Automakers will meet with EU officials and green campaigners this month to open discussions on what will likely be a tough 2030 target for the reduction of CO2 emissions from new cars sold in Europe. The meeting likely will be tense. After achieving a 34 percent drop in emissions over the past 20 years, car companies say they are reaching the limit of what is doable. European Commission officials and environmental campaigners are likely to disagree with the automakers and instead seek further cuts to CO2 emissions, which are partly blamed for climate change. On June 18 the Commission will present studies evaluating areas including the need for CO2 cuts, which technologies will help meet the goal and whether investing to cut emissions will hurt automakers’ competitiveness.
The EU wants automakers to cut fleet CO2 emissions to 95 grams per kilometer by 2021, down from an average of 123.4g/km currently. The European Parliament voted last year for a CO2 target of 68g/km to 78g/km for 2025. The parliament’s target is an “indicative range” that has to go through consultation. The auto industry’s lobby group, ACEA, said on April 16 that “delivering on that aim requires ever greater technical investments to achieve smaller reductions.” The next target, for 2030, could be even tougher with the EU seeking a 30 percent reduction in emissions for the transport, housing and agricultural sectors -- in essence asking carmakers to achieve in 10 years what they achieved in 20 years for the last set of targets. “This gives you the idea of the technological challenge we are facing,” said Massimo Beccarello, vice director for development, energy and environmental policy at Italy’s Confindustria business lobby.
The EU is marshaling its research to make an unassailable case for lower targets. For example, one of its studies debunks the assertion that European carmakers’ competitiveness has been hurt by the expense of creating emissions-reducing technology. Electric vehicles, plug-in hybrids, fuel cell and natural gas-powered cars -- and how to pay for them -- will be crucial to reaching the new target, ACEA said. Automakers have introduced alternative powertrains such as EVs and plug-ins to their fleets, but most of the fuel-efficiency gains to date have come from improvements to traditional engines. That will have to change.
Automakers, environmentalists and EU officials all say a big step forward in alternative powertrain technology will be needed to meet tougher targets. Auto industry executives are already calling for incentives to help meet the costs for new technologies. “Governments across Europe will need to increase their support if we are to see a significant increase in sales [of electric vehicles], both in terms of helping to build the charging infrastructure necessary and in influencing consumer choices,” ACEA Secretary General Erik Jonnaert said. The EU offers financial support through programs such as Horizon 2020, which has 80 billion euros available for r&d, and the new European Fund for Strategic Investment (EFSI) launched by European Commission President Jean-Claude Juncker. But it’s unclear whether that will be enough.
For suppliers, however, the new 2030 targets could be a boon, said credit ratings agency Fitch in a report that singled out Robert Bosch, Continental and Faurecia among beneficiaries of tighter emissions regulation. “Contrary to suppliers, we believe that manufacturers have a very limited ability to pass on to their own customers the costs incurred to improve fuel efficiency,” Fitch said.
Since the 2030 emissions targets will be much tougher, the Commission has asked for more detailed assessment studies than it did for the targets that take full effect in 2021, said a person familiar with the process. For the 2021 target, the EU did two studies -- one for cars, and one for vans. This time, it’s doing at least eight: evaluation of current regulations; competitiveness; down weighting; mileage; embedded emissions; in-use factors; technologies and costs; modalities of future regulations.