EU Green Deal too important to fail environment and industry

The envisaged early review of the CO2-emission targets for cars and trucks for 2030 confronts the European Commission with an uncomfortable dilemma. The review offers a compelling opportunity to increase the efficiency of the available regulatory levers, allowing manufacturing competitiveness and employment to be preserved while delivering on ambition.

in CLEPA, by Sigrid de Vries, 17-03-2021


However, the timeframe of the forward-hauled review is so tight—it is set to be accomplished by June this year—that any serious rethinking of the available instruments is deemed ‘too cumbersome and too complex, while inviting the risk of unwelcome delays.’ Or so it echoes in Commission corners.

Are these concerns credible?

The EU Green Deal, coined as a green growth strategy, is too important to fail. There is too much at stake for the environment, workers, citizens and industry alike. It would be equally ‘unwelcome’ to risk massive collateral damage as a result of EU policy that is rightly aiming for bold and ambitious reforms.

As laid out in detail in the new CLEPA position paper on climate neutral transport, the Commission should seriously consider solutions that can make a difference and that actually already exist, within the current framework of policies and legislations. This is neither complex nor cumbersome, and it does not need to cause delay.

Simply upping the target levels without accompanying measures to making them viably implementable will not do the trick for the environment and cannot be considered as responsible policy making either. Such an approach risks doing an irreparable damage to the economic fabric that is fundamental for Europe’s capability to innovate and meet its goals.

What do the available policy levers consist of?

First, there is a need for the large-scale delivery of electric charging infrastructure to enable the current plans for vehicle technology targets to be achievable. At present, the number of public charging stations stand at 220 thousand, disproportionately spread across the EU. Significantly more stations will be needed to achieve the existing 37.5% reduction target for cars, and every additional percentage point will require correspondingly more charging stations and power infrastructure to serve them. The pending revision of the alternative fuels infrastructure directive should be used to mandate member states to make the necessary investments.

Second, technology should be allowed to deliver on climate neutrality, rather than regulation prescribing or banning technology. The full range of efficient technologies, renewable energy and climate-neutral fuels will be needed, so that the right technology can be chosen depending on the use case: highly-efficient piston engines powered by hydrogen or sustainable renewable fuel, electric vehicles (battery electric and fuel cell electric), hybrids and plug-in hybrids.

Importantly, technology openness will offer a choice to those consumers and businesses for which electrification is not a practical or cost-effective option, enabling them to take older, higher-emitting vehicles off the road. The definition in green procurement standards of zero and low emission vehicles should therefore include all technologies enabling zero and low emission driving. Plug-in hybrids with an electric range of 80 km should be treated the same as battery and fuel cell electric vehicles. Suppliers support the implementation of on-board fuel consumption meters to reflect as much as possible real driving emissions. Technology can also help secure electric-mode driving.

Policy should activate a link between CO2-targets for vehicles and incentives to invest in defossilised fuels

Third, policy should activate a link between CO2-targets for vehicles and incentives to invest in defossilised fuels to deliver on the objective of climate-neutral transport and mobility. Complementing electromobility, it is realistic to expect vehicles with an internal combustion engine on the roads up to 2050 and beyond.

With the use of renewable and low carbon fuels, CO2 emissions would decline from the get-go. Defossilising fuels has an immediate effect on emissions from all cars and trucks on the roads, not only new vehicles. Renewable fuels can be deployed in the existing fuel infrastructure, and can be produced efficiently.

Clean combustion is a viable option, also regarding air quality, as recent data from the UBA, the German Energy Agency, has demonstrated. The regulatory framework should recognise and foster the reduction potential of renewable fuels in transport. This doesn’t need a major overhaul; the instruments are there, such as the existing sustainability certification scheme for transport fuels in the Renewable Energy Directive.

A system, for example, of providing CO2 credits in exchange for the use of renewable fuels can deliver substantial CO2 savings cumulatively by 2030, as calculated by Frontier Economics, 2020 for the German ministry of economy. Such crediting scheme can provide a pull to market-driven carbon-neutrality, facilitating the efficient use of different technologies. The scale in road transport would also help to pave the way for the use of renewable fuels in hard-to-electrify sectors such as shipping and aviation.

The direction of travel and the speed of the journey are crystal clear and automotive suppliers are heavily invested in the change

To be clear, this is not an argument against electrification of the drivetrain, nor do automotive suppliers argue to slow anything down. The direction of travel and the speed of the journey are crystal clear and fully supported. The industry is heavily invested in the change, as illustrated this week once more by the CLEPA Pulse Check survey of its members.

Ours is an argument in favour of a pragmatic approach, a ‘win-win’ for climate and jobs, one that harnesses EU industrial capacity and creates a level playing field for technology options to compete in the marketplace in the EU, but also globally.

There are significant opportunities for the mobility 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. But there are also significant risks involved. Especially when forced disruption takes precedence over rapid yet efficient transformation. The jobs at risk are, in many cases, not easily interchangeable with newly created jobs elsewhere in the mobility value chain. Many livelihoods will be impacted dramatically.

Industry and society need to be given the chance to manage an ambitious transition. The current regulatory framework has the instruments in place to help deliver short-term. They need to be seriously considered and mobilised.

Sigrid de Vries

CLEPA Secretary General

Automotive supply industry confidence picks up considerably – CLEPA Pulse Check

  • Profitability expected to stabilise on back of growing order intake
  • Sentiment positive despite hindrances in supply of semiconductors and other critical materials
  • Nine out of ten suppliers are reviewing and adapting product portfolio

in CLEPA, 16-03-2021


Automotive suppliers have become significantly more optimistic with their outlook on 2021, with 38% of surveyed suppliers showing positive forecasts compared to just 8% six months ago. Yet, 31% of respondents still hold a notably negative view, a much higher share than in pre-Corona times. This follows from the latest CLEPA Pulse Check survey on business sentiment in the sector, held late February into early March.

The majority outlook is robust in response to the much faster than expected rebound of the global automotive market, with four out of five suppliers expecting to increase order volumes in the next 12 months. Profitability is foreseen to stabilise further, with numbers above 5% in reach for over four out of ten respondents again.

“Sentiment is improving despite the continued concern on the impact of the pandemic and the current difficulties with deliveries of semiconductors and other critical materials, like steel and plastics, and constraints in transport and logistics capacity, all of which do have a dampening effect”, said Sigrid de Vries, CLEPA Secretary General. Over 60% of respondents in fact indicate to be impacted by these difficulties, resulting in delayed or interrupted production.

Respondents acknowledged that the semiconductor crisis has unveiled flaws in the just-in-time supply chain management. This has been compounded by low upfront chip commitment, and competing with strong demand in consumer electronics and a saturated capacity with base-chip manufacturers. Short-term recovery is not expected before at least another 3 months, and concerns are raised about the traditionally strong consumer demand  in the third and fourth quarters ahead of Christmas shopping. De Vries: “Suppliers and OEMs must work to increase their visibility on demand along the whole chain and leverage the rapidly growing automotive demand toward other sectors.”

Situation on the ground 

A closer look at the overall sentiment reveals a considerable number of both bullish and more bear-sighted respondents, with the share of neutral views fading. De Vries: “The situation on the ground differs depending on exposure to global markets, impact of the COVID-19 crisis, level of advancement towards new opportunities in connected and automated driving and alternative powertrain solutions including electric motors, axles and battery management systems, and the need to manage change in a shrinking market.” The rebound in order volumes is mainly seen in China and the US, with Europe lagging behind. 

The pandemic is accelerating the structural transformation of the sector on the road to digital and carbon-neutral mobility, which had already started before 2020. “During the crisis, many companies have drastically cut costs and these measures are now paying off. With expectations on the pace of the economic recovery in 2021 until only recently having been much more modest, companies now see their order books filling up fast, allowing for an uptake in investment spending and planning.”  

Dramatic change 

Market watchers agree that the need for further structural measures has not gone away. “The race to stay competitive is on, and there will be winners and losers as a result. This is indeed visible in the CLEPA Pulse Check. Only 4% of respondent do not foresee dramatic change in their businesses in the next 5 years. This number has not yet been so low”, added De Vries. 

Change is expected to culminate in further consolidation of the sector (70% of respondents rank this number one). 68% refer to an expected shift in profit pools from traditional components to software. Half of respondents point at the increasing importance of activities involving key high-tech components.  

So-called sunset components are believed to become even more commoditised with lower margins resulting consequently. For those active in combustion engine related technology, the increasing demand for electrified solutions puts significant pressure on their business model. With global automotive volumes not foreseen to reach beyond 100 million units again any time soon, the overall pie is also shrinking.   

Portfolio shift 

For many, the challenge is to maintain revenues while making substantial investment in alternative solutions, without an immediate return in sight. The demand for electrified vehicle is increasing but the overall share in sales is still modest, reaching 11% of market share in Europe in 2020. The same applies to smart mobility and connected services. The fight for a part of the future share is, however, taking place right now. 

Nine out of ten suppliers are currently reviewing and adapting their product portfolios. The Pulse Check reflects the various strategies they currently deploy to manage change. Foremost, 61% of respondents ranked in-house development of new technologies a priority, secondly, 51% opt for change of strategic focus within the existing portfolio, with consolidation and mergers and acquisitions ranking almost equally third (32%) and fourth (29%). Interestingly, half of suppliers also actively explore markets for their technology solutions outside of the automotive realm, notably in household appliances and charging solutions. 

CLEPA performs the Pulse Check survey twice a year, surveying CLEPA members with the support of McKinsey who aggregate the data. 

 

European steel users call on Commission to terminate safeguard measures on 30 June 2021

In response to today’s announcement by the European Commission that it will review the safeguard measures on steel, in place since 2018, a coalition of downstream users of steel is urging the Commission not to extend the measures beyond their expiry date this June.

in CLEPA, 26-02-2021


While the COVID-19 pandemic has severely impacted manufacturing activity across all sectors in Europe during 2020, production levels are now increasing and are expected to continue to do so as the economy recovers during 2021.

As a consequence, and since the second half of 2020, companies are facing surging prices for steel products and long delivery times because of an insufficient domestic supply. Due to the safeguard measures currently in place, reduced competition from third countries means that import alternatives aimed at easing cost and lead-time pressures on European manufacturers have been limited.

The possibility of extending the safeguard measures beyond June 2021 adds to the uncertainty and adverse market conditions that steel users are currently facing.

It is in the interest of downstream users to rely on a strong and competitive EU domestic steel industry. Excessive protection will only result in an uncompetitive European steel industry, to the detriment of downstream users and final consumers. Therefore, the steel safeguard measures should expire on 30 June 2021 as foreseen.

 

The coalition of EU trade associations representing the interests of downstream users of steel consists of ACEA, APPLiA, CECE, CEMA, CEMEP, CLEPA, Orgalim, and WindEurope.

 

2021.02.10 Joint PR-Review of Steel Safeguard Measures_vF

 

 

CLEPA welcomes the European Commission’s new trade strategy and is ready to continue to engage

CLEPA recognises that today’s communication confirms the EU’s growing attention for sustainability and level playing field. CLEPA will continue to play a constructive role ensuring that trade policy initiatives that aim to address legitimate concerns regarding level playing field, supply chains, human rights and sustainability are shaped effectively and do not result in counterproductive outcomes. It will be crucial to ensure that trade policy instruments do not circumvent or undermine the WTO. Instruments that could be perceived as protectionist should be carefully considered and trade partners should be consulted to avoid trade tensions and a spiral of retaliation measures. Trade in innovative and sustainable technologies will play a key role realising the objective of a sustainable and circular economy, highlighting the importance of a trade strategy that facilitates a global flow of goods and access to markets.

in CLEPA, 18-02-2021


CLEPA Secretary General Sigrid de Vries said: “CLEPA welcomes the European Commission’s new trade strategy and the clarity the communication provides on the core objectives of the EU’s trade policy. Europe’s automotive suppliers agree that an open trade regime is at the centre of Europe’s economic prosperity and competitiveness. Continued access to global markets and a stable, global trade environment will be crucial for our sector to recover from the current crisis and continue to invest to maintain our leading role as innovators in sustainable and safe mobility.   

The openness of the Single Market and Free Trade Agreements create opportunities for businesses across the world and help attract investments, creating jobs and strengthening Europe’s economic fabric. CLEPA will continue to support the Commission in its efforts to negotiate trade agreements with third countries and endorses ratification of concluded agreements, including the FTA with Mercosur. The Commission rightly pursues reform of the World Trade Organisation, as it will play a crucial role providing a secure and stable framework for international trade and investment.  This is particularly true for automotive suppliers who rely on an open and stable trade environment to fulfill a leading role in the global supply chain. The scale of the global market allows our industry to provide 1.7 million direct jobs in the EU alone and invest €30 billion a year in innovation.

CLEPA | Sheer dimension of chip shortages requires rethinking by industry and policy makers

The sheer dimension of the semiconductor shortage and the complexity of solving both short and long term issues requires rethinking of supply chain options by both industry and policy makers. It also signals how 2021 may well become a year of great volatility for manufacturing industries.

in CLEPA, by Sigrid de Vries, 17-02-2021


Many elements are coming together in the current semiconductor shortage in the automotive industry: from the fall-out of the COVID-19 crisis and the unpredictability of crisis recovery, to increased automotive demand for chips due to assisted-driving functions and electrification, to geopolitical and natural disaster ‘de-risking’, to competing demand from other sectors.

In the first wave of the pandemic, the automotive industry came to an almost complete standstill and had to dramatically adjust production volumes to fence off costs, with little to go on as regards timing and speed of the recovery. When demand then picked up rapidly, many were still wary on how solid the trend would be. The automotive supply chain for advanced chips is typically long and this added complexity: many actors need to align and sync their demand and supply.

Marked volatility may also hit sourcing of other key materials

In January 2021, the sector saw itself confronted with a large gap between ordered and produced vehicles, coupled with a higher demand for 2021 than scenarios foresaw and much lower stocks than usual. In addition, demand for electric vehicles started soaring driven by acceleration of the green transition, increasing pressure on semiconductor demand.

Industry and market watchers expect the disruptions to last well into the second half of the year, with great variety in who will be hit and for how long. Industry sources also warn that similar patterns may occur throughout 2021 in the sourcing of other materials needed to build cars as well as industrial goods and consumer products. A continued, marked volatility in demand, driven by uncertainty around the containment of the pandemic, regional variations, and difficulty to predict purchasing behaviour, may cause disturbance in the supply of essential resources. Logistics may be vulnerable too, with demand soaring in China taking away capacity from elsewhere.

The unmistakable trend, however, is that automotive demand for semiconductors will continue to grow big time due to the increasing share of automated and assisted driving technologies to keep drivers comfortable and safe, as well as the electrification of vehicles with the required sophisticated management of battery performance and other electronics.

Automotive demand for semiconductors will continue to grow big time

On average, a vehicle today already contains around a hundred advanced semiconductors chips, a steep increase compared to only a decade ago, but the value of semiconductor content of electrified vehicles can be up to three times higher. Expert estimations hold that electronics and semiconductor materials could represent up to 45% of the value of a car by 2030.

Automotive supplies are already heavily invested in vehicle electronics, covering the wide range of applications from on-board comfort and infotainment systems to active-safety features to battery and wider powertrain management. With activity and employment rapidly diminishing in combustion engine based technology, the expansion into ‘digital’ offers substantial opportunities.

Whereas the European semiconductor ecosystem currently provides employment for 200,000 people, McKinsey estimated in 2019 that under the right conditions, the automotive industry alone could create 400,000 European jobs related to electronic and software components for vehicles. Currently, 1.7 million people are employed by the automotive suppliers in Europe, on top of the 1.2 by vehicle manufacturers.

However, the investments needed amount to billions of euros and the return in both revenue and employment levels is years off in comparison to the impact of the restructuring costs and R&D efforts made in the here and now. In this light, the semiconductor events not just underline the attention required for the diversification and resilience of the supply chain. They also raise strategic questions for Europe.

Questions that the European Commission will try to partly address through a Microelectronics Alliance for Europe, to be launched next month, in analogy to the earlier established European Battery Alliance. The German and French governments are also looking to increasing industrial activity in this field, as voiced in a joint statement this week, notable through the IPCEI instrument (Important Project of Common European Interest), and argue that the European Recovery and Resilience Funds should be used for this.

Focus should be on R&I and market demand, rather than on subsidies and reshoring

The European Commission will look at both manufacturing options as well as strategic R&I, and this is the right approach. Both aspects need careful consideration. Successful industries do not result from subsidies and government intervention towards reshoring, but follow market demand and concrete business cases. The focus on R&I will be critical, as will the availability and strengthening of digital skills and competence throughout education and employment in Europe.

The key challenge will be to secure advanced semiconductor development and production in Europe, sharing base technology between players while allowing enough space for diversification, on a scale to profitably supply a home market as well as players abroad. The Commission has rightly identified automotive as one of four sectors to focus on. Automotive globally is responsible for around 10% of semiconductor demand, yet in Europe for 37%: there will be no successful European semiconductor strategy in which automotive won’t play a key role.

European semiconductor strategy cannot be successful without a key role for automotive

The future semiconductor strategy is connected to the wider question of how to ensure that EU industry as a whole captures business and employment opportunities in electronics, software and artificial intelligence and secure its future relevance. In this light, also the upcoming Digital Decade Strategy of the Commission and the review of the EU Industrial policy will need careful calibration. The many strategies and initiatives must be coherent and mutually reinforcing.

A successful industrial strategy will have to rely on the long game of supporting R&I investment, standard setting and improving Europe’s role in artificial intelligence research, skills as well as its attractiveness for international talent. The automotive sector has the potential to serve as an essential bridgehead for the wider European industrial base to capture opportunities of an increasingly digital economy.

Sigrid de Vries

CLEPA Secretary General

 

Automotive suppliers raise red flag over border closures and intensified inspections

The implementation of border controls between the German and the Czech and Austrian border crossings risk to create disturbances in automotive industry production plants soon.

in CLEPA, 15-02-2021


Sigrid de Vries, CLEPA Secretary General highlights: “Europe’s automotive suppliers are concerned about recent announcements on border closures and intensified inspections. These measures result in disruption at Europe’s internal borders and critical delays in the supply chain. The Single Market is an important achievement of the European Union. Defending its integrity is a priority, specifically with regards to the freedom of movement of goods and workers. Parts stuck at the border could disrupt our Just in Time supply chains, interrupt production and put the sector’s performance and jobs at risk”.

in CLEPA, 15-02-2021


While health and safety are paramount, and industry itself has taken numerous measures to keep up highest standards, it is also important to safeguard the integrity of the internal market. “EU governments must respect their commitment agreed during the January Council to keep borders open”, says de Vries.

“Transport of goods should be exempt from border closures and Member States should ensure the alignment of their border control measures to support the functioning of the Single Market. If controls at the border crossings are intensified, Member States should respect their commitment to prioritise freight transport, as done successfully during the first wave through the introduction of ‘Green Lanes‘ with easily applicable rules. It is important to note that COVID-test requirements for professional truck drivers could undermine corridors for goods and risk disrupting supply chains, as shown by the example of Dover in December, where long queues to test truck drivers resulted in significant disruption, while almost all truck drivers tested negative for the virus. Only by setting up a practical test practice that can ensure the protection of the workers while guaranteeing the supply of goods would keep the automotive supply chain working”.

EU-China investment agreement is hopeful sign, but clarity on substance is critical

Europe’s automotive suppliers welcome the conclusion of negotiations between the EU and China on a Comprehensive Agreement on Investment

in CLEPA, 30-12-2020


Sigrid de Vries, CLEPA secretary general, comments: “China is our industry’s second most important investment destination and European automotive suppliers are the biggest foreign investors in the sector in China. There are growing concerns that investment and market access conditions in China are uncertain and do not reflect the openness of the European market. A deal that secures and improves reciprocity in market access and investment conditions is therefore crucial for our industry and the protection of hundred thousands of jobs across the EU and China.”

European suppliers would support a deal that eliminates hurdles for investment in so-called new energy vehicles, provides enhanced protection of intellectual property and introduces more transparency and disciplines on state aid to establish a level playing field and reduce market distortions. Lastly, the deal could provide a meaningful institutional underpinning for cooperation between the EU and China to achieve climate neutrality and address human rights concerns.

CLEPA wants to acknowledge the efforts on both sides over the past seven years to come to an agreement. De Vries: “With the political decision to conclude negotiations being taken, it is now critical that the European Commission engages with all stakeholders to provide more clarity on the substance of the agreement. European suppliers currently lack sufficient detail on the Comprehensive Agreement on Investment to assess whether the sector’s concerns are sufficiently addressed. CLEPA is ready to scrutinise the agreement in principle and contribute to the next steps.”

 

Automotive suppliers comment on the EU-UK trade deal

The European Association of Automotive Suppliers, CLEPA, welcomes the Christmas trade agreement between the EU and UK and thanks all parties involved for their commitment to getting a deal agreed. This deal represents the starting point to ensure the continuation of the cooperation for both sides.

in CLEPA, 24-12-2020


Sigrid de Vries, CLEPA Secretary General, commented: “This deal avoids what would have been a worst-case scenario for European suppliers and the many jobs depending on the EU-UK trade relationship. Businesses and customs authorities now need The European Association of Automotive Suppliers, CLEPA, welcomes the Christmas trade agreement between the EU to work around the clock to get ready for the new trading conditions only one week before its implementation. We ask policy makers to engage with us to ensure trade in components is not needlessly being hit by tariffs and to avoid disruption at the border.”

CLEPA will analyse the technical details of the deal as soon as all the material is published to assess the extent into which this deal will serve the interests of the highly integrated EU/UK automotive supply chain, and refrain from commenting on the substance of the deal before then. Already certain is though that the deal will not avoid the resurrection of many trade barriers. We will therefore continue to work constructively with our partners in the EU and the UK to ensure that this free trade agreement proves a first building block rather than an end point.

 


 

About CLEPA

CLEPA, the European Association of Automotive Suppliers based in Brussels, represents over 3.000 companies, from multi-nationals to SMEs, supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over 30 billion euros yearly in research and development. Automotive suppliers in Europe employ about five million people across the continent.

A manageable transition to climate neutrality rests on competitive technologies

Sigrid de Vries, Secretary General of CLEPA comments on the Strategy for Sustainable and Smart Mobility, adopted today by the European Commission:

in CLEPA, 09-12-2020


“A manageable transition, for the climate, industry and employment, rests on competitive technologies such as the internal combustion engine, plug-in hybrids, fuel cell and battery electric vehicles. Only a transformation that is industrially successful and socially accepted can be sustainable politically and achieve the climate neutrality objective. A strategy that builds exclusively on battery and fuel cell electric vehicles contradicts the principle of technology openness and will neither achieve carbon neutrality nor support European competitiveness.”

The automotive suppliers in Europe, associated in CLEPA, support the Paris Agreement and the objective of climate neutrality for 2050. They are convinced that the way to climate neutrality is through a technology open environment that balances environmental, social as well as economic goals.

De Vries: “The question is not if, but how to best achieve climate neutrality. Climate policy must strive for effectiveness and efficiency in order to achieve the objective at a minimum cost to society. We underline, that an approach taking life-cycle or well-to-wheel emissions into account will create incentives for all technologies to reduce emissions and increase efficiency.”

CLEPA welcomes the Commission’s work on exploring an approach, including impact assessment, that takes into account the potential contribution of fuels from sustainable renewable sources including the option of a voluntary crediting mechanism. It is positive that the Commission considers increasing targets for renewable energy and sustainable renewable fuels in the Renewable Energy Directive (RED II) to ramp up their development and deployment.

De Vries: “Climate-neutral internal combustion with fuels from sustainable renewable sources is a viable option. Supplying renewable energy and fuels for mobility along with the necessary infrastructure must be a priority for policy makers, including for road transport and not limited to other sectors. It is positive that the Communication recognises this, and we are keen on working further on the rules and conditions to make deployment of renewable energy and sustainable fuels from renewable sources a success. The targets of 3 million public charging points by 2030 and 500 hydrogen stations by 2025 are welcome. But the need will by far exceed these numbers, specifically if the CO2 emission targets for vehicles for the year 2030 were to be made tougher.”

CLEPA stands ready to contribute to the detailed design of the rules, regulations and definitions shaping the path ahead. For one, it will be important to keep the clear distinction between pollutant emissions and carbon emissions and to maintain the focus of the respective regulations.

CLEPA welcomes the Commission’s objective of designing a clear framework for artificial intelligence (AI).  “Artificial intelligence is a key enabler for the automotive industry’s digital transformation. AI can also contribute to reducing the impact of transport on the environment, and significantly improve road safety”, says De Vries.

CLEPA supports a horizontal AI legislation addressing only high-risk AI applications and ensuring a level playing field for all actors. These principles can be complemented with technical requirements in sector-specific regulations (either new or by modifying existing legislation), if deemed necessary.

Availability and access to data from connected vehicles is still often hampered, as the strategy correctly points out. A European Common Mobility Data Space is welcome in principle but further details on the design and objectives are required to assess its added value.

CLEPA welcomes the objective of automated mobility being deployed on a large scale by 2030 and calls on the European Commission to speed up processes to create a harmonised EU legal approach for highly-automated applications as a precondition for reaching this goal.

 

 

Stakeholders’ joint letter: Sustainable renewable fuels should be included in the EU mobility legislation

ON 30 NOVEMBER 2020, CLEPA TOGETHER WITH 38 ASSOCIATIONS AND COMPANIES, COLLABORATIVELY SIGNED AND SENT A LETTER, CALLING ON THE EUROPEAN COMMISSION TO INCLUDE SUSTAINABLE RENEWABLE FUELS IN EU MOBILITY LEGISLATION.

The signatories of this joint letter represent a crucial part of the automotive, fuel, energy industry and civil society in Europe, i.e. a combined force behind the transformation of EU mobility towards climate neutrality in a smart and sustainable way.

The European Union has set itself the ambitious objective of becoming climate neutral by 2050 and consequently raised its 2030 climate target. Whether the objective will be achieved and what impact this will have on EU competitiveness and employment strongly depends on the design of a suite of climate policies for the coming years. Transport and future mobility will be a central element of these policies. The EU’s long-term climate strategy cannot rely solely on the development of new technologies and infrastructures; it must embrace a diverse portfolio of solutions in parallel, including existing sustainable renewable liquid and gaseous fuel solutions that can reduce greenhouse gases starting today.

Against this ambition, the EU Commission will outline the Sustainable and Smart Mobility Strategy and revise important mobility and energy legislations, such as CO2 emissions standard for cars, vans and also heavy-duty vehicles. These upcoming revisions are the timely opportunity to implement a truly technology neutral approach by including the contribution to emissions reduction achieved using sustainable renewable fuels.

This recommendation aligns with the following principles, crucial to achieve a carbon neutral road transport sector in Europe:

  • Technology and fuel diversity towards 2050 – With increased climate targets there is added urgency for transport to accelerate its path towards net-zero emissions. To facilitate this acceleration, a broad portfolio of solutions is necessary to support the full spectrum of geographic, economic and vocational market demands. Considering the lack of a “one-size-fits-all solution”, it is imperative that all low carbon options, including alternative and renewable fuels, play a role in the energy transition not only on the existing fleet but also for new vehicles to curb the GHG emissions from the road transport sector across all the EU countries.
  • Coupling the efforts for the expansion of the sustainable renewable fuels market with further improvement of vehicle efficiency – Despite gains in fuel efficiency, increased demand for personal mobility and freight transport have led to increased CO2 emissions from road transport. It is necessary to leverage all available solutions to reverse this trend and accelerate the decarbonisation of the sector. Accelerating the production of sustainable renewable fuels, accompanied by continued development of a range of new vehicles optimised for these fuels, can have a climate-positive impact today via the existing and future vehicle fleet for both passenger cars and heavy-duty vehicles.
  • Enabling a competitive, sustainable market till 2050 – Many publications have shown that relying on full electrification alone will not result in climate neutrality in 2050. Products and solutions need to be placed according to their mission profile, where they are more necessary and accommodating the market demand. Conventional fuels and engine technologies provide a stream of revenues for vehicle manufacturers that can continuously be invested into alternative powertrains and solutions, according to the mission segment. As global players, vehicle manufacturers will maintain a central role in delivering innovative products, also in other parts of the world.
  • Integrating a growing rate of renewables in the market to practice the circular economy while seizing industrial opportunities – Sustainable renewable fuels technologies offer sectorial integration with the waste management and the agricultural sectors. This enables a clever approach to treat waste materials, which would have otherwise been disposed with the consequent emissions, while producing sustainable energy and, at the same time, high quality by-products like bio-fertiliser. This is a landmark example of circular economy targeting emissions in agriculture and waste. At the same time, the production of sustainable renewable fuel technologies involves a long value-chain, from renewable energy systems to components, taking place mostly in Europe. Sustainable renewable fuels value chain can contribute to create many new jobs and to maintain industrial leadership, while strengthening the cooperation with third-countries on innovative energy projects to speed up the energy transition.
  • System affordability – It is key to avert mobility poverty and to avoid a two-speed Europe while heading towards a carbon neutral mobility system. Being based on proven engine technologies and an already structured distribution network, sustainable renewable fuels are the most cost-efficient way to contribute to the decarbonisation process at the lowest possible cost to society. Besides the cost in relation to emission reductions, it is important to consider the impact on industrial competitiveness, innovation, affordability, and employment to ensure a fair transition for all European citizens.

Our industries are ready to contribute to a technology-open, ambitious but pragmatic regulatory framework to drive the decarbonisation of EU road transport.

 

Read the full letter here