Draft report goes far beyond Commission's proposal – technological leadership called into question by climate-friendly powertrains – use of quotas reminiscent of a centralised planned economy
The rapporteur of the European Parliament's Committee on the Environment, Public Health and Food Safety (ENVI), Miriam Dalli, MEP, today presented her draft report containing her demands for future CO2 regulations for new passenger cars and light commercial vehicles for the period after 2021.
Maltese Labour MEP Dalli is demanding that car manufacturers reduce CO2 emissions for their new vehicle fleets in the European Union (EU) by 50 per cent by 2030 (compared to 2021). She also advocates rolling out a mandatory interim reduction target of 25 per cent through to 2025. The same reduction rates are proposed for light-duty vehicles. Dalli’s report also urges putting a stop to eco-innovations and dropping the mass utility parameter. Moreover, it assumes a 20 per cent market share for zero emission vehicles by 2025, rising to 50 per cent by 2030. Should manufacturers not be able to achieve these targets, they will be penalised – the aim is to tighten individual fleet targets. De facto, the report is thus proposing a quota.
In response, the German Association of the Automotive Industry (VDA) states that:
'The ENVI report presented by Ms Dalli lacks all sense of proportion. The demands run counter to the political objective of strengthening growth and employment in Europe. The Commission's proposal for future CO2 regulation is already an extreme challenge for the automotive industry but the ENVI report will lead to a massive tightening of reduction targets. The draft report does not say anything about how the transformation to more climate-friendly mobility can succeed.
The automotive industry is aware of its responsibility for climate protection and is investing heavily in research and development into alternative powertrains. The German automotive industry, for example, is investing some 40 billion euros in alternative powertrains through to 2020. Moreover, in the same period, German manufacturers are tripling their range of e-vehicles, taking the total up to 100 different models. The automotive industry is keen to offer the citizens of Europe a wide range of powertrains that satisfy their mobility requirements while meeting climate targets. The industry's vision is to decarbonise mobility by the year 2050.
The draft report does not give any objective justification for setting targets that are even stricter than those in the Commission's proposals. The level aspired to in the Commission's proposal will already ensure that the EU climate targets are achieved reliably and economically efficiently. A dangerous numbers game is being played – and a key industry and thus many citizens across Europe will end up paying the price. From an industrial policy point of view, the report is sending the wrong signals about the industry's competitive capacity.
Specifically, the VDA criticises the following points:
- The draft fails to consider the fact that achieving the CO2 targets essentially depends on how customer acceptance of alternative powertrains evolves in the years ahead and on how quickly public and private infrastructure for alternative powertrains is rolled out. For this reason, VDA proposes certain conditions for the 2030 target.
- Ms Dalli's proposal for the interim target for 2025 is not technology neutral, in that it can only be achieved by massively ramping up electric mobility. But the framework conditions are not in place for this. VDA therefore advocates having an interim target that can also be achieved with the anticipated market growth in electric mobility.
- In her draft, Ms Dalli explains that her demands might lead to the loss of a large number of jobs in Europe's automotive industry – an issue she aims to address through programmes designed to mitigate the social impacts of the transformation process. She intends to fund these programme from the penalties paid by the manufacturers concerned. The report does not state who is to foot the bill for these cushioning programmes if no one gets fined. The situation is similar with regard to the demand for more public and private funding for charging infrastructure and the expansion of renewable energies – no one knows how much funding is required and where the money will come from. The report does not indicate any actual alternatives for the workers facing job threats.
- The quota regulation proposed in the draft report enforces the sale of electric vehicles even if there is no demand for them, which is reminiscent of a centralised planned economy. As with the proposed abolition of the mass utility parameter, this could result in a massive drop in product diversity in Europe's automotive market.
- Furthermore, the report makes the case for a real-world CO2 emissions test (RDE). However, this overlooks the fact that the greenlight has been given for a new WLTP test procedure from 1 September 2018, which has yet to furnish sufficient empirical data.
- The demands for light-duty vehicles given in the report ignore the technical and economic differences to passenger cars. Taking up to 10 years, LDV development and product cycles are substantially longer. Moreover, low fuel consumption has always been a major motivation to buy amongst commercial vehicle owners. As such, the market is already geared to CO2 efficiency.
All things considered, the measures presented in the draft report are intended to bring about a hasty departure from the combustion engine. However, there is a risk that this will heavily devalue the automative industry's material and immaterial capital stock, including production plants and patents, for example. When it comes to highly efficient combustion engines, Europe's automative sector is an international market leader. And highly efficient combustion engines will continue to make a significant contribution to climate protection for many years to come, not just in Europe, but in other key markets. The draft report also makes no mention of the combustion engine's potential for mitigating climate change through the use of climate-neutral e-fuels, for example.