20 November 2017

EU proposes 30% CO2 emissions cut from new cars and vans by 2030

The European Commission has published long-awaited proposals aimed at cutting average new car and van carbon dioxide (CO2) emissions by 30% by 2030 compared with 2021 levels.

Motor manufacturers responded by calling the targets ‘challenging’ and the Commission accepts that the technology required to be introduced to enable the targets to be achieved will mean the cost of new cars and vans increasing.

The Commission’s announcement also contained an interim CO2 new car and van emissions reduction target of 15% lower by 2025 compared with 2021.

The 2021 emissions reduction starting point is 95g/km for new cars and 147g/km for new vans.

Both those figures are based on the long-established NEDC (New European Driving Cycle) vehicle emissions and MPG testing procedure and not the new Worldwide harmonised Light vehicles Test Procedure (WLTP) protocols, under which CO2 emissions figures on a vehicle-for-vehicle basis are forecasted to be higher. That is why the newly proposed 2025 and 2030 targets are not defined as absolute values (g/km), but expressed as percentage reductions compared to the average of the specific emission targets for 2021.

Additionally, any changes would not be binding on the UK if it was no longer a member of the European Union. Although, of course, the UK could choose to introduce the targets into its own regulations.

The Commission said the measure would ‘help accelerate the transition to low and zero emission vehicles’.

The Commission stated the emissions reduction proposals would stimulate both innovation in new technologies and business models, and a more efficient use of all modes for the transport of goods. These proposals would be boosted by targeted financial instruments to ensure a swift deployment.

The proposed CO2 standards require vehicle manufacturers to introduce new technical measures in order to reduce the average emissions of their new cars and vans and that was likely to result in increased production costs which could lead to higher vehicle prices.

It calculates that for an average new car registered in 2030, additional manufacturing costs would be up to about 1000 euros. For an average 2030 van, they would be up to about 900 euros.

However, the Commission says that the additional costs would be significantly lower than the fuel savings from which owners would benefit over a vehicle’s lifetime.

The Commission calculates that the increase in upfront costs to purchase more efficient vehicles would be outweighed by increased fuel savings. It says that the net savings would be up to around 600 euros for new cars bought in 2025 and up to about 1500 euros in 2030, considering a lifetime of 15 years.

Small and medium-sized enterprises using more efficient vans would also largely benefit from fuel savings. As a result of the proposal to set new CO2 emission standards, additional net savings for an ‘average new van’ bought in 2025 are expected to be up to about 2300 euros and up to about 3800 euros when bought in 2030, considering a lifetime of 15 years.

The Vice-president responsible for the Energy Union, Maroš Šefčovič said: ‘[The] set of proposals is setting the conditions for European manufacturers to lead the global energy transition rather than follow others. It will entice them to manufacture the best, cleanest and most competitive cars.’

Nevertheless, while the proposal would speed up the market uptake of zero and low emission vehicles, according to the Commission, the accelerating innovation and reaching economies of scale means that the change in the fleet composition will be gradual. As a result, it is expected that at least 80% of the new car fleet in 2030 will contain an internal combustion engine.

The European Automobile Manufacturers’ Association (ACEA) said it would now work with its members to assess the full details of the proposals before continuing to engage with the European Union institutions.

Regarding the CO2 proposal, ACEA said it welcomed the fact that the date for the new targets had been set for 2030.

‘This is consistent with the timings already agreed by the European Union heads of states with the 2030 Climate and Energy Framework,’ said ACEA secretary general Erik Jonnaert.

However, setting an additional interim target already in 2025 – just a few years after the 2021 targets – did not leave enough time to make the necessary technical and design changes to vehicles, in particular to light commercial vehicles, given their longer development and production cycles, warned Mr Jonnaert.

The 30% reduction level proposed by the Commission was also overly ‘challenging’, he said, going beyond the ambition level set out in the Climate and Energy Framework and in its own 2016 impact assessment. In line with that, the European automotive industry said it considered a 20% reduction by 2030 for cars to be achievable at a high, but acceptable, cost.

‘Clearly, CO2 targets can provide an impetus for innovation in the auto industry, but the current proposal is very aggressive when we consider the low and fragmented market penetration of alternatively-powered vehicles across Europe to date,’ Mr Jonnaert stated. Indeed, success in meeting a 2030 target will be clearly linked to the market uptake of alternatively-powered vehicles.

‘Europe needs much more investment in recharging and refuelling infrastructure, before we can expect consumers throughout the entire European Union to embrace such vehicles.’

However, he continued: ‘A radical change in the market for alternatively-powered vehicles will of course not happen overnight. This is why focusing on a 2030 target is the best way forward. Instead of setting an interim target in 2025, it should rather be seen as a milestone year to review the progress made in reducing CO2 emissions towards 2030.’