Europe to cut vehicle CO₂ by 30%
Targets have recently been proposed for the EU fleet-wide average CO2 emissions of new passenger cars and vans that will apply from 2025 and 2030. Rose Gill, Insight Editor, explores the rationale behind the cuts and the potential impacts as the region works to lead the way in the fight against climate change.
Under the Paris Agreement, the European Union (EU) is committed to a domestic CO2 reduction of at least 40% by 2030. In working towards this commitment vehicle CO2 emissions reduction targets have been phased in. The current legislation states that by 2021 the fleet average to be achieved by all new cars is 95 grams of CO2 per kilometre (g CO2/km) and for vans the 2020 target is 147 g CO2/km. Both of these targets are based on the NEDC (New European Driving Cycle) test procedure.
In November 2017, the Commission presented a legislative framework setting new CO2 emission standards for passenger cars and light commercial vehicles (vans) in the EU for the period after 2020. The proposed Clean Mobility Package builds on the current CO2 regulations, which will be repealed on 1 January 2020.
The Package sets targets for cars and vans registered in the EU in 2025 at 15% lower than in 2021, so as to ensure that emission reductions occur as early as possible. Average emissions of the EU fleet of new cars and vans in 2030 will have to be 30% lower than in 2021.
The 2025 intermediary targets are designed to kick-start investments in greener technology and the 2030 targets are intended to give stability and direction to keep up the investments in new and clean vehicles.
Starting from 2021, the emission targets will be based on the Worldwide Harmonised Light Vehicle Test Procedure (WLTP), which was introduced on 1 September 2017. As the WLTP will be phased in, the newly proposed 2025 and 2030 fleet-wide targets are not defined as absolute g CO2/km values. Instead they are expressed as percentage reductions compared to the average of the specific emission targets for 2021.
The Commission says the 30% reduction target for passenger cars, although ambitious, is realistic and is the result of a robust and thorough impact assessment. The target goes beyond the desire for cleaner air and reduced greenhouse gas emissions; it is also designed to help European industries to be the world leaders in innovation, digitisation and decarbonisation. The Commission expects the 30% target to provide benefits for the environment, consumers and for employment:
- Environment – it will help Member States to meet their 2030 targets for the non-Emission Trading System sectors. It will deliver emissions reduction in road transport in line with its cost-effective potential, while leaving space for additional policies, in particular for trucks.
- Consumers – increased fuel savings will outweigh the increase in the up-front cost to purchase more efficient vehicles. The Commission estimates the net savings could be €600 for new cars bought in 2025 and some €1500 in 2030.
- Employment – Hybrid technology, which is incentivised, is expected to grow. Since these vehicles comprise an internal combustion engine and an electric engine they have the highest labour intensity. The phased approach should ensure sufficient time for the re-skilling and up-skilling of workers in the current automotive supply chain.
Internal combustion engines power almost all of the cars and vans in today’s car parc. To help improve air quality and lower CO2 emissions there is a drive to increase the deployment of zero-emission vehicles (e.g. battery electric and fuel cell) and low-emission vehicles, which are those having tailpipe emissions of less than 50 g CO2/km (mainly plug-in hybrids).
To support this initiative, the proposal includes a dedicated incentive mechanism for these vehicles. But, despite these measures, designed to speed up the market uptake of cleaner electric cars and hybrid vehicles, the Commission says the change in the fleet composition is likely to be gradual.
Even with a rapid increase in zero- and low-emission vehicles, the Commission expects that more than 80% of the new vehicles produced in 2030 will still contain an internal combustion engine.
We have all read sensational headlines in the media stating that some OEM fleets will be 'all electric' by the end of the decade. What this means in reality is that yes, more vehicles will be electrified, but, since the largest growth is expected in plug-in hybrids, vehicles will still contain a combustion engine for many years to come.
Indeed, the EU legislation in this area is completely technology neutral and the proposal does not include any technology-specific quotas or mandates. This leaves the individual vehicle manufacturers free to decide which technologies to apply in order to best meet their specific emissions targets.
As OEMs move to a whole vehicle approach for emissions compliance, we can expect the demand for cleaner, greener and high performing fuels and lubricants to increase.
Why incentivise zero- and low-emission vehicles?
The US, Japan, South Korea and China are moving ahead very quickly in the clean vehicle segment. China, for example, has introduced mandatory zero- and low-emission vehicle quotas for manufacturers from 2019. In the US, California and nine other states have successfully established a regulatory instrument to enhance the uptake of zero- and low-emission vehicles. These activities give the Commission cause for concern, in that the EU automotive industry risks losing its technological leadership here, which will be of particular importance for future growth.
By introducing incentives for these clean vehicles the Commission says it is delivering a well-chosen regulatory signal on the future market size to increase the confidence of those investing in zero- and low-emission vehicle technologies. In addition, they believe that private and public providers of charging infrastructure will have a more credible signal on the future charging demand, enabling further investment with less risk.
According to the Commission, the new proposal establishes ambitious, realistic, cost effective and enforceable rules to help secure a level playing field between actors in the industry operating in Europe.
Clearly, they hope that this action will stimulate both innovation in new technologies and business models, and a more efficient use of all modes for the transport of goods.
The Clean Mobility Package puts in place a clear direction of travel towards achieving the EU's agreed commitments under the Paris Agreement. It is also part of wider political context to make European industry stronger and more competitive.
The proposal has been submitted to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions for further consideration under the ordinary legislative procedure. The Commission has called on all stakeholders to work closely together to ensure its swift adoption and implementation.