EU Green Deal too important to fail environment and industry – Newsletter Editorial March 2021

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.

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


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