Currently transport is responsible for about one quarter of EU carbon dioxide emissions, as well as contributing significantly to reduced air quality, particularly in urban areas. It was surprising therefore that the Commission's Europe 2020: A Strategy for smart, sustainable and inclusive growth, published in March 2010, and which reiterated the climate change targets from the "20-20-20 package", did not expressly deal with transport. This has now been addressed in the Commission's European Strategy on clean and energy efficient vehicles published on 28 April 2010('the Strategy').1

In this Strategy the Commission sets out its aims to

  • improve internal combustion engines so they are more fuel efficient and introduce ultra-low-carbon technologies, thereby encouraging electric vehicle production;
  • continue its legislative programme on vehicle emission reductions; and
  • support research and innovation in technologies for ultra-low-carbon vehicles;
  • and by doing so help establish the European car industry as a leading player in the global green vehicle market.

The Strategy includes an eight point action plan (both medium to long-term actions) which pledges to maintain the existing regulatory framework, support research and innovation in green technologies and increase the European market share. This includes a proposal to develop common standards for electric cars so they can be charged anywhere in the EU.

The Strategy has been welcomed by all manufacturers in the vehicle supply chain as it is the general view that electric vehicles are the best long term solution for reducing emissions in this sector.

It is interesting to look at what is already in place to encourage the growth in this sector and the performance in emission reductions from new passenger cars.

Trends in CO2 emissions

At the start of 2010 the Commission published its report on CO2 emissions from new passenger cars in the EU for the year 2008. For the first time this included data for alternative fuel vehicles ('AFV') as a result of their increasing market share and improved data quality.

Alternative fuel vehicles includes vehicles in the following categories:

  • Liquefied Petroleum Gas ('LPG');
  • Natural Gas ('NG');
  • Electric;
  • Hydrogen;
  • Dual Fuel;
  • Petrol – Bioethanol;
  • Petrol – LPG; and
  • Petrol – NG

The report shows that AFVs have improved their emissions by 34% since 2000, when the monitoring scheme first began, dropping from an average of 208g CO2/km to 137g CO2/km. The comparative figure for petrol cars for 2008 was 156.6g CO2/km and for diesel cars, 151.1g CO2/km. The table below sets out the results for the period from 2000 to 2008 inclusive.

Table 1: Average CO2 emissions from new passenger cars by fuel2

The drop in average CO2 emissions from passenger cars for the year 2008 has been the largest relative drop in specific emissions since 2000, although the Commission accepts some of this reduction may be due to the onset of the European recession. Compared to 2007 there has been a decrease of 8% in new passenger car registrations.

The share of fuel type in new passenger cars also shows that in 2008 AVFs almost doubled from 2007, moving from 0.7% to 1.3% of new passenger car registrations. Petrol vehicles' share has decreased from 68.9% in 2000 to 47.3% in 2008, whilst diesel cars share has risen from 31% in 2000 to 51.4% in 2008. The table below shows the change in the share of fuel type in greater detail.

Table 2: Share of fuel type in new passenger cars3

Target levels for CO2 emissions

The results of the monitoring report are likely to be regarded by the EU as disappointing given all the consultation and discussions as to the limit to be set for CO2 emissions from vehicles. The Commission adopted a Community Strategy for reducing CO2 emissions from cars in 1995 which was based on three pillars:

  • voluntary commitments from the car industry to cut emissions;
  • improvements in consumer information; and
  • the promotion of fuel-efficient cars by means of fiscal measures.

Following the failure of the voluntary approach the Commission then proposed legislation in December 2007 to reduce the average CO2 emissions of new passenger cars sold in the EU to 120 grams per kilometre by 20124. The proposal was seen as the cornerstone of the EU strategy to improve the fuel economy of cars, which account for about 12% of the EU carbon emissions. More importantly emissions from road transport are rising rapidly – they rose by 26% between 1990 and 2004 – and the developments in vehicle technology to date have not been enough to cancel out the effect of increase in traffic and car size.  

After much debate a limit of 130g CO2/km by 20125 was agreed upon for new passenger cars, with a further additional 10g CO2/km reduction to come from the use of complementary measures, such as the air conditioning system or tyre pressure which will help improve fuel efficiency. The Strategy also proposes to set out measures to implement this regulation by 2011 and presents ways to reduce the fuel consumption effects of air conditioning systems.

It was hoped the legislation (which will be directly applicable and therefore Member States do not have to take any steps to implement it into national law) would encourage the car industry to invest in new technologies and promote eco-innovation. The average emissions of CO2 for new cars in 2007 was around 185g CO2 per km and the new target would be a 19% reduction in CO2 emissions and place the EU among the world leaders of fuel efficient cars. The rate of reduction shown by the Commission's report is not sufficient to achieve the required target by 2012. This is supported by a report from the European Federation for Transport and Environment which also concludes that although progress towards the target has generally been in the right direction, car manufacturers, at the end of 2007, fell on average 17% short of the 2012 emissions level target.  

The target level of 130g CO2/km set out in the legislation is a fleet average for each car manufacturer for all new cars registered in the EU. This produces a limit value curve of permitted emissions of CO2 for new vehicles according to the mass of the vehicle. So from 2012 a manufacturer will be required to ensure that the average emissions of all new cars which it manufactures and which are registered in the EU are below the average of the permitted emissions for those cars as set by the limit curve. That curve is set in such a way that heavier cars will have to improve more than lighter cars compared to today, but manufacturers will still be able to make cars with emissions above the limit value curve provided these are balanced by cars in their fleet which are below the curve.

To address concerns that the limit curve was likely to cause imbalance between different types of car manufacturers, particularly those who were smaller niche producers, several manufacturers will be able to group together to form a pool which can act jointly in meeting the specific emissions targets. In addition independent manufacturers who sell fewer than 10,000 vehicles per year and who cannot or do not wish to join a pool can instead apply to the Commission for an individual target.

There is also to be a phasing in of the new requirements, with 65% of each manufacturers newly registered cars being required to comply on average with the limit value curve set by the legislation in 2012. This will rise to 75% in 2013, 80% in 2014 and 100% from 2015 onwards.

Test procedures for eco-innovation have still not been set, i.e. to demonstrate their CO2 reducing effect, so manufacturers will be granted a maximum of 7g/km of emission credits on average for their fleet if they equip vehicles with innovative technologies based on independently verified data. This is to be an interim procedure until the test procedure is reviewed, which is set to take place by 2014.

Penalty payments will become due if the average CO2 emissions of a manufacturer's fleet exceed its limit value in any year from 2012, starting at a rate of €5 for the first g/km in excess and rising to €95 for the fourth g/km in excess. From 2019 the rate will be €95 for each gram in excess of the limit value.

Finally a target of 95g/g CO2/km for passenger cars is specified for the year 2020, with the details to be set out in a review to be completed by the start of 2013.

Other EU initiatives

Labelling

Consumer information in the form of a label displayed in the marketing of all new (i.e. sold after September 2005) passenger cars showing its fuel consumption and CO2 emissions and publishing fuel efficiency information on adverts was passed by the EU as long ago as 19996 to increase consumer awareness. The Commission is currently revising this Labelling Directive as the effectiveness of this in enabling consumers to make an informed choice has been questioned and the Commission is also looking to manufacturers to sign an EU code of good practice on car marketing and advertising. One of the action points set out in the Strategy is to present a proposal to amend the Labelling Directive.

The UK has already gone beyond the Directive's requirements as UK car manufacturers voluntarily agreed to display a colour coded label (see below) listing a range of environmental data for new cars including CO2 emissions, noise levels, regulated emissions standards, fuel consumption figures and annual road tax costs. The industry believed this level of information was required to enable consumers make an informed choice. The Vehicle Excise Duty bandings in the UK were then realigned to be consistent with this label.

Type of fuel

The type of fuel used to run vehicles has been a major area of research and development but does require massive new product and fuel infrastructure investment. The Society of Motor Manufacturers and Traders Limited view hydrogen as being the only environmentally sustainable transport fuel in the long run but there are still problems with the sub zero temperature this needs to be stored at to keep it a liquid and therefore the availability of a refuelling points.

The use of biofuels in road transport fuels is encouraged by another EU Directive (2003/30/EC) which aims to raise the market share of biofuels to 5.75% by 2010 and to 10% by 2020. There has of course been a concern as to the use of biofuels taking land out of production for food and the need for sustainable biofuels is now recognised, i.e. third-generation or algae-based biofuels. The Commission has now set out sustainability criteria for biofuels and part of the Strategy is to ensure implementation of these criteria.  

Carbon tax

The EU has also been considering a Europe-wide carbon tax on road fuel as the Commission seeks to bring more carbon emitters into line with the European Union's climate change policy. The proposed tax on petrol, natural gas and diesel would hit consumers directly and is supported by the Nordic countries and by France, which has introduced a carbon tax on domestic fuel. The UK is opposed to the tax, but the proposal is gaining support among other European countries. In a draft proposal, the Commission suggested a tax in the range of €10 to €30 per tonne of CO2.

The UK has however used other financial measures to promote fuel efficient cars with a higher vehicle excise duty being charged for high emissions vehicles. The Commission has proposed EU legislation (COM (2005)261) aimed at including CO2 elements in national car taxes. The Committee on Climate Change in the UK has also recommended reducing the speed limit on all motorways to 60 mph (which would produce a saving of 1.5m tonnes of CO2 a year) and introducing a tax by way of a national road – pricing system but with no corresponding reduction in fuel duty.

The table at the end of this article summarises a number of incentives that exist across Europe to encourage the development of low-emission vehicles. The table shows the un-coordinated approach across Member States. The Strategy also proposes to present guidelines on financial incentives to consumers to buy green vehicles in 2010.

Directive 2009/33/EC which aims at reducing greenhouse gas emissions and improving air quality, especially in cities, requires public authorities to take into account energy and environmental impacts of the operation of a vehicle over its lifetime. This does therefore give a comprehensive advantage to green vehicles but consumers still need to be well informed as to the advantages and practical aspects of low-carbon vehicles. As part of the Strategy the Commisssion states that it will monitor the implementation of this Directive.

Safety standards

Common safety standards have also now been adopted7 to ensure that all types of electric and hybrid cars (including hydrogen fuel cells vehicles) meet designated electric safety requirements so they are as safe as conventional cars. Car manufacturers will benefit from the mutual recognition of this approval in all 41 contracting parties applying the UNECE regulation and so will be able to sell their vehicles on the basis of common standards not only in the EU but in a number of other important automotive markets such as South Korea, Japan and Russia. The change in this regulation reflects the growing interest of both manufacturers and customers for electric and hybrid vehicles.

UK specific measures for electric cars

The King Review8 in 2008 on low carbon cars makes a strong argument for the electric car as the most environmentally friendly mode of passenger transport but although it is likely that a more diverse range of technologies to power cars can be expected it is unlikely that the internal combustion engine will disappear entirely. Currently less than 0.1% of the UK's 26 million cars are electric.

A study9 by Cenex (October 2008), the Government's low carbon technology adviser, notes that in 2010 an electric car would produce 70-100 grams of CO2 per km over its life cycle compared with more than 150g CO2 per km for a diesel car. By 2030 this should reduce to 40-50g CO2 per km for electric cars compared with 100g CO2 per km for diesel cars.

The UK Government announced in February this year financial support (total funding of £200m) for the purchase of electric cars (the 'Plug-In Car Grant') but this will not become available until the Government believes such cars will come on to the market, which they have stated will be 2011. There has been criticism expressed that the subsidies should be made available before then. Cars will be discounted at the point of purchase and the subsidy claimed by the manufacturer to provide a straightforward process for the consumer. The Government is seeking state aid approval from the European Commission to operate the subsidy. Consumers will receive £2000 - £5000 towards the purchase of an electric or plug-in petrol-electric hybrid vehicle. The Committee on Climate Change has commented that the amount of subsidy needs to be a lot greater, about £10,000, as otherwise the extra initial cost of battery-powered cars would be prohibitive.  

By way of illistration it currently costs 90p to charge the electric C1's 26 batteries which gives a range of 70 miles – compared to the cost of £5 in fuel for the same distance - but it takes about seven hours to recharge fully from a domestic 13amp socket. The range an electric car can travel is an issue and this is exacerbated by the lack of a network of charging stations and the time it takes to fully recharge the batteries.

The Government is also to provide funding of £30m to develop a network of charging points for electric vehicles in cities, starting with London, Milton Keynes and the North East. 11,000 vehicle recharging points are to be installed in these centres over the next three years. These 'Plugged-In Places' are planned to appear in car parks, major supermarkets, leisure and retail centres as well as on the street.

London Mayor, Boris Johnson, has also announced plans to install 25,000 charging stations and convert 1,000 Greater London Authority vehicles to electric by 2015 at a cost of £60m, of which the Mayor will provide a third.

There is also a general concern, expressed in particular by the Friends of the Earth, that electric cars are only as green as the electricity they run on. A recent adjudication by the Advertising Standards Agency upheld a claim against an advert in which Renault claimed its new electric vehicle reduced CO2 emissions by 90%, and while this might be true in France where the majority of electricity is generated from nuclear or renewable sources, this would not be the case in the UK.

A major concern for consumers is the time it takes to charge batteries and the distance that a car can run on a battery, but the non-commercial vehicle sector has quite successfully developed a variety of vehicles to suit different types of journeys. Could the same happen in the consumer vehicle market, for example keeping a pure electric vehicle for short journeys but also having a hybrid vehicle for longer journeys? Different types of battery charging facilities are available ranging from standard, like a domestic socket, which will take about 6-7 hours to recharge a battery from flat, a fast system being a 32 amp, 240 volt which will take 3-4 hours to recharge and so would be ideal for retail complexes in car parks so cars can be recharged whilst the consumer is shopping. Finally, rapid charging stations can be made available but these are expensive and have to be manned and can also create grid issues.

An intelligent smart charging system will be required to allow not only billing itemisation but also if the number of electric vehicles does grow as is hoped - a recent study predicts 11-30% of new car sales in 2030 will be battery electric vehicles with plug-in hybrid vehicles comprising 5-20%10 - then we can not all recharge at the same time. A system will be needed to control recharging so it can take place when capacity is available on the grid or to charge a premium rate otherwise, for example at 6.30pm. Full integration would also allow batteries in electric vehicles to provide storage capacity for excess renewable energy production.

As already mentioned the Strategy includes a mandate to develop a standardised charging infrastructure to ensure interoperability and connectivity and common standards across the EU. The recycling or re-use of batteries also needs to be considered, Le looking at other uses once their energy storage capacity falls.

Conclusion

Transport contributes around one quarter of man made emissions and, more importantly, the sector's share is increasing. UNECE predicts that the global fleet will grow from 800 million to 1.6 billion vehicles by 2030.11It is therefore seen by many Governments as a vital part of any climate change policy to reduce the level of emissions by encouraging the introduction of low carbon vehicles and fuel. The market is currently immature and environmental concerns still remain relatively low priorities for most new car buyers. There is uncertainty as to how the market will develop and so there is a need to help consumer demand and encourage the right investment. There is a need to get the infrastructure in the ground and to develop skills and training in the use of electric vehicles. The reports referred to in this article demonstrate that a lot more is still required to really deliver growth in this sector. It is clear that a long term and consistent approach needs to be developed to environmental incentives and vehicle taxation to improve and maintain the current rate of reductions being seen in the emissions for average new cars. Whether the European Commission's recently published Strategy on clean and energy efficient vehicles will deliver the adpotion of clean and fuel-efficient vehicles and accelerate the development of new low-carbon vehicle technologies remains to be seen. The Commission certainly hopes that the forthcoming White Paper on European Transport Policy, together with the Strategy, will contribute substantially to more sustainable mobility.