On Tuesday 16 December in Strasbourg, the European Commission presented a package of measures aimed at granting flexibilities to the automotive sector and putting in place measures to stimulate the adoption of electric vehicles.
Reverse on ban of production of internal combustion engine vehicles. “Europe confirms its course of decarbonisation by 2035 for the automotive industry. It is a clear course, maintained and assumed”, assured Stéphane Séjourné, Vice-President of the Commission, responsible for Prosperity and Industrial Strategy, at a press conference. “However, the calculation methods are changing. [...] All potential additional emissions generated by these flexibilities will have to be fully offset upstream”.
In line with the principle of “technological neutrality”, the updating of CO2 emission standards for cars and vans takes account of the entire value chain. From 2035 onwards, carmakers will need to comply with a 90% tailpipe emissions reduction target, while the remaining 10% emissions will need to be compensated. This compensation will be achieved through two mechanisms: the use of low-carbon steel manufactured in the EU and real emission reductions resulting from electronic fuels and biofuels.
These mechanisms grant credits: credits for low-carbon steel can contribute up to 7% of the benchmark targets for 2021, compared with 3% for fuels.
The proposal will therefore allow the production of plug-in hybrids, light hybrids and internal combustion engine vehicles to continue beyond 2035. “Other texts will reinforce this trajectory - I’m thinking in particular of the ‘Industrial Accelerator’, which I will have to present to you at the beginning of next year and which will be devoted in particular and directly to the automotive sector”, emphasised Mr Séjourné. “Is Europe introducing a European preference for cars? The answer is yes, and it’s a major step forward, the ‘Made in the European Union’ is included in all the measures we are proposing”, he added.
To speed up the take-up of small, affordable electric cars made in the European Union (see EUROPE 13706/6), the Commission is proposing additional flexibility for carmakers: they will be entitled to ‘super credits’. These vehicles will benefit from a multiplier of 1.3 in the accounting. The new ‘M1E’ category will cover vehicles less than 4.20 m long, sold for between €15,000 and €25,000. “We are committed to reducing the introduction of new regulatory obligations as far as possible over a ten-year period”, said Mr Séjourné. A number of other recommendations are included in this category, such as a purchase bonus, a scrappage scheme, favourable parking conditions, a toll exemption or reduction and reduced-price tariff recharging.
In addition, with regard to CO2 emission standards over the period 2030-2032, multi-year compliance or ‘bank and borrow’ flexibility is introduced, so that manufacturers can exceed the target in one year, if this is offset in another year of the period.
The Commission is also proposing a targeted change to CO2 emission standards for heavy commercial vehicles, with flexibility to make it easier to meet the targets by 2030.
To read the proposal on emissions from heavy-duty vehicles: https://aeur.eu/f/k1b
Stimulating the battery industry. The ‘Battery Booster’ is based on five pillars: - financing; - access to raw materials; - tougher conditions for foreign investment; - support for demand through local content; - accelerating research and innovation in this area. €1.5 billion will support European battery cell producers through interest-free loans. The programme ensures a level playing field for batteries manufactured in the EU and harmonises Member States’ actions to boost competitiveness and sustainability.
“Another 300 million will go to helping diversify our supply chains in critical raw materials”, said Wopke Hoekstra, European Commissioner for Climate Change.
Greening corporate fleets. The Commission is proposing a regulation to stimulate business demand for zero-emission vehicles, by setting binding targets at Member State level. Company registrations account for around 60% of all car registrations and around 90% of van registrations in the EU. These targets will be assessed in terms of GDP per capita.
“We are focusing only on large companies, meaning companies with more than 250 employees and €50 million turnover. We cover, in other words, only 0.16% of all companies in the EU”, explained Apóstolos Tzitzikóstas, European Commissioner for Sustainable Transport and Tourism. The aim is to avoid overburdening small and medium-sized enterprises (SMEs).
“At the same time, we’re also sending a strong signal to investors by stimulating demand that will strengthen EU manufacturing and supply, support job creation and protect our industrial leadership”, he stressed.
With this measure, the Commission also hopes to speed up the availability of ‘zero-emission’ vehicles on the second-hand market, as 80% of EU citizens buy their vehicles on the second-hand market. This will make them more affordable, particularly for citizens and SMEs, and especially in Member States where the second-hand vehicle market is predominant and national incentives are not sufficient to make new vehicles competitive.
As anticipated by Agence Europe on Monday 15 December (see EUROPE 13773/9), the ‘Automotive Omnibus’ will lighten the administrative burden and reduce costs for European manufacturers. According to the Commission, businesses should save around €706 million a year.
To read the proposal on fleets: https://aeur.eu/f/k1a
To read the ‘Omnibus’ proposal: https://aeur.eu/f/k0c ; and its annex: https://aeur.eu/f/k0d
Mixed reactions. The Commission’s announcements did not satisfy everyone. The EPP welcomed the reverse on the ban of production of internal combustion engine cars. “We need a realistic, low-bureaucracy approach that strengthens production sites in Europe while also taking sufficient account of the international supply chains of European manufacturers. We also reject mandatory national electric car quotas for fleet operators”, commented German MEP Jens Gieseke.
But for Marie Toussaint (Greens/EFA, French), “going back on 2035 would be a major political mistake: a climate mistake, but also an industrial mistake”. As for the rest of the measures, for her, they are too weak. “Believing that European competitiveness can be won by relying on combustion engines is a short-term vision that does not correspond to reality”, added the leader of the S&D group, Iratxe García Perez.
Industry representatives are sceptical. The European Automobile Manufacturers’ Association (ACEA) and Automotive Mobility Europe (AME), which represent dealers, repairers and other service providers, stated that this package requires more decisive measures to facilitate the transition over the next few years. (Original version in French by Anne Damiani, with the editorial staff)