Credit: Think Stock

Last month Germany’s Bundesrat (the federal council of all 16 German states) voted to ban gasoline- and diesel-powered vehicles by 2030. What is more, the Bundesrat’s resolution called on the European Commission to “evaluate the recent tax and contribution practices of Member States on their effectiveness in promoting zero-emission mobility”.

In the aftermath of the Dieselgate scandal, much of the attention has been focused on the serious human health- and environmental impacts of the largely under-reported air pollutants from diesel-powered vehicles, as well as the need for vehicle taxation schemes to accurately reflect this.

While cheating practices have helped car makers achieve significant cost savings, amounting to roughly €7 billion, from complying with EU regulations, the associated costs incurred by society have been detrimental, in the form of deadly air pollution levels and human lives at stake. According to the European Environment Agency air pollution continues to be responsible for more than 430 000 premature deaths in Europe, making it the single largest environmental health risk on the continent.

The fossil industry’s heavy footprint also needs to be reflected in the EU’s CO 2 regulations. In the currently ongoing revision process of the Commission’s fuel efficiency regulations for new cars and vans, Bellona has called for the inclusion of a mechanism to encourage the deployment of zero-emission vehicles, alongside fuel economy targets for conventional fossil vehicles. More concretely, this should be in the form of targets requiring car makers to produce and sell a minimum proportion of zero-emission vehicles. For our detailed recommendations see here.

While Germany’s recent resolution is not legally binding, it sends a strong signal of the German auto industry’s commitment to embracing electro-mobility. Earlier this year the German government reached an agreement with car making companies Volkswagen, Daimler and BMW for the introduction of an incentives scheme which will see electric vehicle (EV) buyers receiving a direct cash subsidy of €4,000. The €1 billion programme also envisages funding in the amount of €300 million targeted for the roll-out of the country’s fast-charging stations. The support scheme is expected to result in an additional 400,000 EV sales in the coming years.

Embracing zero emission, electric mobility is not only a matter of meeting our climate targets, but also a matter of retaining Europe’s industrial competitiveness

Freight is one obvious sector where the EU is already falling behind the US, China and Japan with regards to CO­ 2 regulation and innovation. Unlike the US, China and Japan, Europe has had no fuel efficiency standards for trucks, which has resulted in limited innovation and ever worsening carbon footprint of trucks over the past two decades. We are also seeing the EU fall behind Asian manufacturers who are dominating the Li-ion battery production. In China, for instance, the development of alternatively fueled vehicles and the Li-ion battery sector has been booming thanks to the robust support scheme that has been put in place by the government. In May 2016 alone, nearly €360 million have been poured into China’s Li-ion battery market. To put this into perspective, over the past five years, the growth of the energy storage market in China has outpaced that of the global market by six times, with a growth rate of 110%. Installed capacity of Li-ion battery captured 66% of the market share in the energy storage market[1].

In light of this strong competition from its Asian counterparts Europe needs to urgently get off the brakes on electro-mobility so as to avoid undermining the industrial competitiveness and viability of its automotive industry. It appears the German car industry is slowly coming to terms this with reality.

[1] http://www.cnchemicals.com/