The five tests awaiting the EU’s big ‘Fit for 55’ climate push

June 29, 2021

On the 14th July the European Commission will propose what may well be the most important climate legislation anywhere, ever. On the line in this bumper package is Europe’s ability to decarbonise transport. Failure on transport, would mean failure for the entire package. Success, on the other hand, would supercharge action in an area that affects the everyday lives of Europeans.

Emissions from cars, trucks, planes and ships have risen steadily over the past decades.  But with electric vehicles going mainstream and green hydrogen fuels for shipping, aviation and industry close to a breakthrough, transport is now one of the most promising areas to achieve deep and rapid emission cuts.

Whether people live in the suburbs, the countryside or the city, there are excellent zero-emission mobility solutions available. We don’t need to ban cars, holidays or global trade, nor do we need to force everybody to live in tiny flats in cities. All we need to do is hold the auto, oil, shipping and aviation industries accountable and require them to slash their emissions.

So, can Ursula von der Leyen, the first German Commission president in recent history, deliver a green deal for transport? Will she dare to take on the industry and its lobby? Here’s five things to watch out for.

1. Ambitious CO2 standards and an end date for combustion engines

Europe has the power to make electric cars affordable and accessible to all. Its car CO2 standards gave hundreds of thousands of Europeans the chance to buy their first electric car in 2020. Today one in seven vehicles sold has a plug. We can and should accelerate the transition away from combustion engines. Tougher EU CO2 standards, from 2025 onwards will trigger a ‘Henry Ford’ moment for the auto industry, making electric cars better and cheaper so they become accessible to all drivers. In 2030 two-thirds of new cars in 2030 sold should be emissions free, rising to 100% a few years later. Over the weekend Europe’s largest carmaker Volkswagen announced its VW brand is planning to go all electric by 2035. It was sending an important signal to Ursula von der Leyen: “yes, we can”.

2. An ambitious infrastructure law for cars AND trucks

If we want all drivers to switch to electric, they need to be confident they can charge their cars wherever they live or go. Norway and the Netherlands show the way but we can’t leave this to chance. That’s why the Commission should introduce a charging regulation to guarantee good charging coverage and a great user experience across the Union.

Big rigs are going electric too, so the new charging law needs a big chapter on trucks. Daimler is about to start mass producing an electric version of its flagship Actros. Scania expects half of its sales to be electric in less than a decade. We need to prepare for that now and roll out megachargers along our motorways.

3. Beyond biofuels 

The EU has long had an unhealthy obsession with biofuels. The good news is that recently the Netherlands, Germany and France have decided to start crediting and promoting (with a multiplier) electricity in their national green fuel laws.

This matters because it means Shell, Total and Exxon can meet their green fuel goals not just by blending (mostly bad) biofuels, but also by investing in chargers (either their own, or others). This simple change helped the Dutch halve payback times for chargers outside prime locations. This is huge. The Commission should Europeanise the Dutch approach and break the biofuel monopoly on the Renewable Energy Directive. Burning corn, palm oil or rapeseed in vehicles, planes or ships has nothing to do with climate action.

4. Green hydrogen fuel mandates for aviation and shipping

Clean flying and sailing is no longer just a dream. Green hydrogen, in the form of e-kerosene or e-ammonia for ships, can power planes and ships just as well as current fossil fuels. But without economies of scale, they will continue to be prohibitively expensive. The Commission should propose ambitious e-fuel mandates for planes and ships. These will help get green hydrogen production off the ground and, with the right industrial strategy in place, drive down prices. It should refrain from promoting biofuels in planes and ships. Recent scandals with so called ‘used’ cooking oil shows that even so called advanced biofuels have major sustainability challenges.

5. A price on shipping and aviation pollution (and a kerosene tax)

Flying is the fastest way to fry the planet. And yet, aviation is one of the least taxed sectors in the world. This has led to price dumping and sky high emissions growth. But while aviation is known for this, the maritime sector is worse. Based in tax havens, shipping companies have long escaped all sorts of taxes, carbon pricing or, indeed, any form of environmental regulation. That’s why the Commission must include all European shipping into its emissions trading scheme, strengthen and expand the one for aviation, and finally introduce a kerosene tax. This is about fairness. We can’t ask ordinary people to make a big effort and have airlines and shipping companies pollute for free.

As far as the Commission’s plan to include road transport into a carbon market is concerned, this is not a big priority as it will do little to reduce emissions. Either way, it’ll be very hard to convince EU states to agree to the scheme.

The opportunity before us is not just a once in a generation chance to get things right, it could be our last opportunity to limit global warming. There has never been such momentum for ambitious action on transport. It’s now or never.

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