EU misses opportunity to combine climate and industrial policy

    Berlin, June 28, 2022

    Prerequisites for a successful ramp-up of e-mobility are neither considered nor decided – EU misses opportunity to combine climate and industrial policy – goals in the transport sector cannot be achieved without e-fuels – ETS as a central instrument for CO2 reduction

    The agreement in the Council leaves a lot in the dark and still provides for a de facto ban on combustion engines in 2035. In the case of e-fuels, it only seems to have been enough for a declaration of intent, the implementation of which is open. In addition, the framework conditions and clear targets that make up the prerequisites for the corresponding ramp-up of e-mobility are missing, in particular the development and expansion of the charging infrastructure.

    "With this decision, the environment ministers have taken a decision against an industrial policy that is open to all technologies. They are ignoring the still more than inadequate development and expansion of the European charging infrastructure. Further they do not assume sufficient responsibility for a resolute, nationwide development that takes into account the reality of life of consumers and enables charging anytime and anywhere.

    Politics has the task – especially when setting such ambitious goals – to create the framework conditions for these projects to be achieved. The climate goals cannot be achieved with a policy that only demands from others and does not deliver itself. When it came to the specifications for expanding the charging and H2 fueling infrastructure, the council was far from ambitious enough. This not only jeopardizes the achievement of goals, but also gambles away consumer confidence and the opportunity to successfully combine climate and industrial policy. That must now be corrected promptly," explains VDA President Hildegard Müller.

    One thing is certain: "The automotive industry is committed to climate protection. It will rise to the challenge and offer consumers zero-emission vehicles," Müller continued. "Without any doubt, electric mobility is central for achieving the climate targets in the transport sector. The automotive industry is also making huge financial efforts in research and development and the conversion of plants. So far, however, the EU has not presented sufficient plans on how to create the conditions for only electric cars to be sold from 2035 onwards. In plain language: A comprehensive, Europe-wide, reliable charging and H2 fueling infrastructure is a mandatory requirement for consumers. In Germany we are a long way from that – and with this poor record in a whole European comparison, we are still better than almost everyone else. The EU requirements currently being discussed are lagging behind. Even the announcement of an assessment in 2026 is not enough, since the target for 2035 should be maintained in any case. We therefore continue to strongly recommend that a decision on the final target after 2030 is only made in a comprehensive review in 2028 based on defined criteria," Müller continued.

    Ambitious commitments are not only lacking in the expansion of the charging and H2 fueling infrastructure: "In order to achieve climate neutrality in transport, the conclusion of trade agreements, in particular for the procurement of raw materials, as well as energy partnerships, in order to ensure the supply of sufficient renewable energy, essential," says Müller. "The commitment to just one technology is not only an industrial policy mistake, but also creates new dependencies - in times when it is important to enable and achieve maximum diversification and resilience."

    "This list of unfulfilled tasks can be continued: In addition to the topics mentioned, raw materials and renewable energies, for example, on the topic of competitive site conditions with taxes, levies, planning and approval processes or the faltering digitization. The EU must think bigger and act faster here so that the mission of climate neutrality is a success for everyone.

    This criticism and this claim are an expression of our determination to actually achieve the ambitious goals. Only if the European path to climate neutrality is so successful that it is copied worldwide will we really make progress in global climate protection," emphasizes Müller.

    Basically, you need to look beyond European borders: "All climate-friendly technologies are needed to achieve the climate goals in transport. The companies in the German automotive industry operate globally. Combustion engines will still be needed around the world after 2035. The different technologies will contribute to sustainable mobility in different regions. The German automotive industry does not want to and must not leave this progress and the associated added value to other regions of the world alone.

    In this context, synthetic fuels are also essential in order to decarbonize the existing fleet of vehicles – without these e-fuels, the climate goals in transport cannot be achieved. A ban can block important opportunities for us to enter new markets. Whether and to what extent climate-neutral combustion engines can be approved outside of the CO2 fleet regulation must now be clarified as soon as possible," says Müller.

    "The extension of emissions trading to include road traffic is a fundamentally correct decision: the best way to reduce CO2 is to use market-based price signals that provide planning security and promote innovation. That is the most efficient way, not the ban on certain technologies. In the forthcoming trilogue negotiations it must be ensured that effective emissions trading can also be established in road traffic as a central instrument of climate protection," explains Müller.

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    Simon Schütz

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