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.