The automotive industry is an important factor in the EU’s economy with around 7% of the EU’s GDP coming from this industry. The automotive industry not only has linkages with other sectors such as steel, chemical and textile industries, but it is also important for employment as approximately 13.8 million people work in the car sector of the EU.
Hence, it goes without saying that the automotive industry is essential for Europe and its economy. However, the industry is linked with a lot of emissions, responsible for emitting air pollutants such as carbon monoxide, nitrogen oxides, particulate matter, benzene, and volatile organic compounds. These pollutants decrease air quality in urban areas and have negative health effects on humans.
Additionally, road transport affects climate change: Around 784 million tonnes of carbon dioxide were released into the atmosphere by road transport modes in 2019 in the EU, which is an increase of 28% from 1990. 62% of these emissions are caused by passenger vehicles and motorcycles, “27% from heavy-duty trucks and buses and 11% light duty trucks”.
Emissions are also not only emitted via the exhaust of cars but also from other parts of the vehicles, for instance, the tires. According to a study from Emissions Analytics, a tire will emit an average of 1850 times more particles than the tailpipe of a car. Besides, there are negative environmental effects of the microplastic from tires.
Reducing emissions from road transport is especially important given the current energy crisis. The demand for oil was primarily driven by road transportation at around 47%, with other transport sectors like aviation at 4% and maritime at 9%. In general, transport in Europe is around 90% dependent on oil for its energy demand. It makes the EU economy and the transport sector, in particular, extremely vulnerable to changes in supply and prices.
In many countries such as Germany, Italy and the Czech Republic, the automotive industry is a very important economic activity. Hence, measures to decarbonise cars are quite controversial within the EU. Many countries fear a large incise in their economy, effects on low-income households and the outsourcing of cars to poorer countries. Whereas some countries such as The Netherlands and Denmark are keener on decarbonising cars, other countries remain sceptical.
Nevertheless, recently, in October 2022, the European Parliament and Council agreed to a ban on fossil-fuel cars by 2035. Which is a sign in the right direction.
The EU’s Road to Decarbonisation
There are already some measures in place for a more extended time period that tackles emissions from cars. For example, the CO2 emissions standards for cars and vans set a limit for how much carbon dioxide emissions of newly produced cars can emit, meaning newly manufactured cars must produce fewer emissions before being allowed on the market. They exist since 2009 and the standards are increased with each revision. It aims to stimulate the roll-out of more zero-emissions vehicles. The revision was recently approved by the European Parliament and the Council, and it was decided that internal combustion engines—the engines used in fossil fuel-powered cars—will be banned by 2035. There are, however, fears of outsourcing fossil-fuel cars to non-EU countries by car manufacturers, which would outsource pollution.
A regulation that tackles air pollutants in cars such as nitrogen oxides is the Euro standards. The Euro standards date back to 1992. They have been revised six times. Just recently the proposals for revised Euro 7 standards have been published by the European Commission and are soon entering the negotiation phase between the European Parliament and the Council. Although, they are criticised by various environmental NGOs for not being ambitious enough.
More measures are proposed by the European Commission and some are currently debated in the European Parliament and the Council. A revision of measures has been submitted within the EU’s Fit-for-55 Package, the EU’s initiatives to achieve carbon neutrality by 2050. It includes, amongst others, the revised CO2 emissions standards, as mentioned above, a revision of the Alternative Fuels Infrastructure Regulation, a revision of the Renewable Energy Directive and a separate Emissions Trading System for road transport.
In general, the European Emissions Trading System puts a price on carbon and lowers the cap on emissions for certain economic sectors. It sets a limit to installations on how much CO2 they can emit. If the limit is exceeded, an installation must purchase allowances to avoid a penalty. So far, road transport has been excluded from the scheme. From 2026, the road transport and building sector would have to surrender allowances to tackle emissions of cars. The cap on emissions would be set in 2026 and would gradually be decreased to a 43% reduction of emissions in 2030 compared to 2005 levels. Furthermore, indirect social impacts from rising prices of road transport and heating fuels are addressed through a legislative proposal for a Social Climate Fund, a fund to support vulnerable households.
The revised Alternative Fuels Infrastructure Regulation will require EU Member States to expand charging capacity in line with zero-emission car sales as well as to install charging and fueling points at regular intervals on major highways.
The revision of the Renewable Energy Directive sets an increased target to produce 40% of energy from renewable sources by 2030 (before it was a 32% target). Regarding transport, it mandates that by 2030 all EU Member States must ensure that at least 10% of the fuels used in the transportation sector are derived from renewable sources. The revision, however, leads to a discussion of the controversies behind biofuels as an alternative sustainable fuel for transport.
Concluding Remarks
With so many new and revised measures, it goes without saying that they will have a strong impact on the EU’s automotive industry. The next article will dive more deeply into how effective these initiatives are in reducing road transport emissions. Moreover, when talking about road transport decarbonisation, we also need to discuss the environmental and social challenges and controversies when it comes to the expansion of sustainable fuels for road transport and road transport electrification.
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