Environment and Climate

CO₂ regulation of passenger cars and light commercial vehicles in Europe

Official CO₂ limits for passenger cars and light commercial vehicles have been in force for a number of years. EU Regulation EC 443/2009 set an official CO₂ limit for passenger vehicles of 130 g/km CO₂ for 2012, phased-in gradually by 2015.

Pillar 2: CO₂ reduction potentials outside the automotive industry

Today’s regulatory regime is based solely on improving the efficiency of about 14 million new vehicles every year. The total number of vehicles on the roads is almost twenty times that (approx. 253 million), and the average fleet age, plus the individual mileages and individual driving behavior have so far not been included in the EU Regulation.

However, to achieve the overarching climate protection targets, in the future it will be essential not only to optimize the vehicle but also to include the upstream chain and the use phase, because these measures have much greater and faster leverage. Improving the existing fleet by 1 g – for example by using a lower-CO2 fuel – has a prompt impact and is as effective as a 20 g improvement in the new car fleet.

Upstream chain: energy carriers

Decarbonized fuels
The development of alternative fuels is of key importance for attaining the long-term climate protection targets. What is important is the comprehensive decarbonization of fuels, since they affect the entire vehicle fleet. Apart from taking into consideration higher shares of biofuels, in the future targeted promotion should also be given to the manufacture of gaseous and liquid fuels from renewable electricity (PtX technology, e-fuels). In this way excess production from renewable energies such as wind and solar power can be stored until it is actually used. So electricity that until now was surplus to requirements could be used for transport, to benefit the climate. With this link between the energy sector and the transport sector, the transport sector would become a decisive element in an effective shift to renewable energy. Coupling sectors in this way ultimately harbors the key to successful complete decarbonization of transport.

The technology for doing this is already available. However, some changes to the regulatory conditions are needed to make the market competitive and to motivate investors to build up a European production capacity. The crucial factor here is – alongside the imposition of taxes and levies on the original energy (electricity) and the final product (renewable fuel) in the individual Member States – the possibility of crediting climate-neutrally produced fuels to the CO2 fleet values for vehicle manufacturers.

Including fuels in emissions trading
As a supplement to fleet regulation for new cars, it also makes sense to include the fuels in the upstream emissions trading, because this too affects the complete vehicle fleet and the mileage driven. Numerous studies suggest such an approach, for instance most recently the Cologne Institute for Economic Research: “As the most efficient form of CO2 regulation within a national economy, emissions trading is easy to apply to road traffic.”

Upstream emissions trading is the allocation or auctioning of CO2 emission rights, called CO2 certificates, to the petroleum companies and their refineries. The allocated number of CO2 certifications is reduced every year. If a company exceeds its “emission budget,” is must acquire additional CO2 certificates. The cost of the certificates is passed on to the customers at the pumps. This kind of upstream emissions trading can act as a flanking measure to support the CO2 Regulation, as it takes into account mileages, driving style and the vehicle fleet – because all vehicles (passenger cars, vans, trucks) visit filling stations. Ultimately the charge acts like a tax increase. But in contrast to a national tax increase, emissions trading can be applied by the European Commission in all 28 EU Member States. Ideally, the revenues thus generated could be used to expand the infrastructure for alternative powertrains and to push digitization forward.

Irrespective of whether road traffic should be included in EU emissions trading, today elements of the EU emissions trading could certainly be applied for road traffic, for example the Clean Development Mechanism. Instead of rigid compliance with purely technological CO2 improvement rates and limit values, a certain amount of compensation would also be possible via alternative CO2 reduction projects in other areas. For instance the automotive industry could set up wind farms for electric mobility. Such measures could also drive forward the intended coupling of the energy and mobility sectors.

Demand and the use phase

Involve and renew the existing fleet
In 2030, the entire EU passenger car fleet will emit over 30 percent less CO2 than it did in 2005 – this is the result of fleet renewal and compliance with the CO2 legislation already passed. Incentives for fleet renewal in the EU could reinforce and accelerate this effect.

The average age of passenger cars in the EU is around ten years and is rising. The average age of passenger cars in Germany has climbed by about 50 percent over the past 25 years. The great age of the European fleet is necessarily accompanied by outdated technology.

This trend must be reversed – and not only for reasons of CO2, but also because of the pollution caused by old passenger cars. Regarding the alternative forms of propulsion: the longer old cars are on the roads, the later the new technologies will affect real-world CO2 values.

This is where fleet replacement programs could come into play, which the manufacturers and policymakers should elaborate together.

Continue developing promotional policies for alternative powertrains
The policies in all EU countries should promote the market success of alternative powertrains, including the following incentives:

  • Supercredits or more lenient targets in the European fleet regulation
  • Tax incentives or direct subsidies
  • Cofinancing of publicly accessible charging infrastructure
  • Continuation of precompetitive research and development.

Develop binding plans for and expand the infrastructure for alternative powertrains and the digital infrastructure
The establishment of a charging infrastructure, especially in public spaces, must be accelerated and it must be available on a needs-driven basis as electric vehicles are rampedup. Customers expect an extensive and accessible charging infrastructure with a simple payment system.

And in order to push forward connected and automated driving, the automotive industry needs to join forces with the national and international policymakers. The infrastructure in particular must be adapted and expanded for connectivity, so that CO2-reducing technologies in new vehicles can become effective. According to a study by ERTICO, in the EU by 2030 this type of technological connectivity could bring about an additional reduction of 5 to 15 percent as compared with 2015.

Promote efficient driving
A change in driving behavior supported by on-board tools with indicators suggesting gear changes and speed, can result in an annual CO2 reduction of ten percent. Therefore, alongside manufacturers’ commitment, broad-scale public training programs should also be initiated. Moreover, it would be conceivable to have lower insurance premiums for customers who have completed a course in economical driving.

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