EU electric car producers got a fresh lease on life last week as the European Commission proposed caps on vehicle emissions as a way to fight against global warming—and to help close a technological gap with China.

The Asian nation is the world’s biggest supporter and producer of electric vehicles, and this year it overtook the U.S. in terms of the number of EVs on the road, with new registrations increasing 70 percent year-on-year to around 350,000 units, while Europe saw sales rise by only 7 percent.

In an effort to catch up with Beijing in a rapidly expanding market, EU lawmakers threatened financial penalties on carmakers that fail to cut tailpipe emissions by 30 percent between 2020 and 2030.

On the face of it, this might sound like a smart move, and one supported by international institutions. The International Energy Agency chimed in earlier this year, showing that EV sales have grown by 60 percent in 2016, surpassing the 2 million vehicle mark.

It’s a surprising development for a market segment that was virtually non-existent only five years ago. Although EVs still only represent 0.2 percent of all light-duty vehicles and still cost more than their diesel- or petrol-powered counterparts, rapid market growth is only expected to continue as governments enact CO2-cutting policies in an effort to meet Paris Accord targets.

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The issue with this policy shift, however, is that EVs have yet to catch up with their reputation. Although they might have been promoted as ‘zero emission,’ analysing the entire manufacturing process—not simply the fumes they emit—shows they have the capacity to create a far greater environmental impact than assumed. The so-called “long tailpipe” of electric cars should be a wakeup call for EU regulators to embrace lifecycle analysis before incentivizing the industry to produce EVs.

Comparing the carbon footprint of the electric Tesla Model S P100D saloon and the conventional Mitsubishi Mirage, as researchers at MIT have done, illustrates the dilemma facing regulators. According to their data, a Tesla driven in the U.S. Midwest produces 226g of carbon dioxide per kilometre over its lifecycle, far less than the 385g emitted by the 7-series BMW. Yet the humble, combustion-engine Mirage produces even less CO2, at 192g.

Such a comparison shows that focusing on tailpipe emissions risks missing the bigger picture. And no country demonstrates this conundrum better than China, where the government has been aggressively promoting EVs as a key weapon in the fight against pollution and as a cornerstone of a new industrial policy known as ‘Made in China 2025.’ In response to Beijing’s measures, the domestic EV industry has been booming, with sales of electric and hybrid vehicles expected to reach 5 million by 2020.

Yet the government’s policy of subsidies for the EV industry runs the risk of making smog worse, not better. New studies have shown that EVs charged in China produce up to five times as much particulate matter and smog-producing chemicals in comparison with petrol-engine cars—meaning that in China, shuttering fossil fuel-driven power plants, not relying on EVs, is far more important to curbing emissions.

Beijing currently aims to reduce its reliance on fossil fuels, which would go far towards making EVs greener. But a number of experts have questioned the feasibility of that goal, meaning that unless grid reform accelerates more rapidly, it could be decades before EVs produced and charged in China earn the moniker of ‘green.’

There’s also the question of what kind of energy is used to produce aluminium, an increasingly dominant material in EVs as auto manufacturers turn to light weighting in order to improve efficiency and performance.

Currently used for EVs’ chassis, body, battery cases, and other components, the percentage of aluminium is expected to grow to roughly 250kg per vehicle by 2028—or 16 percent of a vehicle’s curb mass. In addition to component parts, the infrastructure for serving EVs, from charging stations to assembly plants, also relies heavily on aluminium. It’s no wonder that the industry’s heavy reliance on fossil fuels has earned EVs the unflattering moniker of “coal-powered cars”. Related: Chinese Crude Inventories Fall For First Time In 12 Months

China is the main culprit in the story. Not only is it the world’s largest producer of aluminium, it’s also the dirtiest due to its reliance on coal power to fire up its smelters. For each ton of aluminium produced in the Middle Kingdom, a whopping 14 tons of CO2 are emitted. By contrast, Norway’s Norse Hydro and the U.S.’ Alcoa emit a third of that, thanks to their reliance on hydropower. Similarly, Russia’s Rusal has launched a metal that will be produced with less than 4 tons of CO2.

One of the main sources for the U.S.’s car industry, the company expects a great chunk of future aluminium demand to come specifically from car manufacturers wanting to achieve a more sustainable footprint for their products. Rusal, currently generating 95 percent of its electricity from Siberia’s rivers, aims to move to 100 percent renewables by 2020, in a bid to further optimize its production process.

Though such low-carbon options are available, many EV producers—especially in China—do not necessarily avail themselves of such components. This leads us to the elephant in the room: Without a complete paradigm shift in electricity generation and industrial production, EVs will simply send CO2 emissions upstream.

While regulators’ myopic focus on big-ticket policies such as banning combustion engine cars in big cities might earn them kudos with parts of the population, it will only have limited effects on reducing emissions. At the moment, Brussels runs the risk of replacing one problem with an entire host of new ones.

By Christopher Stakhovsky for Oilprice.com

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