Key topics for 2023
in CLEPA, 31-01-2023
1. Climate Action & Sustainability
Every climate-neutral solution is a step towards sustainable mobility
Automotive suppliers contribute to personal mobility, but they also deliver the sustainable technologies needed for multi-passenger transport and the movement of goods. Last year’s climate agenda had a strong focus on passenger cars, and this time the discussion will be around the bigger vehicles on EU roads, with a new Commission’s proposal on CO2 standards for heavy-duty vehicles (HDV) expected on 14 February.
This proposal looks at a complex ecosystem: Freight transport includes very diverse transport modes—from buses and coaches, to trailers and trucks— but also very different use cases—from vehicles driving up mountains carrying heavy loads, to everyday urban deliveries. CLEPA sees this regulation as an opportunity to empower innovation through #TruckDiversity, supporting a wide-ranging set of sustainable technologies that contribute to climate-neutral mobility while giving truckers, fleet operators and local businesses the freedom to choose what suits them best.
Also looking at air quality, the proposal for new vehicle pollutant emission standards Euro 7, published in the last quarter of 2022, will be now discussed in the European Parliament. Overall, CLEPA sees this proposal as a significant step towards higher ambition. However, there are key elements of timing and both technical and economic feasibility that need to be addressed to ensure the new rules can be implemented and applied to realistic driving situations.
Sustainable vehicles: From cradle to grave
A successful technological transformation requires a number of critical raw materials that are essential to build safer and more sustainable vehicles, from electronics to lightweighting. When it comes to electromobility, the amount of these needed materials is expected to grow from 40kg in conventional vehicles, to 200kg in electric cars. The higher volumes are not the only concern. Dependencies on single sources, especially from countries with geopolitical risk, as we recently saw with the energy crisis, can have devastating effects on supply chains and affordability.
The Critical Raw Materials Act (CRMA) will be published by the European Commission on 8 March and has the aim to secure robust material supply chains for the EU. CLEPA’s position highlights the need to improve the recovery rate of materials through design innovation, certification of recycling companies and measures to combat the illegal or inefficient disposal of used vehicles, and further highlights the importance of trade and raw material agreements with economic partners across the world. The CRMA is unlikely to cover all required elements relevant for this sector, and some essential aspects will only be made clear with the revision of the End-of-Life-Vehicle Directive—expected in March 2023—and the revision of the Battery Regulation—finalised last December—now leading to extensive work for its implementation, including new rules on Battery Product Environmental Footprint.
2. Smart & New Mobility
Access to data: Unleash the untapped potential of mobility markets
Connectivity is shifting the way we conceive mobility and opening the market to new services and platforms that can drastically improve aspects such as safety, traffic management or the overall driving experience. It is estimated that 177 million vehicles of the EU car park will be connected by 2030.
Being aware of the potential of this market, in 2022 the European Commission published the Data Act, a proposal to establish a harmonised framework for industrial, non-personal data sharing in the European Union. The Industry Committee, which leads discussions on this file in the European Parliament, received MEP amendments at the end of the year and is now working on reaching compromises between political groups. Other committees will give their opinion during the final vote, slated for February.
CLEPA has consistently raised the need to complement the Data Act with a sector-specific regulation on access to in-vehicle data. Currently, the Data Act is not concrete enough to tackle the particular obstacles concerning the deployment of data-based services in the automotive sector. The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs acknowledged this opinion and announced the intention to work on such text and make it public over the next months. Raising the concerns of yet another potential delay in the publication of this sector-specific proposal, CLEPA, together with 9 other European associations addressed a petition to the Commission to consider the negative impacts that this would entail for consumers and EU competitiveness.
Semiconductors to get milestone regulation in the EU
Automated, connected driving solutions and artificial intelligence applications are leading to more automotive demand for chips. In fact, the share of specific chips used by the automotive industry is forecasted to grow from about 2% today to 10% by 2030. As a response to the global semiconductor shortage, the European Commission published a legislative proposal for a Chips Act, with the aim of boosting EU production of semiconductors and addressing future supply chain crises.
This policy file has just gotten through an important legislative milestone. Member States have agreed on a set of amendments to the proposal. The European Parliament’s lead committee last week also endorsed a set of amendments, bringing the regulation close to adoption over the next months and paving the way for billions of public support for projects in the EU semiconductor ecosystem. The EU Chips Act provides an opportunity to strengthen the resilience of supply chains and further cement the European automotive sector’s global leadership position on innovation. CLEPA calls upon the European Commission, Parliament and Council to prioritise its adoption.
3. Innovation & Competitiveness
Reshaping automotive supply chains
The mobility transformation requires significant investments, particularly upstream in the supply chain, to ensure sufficient access to green steel, aluminium, polymers, battery cells and chemicals. The US decision to support green technologies with billions of state aid could divert investments from the EU to the US. President von der Leyen recently announced in Davos the Commission’s intention to publish a Net-Zero Industry Act, which could speed up permitting procedures and ease state aid rules.
In the meantime, the work on the regulatory framework to move sustainability to the centre of corporate strategy continues. The European Parliament is currently discussing legislation to impose far-reaching social and environmental responsibilities on companies and their value chains through the Corporate Sustainability Due Diligence Directive (CSDD). The European Parliament is expected to reach a position in March. CLEPA supports the initiative to regulate supply chain due diligence requirements, but together with coalition of industry associations, raised concerns that the current proposed framework will undermine the ability of EU businesses to take part in critical supply chains.
Last year, the European Commission published the EU Taxonomy Regulation, a green finance rulebook, that establishes a common language on which economic projects and initiatives are considered ‘sustainable’. Its guidelines consider both the purchase of a zero-emission vehicle component and its installation in the car by a vehicle manufacturer as sustainable business activities, but do not recognise the production of that very same component as such. CLEPA has recently launched the social media campaign #FairTaxonomy, with statements by industry leaders, asking the European Commission’s Directorate-General for Financial Stability (DG FISMA) to correct course, as limiting access to green finance to the industry can have a huge impact in suppliers’ ability to keep the green transition at pace.
US working on addressing EU concerns about EV vehicle incentives
Taking recent headlines in the media, is the United States bet towards economic protectionism brought by their US Inflation Reduction Act (US-IRA). This regulation—signed at the end of last summer—introduced a measure for which consumers could get up to $7,500 in purchasing incentives for an electric vehicle. This incentive would, however, not apply to most cars assembled in the EU or cars with an EU-manufactured battery. Organisations all over the European auto sector have since raised concerns around violation of WTO treaties. The issue became political, and the EU-US Trade and Technology Council between the European Commission and US government representatives, have held several meetings.
The Commission asks the US that the EU is provided with the same exemptions as Canada and Mexico. The US treasury department indicated end of December that it would adopt an expansive definition of which countries have a free trade agreement with the US. Potentially an agreement on cooperation on raw materials between the EU and US could then serve as an exemption of local content requirements for EU cars. Furthermore, the department also issued guidance for a separate tax credit for clean commercial vehicles which could offer opportunities for EU manufacturers using US dealerships. CLEPA continues to make the case that globally integrated supply chains and free trade are a source of prosperity, and local content requirements undermine the global trading system. CLEPA therefore encourages the Commission to continue the dialogue with the US to address sector concerns.
4. Road Safety
Paving the way towards global harmonisation
As the technology within vehicles continues evolving to improve road safety, so does the regulatory framework incorporating measures around these advancements. Over the last period, the United Nations has adapted some of its Working Groups and created new ones, both of which will see a boost in activity in coming months.
The United Nations World Forum for Harmonisation of road vehicle Regulations–WP. 29–started discussing potential regulatory needs for vehicle-to-vehicle V2V and vehicle-to-anything V2X communication, following concerns expressed by China and the International Telecommunication Union (ITU) on absence of harmonisation in the context of Automated Driving Systems. CLEPA submitted its initial feedback and foresees active participation also in the United Nations, on definitions around artificial intelligence and harmonisation at global level. In parallel, CLEPA is working within the UN Cybersecurity and Software updates group in preparing global guidance principles on data security.
The WP. 29 has also recently reviewed its “Framework document on vehicle whole-life compliance” and welcomed the CLEPA proposal, supporting the initiative to further evaluate the level of safety and environmental performance of vehicles, equipment and parts along different stages of their life but stressing the predominant role of the Contracting Parties to the United Nations 1958 and 1998 Geneva Agreements in the evaluation of vehicle safety and noting the importance of confidentiality, IP protection and data security. Now the dedicated UN Periodical Technical Inspection WG will address the concerns expressed by CLEPA, that were supported by several member countries of the United Nations.
Euro NCAP to include new parameters of connectivity and automation in safety assessment
The Euro NCAP (the European New Car Assessment Programme) is a European voluntary car safety performance assessment that provides information to consumers about the performance of their vehicles when it comes to safety. The programme has recently launched the Euro NCAP Roadmap 2030 with the aim to better encompass assisted and automated driving in their methodology, having announced that the current overall safety rating will be replaced in 2026 by a new scheme based on the four distinctive phases of an accident: safe driving, crash avoidance, crash protection and post-crash safety.
The main update concerns the introduction of a 3-year update cycle for cars and commercial vehicles with a first one in 2026 and a second one in 2029. CLEPA is working closely with Euro NCAP on the coming updates for 2026 impacting the overall rating. In this context, a new V2X working group has started, as V2X technologies act as an enabler of existing safety functions. A penalty/reward approach will be adopted for cars offering assisted driving systems. The speed assistance protocol will be overhauled to incorporate the latest technologies. Several updates will be introduced for in-cabin monitoring to ensure a proper driver engagement in all situations and especially when advanced assisted driving systems are used. Scenarios for autonomous emergency braking (AEB) will be also updated. Regarding crash protection, virtual testing is under development and is expected for 2025-2030. Other minor protocol updates are tentatively planned. Euro NCAP is also currently working on Over-the-Air-Update, cybersecurity and data access.