Three ways for the German presidency to claim a bargain

[mailchimp_signup][/mailchimp_signup]The bargain is this. If the EU invests in substantially reducing energy use in the transport sector, it will get better climate security, better oil security, and regain control over oil prices. Best of all, there are three prime opportunities to help achieve this on the EU agenda in the first half of 2007: the follow-up to the voluntary agreement to improve the fuel consumption of new cars, the strategy for reducing the contribution of aviation to climate change, and the review of the biofuels directive.

It is no exaggeration to say transport threatens the EU’s entire strategy for combating climate change. Transport’s emissions went up by 32% between 1990 and 2004, while all other sectors of the economy reduced theirs. This makes it difficult for policymakers to ask for additional cuts from other sectors. And there is a real danger that increases from transport could completely offset the progress made in other areas.

The transport sector is also largely to blame for both the higher oil prices seen recently and for Europe’s high-risk dependence on imported oil from increasingly hard-to-reach or politically unstable regions. By 2020 the EU will have to import 86% of its oil. Transport guzzles most of it (71%) and its share is rising. It is easy to blame the growth of countries like China and India for higher oil prices, but in reality, the problem is here on our doorstep. We are responsible for one fifth of global oil use and our demand increases by 2% per year. If we could just reduce our oil demand in transport, we would spend less on it in the first place and would also save on what we continue to buy because the price would go down (as would the price of gas). EU cost/benefit analyses never consider this additional benefit of lower energy use. That should change.

Another reason for doing more on transport is simple – it is not subject to competition from outside the EU in the same way that fixed polluters are. A properly functioning EU Emissions Trading System (ETS) is fine for energy-intensive factories. But transport operators on routes in Europe will not suffer the same competitive threat from outside. You can produce aluminium in China, but you can’t move the London-Brussels transport route there. Transport can, and therefore should, do more.

THREE AREAS FOR ACTION

The German presidency should look to three areas over the next six months to help reduce energy use in the transport sector.

Firstly, cars and vans are responsible for 15% of all CO2 emissions in Europe – so the follow-up to the voluntary agreement with car makers to reduce CO2 emissions from new cars is a good place to start. T&E’s recent study showed that 75% of big brands are behind (some well behind) the current 140 g/km target, but the other 25% are on track. This success should be the inspiration for ambitious targets, legally binding this time, to ensure the industry as a whole takes its responsibility seriously. Doubling fuel efficiency of new cars in a decade is feasible and, as we have seen, necessary.

On aviation, the EU faces another trade war with America if it is serious about including aviation in the ETS. Failing to include flights that start or end their journeys outside the EU, or exempting intra-EU routes where non-EU airlines also fly, would kill the effectiveness of the system before it is even born. When America demands new security rules for all airlines arriving in the US, it expects European airlines to comply. So Europe must equally fight for its right to act on the emissions from the fastest growing transport sector.

Finally, in the biofuels debate, some push hard for increased volume-based targets for biofuels. But the name biofuels is deceptive – they are not all good. The target for biofuels, indeed all fuels, should be that those that result in the least emissions (and other environmental impacts) from “well to wheel” should be promoted.

Germany takes over the presidency at the height of the winter sales. The bargain is there for the taking. Germany must make sure Europe takes it.

This news story is taken from the December 2006 edition of T&E Bulletin.