A Comprehensive Roadmap for V2X Integration in Europe
Energy & Infrastructures
A Comprehensive Roadmap for V2X Integration in Europe
The paper outlines enablers and barriers concerning bidirectional charging systems, clarifies key barriers, highlights ongoing efforts to mitigate them, and underscores the critical need for concerted and regulatory actions to achieve the transformative potential of V2X integration.
Electric Vehicles (EVs) both pose particular challenges and present promising opportunities for the energy system; they mark a pivotal moment in the evolution of transportation and energy sectors. With the increased adoption of EVs lies the imperative for strategic planning and collaborative action on Vehicle-to-X (V2X), a crucial technology for smartening the road transport sector.[i]
Recently adopted legislation – as part of the European Green Deal – has already paved the way for the roll-out of smart-charging technologies in the electromobility ecosystem.[ii] We welcome these initiatives and will monitor their implementation closely. Smart charging is a fundamental prerequisite for V2X, which will deliver further advantages for people, the climate and European businesses alike.
Recognising this, this document from the Platform for Electromobility seeks to present a comprehensive roadmap on V2X, setting out a series of actionable steps that by Member States (MS) should undertake, along with measures required at the EU level. Stressing the importance of a cross-sectoral approach, our strategy seeks to navigate the complexities of V2X integration in our energy system without delving too deeply into intricate technicalities. The paper outlines enablers and barriers to adopting bidirectional charging systems, clarifies crucial barriers – and highlights ongoing efforts to mitigate them – and underscores the imperative for concerted and regulatory action to realise the transformative potential of V2X integration.
1/ Benefits of bidirectional charging
a/ Benefits for public finances & grid investments
V2X integration offers a multifaceted solution, one with the potential to unlock a wide range of benefits across various domains. Foremost among these, V2X – as with other flexibility resources – complements conventional grid reinforcement measures, helping alleviate the strain on existing infrastructure while enhancing its resilience. We are already starting to see increasing tensions in the grid and the overwhelming need to reinforce it; therefore, the deployment of V2X and the use of EVs as batteries represents a ‘no-brainer’[i] and would effectively smooth the rollout of grid reinforcement, something that usually takes between 5-15 years. V2X integration thus offers access to a realm of ‘low-hanging fruit’ opportunities, allowing the cost-efficient adaptation of the grids to growing electrification.
b/ Benefits for Europe energy autonomy
The integration of V2X will help deploy renewable energy sources (RES), by providing efficient storage solutions. It has the potential to help balance the grid and increase the penetration of renewable electricity (RES-E) into it, thus accelerating the drive to climate neutrality. Indeed, in order to ensure generation adequacy – key for the energy transition – V2X will be pivotal. As intermittent renewable energy becomes increasingly prevalent, maintaining grid stability and meeting demand poses significant challenges. Here, V2X solutions can play a crucial role in balancing supply and demand, enabling dynamic resource adequacy analyses that realise the enormous potential of V2G capabilities.
c/ Benefits for grid operators
From the perspective of the grid operators, there are manifold advantages. For Transmission System Operators (TSOs), V2X is particularly beneficials for Frequency Regulation (FCR) Services, which are pivotal functions for TSOs. In addition to mere savings in battery costs, V2X optimises both standalone and grid-connected storage battery systems. FCR plays a critical role, not only in reducing the necessity for investment in battery storage services but also in minimising the need for grid upgrades. These efficiencies translate into systemic savings, ultimately benefiting electricity consumers. For DSOs, V2X can play a major role in local flexibility markets and congestion solutions providing services to DSOs and representing a valuable flexible resource that can be procured to ease tensions on distribution grids. This requires flexibility mechanisms in which V2X value can be stacked based on related remuneration. To enable even more value of V2X for every DSO, market based procurement of flexibility based on V2X shall be stimulated.
d/ Benefits for users, people and businesses alike
From an end user’s perspective, the benefits of V2X integration will be substantial. Through leveraging V2X capabilities, users will have the opportunity to earn money from feeding energy into the grid, thus enhancing the overall value proposition of electric mobility.[ii] Remuneration mechanisms (such as those based on availability, capacity or time) will trigger further consumers to participate; once they do so, they will naturally generate demand for V2X. V2X integration will not only enhance grid resilience and promote renewable energy uptake but also pave the way for a more sustainable, efficient and adaptive energy ecosystem, one where EVs can equally participate in flex mechanisms.
2. Legislative and Regulatory Principles for V2X Integration
As we call on legislators to begin shaping the regulatory framework for V2X integration, there must be a number of core founding principles that underpin their efforts to foster innovation, interoperability, fairness and trust within the emerging ecosystem.
a/ Consumer trust
Foremost among these principles must be building and maintaining consumer trust. Legislators must prioritise creating a robust system that instils trust among users, system operators and businesses alike. This will entail ensuring transparency and accountability in V2X transactions while also safeguarding consumer rights and interests.
b/ Business models based on use cases
The deployment of V2X infrastructure must be accompanied by corresponding business models, particularly where financed/cofinanced by public entities. As the value of V2X depends on the use case of fleet and chargepoints, there need to be proper business models created that provide an incentive for consumers. Regulators should therefore facilitate mechanisms to support user compensation and fair pricing; these should recognise the pivotal role granular pricing structures play in enabling diverse business models and in incentivising dynamic energy management. The increased volatility in our energy system arising from renewables and negative grid tariffs can further stimulate consumers to engage and participate in V2X initiatives.
c/ Commonly accepted and harmonised standards
The promotion of common standards is paramount for ensuring interoperability and reliability across V2X systems. These should allow the CCS standard to provide smart and bidirectional charging. This should be implemented as early as possible in both charging stations and cars. Any further delay will lead to infrastructure that is not future-proof and will fail to deliver the smart-charging services we will need for the energy transition to succeed. Standardisation bodies should prioritise development and enforcement of standardised protocols for battery efficiency and warranty and for EV charging protocols between both the grid and vehicle. This will bolster consumer confidence and trust in V2X technologies.
d/ Affordability through democratisation
The accessibility and affordability of V2G-capable vehicles must be a priority if access to this transformative technology is to be democratised. By incentivising competition and innovation in the production of V2X-capable chargers and EVs as well as through lowering the barriers detailed below, legislators can drive down costs and promote widespread adoption. This in turn will create economies of scale and lower barriers to entry. With the right regulatory framework in place, recharging costs can theoretically be brought down to zero with bidirectional charging.[i]
e/ Equal treatment for all grid usages
Ensuring equal access, participation, and treatment for all energy usages, including all type of V2X, is fundamental. All grid users should receive equal treatment without discrimination, be they electric vehicles, wind turbines or home appliances. Any exceptions – such as tariff exemptions – should be restricted to emerging user groups, should remain temporary and should be appropriately justified.
f/ Upgradability path
In envisioning the regulatory framework for V2X integration, it is imperative to prioritise establishing future-proof systems capable of evolving alongside advancing technologies and changing needs. Although V2X technology is not as yet fully harmonised across Europe and still faces barriers, its early rollout is needed in order to facilitate improvements. Central to this endeavour is the need for an ‘upgradability path’, embedded within the regulatory framework. Such a path will not only instils trust among consumers and markets but also ensure compliance with future technological advancements and emerging requirements.
g/ Public charging hidden potential
In Europe, a significant proportion of the car fleet lacks access to home charging. As a result, publicly available charging will continue to be necessary in the future. This presents an opportunity to leverage V2X technology at these points also. We therefore encourage public charging points to be V2X-capable; this is provided that the cost-benefit analysis is positive, they are priced similarly, only implemented on slow chargers and do not impede the rollout of charging stations across Europe.
3. Barriers to V2X Deployment
Despite the potential offered by V2X integration, several barriers continue to hinder its widespread deployment. Overcoming regulatory, technical and market hurdles will require concerted efforts.
a/ Implementation of the Electricity Market Design
At the forefront of these challenges are regulatory barriers, most notably the lack of implementation by MS of the 2019 Electricity Market Design, which discriminates and disincentivises the participation of V2X in the electricity markets. To address this, there is an urgent need for MS to accelerate their implementation.
b/ Double Taxation
One of the asks of battery stakeholders (EVs and stationary) is to eliminate double taxation; that is, the taxing again of electricity injected into the grid from a battery. Double taxation[i] remains a persistent concern, particularly in scenarios where energy storage is integrated with other loads. While progress has been made in mitigating double taxation for large-scale storage, challenges persist for small-scale storage assets such as V2X. For example, in Germany, double taxation for stationary storage has been removed, yet remains in place for mobile storage.
c/ Uncoordinated grid requirements
The absence of the anticipated regulations, coupled with limited access to organised markets and revenue streams, poses significant challenges to V2X deployment. Uncoordinated grid requirements and standards between countries are exacerbating these challenges, hindering interoperability and complicating cross-border deployment efforts. Divergent communication standards and disparate smart meter adoption rates – something that is particularly evident in countries such as Germany, which has low penetration rates – underscore the urgent need for harmonisation and standardisation initiatives to realise the full potential of V2X integration.
4. Call for coherence, actions and political ownership at EU level
a/ Coherence across Member States
As the EU navigates the complexities of V2X integration, it is vital to address the prevailing divergences among MS and to foster a cohesive regulatory framework that promotes innovation and harmonisation. Despite incremental progress, no MS has successfully removed all barriers to V2X deployment, underscoring the imperative for EU-level intervention. For V2X for slow public charging, we therefore call for national capacity targets – rather an EU-wide one – because the share of cars without access to off-street parking at home differs significantly between MS.
b/ Coherence across EU legislations and regulations
To advance implementation of V2X and harness its manifold advantages within Europe, it is crucial that the newly installed European institutions adopt a holistic approach to this challenge. All V2X-relevant measures should be in the form a comprehensive regulatory framework, rather than addressing them in isolated discussions, or rather than discussion technologies (AC vs DC). One way of ensuring this seamless integration across diverse legislative frameworks – and avoiding a fragmented approach – is to establish political ownership.
c/ Multilevel coherence on V2X
Cities will, in general, be the key enablers and accelerators of V2X due to the alignment between clean air and decarbonisation strategies (such as growing adoption of zero-emission zones, electrification of heating as an alternative to petrol/gas/wood). V2X should therefore be part of an integrated mobility and energy strategy at all territorial levels. We therefore call upon the EU to adapt the proposed SUMPs/SULPs into SUMEPs/SULEPs (Sustainable Urban Logistics/Mobility and Energy Plan). This will ensure coordinated and integrated planning, helping couple mobility/logistics with energy aspects
d/ Double mandate to jumpstart the market.
Mandating V2X interoperability for all bidirectional-capable vehicles, while at the same time requiring V2X capability for public fleets and buildings would be decisive in kickstarting the market and boosting widespread adoption. It would also ensure flexibility for independent aggregators and promote the use of submeters. Requiring interoperability and encouraging public fleets to lead by example will help jumpstart the market.
Conclusion
Additional measures, including addressing communication standards and issuing non-binding guidelines for MS, will be essential for fostering coherence and facilitating the transition towards a sustainable, interoperable V2X ecosystem. With upcoming revisions to key pieces of legislation now on the horizon, it is an opportune moment for the European Commission to demonstrate leadership and to spearhead concerted action to achieving V2X integration goals. By embracing coherence at an EU level, policymakers can unlock the full potential of V2X technologies and accelerate the shift to a smarter, greener future.
Introduction [i] V2X is an EV bidirectional charging technology encompassing several sub technologies: When the vehicle is plugged and electricity automatically flows from the car back to the grid, this is known as Vehicle-to-Grid (V2G). If the charging and discharging of electricity stored in electric vehicles takes place in buildings, this technology is known as Vehicle-to-Building or Vehicle-to-Home (V2B or V2H). [ii] Notably in the Energy Performance of Buildings Directive, the Renewable Energy Directive and the Alternative Fuels Infrastructures Regulation The benefits of bidirectional charging [i] It has been calculated that V2G can offer 21TWh of upward flexibility, and 24TWh of downward flexibility by 2030, considering 30% of the EVs are charged bidirectionally. Together with other flexibility resources, €11 to €29 billion could be saved in annual savings in distribution grid investments. Source : https ://smarten.eu/wp-content/uploads/2022/09/SmartEN-DSF-benefits-2030-Report_DIGITAL.pdf [ii] In a fleet demo in Denmark, a 10-EV fleet engaging in frequency regulation (FCR) services recorded an average revenue of € 1,860 per car per year[ii]. In a residential V2G project connecting 320 homes in the UK, the V2G units were able to create ‘between £230 and £300 of value per year through the spot electricity market’ and the project team expects that ‘when combined with flexibility services this could grow to £500 per year[ii].’ In the UK, a solution already commercialized proposes the first V2G tariff in the UK where EV drivers would get free charging thanks to their V2G charger and vehicle[ii], providing clear incentives and enhancing the social acceptance of the consumer to opt for bidirectional charging. Source: https://www.ofgem.gov.uk/publications/case-study-uk-electric-vehicle-grid-v2g-charging Legislative and Regulatory Principles for V2X Integration [i] Source: https://smarten.eu/position-paper-why-flexible-consumers-matter-a-contribution-to-eu-elections-2024/, p 9 Barriers to V2X deployment [i] In fact, battery stakeholders face a triple taxation. Once when the energy is taken from the grid, twice when part of the energy is injected into the grid, and a third time when that electricity is used somewhere else. The electricity injected to the grid should not be taxed when taken by the battery nor when injected back into the grid.
[Video] Charles Esser highlights importance of coordination and cooperation between grid stakeholders.
Energy & Industry
Rise of electric vehicles, fall of the power grid?
The smooth integration of electric mobility into the power grid is the next frontier on the path toward clean mobility. The Platform for Electromobility issued a 15-solutions strong recommendations paper to ensure a smooth integration. Charles Esser highlighes here some key points and invites you to join the debate with key transport manufacturers.
Electric Vehicles are “battery-on-wheels”. What does that mean? With the right policy framework, smart charging can smoothen the impact of EVs on the grid.
But what’s more, the millions on new electrified vehicles in Europe can actually be used as assets to support the grid when it is under stress with Vehicle-to-Grid technologies.
We recently published with other members of the Platform, a roadmap of 15 solutions for a smooth integration of e-mobility into the grid. I won’t cover them all here but would like to underline one point:
One of the main challenges in planning the electrical grid in a way that can absorb charging of EVs lies in the uncertainty about how different types of EVs will recharge in different places.
The key to success here is early communication, coordination and collaboration between stakeholders: this includes the DSOs that we represent, but also local authorities, charge point operators, energy companies, fleet managers and so on.
While the Platform for Electromobility helps us get closer to each other, we call on European authorities to initiate, moderate and formalize this collaboration.
In a few weeks at the European Sustainable Energy Week in Brussels, I will be discussing all this from the point of view of European industries at our EUSEW session on 11 June in the late afternoon.
We gathered major European clean transport manufacturers across different modes to understand how upcoming European energy policies can help them be at the same time more competitive, more sustainable with a minimum, or maybe even positive, impact on the power grid.
Make sure to join us! You’ll find the registration link under this video. See you there!
Electromobility Stakeholders' Manifesto Compilation for 2024-2029
EU Elections
Compilation of Electromobility Stakeholders' Manifestos for 2024-2029
A unique document for policy-makers to tackle challenges ahead of us and make electric mobility transition a success for people, climate and businesses.
Europe’s future, decarbonised mobility ecosystem will be composed by a myriad of stakeholders. To make the energy transition a success, they all present both specific and cross-sectoral needs. All presented in this unique document.
Hereby, we present a unique compilation of the political manifestos from several members of the Platform for Electromobility. It stands as a testament to the collective effort and unified vision driving the advancement of electric mobility across all sustainable modes of transportation; but also showcases the diversity of legislative measures and political steps that remain to be taken for each and every sectors.
Within these manifestos lie the cornerstone recommendations crucial for the development and integration of electric mobility into European societies and economies. They stem from a diverse range of entities spanning industries, associations, NGOs, and local authorities, underscoring the breadth and depth of stakeholder involvement in shaping the decarbonised mobility ecosystem. As we approach the EU elections, this consolidated document serves as an exceptional resource for policymakers and stakeholders alike, providing them with a comprehensive overview of the priorities and aspirations of all the sectors composing the clean mobility system of tomorrow.
Transpiring from all manifestos presented here are cross-sectoral imperatives captured by the triple priority : Implement, Invest, Industrialise. Implement the Green Deal’s legislative measures. Invest to make the Green Deal a concrete reality. And industrialise to make the Green Deal beneficial for all Europeans, climate, people and businesses alike. These overarching goals gathered in the Platform for Electromobility’s manifesto, represent the pillars upon which our collective success rests. I invite you to delve into this compilation and explore the nuanced perspectives and unique contributions of each sector. Each of them is a milestone on the path towards a sustainable, electrified mobility.
Access each individual manifesto for 2024-2029 below.
Platform's statement: PFAS in sustainable e-mobility
Supply chain
PFAS in sustainable e-mobility
In the pursuit of the electrification of the mobility sector for the years to come, it is essential to recognise concerns surrounding certain PFAS use cases and their production, use and disposal.
The Platform for Electromobility acknowledges the significance and broad presence of Per- and Polyfluoroalkyl Substances (PFAS) in the electromobility ecosystem. PFAS represent a group of artificial/ anthropogenic chemicals with different physical, chemical, and biological properties[1]. PFAS have been widely utilised in most industries for their valuable properties (including resistance to heat, water, and oil) that enhance product performance and safety. However, their production and disposal raise concerns about environment and human exposure[2].
In the context of clean mobility manufacturing, e.g components of electric vehicles of all modes to renewable energy infrastructures, PFAS have played an enabling role. They are used in sustainable transportation, energy systems and components, such as batteries, wiring, and battery thermal management systems.
In the pursuit of the electrification of the mobility sector for the years to come, it is essential to recognise concerns surrounding certain PFAS use cases and their production, use and disposal. Considering that environmental and human health protection are critical, we are committed to supporting the transition to PFAS-free solutions in the sustainable mobility sector, and would support measures to eliminate all emissions released during the life cycle as soon as viable industrial alternatives[3] are available[4]. Our primary collective objective is to reduce, and where possible, phase out the use of PFAS following the REACH risk management approach across all mobility industries. We advocate for continuous innovation to replace such PFAS application in sustainable mobility.
We outline below crucial points for consideration to the Regulators during the whole restriction proposal negotiation process:
1. Minimize uncertainties for investors
While Europe has shown its intention to take a global leading role in environmentally conscious battery production, ongoing uncertainties around PFAS use in the battery industry represents a real threat to this nascent and needed industry for the coming years. The PFAS restriction proposal presented by the four Member States and Norway to ECHA is putting investments in Europe into the mobility sector today at risk, while other parts of the world are actively promoting the development of a domestic e-mobility value chain. Uncertainties regarding the duration of the derogation period pose a potential risk of exposing the sectors to a phase-out without adequate alternatives.
We call upon legislators to take a detailed approach ensuring predictability for battery value chain operators while future-proofing the industry from further restrictions.
2. Allow appropriate, open-ended derogation periods
The proposed phase-out of PFAS, which does not take into account the long lead times for developing alternatives will likely hinder the deployment of ‘made-in-Europe’ essential sustainable mobility solutions, particularly in uses when no viable substitutes exist. Legislators must recognise that, up to date, some components of e-mobility applications cannot work without PFAS[5], because no viable alternative solutions exist on the market or possible alternatives have been ruled as unviable. In order to avoid disastrous consequences for the battery industry and therefore the e-mobility roll-out, the proposed PFAS restriction requires careful and specific consideration:
We call on legislators to grant appropriate derogation periods for as long as necessary for testing alternatives and bringing them to the market[6] and allow for the use of PFAS where no alternative is available.
Encourage continuous and increased research and development to accelerate the testing and research around possible alternatives.
We also support reducing the scope of the current restriction proposal to exclude applications where no significant emissions happen during the whole life cycle, such as for batteries.[7]
3. Consider appropriate tools to increase transparency along the e-mobility supply chain:
Transparency and monitoring requirements could help improve the appropriate capture and destruction of PFAS using complementary abatement technologies and improve depollution standards.
4. Ensure consistent and future-proof legislation
Consistency across various EU legislations is key. Upstream, the issue of PFAS should be addressed within the context of Article 6, which pertains to Substances of Concern in the EU Batteries Regulation. Downstream, matters related to the disposal of materials containing PFAS in electric vehicles are currently under discussion in the End-of-Life Vehicle Regulation proposal.
We urge legislators to pay special attention to the issue of legacy substances under the revision of the EU End-of-Life Vehicles Directive.
Any ban on substances must be applied only on new types of vehicles.
Subsequent set of policies
Following the above-mentioned principles, we call for adopting the following balanced set of policies, which support reducing PFAS use where possible, mitigate their impact on the environment and human health, while supporting the energy transition and path towards climate-neutrality:
Encourage and invest in research and development to identify and promote viable alternatives to currently used PFAS in the electromobility sectors
The derogations which will be defined in the European Commission’s restriction for the use of PFAS substances in MAC (Mobile Air Conditioning) should be the same for all vehicles including EVs and combustion engine vehicles with mechanical compressors;
Ensure legislative predictability and science-based principle in chemicals management so that PFAS restrictions do not unintentionally increase the risk of investment diversion in battery manufacturing, potentially shifting operations from Europe to third countries.
Increase transparency and traceability on PFAS presence across the EV value chain, beyond battery production, notably by merging requested information of the Vehicle passport as proposed in the ELVR and the Battery passport behind a single QR Code.
It is imperative to foster sustainable and viable alternatives to PFAS in a balanced approach to align with the EU’s wider objective of accelerating a sustainable and resilient clean mobility sector.
[1] https://www.oecd.org/chemicalsafety/portal-perfluorinated-chemicals/terminology-per-and-polyfluoroalkyl-substances.pdf [2] The PFOA, a sub-group of PFAS, have notably been included in recent WHO classification as group one carcinogen (IARC Monographs evaluate the carcinogenicity of perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) – IARC (who.int)). Resulting from this, PFOA have been already globally regulated and phased out. They are not in the scope of this document. [3] Industrial viable alternatives are defined as innovations that have been tested, approved and scalable, ready for mass-market applications. [4] Regarding vehicles, only new types should be concerned by the upcoming restrictions. [5] https://rechargebatteries.org/wp-content/uploads/2023/09/FINAL-SECOND-SUBMISSION-.pdf [6] ready for mass-market applications [7] ECOS have decided to dissociate from other members of the Platform for Electromobility and not to support this last specification.
Open Letter to Prof. Draghi and EU Heads of States on EU Competitiveness Strategy
Open letter
Platform Chair: Prioritizing EU Competitiveness in the Transport Sector
to Prof. Mario Draghi and EU Heads of States
Industrial competitiveness will be high on the agenda of the Special European Council of 17th and 18th April in Brussels. It has lately tended to overshadow sustainability. We, members of the Platform for Electromobility, a unique coalition of industries, NGOs, and civil society organizations committed to advancing electric mobility across all modes of transportation in Europe, firmly believe there can be no industrial competitiveness without sustainability. The Green Deal has set the course. It is imperative to implement it swiftly and continue in that direction.
The EU does need an industrial strategy to ensure its businesses can complete the transition as planned. In our latest publication, “A 360° e-mobility industry strategy“, you will find five recommendations we believe should be a priority of the next strategic agenda:
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Ensuring regulatory stability for industries and investors. This means first and foremost ensuring that the European Green Deal legislations as voted in the 2019-2024 mandate remain steady over time.
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Enhancing value chain competitiveness and resilience. European industrial policy initiatives should see their focus widened from specific components to a more comprehensive approach, spanning from raw materials to end products and from individual to all modes of sustainable transportation.
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Financing the short-term transition through accessible opportunities. Existing EU funds can already serve as valuable assets if they are distributed efficiently and intelligently, notably by streamlining access to finance, particularly for net-zero industries, through instruments such as the Innovation Fund and InvestEU.
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Establishing a Net Zero Investment Plan for long-term financing. The STEP platform, although welcomed, unfortunately far from the pan-European response to global competition on cleantech that the EU needs.
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Strengthening international cooperation. Strengthening ties with diverse regions would diversify sources, reduce geopolitical risks and uncertainties, ensure a secure supply chain, enhance global industrial collaborations, and uphold a fair competitive environment for all clean transport industries.
We urge the European Council and the upcoming report of the future of European Competitiveness to recognise that industrial competitiveness and sustainability are intrinsically linked and cannot go one without the other. Hoping that our recommendations will help shape the policy priorities of the upcoming EU legislative cycle, we stand ready to contribute to the discussions further.
Céline Domecq
Chair of the Platform for Electromobility, 2024
Five steps towards a 360° e-mobility industry strategy
EU Industrial Strategy
Our recommendations for a “Green Deal Industrial Plan”
Any “Green Deal Industrial Plan” would not be complete without a strong chapter on the electromobilities manufacturing ecosystem.
In the context of the forthcoming EU legislative mandate, the Platform for electromobility endorses the overall shift in European policy priorities set by the European Green Deal as a welcome long-term compass. Recent institutional declarations[1] aligned with Platform’s EU Election Manifesto[2] support the development of a robust industrial policy. This is essential to ensure Europe’s competitiveness, resilience in a rapidly evolving global landscape, and maintain its leadership in climate change mitigation. Any “Green Deal Industrial Plan” would not be complete without a strong chapter on the electromobilities manufacturing ecosystem. To achieve these goals, we propose a multifaceted approach that considers the entire value chain’s competitiveness in green transport solutions while revitalizing their financial support. Such policies must be implemented within a framework of regulatory stability and close international cooperation with other regions.
We will set out these proposals below under 5 headings:
- Ensuring regulatory stability for industries and investors
- Enhancing value chain competitiveness and resilience
- Financing the transition in the short term: the “low hanging fruits”
- Financing the transition in the long term: Net Zero Investment Plan
- Strengthening international cooperation
We welcome questions and cooperation with the Platform for Electromobility on our proposals.
1. Ensuring regulatory stability for industries and investors
A stable regulatory system is crucial. Attracting investment to create the net-zero industrial ecosystem for electromobility will be facilitated by maintaining a consistent, clear regulatory framework and climate objectives. This means first and foremost ensuring that the European Green Deal legislations as voted in the 2019-2024 mandate remain steady over time. We strongly warn against disruption of the Green Deal and their long-term planning notably by limiting the scope of major reviews. At a more granular level, we call for stability in the regulatory frameworks of all transport modes. It is a key element for successful risk management. A consistent, clear regulatory framework secondly means performing sound impact assessments before proposing new legislation. Potential legislations should be in line with the direction taken by the Green Deal as voted during this mandate. Thirdly, regulatory stability means focus on proper implementation through the swift adoption of all necessary complementary acts In a nutshell, implementing before reviewing.
2. Enhancing value chain competitiveness and resilience
a. A 360° e-mobility industry strategy
While recent European industrial policy initiatives, such as the Net Zero Industry Act (NZIA), have focused on key components and sub-systems[1], we have observed that an emphasis and consideration of full value chain competitiveness is lacking. It is crucial that these policies take into account the comprehensive nature of mobility industry value chains across sectors and support their global competitiveness as they navigate the green transitions. We call for a 360° e-mobility industry strategy, widening the focus from specific components to a more comprehensive approach, spanning from raw materials to end products and from individual to all modes of sustainable transportation.
B. Upstream and downstream
While the presence of gigafactories is fundamental for the development of green industries in Europe, with production capacity on some parts of the value chain (so far mostly focused on end products), it is important to highlight that they alone do not guarantee a competitive and non-dependant industry[2]. Indeed future industrial policy should go beyond the end-product and also consider upstream (refining) and downstream (recycling), both sectors being, so far, not located in Europe. A European industrial network of innovative companies from all sizes would help securing all stages of e-mobility value chains for the manufacturing and recycling of key components. The EU should channel purchases toward “made in Europe” products and increase production chains within Europe. Given the high demand for strategic raw material to manufacture electric vehicles, securing the value chains also includes a strong focus on security of supply of such materials and other available alternative technologies, as well as the recyclability of engines and batteries. The creation of new industrial hubs in Europe should go hand-in-hand with this strategy.
c. Energy-cost efficient strategy
Energy costs play an integral part of manufacturing competitive transport solutions. The availability of affordable, decarbonised energy is paramount to maintaining Europe’s competitiveness in the global low-carbon technology competition. We ask policymakers to work urgently on mitigating electricity prices disparities between the Union, China and the US, which are severely disadvantaging EU manufacturers. We endorse other calls[3] for the introduction of incentives that reward low-carbon technology producers favouring local materials and components.
d. Public procurement driven sectors
Similarly, for mobility sectors where investment decisions are predominantly the responsibility of public authorities, such as rail, the relevant EU legal framework must be properly enforced. That starts with public procurement, ensuring that tender evaluation criteria set the right focus on the sustainability of the selected solutions but also include all available tools to ensure fair competition, such as the foreign subsidy regulation. We strongly support the NZIA’s non-price criteria proposal in public procurement supporting sustainable development and resilient European industries. Those criteria will help favour European industries in public auctions and ultimately promote technologies produced in Europe.
e. Accompany workers and employers in skills transition
Industrial sectors must be supported in their skills development and employment policies for a successful decarbonisation of its values chains. For this purpose, EU institutions and Member States should undertake a mapping of skills shortages. This should consider both traditional and new skills. That way, we can assess the needs for jobs and skills in each sector, developing tools to identify and publicise available training, and highlight those that need to be created. Based on the identified needs, measures should be undertaken by the EU – such as NZIA’s initiative for “Net-Zero Academy” – and the Member States to support existing training structures in Member States as well as to ensure that the trainings are conducted by practitioners from companies.
3. Financing the transition in the short term: The “low hanging fruits”
Existing EU funds can already serve as valuable assets if they are distributed efficiently and intelligently, notably by streamlining access to finance, particularly for net-zero industries, through instruments such as the Innovation Fund and InvestEU. To do so, we have identified five “low-hanging fruits” measures that can be taken without further delay:
- Low hanging fruit 1: Guarantees. As a matter of priority, public investment tools should crowd in private investments by increasingly making use of instruments like guarantees. Firstly, the InvestEU Fund should be further mobilised in support of a 360° e-mobility industry strategy. Secondly, the European Investment Bank (EIB) Group should strengthen the provision of commercial bank guarantees for investments by companies across the EV value chain, replicating the recently announced €5 billion guarantee facility for the wind sector[1].
- Low hanging fruit 2: Innovation Fund. We welcome the recent initiative under the Innovation Fund to dedicate €3 billion to the EV battery value chain. This new mechanism needs to focus on the most sustainable EU battery and components manufacturers[2]. A robust mechanism needs to be built, including for channelling increased funding from Member States to match EU funding.
- Low hanging fruit 3: Capacity building. To enhance accessibility, we propose that EU or national administrations train and appoints specific staff to provide advisory services to both applicants and national authorities responsible for distributing EU funds. A substantial portion of these funds, especially in the case of Recovery funding, may remain unallocated due to the constrained administrative capacity of Member States[3] to prepare projects or process applications. Supporting project preparation and speeding up authorization procedures at the national level would thus benefit both the applicants and the authorities involved.
- Low hanging fruit 4: Mid-term MFF revision. The mid-term revision of the MFF is the opportunity for European institutions and Member States to significantly raise funds of strategic programmes (STEP but also CEF) to provide appropriate financing instruments to support a competitive decarbonisation of the EU industry and support investments in clean, sustainable mobility solutions.
3. Financing the transition in the long term: Net Zero Investment Plan
a. Why a Net Zero Investment Plan now?
The climate investment gap is deepening by the day and the way to fill the gap will be a major challenge for decision-makers in the coming years. European elections are the democratic the window of opportunity to set priorities about where EU funds should flow and the level of support that EU will provide to shift the continent to clean mobility. 2024 is thus a milestone year for the green transition. The STEP platform is, although welcomed, unfortunately far from the pan-European response to global competition on cleantech that the EU needs. Therefore, we support the creation of a major Net-Zero Investment Plan after the EU elections.
b. Predictable and upfront support for op-ex
The EU should ensure that financial instruments do not exclusively prioritise innovation but also consider the importance of providing strategic support for operating expenses and production, for a limited duration. We highlight the fact that operational expenses (op-ex) are not covered by the current InvestEU funding framework. This means that in addition to promoting innovation, financial support should be directed towards sustaining and optimizing day-to-day operations and the production processes of net-zero industries, thereby creating a more balanced approach to funding allocation. Beyond deciding the level of support that will be provided to the green and digital transition of the transport sectors, upfront predictability and certainty about possible funding should also be provided. A rulebook for financing should make sure op-ex support is both predictable and upfront.
c. Consider ventures with higher risk profiles
To complement this new approach and move closer to a truly comprehensive funding allocation, it’s essential to also consider ventures with higher risk profiles. For instance, when it comes to the Alternative Fuels Infrastructure Fund, the current financing terms are notably stringent. These terms often exclude high-risk endeavours, as they require a minimum of 50% funding from national banks or partners, effectively limiting opportunities for investment in riskier projects. This, in turn, disproportionately affects emerging industries and initiatives in Central and Eastern Europe. To address this issue, the European Investment Bank (EIB) should explore investments in riskier ventures, and InvestEU should be equipped to provide loans and equity for such undertakings. The InvestEU Program, designed to offer guarantees to both public and private banks, can play a pivotal role in enabling them to take more substantial risks in their lending and equity operations. This approach can facilitate the inclusion of ‘investments in riskier ventures’ and contribute to a more diverse and dynamic investment landscape.
d. How to finance a Net Zero Investment Plan?
This Net-Zero Investment Plan should be structured under the EU Multi Financial Framework on the one hand, and via new bond issuance programme replacing the Next Generation EU programme on the other hand. In addition, this broader investment plan should ensure that sufficient European and national funding resources, leveraging private sector investment, are available to achieve Europe’s objectives as set in the Climate Law and in the Smart and Sustainable Mobility Strategy. On top of the achievement of dedicated programs such as the TEN-T, it should include a dedicated Green Industry fund. State Aid measures should be re-designed and local supports coordinated at EU level to ensure a level playing field at European level,. The future State Aid regime should mandate EU governments to integrate environmental and social considerations to their support schemes, so that only best-in-class projects benefit from public support at regional and national level.
5. Strengthening international cooperation
Stability also requires robust international cooperation. Strengthening ties with diverse regions would diversify sources, reduce geopolitical risks and uncertainties, ensure a secure supply chain, enhance global industrial collaborations, and uphold a fair competitive environment for all clean transport industries.
- Proactively setting a Level Playing Field
The EU response to other regions’ recent green industry support program should be prepared with care, to avoid provoking a global subsidy race. The goal should be to create an international level playing field between all economies, aimed at reaching Paris Agreement climate targets (COP21) together and aligned on WTO rules. For certain industries, level playing field can only be reached by matching competitors’ support: for examples, for battery manufacturing, the US IRA provides a significant op-ex support per kWh produced; for reskilling workers, massive support for training automotive workers is proposed. We call for EU policymakers to match such support in some manner to help its European battery industry compete on more equal terms. Without such matching, there can be no global level-playing-field for e-mobility related manufacturing.
- Cooperation to avoid trade disruption
With several studies by the OECD[1] highlighting the challenges faced by European railway producers in the Chinese market, as well as the public assistance received by their companies, the question of China’s undisclosed subsidies benefiting its products is not new for the railway industry. Cooperations should be reinforced to ensure there are no such practices risking unbalancing global competition.
- Cooperation to diversify sources
Dependence on one single third country for green transport technologies is tangible[2] and should also be mitigated. China dominates the production of solar panels, batteries for EVs and part of the world trade in wind turbines. To diversify sources, we support proposals to form a green technology partnership between governments and businesses of the major economic powers to reduce strategic dependencies. Such partnership would be intended to complement, not replace, existing supply chain. Beyond cooperation with third countries, cooperation should also be within European countries and industrial partnerships to multiply joint purchases and thus secure supply of strategic raw materials at advantageous prices.
[1] President von der Leyen’s State of the Union, European Commission’s Work Programme. Executive Vice President Sefcovic’s speech at Environment Council. [2] “2024-2029: Five years to make e-mobility transition a success”, Platform for electromobility, September 2023. --- [1] A "sub-system" refers to a specialized and interconnected set of components that collectively perform a specific function within the overall system. [2] “How to Meet the Industrial Challenge of Electric Mobility in France and in Europe?”, Notes de l’Ifri, Ifri, November 2023. [3] “Call for EU Clean Industrial Deal and urgent actions to keep Europe in the world’s clean technology race”, Eurofer, October 2023. --- [1] Press Release, EIB, December 2023 [2] Press Release, European Commission, December 2023 [3] “How Europe should answer the US Inflation Reduction Act”, Bruegel, February 2023 --- [1] “Measuring distortions in international markets: The rolling-stock value chain”, OECD, February 2023 [2] “De-risking and decarbonising: a green tech partnership to reduce reliance on China”, Bruegel, October 2023.
[Video] Charging Infrastructures: A perspective on 2024 by Jayson Dong
2024: Entry into force of AFIR
Jayson Dong, chair of the WG Infrastructures of the Platform for Electromobility, outlines the upcoming opportunities and challenges entailed by the implementation of AFIR in 2024.