EU contemplates introduction of minimum quotas for the sales of electric vehicles

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BRUSSELS – The European Commission is considering the introduction of a ‘zero emission vehicles’ (ZEV) mandate. If translated into legislation this means that Europe’s car makers will have to comply with minimum quotas for the production and sales of zero emission vehicles. Such a move will give an unprecedented push to the supply of electric vehicles in Europe, while putting an end to the transport sector’s stubborn CO2 emissions which have seen no significant decline over the past decade and still remain higher than in 1990.

The introduction of a ZEV mandate is being deliberated as the EU regulation setting CO2 standards for new cars and vans (together referred to as light duty vehicles) is currently undergoing reform. Late last year the Commission conducted a public consultation, to which Bellona submitted its views, strongly supporting the tightening CO2 standards, and the inclusion of a targeted mechanism, mandating quotas for the sales of zero emission vehicles. The Commission’s legislative proposal is expected later this year, following which it will be handed over to the European Parliament and Member States.

Meeting the EU’s target of reducing CO2 emissions from transport by 60% and eliminating the use of fossil fuels in cars by 2050 will necessitate immediate efforts to transition to a low- and zero-emission transport sector. Existing CO2 legislation has fallen short in doing so however, largely as a result of the inadequacy of the EU vehicle emission testing regime (the NEDC test) which has accompanied fuel economy standards and thus allowed car makers to systematically cheat their way into compliance.

The aftermath of the Dieselgate scandal has heightened awareness of the numerous health- and climate-threatening impacts of continued reliance on fossil transport and has placed electric vehicles (EVs) in the spotlight. Inclusion of a ZEV mandate in the future EU CO2 legislation will send the right signal to both industry and policy makers, and thus pave the way for a zero-emission electric mobility system.

No time to be shy with bold vehicle CO2 legislation

Many studies predict that as early as 2025 EVs will be able to enjoy cost-parity with their conventionally fueled counterparts (without the need for subsidies), thanks to rapid battery advancements in terms of performance and reduced costs. Bearing this positive outlook in mind, Bellona believes it fair to expect a 10-20% total market share of EVs by 2025 for the EU as a whole. When it comes to new car sales, on the other hand, this share should go up to 100% in light of a growing number of EU countries, including Norway, the Netherlands, and Germany, announcing plans of phasing out fossil cars within 2025-30.

In countries like Norway for instance, electro-mobility has already become a reality with EV registrations exceeding 110, 000 and accounting for roughly 20% of the country’s new car sales. In fact, roughly 72% of EV buyers in Norway quote ‘cost savings’ as their primary motivation for choosing electric.

Earlier this month, in a joint letter the Nordic Ministers for Climate, Environment and Transport addressed key European Commissioners calling for greater ambition when it comes to revision of its fuel economy standards in order to promote Europe’s transition to electro-mobility. What is more, the Nordic Ministers urge the EU to prioritise heavy duty vehicles (HDVs) which have so far enjoyed ‘exemption’ from EU-wide CO2 regulation, but account for a significant 30% of the road transport CO2 emissions.

A slow transition away from business-as-usual, with China taking the lead

In China the government already announced a draft legislation requiring car makers to meet EV sales quotas of 8% by 2018, 10% by 2019 and 12% by 2020. While this has been met with strong resistance from industry for being too overly ambitious, the government appears to firm in wanting to uphold its proposed quotas.

Europe is also slowly coming to terms with the need to transition to electric mobility, as the most promising means to tackle health-damaging air pollution, meet climate objectives and sustain its industrial competitiveness. Earlier last month, the head of Germany’s Federal Environment Agency (Umweltbundesamt), Maria Krautzenberger, called for the introduction of minimum EV sales quotas in Germany arguing that achievement of the country’s climate targets would be impossible without these in place. Being home to Europe’s largest car making industry, this sends an important signal that business-as-usual for the fossil car industry cannot continue.