CLEPA | Green Deal and cars: European Commission chooses haste over prudence

Taking the temperature of the automotive industry, I’d say that the word ‘deal’ has lost quite some of its shine. A deal in the political sense typically holds a promise: one of working together, making a pact. Not so in the EU Green Deal and its measures for reducing CO2 emissions from cars and vans. This deal comes in the form of a ’ban’.

in CLEPA, by Sigrid de Vries, 20-07-2021


Ursula von der Leyen and her team have sought to use inspirational language to confront Europe’s challenges right from the start of their mandate. But it is difficult to see the bold headline statements on innovation, technology openness and inclusiveness adding up with their legislative translation on paper, and valid concerns tend to be addressed on the basis of belief, not substance.

Several governments voiced fears of rising costs for mobility and heating for their citizens

Take the idea of a dedicated emission trading scheme (ETS) for transport and buildings. Several governments voiced fears of rising costs for mobility and heating for their citizens. Green Deal Commissioner Frans Timmermans chose to respond by turning the question around. Of course he expected the proposals to be critically received, he said. But think for a moment of the cost of not doing anything.

Let’s think also, for a moment, of the cost of getting it wrong.

As regards CO2 and cars, Timmermans had stated in earlier interviews and stakeholder meetings ‘not to be a friend of banning technology’ and to be aiming, instead, to give ‘a clear signal of where to go’. Following his line, the now published legislative proposal for cars and vans actually claims to be technology neutral.

But it is not. A 100% reduction target by 2035, for emissions coming out of the vehicle tailpipe, de facto prescribes what to produce: electric vehicles only. It discards the contribution that renewable sustainable fuels can make. The internal combustion engine can be climate neutral when running on sustainable renewable fuels. The battery electric vehicle is only climate neutral, when charged with renewable electricity.

Turning vision into tangible measures is the hard part and needs many hands working in a concerted effort

From an engineering perspective, it is very difficult to conceive why options and technologies that can help meet the objectives more quickly and efficiently would be discarded, only because, politically, it seems difficult to go that route. Turning vision into tangible measures is the hard part and needs many hands working in a concerted effort. The recent flooding in parts of Europe has once more emphasised the urgency, but not only of the need for climate action: the importance of robust and resilient infrastructure networks was underscored too.

The Commission has chosen haste over prudence. The horizon given to the automotive industry in Europe is 2035, not 2050. For an industrial transformation of such magnitude, this is unprecedented and a reason for grave concern. For vehicle manufacturers and component suppliers, 2035 is in fact tomorrow. The typical life of a car’s model is 7 years with at most one update during this time. The manufacturing cycles of the industry are woven around this timeframe: the preceding design cycle lasts another 3-5 years on average. Each manufacturer sells multiple models, and they are redesigned and updated in a carefully calibrated sequence. Investment decisions are taken years in advance. People need to be trained and retrained.

The transformation needs to be staged together with the sector to avoid an industrial decline in Europe and upheaval for millions of livelihoods

The automotive industry is committed to climate neutrality in 2050, and believes this objective is realistic. However, it requires a transformation that needs to be staged together with the sector to avoid an industrial decline in Europe and avoidable upheaval for millions of livelihoods. Automotive suppliers design and manufacture all of the components and systems that are needed to achieve the ambitious goals for road transport. They are committed to continuing to do so in Europe. The automotive supplier sector is an innovation powerhouse and, with 1.7 million direct employees, on top of the 1.2 million employed by vehicle manufacturers, there is a lot at stake.

Europe looks set to give up on a competitive technology that will, in Europe and abroad, power mobility outside of cities for a long time to come, and that can be clean and climate neutral with renewable fuels and green hydrogen. The ‘Fit for 55’ package lacks recognition of the contribution renewable fuels can and will have to make in road transport. A technology-open approach would reduce emissions quicker and support European jobs and competitiveness.

The Green Deal offers a unique opportunity to set Europe on a consistent and coherent path towards climate neutrality. For vehicles, specifically, this would mean moving from a ‘tailpipe’ to a ‘life cycle’ approach. And this could be done within the current regulatory framework, putting us on target for 2050. Where electric mobility is the best and most economical solution it will succeed. The business case is growing fast, especially where there are incentives and charging points in place. But where affordability and charging infrastructure are not a given, there should be room for alternatives.

It is now in the hands of the European Parliament and the Council to evaluate the proposal. The earliest chance for adjusting course is the European Parliament’s report on the Sustainable and Smart Mobility Strategy, set for autumn. Automotive suppliers will continue to inform this important debate with first-hand evidence and smart policy proposals. The objectives are shared. Now let’s make it work.

Wishing you all a wonderful and replenishing summer break,

Sigrid de Vries,

Secretary General of CLEPA

 

CLEPA | “Renewable fuels and electricity make transport climate neutral, not a ban on technology”

Commission proposal misses opportunity to promote uptake of renewable fuels to reach climate neutrality in inclusive way. Europe stands to give up on a strategic technology, risking both jobs and competitiveness

in CLEPA, 14-07-2021


Carbon emissions from new passenger vehicles are to be cut by 55% in 2030 and 100% in 2035. These targets are the core of the revised CO2 vehicle fleet regulation adopted today by the European Commission as part of the so-called ‘Fit for 55’ package of measure to revise the EU climate policy.

“A zero-emission tailpipe target in 2035 is a de facto ban on the internal combustion engine. This is not the most effective or efficient way to climate neutral transport in the EU, it may not even get us there,” said Sigrid de Vries, Secretary General of the automotive suppliers’ association CLEPA.

“The internal combustion engine is climate neutral when running on sustainable renewable fuels. The battery electric vehicle is climate neutral when charged with renewable electricity. The priority should be renewable fuels and electricity, not a ban on a technology.”

“The climate ambitions are clear and shared. Society needs both pace and breathing space to manage this monumental transformation and policy choices hold the key: Europe stands to give up on a competitive technology that will power mobility outside of cities for a long time to come, and that can be clean and climate neutral with renewable fuels and green hydrogen. The ‘Fit for 55’ package lacks recognition of the contribution renewable fuels can and will have to make in road transport. A technology-open approach would reduce emissions quicker and support European jobs and competitiveness.”

Direct electrification will contribute significantly to reducing emissions. However, for some transport needs it is not or not yet the right solution. Plug-in hybrids bridge the gap between zero-emission and long-distance or heavy goods transport. Today’s proposal leaves electrification as the only option, regardless of whether it fits the need or not, is affordable or not, or if there is green energy and the infrastructure to charge it or not. This is the opposite of technology neutrality, a principle which the European Commission in theory still defends. The debate in the Commission today lasted until the last minute. Unfortunately, only one side of the argument is reflected in the proposals.

“It is now in the hands of the European Parliament and the Council to evaluate the proposal, whether it adequately balances the climate, industrial and social dimensions and to consider the role of sustainable renewable fuels. It will be a challenge to make the package a coherent and effective set of rules”, adds De Vries. “Only a firm recognition of sustainable renewable fuels in the CO2 fleet regulation makes a difference. The proposed review of progress in 2028 will examine both the availability of charging infrastructure and the role of renewable fuels but may come too late to trigger the necessary investments.”

Employment & competitiveness

Importantly, an electrification-only path puts significant pressure on employment in the automotive industry, specifically on small and medium sized suppliers. An ambitious, efficient and inclusive green transition requires technology openness, providing room for hybrid solutions, green hydrogen and renewable sustainable fuels.

Electrification will generate new employment, but the green transition will affect millions of livelihoods in a very uneven way. There will be major job opportunities, but often for different people, in different places and at a different moment in time. Of the 2.9 million directly employed by vehicle manufacturers and suppliers, close to 1 million people have a job directly linked to the production of vehicle powertrain technology. The total number of employees requiring re- and upskilling is even higher, because of the parallel transformation towards connected and automated driving and the increasing automation of manufacturing. A transformation of such magnitude requires a strong social framework to ensure that nobody is left behind, that people are given a perspective and that the right skills are developed for new opportunities.

Renewable fuels & charging infrastructure

The proposed binding targets for a recharging and fuelling infrastructure are welcome.

The approach favoured by the European Commission does not provide a solution for emissions from the vehicles with a combustion engine which are already on the roads or will enter service in the coming years. Sustainable renewable fuels would reduce their emissions immediately, without the need to wait for fleet renewal. The parameters of the anticipated emission trading system for fuels have yet to be assessed, but it is doubtful whether it will send the price signal which can trigger the necessary investments into renewable fuels and supplement the revised targets for renewable energy.

Considering the contribution of sustainable renewable fuels in the CO2 fleet regulation would generate such a price signal and unlock necessary investments in renewable fuels. What is needed is regulation that allows them to contribute.

 

Coalition calls for urgent ‘Just transition’ framework for Europe’s automotive workforce

In view of the upcoming publication of the ‘Fit for 55’ package next week—which will set out the regulatory framework to implement the EU’s Green Deal, Climate Law and increased 2030 targets—a coalition of industry, trade unions, employers and environmental organisations, including CLEPA, has sent a letter to Vice-President Timmermans calling for an urgent Just Transition framework for the automotive workforce.

in CLEPA, 07-07-2021


The organisations warn that the absence of the right policy framework delivering a Just Transition for all the industries covered by the Green Deal could cause deindustrialisation and social disruption. The letter points out that this framework must support the anticipation and management of change, including, but not exclusively, skills and training, and be underpinned by strong social dialogue.

Currently, there is no such framework for the 16 million workers in the EU’s mobility eco-system, and notably Europe’s automotive sector which is a powerhouse of industrial employment. The auto sector accounts for more than 6% of European employment overall and 8.5% of European manufacturing jobs. Pre-crisis, the sector produced nearly 10% of GDP in Germany alone, along with 40% of the country’s research and development spend. The sector plays a key role in trade, with Europe responsible for more than 50% of the world’s exports of auto products.

“Policy choices hold the key to prevent avoidable upheaval. The European Union needs rapid electrification with clean batteries, in combination with sustainable combustion engine solutions with renewable fuels. A technology-open approach will reduce emissions quicker and support European jobs”, says CLEPA’s Secretary General Sigrid de Vries. With the aim to provide insight into the impact of the green transition on the automotive workforce, CLEPA has launched the Automotive Employment Footprint Portal.

 

Read the letter

 

CLEPA | Green Deal must balance social, environmental and economic objectives and ramifications

  • High-level representatives from academia, workers associations, mobility-technology industry and government call for a balanced, inclusive Green Deal
  • Round table provides sneak peek into new study on impact of CO2 emission regulation scenarios on revenue, market share and employment of automotive suppliers in Europe

in CLEPA, 06-07-2021


CLEPA, the European association of automotive suppliers, held a high-level round table yesterday on the green transformation within the mobility sector, discussing the impact of the various available policy instruments on the employment and manufacturing footprint in Europe with representatives from academia, workers associations, mobility-technology industry, and government.

Among the participants were Sigmar Gabriel, former Vice-Chancellor of Germany, Prof. Renate Köcher, CEO of IfD Allensbach, Prof. José María López from the Technical University of Madrid, Prof. Uwe Cantner, from the Friedrich Schiller University of Jena and advisor to the German government, Prof. Bernhard Geringer from the Technical University of Vienna, Judith Kirton-Darling, Deputy Secretary-General of IndustriAll Europe, Sigrid de Vries, Secretary General of CLEPA, and several executives from automotive suppliers from Austria, Germany, Italy and Spain.

The focus of the event was to analyse the ramifications of the transformation and to discuss the expectations of the various stakeholders. CLEPA also presented a sneak peek on a supplier-specific study that is currently being conducted through the management consultancy firm PWC Strategy&.

Automotive suppliers fully support the objective of reaching climate neutrality by 2050, and they are very much at the frontline of the transformation. Suppliers are at one end investing heavily in new technologies and creating new product portfolios. In parallel, they have to transform, shrink, and in certain cases stop activities they currently run, with the associated challenges and costs attached. It’s at the level of suppliers, not vehicle manufacturers, that the heaviest disruption will occur followed by a ripple effect on materials and machinery suppliers and the economic fabric in the wider regions.

“Politics have to make sure that the socio-economic-ecological triangle is kept in a good balance. Special attention has to be paid to the supplier industry, which consists of many small and mid-size companies that are essential to the strength and well-being of our regions”, stated Sigmar Gabriel, former Vice-Chancellor and Federal Minister for Economic Affairs and Energy of Germany.

“In order to make this transformation a success, we have to make sure that we listen carefully to the consumer perspective. According to our latest mobility report 2020, 59% of consumers have still doubts whether the electric car is a good alternative from an environmental point of view, the trend is showing upwards, in the previous year, only 48% had these doubts”, commented Prof.  Renate Köcher, CEO of IfD Allensbach.

“Our European companies are in a good place when it comes to innovative strength. As with any transformation, it offers great chances, but also serious risks, so we have to make sure that we get the transformation process right, in terms of the economic, ecological and social values it is supposed to entail.” added Prof. Uwe Cantner, from the Friedrich Schiller University of Jena and Chairman of the Expert Commission on Research and Innovation of the German Government.

“The debate about the future of mobility is often driven by emotions and ideology. As scientist I can only call for a fact-based discussion and with strict consideration of the sustainable energy sources available at all, in order to find the most efficient solution to save the climate and to safeguard our industry”, warned Prof. Bernhard Geringer from the Technical University of Vienna.

“We have to make sure that the transformation is both an industrial and social success. Much focus is on upskilling and retraining, but this will demand effective anticipation and management of change, making use of all technologies and tools available to achieve climate neutrality and providing a sufficient timeframe. We are talking about a colossal structural change involving millions of workers and therefore this cannot be left to chance or implemented in haste”, advised Judith Kirton-Darling, Deputy Secretary-General of IndustriAll Europe.

“From a scientific perspective, no technology should be banned, only through an orderly transition can decarbonisation goals be achieved without seriously damaging the automotive industry,” stated Prof. José María López from the Technical University of Madrid.

“Can Europe afford to give up on a competitive technology that will power mobility outside our cities for a long time to come, and that can be clean and climate neutral with renewable fuels and green hydrogen? To reach the climate targets and secure jobs and manufacturing in Europe, automotive suppliers advocate a technology open strategy, combining rapid electrification with sustainable combustion engine solutions”, concluded Sigrid de Vries, Secretary General from CLEPA.

New Study

A sneak peek into the findings of the new study, to be released in the autumn, underlines the importance of understanding and anticipating industrial realities. The future of the EU as a manufacturing centre for clean combustion engine technology remains the number one uncertainty, and this will influence the trajectory of how harsh consolidation measures and job losses will be. What in a macro-economic EU wide model seems to still be a workable market size, may at a company level be a reason to leave a market.

Suppliers identify new, major opportunities too. Yet the question is just how sizeable and stable these will turn out to be for the entire industrial landscape going forward. There is much public focus on creating incentives to stimulate electric vehicle demand and attracting investment in battery cells manufacturing. This is important, but the real employment opportunity lies within the supply chain around batteries and electric vehicle components.

Last but not least, there are important findings on labour intensity & skills: The new electric vehicle components are expected to be high in value add, but significantly less labour intensive. Due to their technical complexity, they also require a higher-skilled workforce. The transition of jobs is often not possible within the same company, but will transfer across regions, companies and mobility subsegments. This highlights the need for public policy support and cross-sectoral cooperation.

A successful transition starts with knowing the stakes. CLEPA launched the Automotive Employment Footprint Portal to provide insight into the impact of the green transformation on employment and manufacturing along the automotive value chain, to offer viewers a journey into the challenges and opportunities presented by the shift, illustrating the reality behind the numbers. The Portal provides access to the findings of more than 15 recent studies performed by independent research bodies, each examining diverse scenarios in the accelerating green technology uptake, the direct correlation with employment needs, and the outlook across Europe.

CLEPA | Automotive Employment Footprint Portal provides key view on impact of green mobility transition

  • CLEPA launches the Automotive Employment Footprint Portal, revealing key data on risks and opportunities for automotive employment
  • Findings of more than 15 recent studies show the magnitude of social dimension and high level of uncertainty

in CLEPA, 30-06-2021


CLEPA, the European Association of Automotive Suppliers, today launches the Automotive Employment Footprint Portal to provide insight into the impact of the green transformation on employment and manufacturing along the automotive value chain, to offer viewers a journey into the challenges and opportunities presented by the shift, illustrating reality behind the numbers. The Portal provides access to the findings of more than 15 recent studies performed by independent research bodies, each examining diverse scenarios in the accelerating green technology uptake, the direct correlation with employment needs, and the outlook across Europe.

“A successful transformation starts with knowing the stakes”, says CLEPA Secretary General Sigrid de Vries. “A close look at the available data shows two things: the green transition will affect millions of livelihoods in a very uneven way. There will be major job opportunities, but often for different people, in different places and at a different time. Second, the data confirms that policy choices hold the key to avoiding a breakneck scenario. An ambitious, efficient and inclusive green transition requires technology openness, providing room for hybrid solutions and renewable sustainable fuels. This is the approach that automotive suppliers urge policy makers to take.”

The Portal offers a visual and interactive journey along the entire mobility value chain, including the more temporary opportunities provided by the need for new digital and physical infrastructure, the upgrading of the energy grid and installation of charging and refuelling points, as well as the opening of new battery plants. A spotlight on key regions showcases how the automotive industry is contributing to local economies, as vehicle manufacturers and suppliers typically form strong regional clusters in the production of vehicles and key components.

“The automotive industry is fully engaged in the transformation and, together with regional parties, trade unions and academia, is bringing a massive re- and upskilling effort on the way to keep people on board and deliver the competencies required for the new age”, adds De Vries. “The existing data shows the magnitude of the social dimension of the transformation and the high range of uncertainty. To manage the transition, we will need more knowledge than can be provided by a macro-economic modelled impact assessment. An even closer look underneath the surface will be crucial to support the sector’s ability to maintain employment and invest in reskilling and innovation.” The CLEPA Portal will be extended with further information after the summer.

Background 

A wide range of studies have looked at the impact of electrification on employment, often with highly contrasting outcomes. Differences in the assumed pace of electrification and considered production activities explain most of these contrasting findings.? The overview in the Portal illustrates that the pace at which battery electric vehicles will win market share is likely to determine the number of jobs at risk, while plug-in hybrids fulfil both a technological and social bridge function.

The automotive sector presently supports 6% of the total active population in the EU. For comparison: the coal transition, generally recognised as dramatic, affects 0.015% of European jobs.

Automotive suppliers directly employ 1.7 million people, on top of the 1.2 million in vehicle manufacturing. Another 370 thousand work in manufacturing sectors deeper down the value chain, including steel and other materials, and another 3.2 million are employed in services related to vehicle use.

Direct automotive job creation in the battery, software and electronics supply chain is on the rise, but will not be able to compensate for the jobs disappearing in powertrain related areas in neither numbers or the type of work nor in terms of timing. Close to 1 million people have a job directly linked to the production of vehicle powertrain technology. An estimated 50,000 jobs will be created in battery cell manufacturing and integration, where research suggests that up to three times that number could be created in the production of the chemical components of batteries and the critical areas of thermal and system management of the battery.

Electrification: 

The electrification of cars will have a significant impact on?the need for labour in the production?of parts, systems and the assembly of engines and vehicles. The powertrain is the most labour intensive part of automotive manufacturing, representing 30% of the value creation. A battery-electric powertrain contains 60% fewer components than needed for an internal combustion engine vehicle. At the same time, up to 70% of the value of a battery cell produced in Europe is imported and this will not improve dramatically towards 2030.

Understanding the battery supply chain and the significant value creation in the material input of batteries is critical to understand employment opportunities related to the transition. The?battery represents between 30 and 50% of the value of a battery electric vehicle; 70% of the value added is generated in the production of the cells and only 30% is generated through the integrating of cells, thermal management, the battery management system, and battery box. The European employment opportunities in the battery sector lie deeper in the battery supply chain, as battery cell plants are highly automated. Maintaining the competitiveness and investment capabilities of European industry and the availability of highly skilled workers will be critical to ensure that these opportunities are captured.

Skills: 

Most job losses in the run-up to 2030 will be among skilled workers, whereas new jobs in, for instance, battery manufacturing, will on average require a higher education profile. People will be needed in different business areas of vehicle manufacturing and supply and will require different levels of training. This transition is already well underway. In Germany, employment increased by 10% (15% for suppliers) in R&D and 34% in IT and remained stable at +2% in manufacturing activities between 2015 and 2019. Employment in the latter category is likely to fall in the coming years.

Infrastructure: 

Road traffic indirectly creates work for around 700 million construction workers that build and maintain highways, roads, bridges and tunnels. Electrification will create jobs in the next ten years related to the installation of charging infrastructure, expansion of grid and renewable energy production and the construction of new battery plants.

 

ACCESS THE PORTAL

 

CLEPA | With some floating a technology ban, social ramifications rise up the policy ladder too

In the slipstream of headlines like ‘EU mulls death penalty for combustion engine’, Brussels starts eying a social framework to ensure that ‘nobody is left behind’. But why should it take such drastic sentence to become serious about managing change in a socially acceptable way?

in CLEPA, by Sigrid de Vries 24-06-2021


The European Commission is expected to announce new CO2 limits for vehicles on 14 July as part of its “Fit for 55” package, aimed at putting the EU firmly on track towards climate neutrality by 2050. Rumours are that one of the scenarios currently discussed by the Commission leadership is a CO2 emission reduction for new cars of 60% by 2030 (up from the 37.5% agreed only in 2019) and by 100% in 2035: hence the comparison to a ‘death penalty’.

As CLEPA said in a statement, such stringent measures would—unless there is a role for renewable fuels acknowledged in the CO2 law—indeed be a de facto ban on combustion engine technology. It leaves vehicle manufacturers no other choice than going electric, or face huge fines.

For consumers and businesses, this means that, if they need a new vehicle in 2036, there won’t be a choice. The car will have an electric engine, regardless of whether it fits mobility needs, is affordable, or whether there is the green energy and the infrastructure to charge it or not.

That is a lot of ‘ifs’.

Automotive suppliers are not the only ones scratching their heads about the consequences. If recent public appearances are indicative, Green Deal Commissioner Timmermans is worried about the impact on those that rely on affordable mobility to commute, or to make a living as a retailer or small workshop. Other Commissioners have questions too. How to compensate for rising fuel and energy prices? How to keep mobility inclusive and accessible for all? How to avoid greater divergences between EU countries in the west and the east, and between more and less affluent regions within Member states?

“Close to 1 million people have a job directly linked to the production of vehicle powertrain technology”

The impact on workers in the automotive sector will be significant as well. Trade union umbrella organisation IndustriAll has good reason to argue for a social transition framework. The coal transition, generally recognised as dramatic, affects 0.015% of European jobs, according to the trade unions institute ETUI. Automotive employment amounts to 6%. Of the 3.9 million directly employed by vehicle manufacturers and suppliers, close to 1 million people have a job directly linked to the production of vehicle powertrain technology. The total number of employees requiring re- and upskilling is even higher, because of the parallel transformation towards smart mobility (connected and automated driving) and the increasing automation of the production. The magnitude of the challenge ahead only seems to be dawning.

To inform the discussion, CLEPA will launch the Automotive Employment Footprint Portal next week: an online repository of data on automotive employment and manufacturing, revealing both risks and opportunities. A successful transition starts with knowing the stakes. Watch your inboxes and our social media channels!

The portal gives access to over a dozen of recent studies from independent research bodies, offering insights into how the uptake of electric and electrified vehicles correlates with the impact on the workforce.

A spotlight on key regions showcases how the automotive industry is contributing to local economies, as vehicle manufacturers and suppliers typically form strong regional clusters in the production of vehicles and key components.

The pace with which battery electric vehicles win market share correlates directly to the number of jobs at risk, and to when this risk materialises. The percentage of electrified vehicles, i.e. hybrids and plug-in hybrids, also makes a notable difference. The Commission’s impact assessment for the current targets assumed a large share of hybrid vehicles underpinning its ‘net job gains’ conclusion. This scenario won’t stand on the tail of steeper targets.

A deep-dive under the ‘net’ employment impact numbers reveals that many livelihoods will be impacted dramatically. The move towards electrification will lead to a decrease in jobs linked to the production of conventional powertrains and to a greater demand for engineers with software and digital skills. The new drivetrains also require skills not yet available in the labour market. ‘Old’ and ‘new’ jobs are in many cases not easily interchangeable, require different skills, or can be located entirely elsewhere.

This does not mean the change should not happen. On the contrary: the climate ambitions are clear and shared. But automotive suppliers argue that society needs both pace and breathing space to manage this monumental transformation. With stringent targets under consideration, so must all of the options to achieve them, linking technology solutions and energy carriers in the most efficient way. To ‘leave no-one behind’, as the Commission declares in the Green Deal. And to make use of our industrial strengths.

“Technology neutrality is a long-standing principle in EU law. It supports innovation, competition, choice and lower prices for citizens and businesses”

It is encouraging to see some members of the European Parliament reaffirming the case for technology neutrality and openness in the debate on future mobility and climate policies. Technology neutrality is a long-standing principle in EU law. It supports innovation, competition, choice and lower prices for citizens and businesses. It does not assume any hermetic knowledge of the future. It keeps options open to adjust to new developments, be they technology breakthroughs, geopolitical events, or the availability of resources. The principle of technology neutrality has served well and should not be given up.

Other regions in the world are also reviewing how to make the transition work without causing unnecessary upheaval. CARB, the California Air Resources Board, is now looking to include a 20% quota for plug-in hybrids (PHEV) in their CO2 mandate beyond 2035. Hybrids with a minimum electric range of 50 miles (around 80 km) would be eligible. The move is based on experience with scrapping schemes showing that low- and moderate-income households (for a 4-person household this equates to roughly $100.000 annual income in CA) have a strong preference for PHEV. This underscores the relevance of hybrid solutions for the acceptance of electromobility in the wider population – even in an affluent region such as California.

In China, by 2035, ‘new energy vehicles’ are targeted to account for more than 50% of the new sales. By then, energy-saving vehicles must have fully realised hybridisation, so the strategy. Hybrid power is considered an effective energy-saving vehicle technology and pure electric and energy-saving vehicles should be developed simultaneously.

“Not all electric vehicles run on green energy. Not all combustion engines need to run on fossil fuel”

And then there is the defossilisation of fuels. Not all electric vehicles run on green energy. Not all combustion engines need to run on fossil fuel. Vehicles are (only then) climate neutral if they are charged with green energy or fuelled with sustainable renewable fuels. Policy makers, industry, infrastructure providers and mobility users must work to ensure that only green energy fuels our mobility as soon as possible.

Where electric mobility is the best and most economical solution, it will succeed. And we see a lot happening there. The business case is growing, especially where there are incentives and charging points in place. But where it is not, there should be choice.

In Europe, this requires ambitious CO2 targets that take ‘well-to-wheel’ emissions into account via a crediting scheme for climate-neutral fuels, combined with ambitious targets in the renewable energy rules, including sub targets for hydrogen and sustainable fuels, and a revision of the energy taxation directive to remove inconsistencies. This is achievable in the current regulatory framework, where it is not too complex and does not need a major overhaul. In this way, all efficient technologies can compete in the market and emissions would be reduced from new vehicles and the existing fleet alike.

The transition to climate neutrality will still be a challenge—the magnitude is immense—but can stay manageable, support jobs, make Europe stronger and indeed keep everyone on board.

Sigrid de Vries

CLEPA’s Secretary General

 

Climate neutral mobility: Defossilise energy and fuel, don’t ban technology

In the context of media coverage on emerging CO2-reduction targets for cars, says Sigrid de Vries, Secretary General of CLEPA, the association of automotive suppliers

in CLEPA, 17-06-2021


“The steeper the target, without recognition of sustainable renewable fuels, the closer one gets to a de facto ban on the internal combustion engine. Without renewable fuels acknowledged in this law, if you need a new car in 2036, there won’t be a choice. The car will have an electric engine, regardless of whether it fits the need or not, is affordable or not, or if there is green energy and the infrastructure to charge it or not. This is the opposite of technology neutrality, an important principle defended by the European Commission.

Automotive suppliers fully support the Paris goals and have a strong commitment toward achieving climate neutrality by 2050. Electrification is a highly suitable option but does not cater for all needs consumers and society have and raises questions on Europe’s strategic autonomy. The sustainable internal combustion engine—clean, efficient and powered by zero-carbon fuel—has an important role to play in making transport climate neutral, running alongside battery-electric and hydrogen fuel cell vehicles.

If electric mobility is the best and most economical solution it will succeed. But where it is not, there would be choice. This approach builds on European competitive strength and an entire strong value chain that creates jobs and added value. The transition to climate neutrality would still be a challenge, but may stay manageable.

For an effective and efficient path to climate neutrality, it is necessary to use all technology options and defossilise energy and fuels. This requires ambitious CO2 targets that take ‘well-to-wheel’ emissions into account via a crediting scheme, combined with ambitious targets in the renewable energy rules, including sub target for hydrogen and sustainable fuels, and a revision of the energy taxation to remove inconsistencies. This way, all efficient technologies could compete in the market and emissions would be reduced from new vehicles and the existing fleet alike.

There are significant opportunities for the automotive supplier industry to remain a key contributor to well-paid employment and to help secure the EU’s role in a global green and digitalised economy. This will require a consistent, predictable and committed approach from policy makers, industry and other stakeholders ensure the necessary framework conditions, reskill the workforce and enable the sector to maintain and accelerate investment levels in innovative mobility technology solutions.”

Automotive suppliers highlight strategic role in EU semiconductor policy; shortages may be felt well into 2022

  • Disruptions in the supply chain of semiconductor chips have globally delayed the production of 500,000 vehicles
  • Effects may be felt further, well into 2022
  • Industry needs a strategic approach that builds on existing strengths and fosters innovation

in CLEPA, 17-06-2021


Commenting on the shortages of semiconductors impacting the automotive industry, Thorsten Muschal, President of CLEPA, the European Association of Automotive Suppliers, says “The second quarter of 2021 has been very challenging, and we still see disruptions in manufacturing, with production delays and occasional stop-and-go situations. While the crisis is not yet over, we believe we’ve seen the worst and the situation is not likely to further deteriorate. But it cannot be excluded that the effects may be felt further, well into 2022. These circumstances also have an indirect impact on suppliers that are not using semiconductors for their own product portfolio, so it affects all of the automotive supply chain.”

In view of the strategic importance of semiconductors for the automotive industry, CLEPA has put together a report with policy recommendations based on input from its member companies. This document provides guidance on how to strengthen supply chain resilience in the EU and delivers principles for a strong European industry in microelectronics.

A timely response to the semiconductor crisis is essential to strengthen EU competitiveness and protect the jobs of thousands of citizens in the EU. Automotive suppliers alone employ 1,7 million people in companies developing sustainable, smart and safe mobility technology. Automotive is responsible for 37% of the demand for semiconductors in Europe, compared to a global demand share of 10%. A successful EU strategy for microelectronics can only be achieved through building on the central role of automotive suppliers, finds the CLEPA report.

The European Commission has identified connected and autonomous vehicles as a strategic cluster that offers the EU significant potential. Advanced driver-assistance systems are taking an essential role in moving towards safer and climate-neutral mobility. As well as boosting societal benefits, this technology has increased the value share of electronic and semiconductor systems to 35% of a car’s cost, with this being likely to continue growing to 50% with the further development of connected and autonomous vehicles.

SME focus

The CLEPA report draws particular attention to the role of small and medium-sized enterprises (SMEs). The smartisation of mobility poses big challenges for SMEs, which need to rapidly transform their production lines and rethink their access to materials. Without conditions and investment supporting R&I departments and industrial deployment, some of the smaller companies might not be able to meet demand, and this may seriously affect employment.

“Small and mid-sized companies are in a particularly challenging position because they are often more subject to the circumstances than master of the solutions, and depend very much on decisions that others in the supply chain take, both at the end of the materials supplier as well as at the end of the customer”, says Marco Stella, Vice-president and SME representative of CLEPA, and CEO of the Italian SME Duerri Tubi Style. “Especially for those that are still short on liquidity, still recovering from the pandemic, the need to evaluate employment levels can arise. The challenge here is to maintain the ability to immediately respond again when the material supply and customer market picks up.”

Critical component

The chip shortages have already delayed the production of 500,000 vehicles all over the world. In the EU some vehicle manufacturers have scaled-down production activities. It is likely that the semiconductor chips shortage will limit manufacturers’ ability to restore global vehicle inventories until late 2021 or early 2022.

It is estimated that in Europe, stock levels are healthy at 60 days between production and the moment vehicles hit the road, suggesting that production disruptions on average have had limited consequences for vehicle manufacturers to meet demand. The question remains on whether the companies’ supply will be in the same situation in the upcoming year. And it is here where jobs are very much at risk.

Advanced processor chips installed in electronic control units are essential for the performance of vehicles today. A modern car may contain around 100 electronic control units, and between 20 to 40 microcontrollers in charge of functions such as engine and power steering, door lock, or keyless entry. The electrification of the powertrain and the development of connected and autonomous vehicles will only further enforce the importance of semiconductor chips.

Europe’s automotive industry sources 60-70% of its chips in production through contract manufacturing facilities in Taiwan and China. Europe has relatively strong automotive chip-design capabilities, but the EU’s fabless industry specialised in chip design shrunk by 50% over the last 10 years, highlighting the need to reassess supply chain dependencies in the critical area of semiconductor technology.

 

CLEPA 2021 General Assembly re-elects President and confirms the association’s priorities

Thorsten Muschal (Faurecia), incumbent CLEPA President, was unanimously re-elected for a second term
CLEPA addresses members after a turbulent year for industry, highlighting the trajectory going forward and stressing membership value

in CLEPA, 11-06-2021


CLEPA, the European Association of Automotive Suppliers, confirmed several leadership mandates and new association membership applications during the annual General Assembly held on 9 June via video conference.

CLEPA President Thorsten Muschal was collectively elected for another 2-year term starting 2022 until 2023 included. CLEPA Vice-Presidents Pierre Barthelet (Garrett) and Matthias Zink (Schaeffler) were also re-elected for a further term. A full overview of CLEPA leadership roles can be found here.

Muschal said: “I’m honoured to serve another term. Coming out of a turbulent year for society and industry, we are still facing massive headwinds on our path. The semiconductor crisis, in particular, impacts our industry significantly and is not yet over. We are nevertheless continuing to rapidly adapt to the largest transformation within the industry in perhaps the past 40-50 years, driving the change towards sustainable and smart mobility. CLEPA has maintained steady support for members in raising the voice of suppliers and through being an active partner on EU political discussions.”

CLEPA has been consistent in the values that it has held in recent years and reaffirmed the priorities going forward to include ambitious climate and societal goals through a technology open and pragmatic approach, while also defending a competitive position with great innovation capabilities. In this spirit, topics supporting the green and digital transition, such as access to data, emission legislation, circular economy, international trade and industrial policy, are of key focus for CLEPA.

CLEPA’s Secretary General Sigrid de Vries highlighted the essential role that suppliers are playing within the mobility ecosystem, and underlined they will continue to be instrumental in delivering innovation to society. De Vries added: “A just and manageable transition to climate-neutrality is a top priority. CLEPA is working to secure the essential framework conditions, stretching from targeted support to strategic research & innovation, to the availability of recharging and alternative fuel infrastructure, to funds for and coordination of the massive re- and upskilling efforts that the sector is forcing on its way.”

Muschal closed with optimism, “In the wake of the COVID-19 pandemic we supported employees across Europe and made strides to support each other as an industry. Our sector has always showed a great resilience, it is our strength that enables us to overcome difficulties associated with crisis.”

The next CLEPA General Assembly will be held in Warsaw, Poland, on 9 & 10 June 2022.

Also, during the General Assembly, members confirmed the new organisations that have joined CLEPA since June 2020:

Corporate members:

  • Autofren-Seinsa (Spain) – Manufacturing of technical rubber elements for brake parts, transmission, steering, suspension, and brake systems.
  • Alfdex (Sweden) – Supplier of highly efficient solutions for cleaning diesel engines from crankcase gases
  • Brugola OEB (Italy/USA) – Producer of critical bolts.
  • Hyundai Mobis (Korea) – Automotive parts manufacturer focused on outfit/chassis products and autonomous driving, electrification and In-Vehicle Infotainment
  • Waymo (USA) – American autonomous driving technology development company
  • Zenuity (Sweden) – Development and commercialization of a software platform for unsupervised autonomous driving and advanced driver assistance
  • Smartmicro (Germany) – Design, development, and manufacturing of radar solutions for traffic management as well as automotive and airborne applications

Associate members:

  • I-Via (the Israeli Association of vehicle importers and automotive start-ups ).

 

CLEPA Secretary General Sigrid de Vries and President Thorsten Muschal taking part in the panel debate organised in the occasion of the General Assembly

 

Extension of steel import restrictions into EU will hinder competitiveness of automotive suppliers and put jobs at risk

  • The European Commission’s proposal to extend the steel safeguard mechanism by three years threatens to derail the automotive sector’s recovery
  • Automotive suppliers source most of their steel within the EU and predominantly import specialised steel for which no sufficient European capacity is available
  • Europe’s automotive sector is responsible for 19% of the demand of the EU’s steel industry, supporting thousands of jobs

in CLEPA, 11-06-2021


The European Association for Automotive Suppliers (CLEPA) is concerned that the European Commission’s proposal to extend the safeguard measure which is restricting steel imports into the EU will hurt the competitiveness of automotive suppliers and put jobs at risk.

Continuing the safeguard measures in a time where steel mills are struggling to meet demand, and prices for steel have reached record levels will negatively impact steel processing industries such as the automotive sector. Under the safeguard mechanism, automotive suppliers are currently subjugated to quarterly import quotas for several types of steel. These allocations are exhausted sometimes within days of the accounting period beginning, forcing suppliers to pay additional duties of up to 25% and limiting their ability to compete with other regions. The proposal to extend current restrictions by three years threatens to derail the sector’s recovery and reduce its global competitiveness.

CLEPA’s Secretary General Sigrid de Vries, commented: “Automotive suppliers typically only source steel outside of the EU in cases where there is no sufficient EU production capacity to satisfy the demand for specialised steel. This means that the continuation of the safeguard instrument with only minimal expansion of relevant quota does not serve the interest of the EU economy as a whole, and comes at a time where suppliers are struggling to source sufficient volumes of steel in time.”

“Europe’s automotive sector is responsible for 19% of the demand of the EU’s steel industry, supporting tens of thousands of jobs in the European steel industry. Automotive suppliers directly employ 1.7 million people across the EU, on top of the 1.2 million people employed in the manufacturing and assembly of vehicle bodies and vehicles. The sector also creates significant employment further down on the supply chain in sectors such as steel, chemicals, textiles and production machinery. Longer lead times and higher steel prices are currently disrupting supply chains. The proposed extension of the safeguard mechanism will continue to mount pressure on the supply chain, putting jobs at risk beyond the automotive industry alone”, says Sigrid de Vries.

Automotive suppliers source most of their steel, by a large margin, within the European Union, and predominantly import specialised steel for which no sufficient European capacity is available. The import allocation for specialised automotive steel is crowded out by imports of sectors with a far less demanding metallurgical requirement, including civil construction. This problem is particularly urgent in three of the dedicated product categories distinguished by the safeguard measure: metallic coated sheets (4B), Non-Alloy and Other Alloy Merchant Bars and Light Sections (12) and Stainless Bars and Light Sections (14). Further liberalisation and a better ringfencing of these categories will be required, for instance, by reassigning rebars and angles from category 12 to the categories dedicated for these less specialised metallurgical products in the categories, namely category 13 and category 17.