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CLEPA Position Paper on Climate neutral transport and CO2 emission standards

For a technology-open framework that balances environmental, social and economic goals

 

This paper is a contribution by the automotive suppliers’ industry in Europe to the debate on achieving climate neutrality by 2050, the position of the sector on relevant legislation and suggestions for the way forward.

 

  • The automotive suppliers’ industry supports the Paris Agreement and the even more ambitious objective of climate neutrality. As world leaders in sustainable mobility, we provide the solutions to achieve the ambitious targets in our sector. We are convinced that the way to climate neutrality is through a technology open environment that balances environmental, social as well as economic goals. It will be necessary to further develop climate policy and its individual elements into a coherent framework which ensures climate neutrality at the lowest cost to society from the status quo up to 2030 and appropriate steps up to 2050. We stand ready to contribute to the design of this framework.
  • The current regulations are fragmented and not efficient enough: Achieving climate neutrality by simply increasing the level of ambition of the existing regulations in isolation creates high cost to society. Such an approach risks disrupting revenues and capacity to invest in innovation and employment at a time when scarce resources are needed to counter the COVID-19 crisis. Rather, interplay and cumulative burden resulting from the legislative agenda should be analysed and limited.
  • Principles for the further development of the policy mix: The Green Deal is an opportunity to align climate policies and to integrate what are currently strictly sectoral regulations. A robust CO2-pricing can improve their effectiveness and efficiency by internalising climate externalities and provide clear price-signals for investment and consumers.
  • Climate neutral mobility requires technology openness in the political approach and regulatory implementation: We need all technology options to achieve climate neutrality—from battery electric vehicles (BEV), to fuel cell electric vehicles (FCEV), as well as efficient internal combustion engines (ICE) including in hybrid vehicles and plug-in hybrid vehicles (PHEV). Defossilising energy and fuels to meet the demand of a climate-neutral fleet must be a priority.
  • A ban on the combustion engine would be counterproductive and unnecessary: We support policies to enable and accelerate electrification, but a ban on the combustion engine is not only potentially highly detrimental to industry, to its employees and to consumers, but would also be counterproductive to reducing emissions. By eliminating affordable low-carbon options for those consumers and businesses for which electrification does not provide the necessary utility or cost effectiveness, it will leave older, higher-emitting vehicles on the road. Investment in engine efficiency will be further disincentivised and the strong technical progress of the past years abandoned. A ban is also not necessary as climate-neutral internal combustion with renewable and low carbon fuels is viable and can cut emissions not only from new vehicles but also from the existing fleet. This technology can reduce emissions during the transition period and can help specific use cases where electric powertrains are not the optimal solution.
  • Well-to-wheel and life-cycle emissions should be considered in climate policies: To incentivise technologies with the lowest carbon impact for the entire value chain, emissions from vehicles should ideally be regulated on a life-cycle basis, with well-to-wheel emissions as a first step. Carbon pricing should complement vehicle emission standards to take advantage of the higher efficiency and effectiveness of such an approach and therefore the deeper aggregate emissions cuts that can be achieved.
  • A voluntary crediting scheme as a first step: It is encouraging that the Commission considers a mechanism to account for sustainable renewable fuel in vehicle emission standards, including a voluntary crediting mechanism.
  • Complemented by ambitious targets: Such an approach should be complemented by ambitious but realistic CO2 emission standards, along with adequate targets for renewable energy, renewable and low carbon fuels and the deployment of charging and refuelling infrastructure. Emission reduction achieved by these fuels would represent an important first step towards integrating climate regulation and towards a well-to-wheel or life-cycle approach.

We call on the European Commission to engage with us on promoting those technology pathways to climate neutrality that allow the successful transformation of the value chain and thus create a win-win for climate and society.