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  • Who’s taking the lead on lead times?

    ‘Lead time’ is an expression most people do not often hear, but you hear it all the time when you work on European green laws. Lead time is the idea that, when you set a new environmental standard for an industry, that industry needs to be given time to adapt. This all sounds fair and good, but in reality claiming that lead times are too short, or even too long, is a very popular tool for industry lobbyists to get rid of or delay laws, and that in turn makes lead time a controversial issue.

    Let’s first clarify that there are instances where lead time does not make sense. An example is the recent proposal to allow truck makers to make their cabins a bit longer and rounder, hence safer and more aerodynamic. Note the word ‘allow’. You do not have to make your cabs longer; you may if you want to. This is enabling legislation. Still, industry argued for – you guessed it – lead time, so that nobody, not even the willing and able, could start to build better cabins for another decade. The resistance to change runs amazingly deep – so deep that it even runs against the opportunity to change. Fortunately, the Commission agreed with us and did not budge, which means that as soon as the rules are ready, truck makers can start selling better cabins.

    But there are many laws that actually oblige, not enable, the industry to green up. In those cases it has become a sport for the industry to always say that the lead time is not right. Remember the car industry’s successful lobbying to postpone the 130 g/km average CO2 legislation, proposed in 2007, from 2012 to 2015? Five years lead time was apparently too short.

    So longer lead times must then be a brilliant and widely supported idea. And indeed, if you listen to industry and its associations, you will hear all about the need for long lead times, stable, predictable and long-term policies, and maximum clarity about expectations. 

    That is, until such long lead times become concrete.

    When the European Parliament insisted in 2008 that the car industry should reach 95 g/km by 2020, suddenly that was too far away. Industry told us we would have no idea what the world, let alone vehicle technologies, would look like by then. Fortunately, MEPs held their nerve, got the 95 g/km through, and are trying to do the same again: the Parliament’s environment committee has just asked for a 68-78 g/km target range for 2025. All the evidence points to such targets being both necessary and feasible. But surprise, surprise: industry says the evidence is not good enough for something so far in the future, and that we should avoid such ‘political’ targets.

    One additional problem here is the European Commission, which is ever more committed to ‘safety in numbers’, also known as impact assessment. In principle there is, of course, nothing wrong with looking carefully at the pros and cons of proposed measures. But in practice, since it is more difficult to assess the impact of measures further in the future, the number-crunching leads to an emphasis on the short term at the expense of long-term clarity.

    So if industry and technocrats are not pushing for longer-term targets, the job falls on good old politicians. Last month, environment committee MEPs delivered by voting for 2025 targets. Let’s hope their spine is as strong as it was five years ago.