As automakers struggle to cope with a COVID-related collapse in vehicle demand, the European Union is relaxing state aid regulations to help car companies speed up their transition to electric cars from fossil fuels.
The bloc has set an overall goal of reaching carbon neutrality by 2050 – a plan known as the European Green Deal -- with automotive emissions a key area of focus. EU lawmakers are aiming to use the coronavirus crisis to rebuild the economies of member states in a more environmentally sustainable fashion.
A senior aide to Frans Timmermans, the European Commission executive vice president in charge of the Green Deal, told an auto industry panel that the COVID-19 crisis served as a catalyst, because any fiscal stimulus undertaken by the EU or member states should be aimed at decarbonizing European businesses.
“We will use this opportunity to speed up the transition. That was already ongoing in large parts of the economy, including the car industry,” said Diederik Samsom, head of cabinet for Timmermans, in an online debate hosted by auto industry lobby group ACEA.
Some of the support for that transition would come from a 750 million euro ($881 million) coronavirus recovery plan, called Next Generation EU, that was approved in July by the bloc’s 27 member states.
The money will be disbursed through grants and loans and will go toward measures to achieve the EU’s midterm 2030 carbon emissions reduction target. It calls for a minimum 55 percent cut in collective greenhouse gas emissions over the 1990 level, an increase over the previous 40 percent target.
That level has been cut by only 24 percent through 2019, meaning the bloc has more than halfway to go.
Road transport, which accounts for roughly a fifth of all EU emissions, has proven to be particularly resistant to reduction efforts thus far, with levels actually increasing considerably over 1990.
This is in large part due to higher traffic volumes, but tailpipe emissions from new cars have also become an issue. The average last year of 122.4 grams of CO2 per kilometer in 2019 represented the third straight annual increase. By law this must drop to just 95 g/km by the end of next year, and sharper cuts are planned over the course of the decade.
"The impact assessment that we just produced a month ago tells us that in 2030 the emission standard for cars should be 50 percent lower than the 2021 standard, which is much more ambitious than the currently envisaged 37 percent,” Samsom said.
"With the public money available in Next Generation EU and via state aid regulations, which we will revise next year for energy and environmental purposes, we will make it possible that taxpayer money is used to help this transition happen," he said.