European Commission, and the UK Transport Authority. We also work closely with our customers to support their vehicle roadmaps and align our innovations to meet their needs. We have close partnerships with universities and educational institutions, which provide access to their innovative and advanced thinking while supporting communities and students alike. In addition, collaboration with our supply chain partners is vital. Q: How does Phinia ensure sustainability is integrated into product design and development, particularly with your “Design for Environment” approach? A: Sustainability is critical in the design process. Our design reviews include considerations like the potential for remanufacturing and the end-of-life designation for products, which are vital elements of a circular
$129M From IRA Boosts Michigan’s Wind, Solar Plans
According to an announcement made by the state and federal governments in July, Michigan is set to receive a significant financial boost to aid in the expansion of large wind and solar projects. Specifically, $129 million in federal funds has been designated to streamline the processes involved in siting, zoning, and permitting large-scale renewable energy installations. This initiative aligns with the state’s goal to rapidly decarbonize its electric grid over the next decade. The funding, part of a $4.3 billion allocation being distributed across the United States, is sourced from the 2022 federal Inflation Reduction Act’s Climate Pollution Reduction Grant program. SBN Detroit interviewed Joel Howrani Heeres, director of community resilience at Public Sector Consultants, who also was Detroit’s first sustainability director, for his thoughts regarding how the money should and will be spent, potential challenges, geographical impact, and other topics. Q: Michigan recently received $129 million in federal funding to advance large wind and solar projects. How do you see it being allocated and what are the biggest priorities to address in terms of large wind and solar? A: I think that the state is rightfully deploying this money to help incentivize local governments to permit solar and wind projects within their boundaries. We have a very aggressive goal to achieve as a state – 60% renewable energy by 2030. The funds provide a significant incentive for communities to host renewable energy infrastructure, offering up to $5,000 per megawatt. Rural areas often lack the resources and personnel needed to review permits and manage other aspects of developing this infrastructure. This financial support will be instrumental in helping these communities navigate the complexities involved in such projects. Q: The funding comes from the Federal Climate Pollution Reduction Grants (CPRG) program, created by the Inflation Reduction Act. Can you tell us more about this and its specific influence in Michigan? A: The CPRG is one of the first grant programs to enable both planning and implementation to address climate change. There is funding allocated for metropolitan areas above a certain size. To me, this regional approach makes a lot of sense. Emissions don’t stop at city boundaries. For example, there are many heavy industries on the Detroit/Melvindale border that impact that whole area and beyond. Taking a regional approach and also statewide grants have been used to help EGLE do their planning as well. I was disappointed to see that Michigan’s metro areas did not get implementation money from this grant, but accelerating renewables throughout the state is important. Q: What are the challenges that come with such large-scale complex projects in Michigan? A: First, local permitting and project development. The amount of land required for renewable energy installations presents another challenge, especially in rural areas where agricultural land is at a premium. Convincing these communities to accept large renewable installations, particularly when the power generated is likely to be consumed elsewhere, can be difficult. Discussing the benefits and costs of hosting these installations has become a political issue. Communities want to see tangible benefits and are reluctant to give up their land without adequate compensation. Thus, providing financial incentives to these communities could be an effective approach. Another important consideration is determining, from a grid perspective, the most strategic locations to connect these large installations to ensure efficient power transmission. Q: Is there a long runway with projects like this from an execution and timeline standpoint? A: Yes, there is. The process from conceptualization to actual ground-breaking involves numerous steps. This includes navigating the political landscape, such as public hearings and potential opposition. Additionally, there are essential stages like securing permits and installing infrastructure. Each of these components requires considerable time and careful planning. Q: Is there a geographical component? What areas of Michigan will be most impacted? A: Rural areas will be impacted the most. Beyond that, I don’t think there will be geographic concentration, I think it will spread across the state. Q: Do you foresee local opposition from Michiganders regarding these projects, and, if so, what are your thoughts on how to address this? A: Yes. Just the other day I was driving through Washtenaw County and saw signs that read “No Industrial Solar.” The focus returns to the tangible benefits of these installations. It is essential for people to see clear advantages. For instance, if a local government receives $5,000 per megawatt to enhance local services — funds that would not have been available otherwise — it can help alleviate some of the opposition to these projects. This financial support can be directed toward improving community services, thereby showcasing the positive community benefits of the installations. Q: Federal money will also flow to workforce development programs. What are your thoughts on how these projects may boost the economy and put people in jobs? A: It’s a crucial aspect of our current situation. We are undergoing a significant energy transition, shifting from fossil fuels to renewable energy sources, which represents a fundamentally different model. This transition requires Michiganders to acquire new skills to compete in the emerging green economy. Additionally, we’re moving toward the electrification of everything. By producing clean energy, we can electrify our homes, cars, and various aspects of our lives, as it all comes from a sustainable source. There is a critical need to retrain workers from the fossil fuel sector to participate in the electrified economy. Significant investments are being made in this area. Ultimately, this is a comprehensive ecosystem, and these changes will impact labor across all sectors. Q: What other ancillary benefits can we expect to accompany the execution of these projects? A: As we transition more of the energy load to cleaner technology, we’ll have less localized pollution, leading to statewide public health benefits. Additionally, there’s a significant potential for economic development. Michigan stands out as one of the most proactive states in terms of climate ambitions, which could attract industries seeking to operate on green power. Whether it’s tech companies, manufacturing firms, or other businesses, the state’s commitment to sustainability
