Juncker’s choice: Will the Commission help EU carmakers remain competitive?

On 8 November the European Commission has the opportunity to transform the European car industry and keep Europe safe and competitive in a decarbonised world. On that day the EU executive will propose a law that regulates the fuel efficiency and CO2 emissions of new cars and vans. The choices it makes – what level of ambition, a zero-emission vehicle (ZEV) mandate or not, 2025 target or not – will determine the future of the European and global auto industry.

The proposal comes at a unique moment in time. In the Dieselgate aftermath – and helped by the Tesla threat and the Chinese clean vehicle quota – Europe’s largest carmakers such as VW, Mercedes, BMW and Renault-Nissan have announced massive investments in electric vehicle technology. If we simply take carmakers at their word, in 2025 around 20% of EU car sales will be zero and ultra-low emissions vehicles. By the end of that decade you’re looking at close to half of new cars. With an increasing share of zero-emission cars and moderate improvements from combustion cars (for example, mild or full hybrid technology) emission cuts of 45% by 2030, which is what we propose, are within reach. All the Commission has to do is cement these commitments and write them into law.

It is not clear whether this is what the Commission intends to do. Leaks and rumours all point towards a -30% cut. That number is conveniently similar to the non-ETS -30% cut agreed in the 2014 climate and energy framework – the Commission’s climate bible. However, work by ourselves and the ICCT shows very clearly that the 2030 effort sharing targets, approved by EU member states a few weeks ago, cannot be achieved without at least 45% emission cuts from new cars.

A shift away from cars that run on oil won’t just secure Europe’s climate goals but will have much wider benefits. We continue to send hundreds of billions of euro annually to petro-states such as Russia and Saudi Arabia. Oil money underpins their oppressive regimes, their military modernisation programmes, their wars and their increasingly aggressive attempts to undermine and subvert our democracies. We have a unique chance to stop subsidizing our rivals’ armies and keep consumers’ hard-earned cash in Europe.

EU governments understand this and are lining up to demand an ambitious proposal. Last week Austria, Belgium, the Netherlands, Portugal, Ireland, Luxemburg and Slovenia wrote to the Commission calling for a 40% reduction in new car CO2 emissions, a 2025 target, and a real-world CO2 test as part of the forthcoming package. France and Sweden wrote their own letters. This follows earlier letters from nine of Europe’s biggest cities and from business, including the electricity sector, calling for an ambitious zero-emissions vehicles sales target. What’s more, with Nicolas Hulot heading up the environment ministry in France and the Greens destined to join the next German government, an ambitious Commission proposal would be accepted in Europe’s two auto capitals.

It is increasingly clear that if Europe wants to keep a strong automotive industry, our carmakers must change. The rest of the world is no longer interested in Europe’s diesel technology; China and India are going all-electric. EU carmakers (and chemical companies too, by the way) have understood this and are already investing billions in manufacturing plants in Asia. If we want to secure future jobs and supply chains we need to secure investment in Europe, not in Asia. Ambitious CO2 targets – for 2025 and 2030 – coupled with a mandate for zero-emission vehicles would create exactly the right framework for this to happen. As shown by a recent study endorsed by the German carmakers’ lobby, the VDA, the transition to e-mobility would create thousands of new jobs.

As the Bulletin goes to press T&E has learned that the VDA’s chief lobbyist, Matthias Wissmann, is leaning very heavily on the top echelons of the Commission – including through Günther Oettinger, the car industry’s man in Brussels – to intervene and water down the car proposal. The German car lobby wants to kill the planned ZEV bonus-malus system by eliminating the penalty for not meeting the ZEV sales target, thereby making it toothless.

The last time Commission president Jean-Claude Juncker and his team took the VDA’s advice they doubled and delayed NOx limits and precipitated collapsing confidence in, and sales of, diesel. The German car industry has cheated regulators and consumers for decades; while the carmakers’ headquarters have just been raided by the Commission as part of what may well be the EU’s biggest ever cartel investigation – following a successful prosecution of truckmakers. Juncker should listen to his commissioners, and others, along with the member states, businesses, cities and MEPs all pressing for ambitious car regulations. It is clear now the car industry cannot see beyond the next quarterly profits announcement.

Making last-minute changes to the EU’s most important automotive proposal in a decade just to please a group of blundering lobbyists is counterproductive and unacceptable.

To sum up, no Commission has ever had better cards in the run-up to a car CO2 proposal. The arguments, instruments and opportunity are all there. All that’s left now is for President Juncker and his colleagues to seize the opportunity and set Europe’s car industry on course for success in a decarbonised world.

Comments

John Wormald, Autopolis Strategy Consultants's picture

Comment: 

Simply electrifying today's cars won't do it. We can't solve the problems by supply/product-side technology changes alone. Europe needs to revisit the whole way it works, lives and moves. We need to cut back radically on the vehicle-km required to meet our reasonable mobility requirements, and deliver those through vehicles with a much better ration of payload to deadweight, with less acceleration and deceleration and slower speeds. If we can really automate driving and remove the risk of collisions, then we can substitute active crash prevention for passive mitigation of crash consequences, which requires so much built-in weight. We can also be much more consistent with the best European style of living and create completely new transportation methods and systems - including avoiding movement through telecommuting etc. This is real innovation - in which our competitors are the Chinese, who have got to to this way in order to solve their energy and environmental problems.

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William Todts's picture

Executive Director

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