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CLEPA | COP26 has given important guidance in both substance and tone – Newsletter Editorial November 2021

This year’s COP26 has just ended, and on a fairly upbeat note. The conference concluded with an agreement between 197 countries to limit GHG emissions even further, validating the objectives already expressed in the 2015 Paris Agreement. Three days before the end of the summit, China and the United States issued a joint declaration, pledging to work actively against climate change with a commitment to decarbonise and electrify. And there was no heavy outcry on either of the extreme ends of opinion, illustrating that consensus prevailed: there is a broad agreement on the need for action, shared by a large and diverse set of actors who, together, build critical mass towards meaningful change.

in CLEPA, by Sigrid de Vries, 18-11-2021

Striking too, was the increased space for shades of grey when identifying what meaningful action looks like. During COP26, an agreement was signed between over 30 governments and a number of large vehicle manufacturers to ban the internal combustion engine by 2040. However, the agreement was not signed by the world’s largest car manufacturing countries, China, Germany and the USA, nor by top vehicle producers, Volkswagen and Toyota.

 

There is no silver bullet to decarbonise transport; multiple solutions must be applied

Most notably, there was room for their arguments to be heard: there is no silver bullet to decarbonise transport; multiple solutions must be applied. Mobility and transport, people and countries, levels of development and investment capacity are all too diverse to apply a one-size-fits-all approach. Banning a technology is not the solution, the focus should be on defossilising energy and fuels.

Europe’s ‘Fit-for-55’ package can and should be strengthened in this respect. The proposed car CO2 targets for 2030 and 2035, measured at the tailpipe, leave electrification as the only option for compliance. The EU targets should be adapted to acknowledge well-to-wheel emissions, providing a more accurate carbon footprint, and allowing emission reductions through the use of sustainable renewable fuels in combination with efficient technologies like plug-in hybrids, range extenders and hydrogen combustion.

 

Scaling up the use of sustainable fuels in road transport, will help pave the way for maritime and aviation too

Where electric mobility is the best and most economical solution, it will succeed. But where affordability and charging infrastructure are not a given, there should be room for alternatives to leave no one behind. Complementing ambitious CO2 targets, quota for renewable energy, and price signals both in the ETS and energy taxation, fuel producers should get the market signal to increase production and de-risk investments in sustainable fuels. Scaling up their use in road transport, will actually help pave the way for maritime and aviation too.

Innovation is in full swing to bring these multiple solutions to the fore. The crucial potential of hydrogen is increasingly recognised, too, and investment appetite is building. At CLEPA, we held our first ever hydrogen in mobility think-tank this week with member companies, OEMs, academia, players in the energy sector and other stakeholders, in order to provide a forum for strategic technical discussion and to add value through thought-leadership. Many pioneering regions and industry players around the world are positioning themselves along the H2 value chain. Europe must avoid fragmentation in this field to remain competitive also on a global level.

 

We must keep in mind the large impact the transition will have on the manufacturing footprint and jobs

Beyond COP26, the search for solutions to climate change collides with two other major challenges: the fall-out of the COVID-19 pandemic and a transition that is not only green but also digital. These challenges have caused bottlenecks in the supply of essential materials and components, such as semiconductors, and have led to price increases, such as for magnesium. In addition, rising energy prices are causing inflation to rise. This has also been recognised by the European Union. All this is happening while the economy seems to be recovering.

As CLEPA President Thorsten Muschal, member of the management of Faurecia, put it this week while speaking to suppliers and policymakers in Portugal: “The EU auto suppliers’ industry is facing tremendous challenges: chip shortages, raw materials inflation and reduced production volumes due to the pandemic. This poses great uncertainty and occurs while the industry is in the middle of a green and digital transformation.”

Muschal also highlighted that “millions of jobs in mechanics will need to shift”, which is why “we need a manageable transition, keeping mobility accessible and affordable, giving industry the possibility to go through this needed change”. CLEPA indeed advocates for a managed transition, without compromising on climate targets, however, we must keep in mind the large impact the transition will have on the manufacturing footprint and jobs. Leaving no one behind means supporting a competitive automotive industry in Europe. Technology openness will be key in this respect.

We are living in a delicate moment, during which the right decisions will have to be taken, balancing social, economic and environmental needs. COP26 has given important guidance, both in substance and in tone. Automotive suppliers stand ready to help shape the future of mobility and industry every step of the way.

 

Sigrid de Vries,

Secretary General of CLEPA

 

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