CO2 Standards for HDVs: Our open letter to Commissioner Breton to boost clean tech industries
Open letter
Cleantech companies and civil society see ambitious truck CO2 standards as catalyst for growing EU supply chains
Adressed to Commissioner Thierry Breton
Dear Commissioner Breton,
We, a large group of industries and civil society organisations stakeholders from the freight, e-mobility and clean tech supply chain, welcome your efforts to respond to the U.S. IRA and boost investments into sustainable and clean European technologies. As we are actively working on the decarbonisation of our industry branches, we fully support the targets of the European Green Deal and Europe’s 2030 and 2050 climate targets.
The Smart & Sustainable Mobility Strategy sets a clear goal for Europe to reduce transport emissions by 90% in 2050. Decarbonising freight transport will require reducing its dependency on fossil fuels, shifting a larger share of traffic to more sustainable transport modes and finally through the internalisation of external costs. The upcoming CO2 performance standards for heavy-duty vehicles (HDV) will stimulate the investments required to achieve the first of these objectives. Cleantech in the EU road freight and heavy-duty vehicle infrastructure sectors is in the early stages. By mirroring the new targets for trucks to the blueprint Europe has just set out for its automotive sector, these sectors can surf on and amplify each other’s supply chains. Mandating around half of new trucks to be zero emission from 2030 and almost all of them from 2035 will shore up demand for battery cells made in EU gigafactories and staffed with EU workers. A balanced policy mix matches increased governmental investment support with such greater demands from, and clarity on the shared end goals for, our EU industries. This will help greening homegrown EU freight sector that can compete with, and ultimately again overcome, competition from across the oceans.
Today, zero-emission trucks are still produced in small numbers. Ambitious standards for trucks can achieve what has been done for cars: seriously scaling up the supply, thereby bringing down the cost per unit. Whilst the CO2 standards as a regulatory tool safeguard the roadmap for a rapid green transition, the subsidies funnel money directly into the sustainable freight and mobility solutions to enable and ensure a thriving European clean tech industry. That way all actors, especially smaller and medium-sized companies, remain competitive and can be part of Europe’s green transition.
We, the undersigned organisations, see ambitious CO2 targets for trucks as an essential means to ensure EU cleantech investments are boosted and channelled into sustainable road freight technologies. This complements the parallel push to switch traffic to more sustainable modes of transport and the internalisation of external costs. Green technologies – from renewable energy to battery production – will secure and provide jobs in Europe, now and in the future. Strong CO2 standards provide certainty to our European industries in a challenging and changing world. And they utilise the momentum of progressive frontrunners that have shown electric trucks are part of Europe’s flagship clean technologies.
EPBD: 3 Pillars to ensure the private charging of EVs
3 Pillars to ensure the private charging of EVs
As 90% of all charging takes place at home or in the workplace and 80% of the EU’s current building stock will still be in use by 2050, private charging is key to the growth of electromobility. Only an ambitious revision of the EPBD (Art. 12) can make it happen.
for multifamily dwellings
Pre-cabling
If a building is not pre-cabled in the construction or major renovation phase, it can be 9 times more expensive to install cables in the latter stage. It'd lead to highly cumbersome discussions with project developers which can take over 6 months in problematic cases to install a charging station. The pre-cabling should cover both technical and electrical installations for the seamless future installation of recharging points.
for users and grid
Smart functionalities
Smart charging (uni- and bi-directional) can reduce one-third of the EV users' electricity bill. Moreover, it would facilitate the integration of the renewable energies into the grid, reduce the electricity consumption during peak hours and provide flexibility services to the system.
For existing buildings
Right-to-plug
Those advantages would not be reached without removing administrative barriers to installing a charging station, especially the delays in multifamily buildings. Time between application and installation should not exceed 3 months.
EU Year of skills: making the Green Deal works for everyone
EU Year of Skills
Our recommendations to make Green Deal works for everyone
A 2021 study undertaken by the BCG looked into the opportunities and challenges created by the transition of the automotive industry towards electrification. The study shows that shift to EVs will have only a minor net impact on jobs through to 2030.
The relatively small net impact should not, however, obscure the massive structural changes resulting from electrification. Changes in production will modify both the skills requirements and distribution of labour. Over the next decade, direct employment in carmakers and ICE-focused suppliers will decrease by 5%, while the workforce in adjacent industries’ will increase by 34%. On top of this large transfer from core automotive industries to adjacent industries, a further 40k jobs will be created each year in construction and civil works for adapting energy production and distribution infrastructures needed for electrification.
By 2030, the job profile of 2.4mn positions will change, with different degrees of training needs to prepare them for future job demands, which means 42% of all employees in the core automotive and adjacent industries will have dedicated training needs. Specifically, 1.6mnwill require retraining, while remaining in their current position; another 610k will need requalification while remaining in the same industry cluster; and 225k people will need support to requalify for work in other industries outside the automotive ecosystem. Some regions – those more dependent on the traditional automotive sector – will feel this impact more acutely, so it is vital that governments provide policies and support to help those regions adapt to the coming change.
The right political and regulatory choices will help workers fully grab the upskilling opportunity created by the transition to electromobility. To support workers during this transition: the EU, governments and companies should prioritise programmes that invest in the education, training, upskilling and reskilling of the labour force to capitalise on new opportunities, raising the bar on employment conditions, to ensure no one is left behind.
The social changes triggered by the Fit for 55 should be tackled with similar levels of ambition by empowering companies, governments and regional authorities to equip the workforce with new skillsets.
Workers in the automotive sector should benefit from a policy framework similar to the Just Transition Fund, Just Transition Platform and Just Transition Mechanism for the energy-intensive industries and assist industrial stakeholders, local, regional and national authorities to:
For industrial stakeholders, support will be needed to design requalification and upskilling programmes and hiring as well as restructuring programmes. Rapid growth of adjacent industries (like battery manufacturing and charging stations operations and production) should be underpinned by ambitious requalification and upskilling and targets. Support should be provided, particularly for SMEs and fast-growing enterprises, as they will lack the analytics and training resources of bigger companies.
Relocations should be avoided where possible by adapting existing production plants, and training for new skills where they are needed. Via their industrial, attractiveness and educations competences, local and regional authorities will play a key role in addressing the knowledge gaps in the workforce. The new ESF+ should be an instrument for supporting local and regional authorities.
Governments need to perform ‘whole-of-economy’ workforce planning in close cooperation with regional and local authorities and industrial stakeholders to:
- Help employers and employees manage their transitions.
- Tailor educational curricula towards new automotive technologies.
- Build new career and employment platforms to help workers navigate to jobs and training opportunities.
- Increase student seats at universities in new automotive technologies and production/process engineering.
Source: https://web-assets.bcg.com/82/0a/17e745504e46b5981b74fadba825/is-e-mobility-a-green-boost.pdf
Critical Raw Materials Act: Our response to the EC's consultation.
Critical Raw Materials Act
Our feedbacks to the European Commission
The vital transition away from fossil fuels towards cleaner technologies for transport will drive, depending on the technology, the demand for raw materials like lithium, nickel. Whilst some CRMs are available in the EU, Europe is largely dependent on third countries for mining, processing, refining and recycling, even more so in the case of batteries needed for EVs and considering the current geostrategic tensions. We would therefore strongly welcome a CRM package beginning of 2023 to tackle our three concerns:
With the e-mobility transition, the EU is lacking an EV value chain beyond battery manufacturing – i.e. extraction, refining, processing, and recycling, which today is located in third countries – and a coherent approach of using existing EU sources of battery materials.
Hurdles to permitting is due to a) the plurality of mining codes in Europe bringing different levels of ambition and lack of coherence across Member States. This leads to, in some cases, not having any safeguards in relation to social or environmental protection; b) lengthy permitting processes when multiple permits are required for both renewable energy production and sustainable mineral extraction projects; c) lack of expert capacity to ensure the efficient, robust and timely evaluation of Environmental Impact Assessments and Area Assessments.
Limited amounts of sustainably sourced materials, notably due to limited geological mapping of available resources. Barriers also exist to the reuse and repurposing of EV parts that could extend the lifecycle of CRMs before recycling.
Critical Raw Materials Act should therefore:
Include a single strategy on raw materials that defines expected needs, challenges, priorities and key lines of action with specific objectives of reducing the need of primary CRMs, with efficient reuse and recycle.
Assess the need of stockpiling mechanisms.
Provide financial, political support (e.g. tax reductions) to economic actors meeting the highest existing environmental and social standards. For EU-sourced material, the initiative would then work in relation with the package of environmental policies that control impacts from its domestic mining and refining operations and the high EU social standards.
Incentivise keeping valuable battery material in Europe, available for domestic recyclers, justifying their investments in EU today and incentivise the recycling of production scrap and blackmass/BAMM in EU.
Ensure the sustainability of CRMs by addressing adverse environmental and social impacts of their production or recycling. For imports, supply should come from responsible sources with robust certification, due diligence rules setting legal requirements for suppliers to control risk across their supply chains.
Support geological surveys to determine accessibility of domestic resources, including waste.
Mandate specific marking for any product containing CRMs to facilitate their recovery and recycling.
Streamline robust permitting processes without undermining existing environmental laws and in compliance of ESG criteria.
Support permitting authorities with additional expert capacities.
Digitalize permitting processes to ensure transparency and full engagement from project developers to local communities.
Support financially the development of recycling capacities as all recycling activities are not financially viable today due to the low cost of some primary resources. Support for the development of recycling capacities is indeed crucial to the circularity and sustainability aspect of CRM sourcing.
Ensure consistency across different pieces of legislation – notably the proposed lithium salts classification – and make sense of the needs of the CRM demand sector.
Give the ERMAlliance the overall view of EU levers and make it a driving force behind the implementation of the strategy.
[Video] The Importance of the AFIR with Koen Noyens (EVBOX)
AFI Regulation
Explained by our member EVBOX
When it comes to charging infrastructure for electric vehicles, the Alternative Fuel Infrastructure Regulation or AFIR is one of the most important EU policy files being discussed today. It defines the legislative framework for public charging for the next decade and is instrumental to realising the Green Deal.
The AFIR is indeed vital for realising a dense, accessible and user-friendly charging network across Europe.
The Platform for electromobility is a strong advocate for creating a uniform EV charging market through binding targets set at Member State level. We believe that through a harmonized Regulation, we can avoid the risk of creating a two speed Europe regarding the EV charging rollout.
The Platform supports both ambitious fleet-based targets as well as distance-based targets across the European highways network.
We need to get going now. We call on the European Parliament and the Council to agree on an AFIR fit for the Green Deal. There is no time to lose to reach our climate targets! You can find more details on our recommendations on Commission’s proposal under the video.
Eight steps for an efficient legislation to increase the share of zero-emission vehicles in corporate fleets
Greening corporate fleets initiative
Eight steps for an efficient European legislation in 2023
In June 2022, the European Parliament voted for a de facto ban on sales of internal combustion engines (ICE) vehicles by 2035. To reach this objective, the Parliament also voted in favour of creating additional measures, notably to support the demand for zero-emission passenger cars and light-commercial vehicles (ZEV) within the Union market (AM. 80). It is essential that these accompanying measures are as ambitious as those of the end goal. A fleet mandate to cover the period prior to 2030 would ensure that demand meet supply.
In May 2021, the Platform for electromobility, an alliance of 40+ industries, NGOs and associations covering the whole value chain and promoting the acceleration of the shift to electric mobility, outlined the benefits and opportunities of dedicated legislation to complete the decarbonisation of corporate fleets. This paper now provides policy makers with overarching principles that should lead the elaboration of the upcoming legislative proposal that will bind the electrification of corporate fleets.
1. Standalone legislation on private fleet
As indicated by the use of the plural ‘proposals’ in the approved text, we recommend that the European Commission prepare two separate, dedicated pieces of legislation; one on the private fleet, the other on the public fleet. While the latter should be addressed in the revision of the Clean Vehicle Directive (CVD), and invite Member States (MSs) to lead by example with ambitious electrification plan for public authorities’ fleet, we must note that 99%1 of fleet-owned cars are the property of private individuals. The dynamics between private and public fleets are also different in areas such as size, procurement rules, and thus should be treated separately. In addition, as the first reference period under the CVD has only just begun, we believe any revision to the Directive would be premature.
The priority should therefore be given to address the decarbonisation of private fleets, which represent more than 60% of EU sales.
2. Need for a Regulation
While the revision of the CVD is appropriate to decarbonise the public fleet, we believe a Regulation, rather than a Directive, is essential to electrify the private fleet. A Regulation would:
- Stimulate deployment of electric mobility throughout the EU before ICE phaseout, by accelerating decarbonisation of the corporate cars that drive more than 2.25 times further than individually owned cars.
- Boost zero-emission uptake in the B2B segment, for which the total cost of ownership is superior, because of higher annual mileages.
- Create a plentiful second-hand market that ensures affordability of zero-emission vehicles before 2035.
- Avoid the delays in implementation that a Directive might entail, such as those that can currently be seen with the Clean Vehicle Directive. While climate change remains an ongoing threat, the time needed to conclude negotiations on a Regulation would be compensated for by the inevitability of its direct implementation. A Regulation will reduce the transition time to electric mobility between those Member States that have already announced the phaseout of ICEs by 2030 and those yet to do so.
- Bring certainty to both EV manufacturers and those companies purchasing targeted fleets. Such certainty for manufacturers, along with ambitious CO2 emission performance standards for new cars and vans, will ensure that the supply of EVs is able to meet the EU’s climate ambitions. It will also help avoid companies competing for a limited supply of ZEVs.
- Introduce stronger safeguards than a Directive against potential Member State market distortions, notably in the form of unfair price increases for the private fleet owners.
3. Almost-complete decarbonisation by 2030
The final target should be 95% of new fleet purchases of passenger cars to be ZEVs by 2030. The last 5% would be difficult to decarbonise, both technically and economically, due to the existence of some specialty vehicles. Setting the final target at a lower level, or after 2030, would not unlock the 10 benefits of mandating the decarbonisation of corporate fleets.
In the area of light-duty vehicles, the market of vans is more limited in supply compared to passenger cars. Therefore, the sector should have both a dedicated trajectory and a dedicated fleet size threshold, above which the Regulation will apply. Vans, with their own specificities, cannot follow at the same pace as cars. Their lifecycle is longer (28 years average) and their usages are usually unique and adapted to specific professional needs. In order to respect the nature of this market, targets must be adapted accordingly. Platform members agree on the need to build a dedicated trajectory and targets for Light Commercial Vehicles (LCVs), although an impact assessment is needed to shape the timeline and the curve appropriately.
While a 95% final target for passenger cars would already ensure a certain level of flexibility, the text voted by the Parliament invites the Commission to also take into account regional disparities.
4. Flexibility measures
Targets should therefore be set at EU level rather than differing targets per Member State. This would prevent some arbitrage strategies from manufacturers and overpricing in those countries in which targets would have been higher.
Setting targets at a European level, based on a certain fleet size, would also ensure that large companies meet the fleet target in each Member State in which they operate. This would ensure that separate strategies are not in place in different countries. Currently, in the numerous electrification strategies of companies operating across Europe, efforts are being centralised on more advanced markets, setting aside those markets where electrification of transport is lagging behind. This must change, as a ZEV second-hand market should be developed in CEE Member States as a matter of urgency.
Given the need to decarbonise the B2B segment in every Member State, while simultaneously taking into account the current differing starting points and ability for companies to effectively procure new
ZEVs, we strongly suggest two types of flexibilities that could be granted. One, a delay of a maximum of two years of the mandate, and two, an increase in the minimum fleet size to which the mandate applies.
It is important that, when it comes to eligibility for such flexibilities, the two types should be applied either at Member State level or at company level. Whichever option is chosen, the flexibility requests should be reviewed and assessed by the European Commission to ensure harmonisation at EU level.
Flexibility is essential to ensure the fair transition to clean fleets, as are interim targets:
5. Interim targets
Interim targets are essential to ensure a gradual and smooth transformation of the European private fleets. Without ambitious short-term targets, and even taking into account the proposed flexibilities above, fleets covered by the Regulation would need to undergo drastic change shortly before the final deadline. An unanticipated increase in demand risks triggering uncertainties not only for the business models of fleet owners and users but also for the availability, sustainability and security of the value chain for ZEVs. Hence the importance of ambitious interim targets, clearly set ahead, to increase visibility for car manufacturers and fleet managers alike. The objective of the Regulation is to accompany the shift introduced by the de facto ban on sales of ICE vehicles for users, but also to ensure demand matches supply all along the transition.
Although setting an interim target for 2025 may seem a tight timeline for a legislation to enter into force in 2024, a 2025 target close to half of all newly procured vehicle in corporate fleets to be zero-emissions is reachable: market analysis show an organic share of ZEV in fleet purchases of up to 35%. A recent study, based on 1300 fleets representing over 46,000 vehicles across Europe, shows that nearly 60% of fleets could save money by transitioning to electric vehicles without any incentives.2 With little impact – and a positive one in most cases – on the purchase decisions of corporate fleets, such a target for 2025 would allow the creation of a secondary market to make EVs more accessible by 2030. A linear trajectory for a convenient transition to 95% final target procurement would then set the following interim targets:
(1) by 2025, 45% of renewed vehicles are zero-emission;
(2) by 2026, 55% of renewed vehicles are zero-emission;
(3) by 2027, 65% of renewed vehicles are zero-emission;
(4) by 2028, 75% of renewed vehicles are zero-emission;
(5) by 2029, 85% of renewed vehicles are zero-emission;
(6) by 2030, 95% of renewed vehicles are zero-emission.
6. Stock target
In addition to renewal targets focusing on the share of ZEV in the new acquisitions of corporate fleets, stock targets should also be included. Stock targets would avoid creating long-term leasing contracts on ICE vehicles just before each interim renewal targets enter into force. On top of annual targets for new vehicles entering the fleet, a 75% zero-emission target for the whole fleet by 2030 should be inserted to prevent companies signing long-term ICE lease or bulk-buying ICE vehicles in 2023 or 2024, in other words before the regulation enters into force.
7. Reporting
Reporting should be managed by Member States and supervised by the European Commission. Alternatively, France offers a testbed for reporting obligation for a similar mandate. In France, there are reporting obligations for all companies based in the country that fall under the decarbonisation mandate of January 2021. Declarations are made on an annual basis, and are reported on the French government’s open data website. These include a CSV file with information relating to company registrations, descriptions of the fleet and of the low emissions / very low emissions renewal of vehicles Y1. Member States could rely on such a declarative open data by the companies to then aggregate the input and send it to the European Commission for compilation. A control, based on licence plates registered to a national registration agency or equivalent, should be conducted by the Government to verify the data entered by companies for their annual reporting.
Member States should, on an annual basis, send the aggregated data collected nationally to the European Commission to provide an EU-wide overview of the situation.
8. Revision of the objectives
The Regulation should introduce a review clause, by 2028, in the event that the objectives are not achieved. This clause would allow the European Commission to propose additional measures to ensure the Regulation is properly applied in every Member State.
Platform members also recognise the positive impact that such a mechanism would have on the decarbonation of heavy-duty vehicles. At the same time, platform members equally stress the importance of support mechanisms for the rollout office-based charging, from subsidies to tax discounts.