European Scrutiny Committee Contents


26 Strategy for clean and energy efficient vehicles

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COM(10) 186

Commission Communication: A European strategy on clean and energy efficient vehicles

Legal base
Document originated28 April 2010
Deposited in Parliament25 May 2010
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 26 May 2010
Previous Committee ReportNone, but see footnotes
Discussed in Council25 May 2010
Committee's assessmentPolitically important
Committee's decisionCleared

Background

26.1 According to the Commission, the European automotive industry is a world leader in developing clean and energy efficient technologies based on combustion engines, but it adds that transport is nevertheless responsible for about one quarter of EU emissions of carbon dioxide and contributes significantly to air pollution and related health problems, particularly in urban areas. It notes that the internal combustion engine is likely to remain dominant in road vehicles in the short and medium term, but that alternative fuel and propulsion technologies are likely to contribute significantly to the Europe 2020 priorities of developing smart and sustainable growth.

The current document

26.2 It has therefore put forward this strategy for encouraging the development and uptake of clean and energy efficient heavy[106] and light[107]-duty vehicles, as well as two and three-wheelers and quadricycles.[108] It sees the strategy as a vital part of the Europe 2020 flagship initiative "Resource efficient Europe", which seeks to promote new technologies to modernise and decarbonise the transport sector, and as building upon both the European green cars initiative which was launched as part of the European Economic Recovery Plan[109] in November 2008, and the existing 2007 strategy[110] for reducing carbon dioxide emissions from passenger cars and light-duty commercial vehicles. It also says that the approach set out will help to boost the competitiveness of the European industry at a time when its global competitors in both America and Asia are investing in research into low-carbon technologies and seeking to develop alternative technologies.

ACTION PLAN FOR GREEN VEHICLES

26.3 The Commission suggests that, in order to achieve these aims, it is necessary to follow two tracks, namely promoting clean and efficient vehicles based upon conventional internal combustion engines and facilitating the deployment of breakthrough technologies in ultra low carbon vehicles. In particular, it notes that alternative fuels for internal combustion engines include liquid biofuels and gaseous fuels, which offer the potential to reduce the environmental impact of road transport, but which (with the exception of biofuels) require engines to be modified, a dedicated on-board fuel storage system, and a sufficiently widespread refuelling network; that electric vehicles, which it says have significant potential to address a number of challenges such as global warming and fossil fuel dependency, are likely to remain a niche market in the near future, but that sales are expected to expand as battery technologies improve, provided significant cost reductions can be achieved through technological improvements and economies of scale; and that hydrogen fuel cell vehicles, which generate electricity on board, can deliver similar environmental benefits, with their deployment alongside battery vehicles being mutually complementary as they share many similar components.

The regulatory framework

26.4 The Commission notes that the EU's strategy to reduce carbon dioxide emissions from road vehicles has already achieved much, with Regulation (EC) No 443/2009 setting performance standards for new passenger cars, a Commission proposal[111] to reduce such emissions for light commercial vehicles being currently under discussion, and stricter emission standards for particulate matter and nitrous oxides having been introduced for cars, vans and heavy-duty vehicles.

26.5 It adds that, even though petrol and diesel internal combustion engines will become less dominant, every available means must be used to reduce their environmental impact, and it says that it will:

  • propose a Regulation on type-approval requirements for two-and three-wheelers and quadricycles in 2010 which will set emission standards, and will adapt or develop measures to take account of new technologies;
  • prepare measures to implement Regulation (EC) No 443/2009 by 2011, including detailed rules on the monitoring and reporting of data, on the application of a derogation for small volume and niche manufacturers, on the procedure for approving innovative technologies, and on the methods for collecting excess emissions premiums;
  • propose detailed rules on the marketing of the 'green additionality' of vehicles to avoid misleading environmental claims;
  • present a proposal by 2011 to reduce fuel consumption impacts of mobile air conditioning systems;
  • propose an amendment of Directive 70/157/EEC by the end of 2011 to reduce the noise emitted by vehicles;
  • ensure that emissions are reduced by proposing at the latest by 2013 a revised test cycle, including a methodology for taking into account innovative technologies: and develop a robust procedure by 2012 to measure emissions, considering the use of portable emissions measurable systems;
  • propose a strategy targeting fuel consumption and carbon dioxide emissions from heavy-duty vehicles;
  • promote additional steps which may help to decrease emissions from road transport, including Intelligent Transport Systems (ITS), infrastructure measures, and urban transport management; and
  • ensure implementation of the Community's sustainability criteria for biofuels, as well as promoting the development of advanced low carbon fuels and sustainable biofuels and engine technology capable of using these fuels.

Supporting research and innovation in green technologies

26.6 The Commission observes that, despite recent technological advances, electrical and hydrogen fuel cell vehicles are still expensive, and that further research is needed to bring down costs and improve their range and driveability, including the development of alternative charging and energy storage technologies. It also notes that the European Green Cars Initiative is funding research into electrifying transport, whilst the Fuel Cells and Hydrogen Joint Undertaking supports research into hydrogen fuel cell vehicles and infrastructure.

26.7 The Commission says that it will:

  • ensure that European research continues to target low carbon fuels and clean and energy efficient transport, including the improvement of conventional engines, alternative battery technologies and hydrogen technologies, with grants focusing on topics with clear added value at EU level;
  • simplify and streamline the administrative rules for obtaining EU research grants;
  • propose a long term research strategy in 2011 in the Strategic Transport Technology Plan and in the Communication on Clean Transport Systems; and
  • explore with the European Investment Bank the continuation of support for research and innovation projects to promote clean and energy efficient automotive products.

Market uptake and consumer information

26.8 The Commission notes that green vehicles are still significantly more expensive, and that appropriate incentives are needed to improve market uptake, particularly in densely populated urban areas where pollution is heaviest, but where the greatest potential exists for the application of new technologies. It points out, although most Member States have introduced carbon dioxide based vehicle taxation schemes or other financial incentives, these vary considerably, and it expresses concern that any benefits may be outweighed by a detrimental effect on the internal market.

26.9 The Commission says that, if consumers are to accept green vehicles as real alternatives, they need to be sufficiently well informed to make the necessary comparisons, and that it will:

  • present guidelines on financial incentives to consumers to buy green vehicles in 2010, and encourage coordination of demand-side measures adopted in Member States, ensuring that any benefit accruing to industry is in line with existing State Aid rules;
  • work on a revision of the energy taxation Directive, to provide better incentives for the efficient use of conventional fuels and the gradual uptake of alternative low-carbon emitting fuels;
  • take action to ensure more coordination and improve the overall effectiveness of vehicle taxation measures taken by Member States to promote green vehicles;
  • monitor the implementation of Directive 2009/33/EC;
  • launch a research project on consumer expectations and buying behaviour, and test ways of comparing clean and energy efficient cars with conventional vehicles;
  • propose an amendment to Directive 1999/94/EC on car labelling; and
  • launch an EU-wide electromobility demonstration project in 2011 to assess consumer behaviour and usage patterns, to foster user awareness of all types of electric technology, and to test new developments in the area of standardisation for electric vehicles, with future initiatives being targeted on those urban areas which have sustained air quality problems.

Global issues

26.10 The Commission notes that the EU industry is competing globally, and that, if the benefits of open world markets are to be secured, this requires a reduction in tariffs and the removal of unnecessarily restrictive technical regulations. It also says that regulatory convergence with the EU's main commercial partners should be sought wherever possible, and that fair and open access to the new (and rare) raw materials needed for electric and hydrogen fuel cell vehicles is important. It says that it will:

  • engage in international standardisation activities and regulatory dialogues with the EU's main commercial partners, and provide technical assistance to non-EU countries to promote trade and prevent market-distorting rules on green vehicles;
  • continue to take regulatory cooperation initiatives to promote harmonised regulations at global level with countries which are not contracting parties at United Nations Economic Commission for Europe (UNECE); and
  • support access to materials in short supply through the raw materials initiative.

Employment

26.11 The Commission says that, if manufacturers are to have a suitably skilled workforce, it is essential to manage restructuring and anticipate the (currently rare) skills needed to design and produce innovative vehicles. It says that it will:

  • establish a European Sectoral Skills Council, aiming at creating a network of Member States' national observatories; and
  • target use of the European Social Fund starting in 2011 to encourage retraining and upskilling.

Mid-term review of carbon dioxide emissions legislation

26.12 The Commission suggests that an objective of the review will be to provide the automotive industry with the planning certainty as to the long-term target, suggesting that any new carbon dioxide standards should be based on the full potential of different technological options in order to drive innovations. It also says that an overriding objective will be to ensure that any support mechanisms for ultra-low emission vehicles do not weaken the incentive for emission-reduction from the existing fleet of conventional combustion engine vehicles.

26.13 It says that it will:

  • review Regulation (EC) No 443/2009 by 2013, looking at the modalities of reaching the 2020 target for passenger cars and the long-term perspective for 2030, whilst building on the experience gained from implementing the short term targets; and
  • review the modalities of reaching the long-term target to reduce carbon dioxide emissions from light commercial vehicles (vans) by a date to be determined.

SPECIFIC ACTIONS FOR ELECTRIC VEHICLES

Placing on the market

26.14 The Commission notes that common (type approval) rules have already been set out for hydrogen powered vehicles, gas fuelled vehicles and biofuels, and that these are needed for electric vehicles too, so as to provide legal certainty for industry and protect consumers. It says that, working together with its international partners, it will:

  • propose electric safety requirements for vehicle type-approval in 2010;
  • review other type-approval requirements covered by Directive 2007/46/EC by 2011; and
  • review crash safety requirements, and consider whether the quietness of these vehicles is potentially dangerous to vulnerable road users by 2012.

Standardisation

26.15 The Commission says that common standards should allow all electric vehicles to be charged and have access to the electricity grid anywhere in the EU and to all types of chargers, with investment in electric charging points based on different standards being avoided as far as possible. It notes that slow vehicle charging from existing electric sockets is already possible, but that fast charging requires a dedicated plug and socket, which needs to be standardised at the EU level to ensure interoperability. It also believes that the quick adoption of a European standard would reinforce the global competitiveness of the European industry.

26.16 It says that it will:

  • within the framework of Directive 98/34/EC, mandate the European standardisation bodies to develop by 2011 a standardised charging interface to ensure interoperability and connectivity, to address safety risks and electromagnetic compatibility, and to consider smart charging (enabling users to take advantage of electricity during "off peak hours");
  • identify a method to enable that standard to be adopted by all concerned, including manufacturers, electricity providers and electricity distribution network operators; and
  • constantly monitor global technological and market developments to update European standards if necessary.

Infrastructure

26.17 The Commission says that, although the entry into the market of electric vehicles enables consumers to start charging them from existing power points, a publicly accessible network of charging points will have to be provided, requiring significant investment and the definition of standards on safety, interoperability and payment. It adds that an assessment needs to be made whether synergies exist between electric and hydrogen vehicles and their connection to low-carbon electricity sources.

26.18 It says that it will:

  • provide a leading role in working with Member States on the build-up of charging and refuelling infrastructure in the EU; and
  • explore with the European Investment Bank how to provide funding to stimulate investment in infrastructure and services build-up for green vehicles.

Energy, power generation and distribution

26.19 The Commission suggests that the impact of green vehicles with alternative technologies needs to be thoroughly assessed and compared with that of conventional vehicles using a life cycle approach, including emissions from electricity generation as well as the environmental impacts due to the production and disposal of the vehicle. It observes that electrifying transport is likely to lead to an increase in overall electricity demand over time, and that if charging occurred at peak times, this could require additional, potentially carbon-intensive generation capacity — a risk it says can be mitigated through smart metering and appropriate consumer incentives. It also believes that batteries in electric vehicles could serve as secondary storage capacity for excess renewable energy if charging was timed to coincide with off-peak or excess intermittent renewable electricity.

26.20 The Commission says that it will:

  • determine and compare the environmental and carbon footprint of different types of vehicle based on a life cycle approach;
  • evaluate whether the promotion of electric vehicles leads to the provision of low carbon energy sources in order to ensure that the electricity they consume is not detrimental to the low carbon electricity already expected from meeting the requirements of the Renewable Energy Directive; and
  • evaluate the impact of the increased requirement for low-carbon electricity on the supply system and on the grid.

Recycling and transportation of batteries

26.21 The Commission says that the intensive use of batteries by electric vehicles has its own environmental implications, whilst hydrogen fuel cells are likely to involve a high recycling of some raw materials, given their scarcity and prices. It says that, when they are no longer of use in vehicles because their energy storage capacity falls, batteries could be used for other purposes, such as stationary energy storage in homes, and that schemes for this 'secondary use' will be considered. It also points out that the quantity of operational batteries which can be transported is currently limited by the Directive on transport of dangerous goods, which contributes to their high cost.

26.22 The Commission will:

  • consider what changes may need to be made to existing legislation in relation to the recycling of batteries and end of life vehicles;
  • promote European research programmes on recycling and reusing of batteries; and
  • review options for changing the rules on transporting batteries after carefully evaluating the costs and potential risks.

GOVERNANCE

26.23 The Commission says that action in the areas identified in this strategy requires a high level of coordination across relevant policy areas, and for stakeholders to put in place what is needed to give the EU a sustainable transport system with a competitive industrial base. It adds that this requires discussion with those who have not necessarily cooperated before, and that, although it recognises that a number of Member States have launched national programmes to promote electric mobility, it points out that, if these are not coordinated, the internal market may be fragmented, with the risk that the EU could lose its competitive advantage in this technology.

26.24 The Commission says that it will:

  • re-launch the CARS 21 High Level Group with a revised mandate and extended stakeholder involvement to address the barriers to the uptake of alternative technologies;
  • implement the strategy to reduce carbon dioxide emissions from road vehicles under the European Climate Change Programme (ECCP);
  • closely coordinate the workflows from ECCP and CARS 21;
  • ensure the integration of this strategy into the overall EU transport policy; and
  • ensure coordination with Member States in order to avoid fragmentation, to create sufficient critical mass for the industry, and to monitor national developments.

The Commission concludes by saying that the added value of an EU strategy is clear, in that it draws together multiple initiatives and actions and creates a platform to keep the internal market working properly. It adds that the initiative promotes better regulation by setting out long-term policy orientations and increasing certainty for business operators. However, in order to ensure its successful implementation, the strategy will be reviewed in 2014 to take stock of progress, to assess how the market and technologies have changed, and to recommend further action.

The Government's view

26.25 In his Explanatory Memorandum of 26 May 2010, the Minister of state for Business and Enterprise at the Department for Business, Innovation and Skills (Mr Mark Prisk) says that the UK recognises the benefits that will arise from the Communication's plan. In particular, the framework for regulatory activity and standardisation would promote better regulation by setting out long term policy objectives and should increase certainty for business, and it would also create a platform to coordinate efforts within the principles of the Single Market.

26.26 He also points out that new regulatory and legislative activity would be subject to agreement by Member States as and when proposals are brought forward by the Commission, and says that it is important the strategy should provide an appropriate and technology neutral framework for a range of technologies in order to achieve environmental and competitiveness goals. However, he notes that the internal combustion engine will continue to be predominant for many years to come both in Europe and internationally, and that continued efficiency improvements to conventional engines will be essential if the EU is to meet its climate change obligations to 2020 and beyond. He adds that the UK is committed to European level research and development, but that this must remain technology neutral, keeping a range of options open and continuing to look at supporting projects based on their merits, rather their technology choices.

26.27 The Minister says that the Communication was discussed and approved at the Competitiveness Council on 25 May, but points out that new and amended legislation indicated in it will be subject to individual scrutiny.

Conclusion

26.28 As will be evident, this is a wide-ranging Communication on a subject of considerable, social, economic and environmental significance, and we have therefore thought it right to report it to the House at some length. Having said that, we do not think any further consideration of the strategy as such is needed, given that it has already been agreed by the Competitiveness Council, and that its very wide-ranging nature would inevitably give rise to a somewhat unfocussed debate. Instead, we consider that it would be more sensible that any further scrutiny should be directed as necessary to the various strands in the strategy, as and when they are the subject of further proposals or Communications. We are therefore clearing the document.


106   Buses and trucks (vehicles of categories M2, M3, N2 and N3 as defined in Directive 2007/46/EC). Back

107   Cars and vans (vehicles of categories M1 and N1 as defined in Directive 2007/46/EC). Back

108   Vehicles of category L as defined in Directive 2002/24/EC. Back

109   (30213) 16097/08: see HC 19-i (2008-09), chapter 4 (10 December 2008). Back

110   (28366) 6204/07: see HC 41-xvi (2006-07), chapter 10 (28 March 2007). Back

111   (31093) 15317/09: see HC 5-iv (2009-10), chapter 5 (15 December 2009). Back


 
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