September 29, 2017
Earlier this month, ACEA President Dieter Zetsche and I had the honour of hosting a press conference for international media at the Frankfurt Motor Show. At this occasion, we laid out the European automobile industry’s pathway to future CO2 reductions from passenger cars.
Manufacturers are committed to reducing CO2 emissions from their vehicles, and our industry has been succeeding at this. Last year, the average emissions of a new passenger car hitting the road were 36.5% lower than in 1995. And by 2021, CO2 emissions from new cars will be 42% less than in 2005. Indeed, the EU already has the most challenging CO2 targets for vehicles in the world.
However, there are no targets for the post-2021 period in place yet. That’s why the European Commission is now working on a new CO2 proposal for passenger cars and vans, which is due out before the end of this year. From our side, we have developed a position on the future CO2 regime that focusses on four key elements: timing, ambition level, the so-called ‘conditionality’ principle and a mid-term review.
In order to be consistent with the timing of the EU’s 2030 Climate and Energy Framework, it clearly makes sense to set a new CO2 target for passenger cars for the year 2030, with 2021 as the baseline. A 2030 CO2 target would also give manufacturers the lead-time they need to plan for the required strategic investments and to develop products and technologies based on the new WLTP emissions test, which entered into force earlier this month. Importantly, it would also give EU member states and other stakeholders sufficient time to implement the necessary steps to ensure a higher uptake of alternative powertrains. Something I will come back to later on.
This brings me to the second element, the ambition level. The European automobile industry recommends that CO2 reductions from cars between 2021 and 2030 should be at a level of -20%. This is a steep reduction. Moreover, it is in line with what is expected of other industry sectors and is consistent with the targets agreed under the Climate and Energy Framework – not to mention the global COP21 agreement.
Beyond 2020, it will be technically unfeasible to continue improving internal combustion engines at the current rate. Many of the most cost-efficient technologies will have already been used by then to reach the 2021 target. Further reductions of CO2 will therefore be strongly dependent on increased sales of alternatively-powered vehicles, and electrically-chargeable vehicles (ECVs) in particular.
Concretely, this means that success in meeting the 2030 target will be linked to the number of ECVs in the fleet. All ACEA members are currently expanding their portfolios of alternatively-powered vehicles and are investing heavily in them. Proof of that was on display in Frankfurt. Unfortunately, however, we see that both market penetration and consumer acceptance of these vehicles are still very low in the EU – and this is no longer due to lack of availability and choice.
The latest ACEA data show that in the first half of 2017 ECVs made up 1.2% of total new car sales, with huge differences between the member states. In other words, the final product alone – no matter how good it is – is not sufficient to create demand. The reality is that market uptake and consumer acceptance of alternatively-powered vehicles (APVs) depend on several factors that are beyond our industry’s control.
Firstly, there are the necessary investments in recharging and refuelling infrastructure that need to be made by member states and infrastructure providers. Secondly, a higher market share will only be possible with the right supportive schemes in place at the EU, national and local level to stimulate sales of APVs (including financial and non-fiscal measures).
Given this unpredictability, ACEA believes that the post-2021 CO2 reduction target should be conditional on both the market uptake of ECVs and the available refuelling and charging infrastructure for electric, CNG and hydrogen-powered cars. In our opinion, this conditionality principle links Europe’s long-term climate objectives to the reality of the market. The European Commission’s proposal should therefore include a mid-term review in the year 2025 to assess progress in both fields.
In practice this means that, based on a review in 2025, this target can be adapted upwards or downwards. In other words, if investment in infrastructure is still lacking by then and sales of electrically-chargeable vehicles remain sluggish, the target should be adjusted downwards. The other way around, and this is something I want to emphasise, if the uptake of ECVs exceeds expectations and the necessary infrastructure has been made available by 2025, manufacturers would be willing to meet a more ambitious target by 2030.
Let me be clear about one thing, our industry is ready to undertake every effort to increase the market uptake of alternatively-powered vehicles. But as long as their market share does not rapidly and significantly increase, APVs will have to be complemented by other powertrain options in order to effectively reduce CO2. This means we will need to further leverage the latest diesel technology if we want to have a chance at meeting future CO2 targets. Today’s Euro 6 diesel vehicles, which now also meet the strict requirements of the new real driving emissions (RDE) test for pollutants, will thus continue to play an important role in the gradual transition to low-carbon vehicles.
In short, ACEA favours setting an ambitious but realistic target for cars for 2030, with an interim review in 2025 to take into account the market uptake of ECVs and the availability of recharging and refuelling infrastructure. The conditionality principle links the post-2021 target to the future development of the market, giving us the scope to be more ambitious in the future.
ACEA is always ready to discuss with policymakers and other relevant players how the automobile industry can continue making an important contribution to the decarbonisation of road transport. It is not only important to find solutions that are as cost-effective as possible, but also take the social implications into account. The livelihoods of 12.6 million Europeans depend on our industry across the entire value chain. Any new proposal for post-2021 CO2 targets should also address the impact on their jobs.
Secretary General of ACEA
I recommend that you take a look at this one-page visual summary of ACEA’s position on the post-2021 CO2 regime for cars, which explains the conditionality principle in more detail.Eric-Mark Huitema