BellonaBrief: Why an electrified transport sector needs to form a core component of the Energy Union

E-mobility in Energy Union Brief
Transport constitutes a large and untapped sector for significant amount of cost effective mitigation potential. Meeting the EU’s target of reducing CO2 emissions from transport by 60% and of eliminating the use of fossil fuels in cars by 2050 will, however, necessitate significant and immediate efforts. Bellona sees electric vehicles (EVs), in particular, as representing one of the most promising technologies for cutting CO2 emissions, reducing petroleum reliance and improving local air quality. EVs will, furthermore, help to optimise the ever increasing use of renewables and increase the predictability of the electricity sector, as EV batteries can be re-used to store and manage wind and solar-based electricity. In this brief Bellona provides a number of policy recommendations to European leadership and national governments in attaining electrified European transport.

In full recognition of the wide range of benefits that EVs offer, the EU Energy Union Strategy highlights that “Europe needs to speed up electrification of its car fleet and other means of transport and become a leader in electro-mobility” (European Commission, 2015). The wider uptake of e-mobility in the EU would entail significant benefits in terms of decarbonising the transport sector; boosting energy security and cutting reliance on fossil fuels by means of re-usage of EV batteries for energy storage purposes; and last but not least, improving local air quality and reducing health risks associated with air pollution.

The European Commission’s recently released Communication on the State of the Energy Union 2015, however, fails to acknowledge the importance of electro-mobility and the multiple benefits it would offer in the strived-towards European Energy Union. The European Commission’s Communication on the Decarbonisation of Transport, expected in early 2016, therefore offers an important opportunity to highlight the key role of electro-mobility in decarbonising the transport sector, currently responsible for one third of greenhouse gas emissions in non-ETS sectors.

This brief, launched as leaders from across the globe are gathering in Paris to negotiate a future climate deal, outlines the rationale for why electrification of transport offers the most promising solution to decarbonising transport and to multiple other issues and goes on to provide a number of recommendations. Here are some of the key messages:

  • In order to render EVs competitive vis-à-vis ICE cars and therefore boost their demand, it is important to ensure long-term government support in the form of targeted policies, including fiscal and practical benefits, and preferential treatment.
  • There is no ‘one-rule-fitting-all’ solution when it comes to EV incentives. The choice of fiscal incentives package will therefore largely depend on the characteristics of each EU Member State in mind, such as for instance, the level of car ownership tax burden, the VAT rates, the cost of electricity, and gas prices among others. Furthermore, the choice of incentives will vary depending on the goals of each Member State in mind, which could include the goal of industrial growth (via EV production) or the goal of balancing electricity generation (via EV batteries’ storage of electricity).
  • To truly reflect the societal and environmental costs of the fossil car industry, Bellona calls for the tightening of CO2 emission performance standards for new passenger cars, set by Regulation (EC) 443/2009. A target of 70g/km for 2025 should be the absolute minimum level of ambition.
  • In order to ensure fair and correct taxation of ICEs, hybrids and plug-in hybrids, we firstly need to ensure accurate emissions data. Bellona’s views on the recent emission testing scandal and recommendations for the future can be read in our brief entitled The Emission Testing Gap: Why business-as-usual for the conventional car industry cannot continue.
  • Green public procurement (GPP) policies can act as a unique tool to build trust in EVs and stimulate demand for the technology. The uptake of EVs and full application of the Clean Vehicles Directive, currently regulating GPP in the EU, by EU public authorities has remained slow, however. Rectifying this would necessitate an expansion of the directive’s scope to cover companies contracted by public authorities to provide various services: a substantial sector, currently omitted by the directive.
  • Fostering the wider uptake of EVs will require, in addition to GPP, a more comprehensive approach to fleet management to be adopted. EU Member States should establish national and regional capacity building centres to provide free advice and training to public authorities.
  • The EU needs to ensure increased levels of funding to stimulate specifically locally-manufactured batteries. While the outlook for battery improvements and cost reductions is looking promising, we need to see further improvements to prolong their lifespan, allow them to charge faster, be lighter and safer, more technically reliable and easily recyclable.
  • Inter-urban and international EV mobility will depend on the construction of a truly interoperable EV re-charging infrastructure across Europe. While the Alternative Fuels Infrastructure (AFI) Directive aims to achieve this, it is important to ensure that its implementation does not hinder the introduction of improved, higher capacity batteries and faster re-charging connector rates.
  • Last but not least, to exploit the full potential of EVs, policies should be put into places which induce EV smart charging.