EV Charging in Competition Spotlight as EU ETS More Expensive Than CORSIA For Foreseeable Future: GMPB

Covered in this week’s Green Mobility Policy Brief: Electric vehicle charging in the EU competition spotlight; ETS will be more expensive than CORSIA for the foreseeable future; Enough public charging for higher EU truck CO2 targets, analysis finds; European Green Deal: New EU-Norway Green Alliance to deepen cooperation on climate, environment, energy, and clean industry.

Electric vehicle charging in the EU competition spotlight. Antitrust Chief, Margrethe Vestager, told reporters that electric vehicle charging is ‘actually developing quite well’, and a study on the electric vehicle charging market throughout the EU and the UK did not uncover any ‘major competitive concerns. Due to the recent EU ban on combustion engines by 2035, it is no surprise that the number of electric vehicles on the road are predicted to multiply in the next decade. However, one major barrier is that of EV charging stations. Consequently, in 2021, Germany’s Federal Cartel Office called for more competition for charging infrastructure, and the UK Competition and Markets Authority issued recommendations to improve industry competition. Electric vehicles made up almost 20% of car sales in 2022, which in comparison to 1% in 2016 shows significant success in pushing towards carbon neutrality in areas of the transport sector. In addition, recharging points are also on the rise, with 90,000 in 2016 to over 450,000 in 2022. However, research by Charles River Associates for the European Commission included a review of the EV charging market in the EU and UK. The report showed that market conditions varied significantly from country to country, and that ICE (combustion engines) still dominate European fleets at around 95%. – Hannah Santry 

ETS will be more expensive than CORISA for the foreseeable future. IBA, a leading aviation market intelligence and consultancy company, recently released data that showed new aviation regulations relating to the EU Emission Trading System (ETS) and the ICAO CORSIA scheme. IBA revealed four main driving forces for ESG investing, which included: government and regulatory pressure, increased consumer awareness, Covid-19’s role as a catalyst, and ESG material risk and growth. Both schemes work in very different ways meaning naturally the impacts will be very different. When comparing CORSIA and ETS schemes, IBA found that carbon prices are 20 times higher in the EU ETS than in a CORSIA offset. The significant difference between the two schemes is likely because EU ETS was implemented in 2005, with aviation only being included in 2012. This meant for seven years carbon prices were low, with only a relatively recent increase in price. Nevertheless, IBA also claims it is unlikely CORSIA will ever match the EUA price because CORSIA’s pricing, by nature, is determined by the credibility and availability of offset projects, but EUA’s prices will continue to increase as the scheme reflects the price of emitting a tonne of carbon. This study supports concerns that CORISA will be ineffective in reducing international aviation’s carbon emissions – Hannah Santry 

Enough public charging for higher EU truck CO2 targets, analysis finds. A new analysis by Transport & Environment (T&E) has found that charging infrastructure can be significantly improved to ensure a faster roll-out of zero-emission trucks. T&E has called for a mandatory 65% reduction in truck CO2 emissions by 2030 – going beyond the standards proposed by the European Commission. Optimistically, Europe’s current infrastructure law means that by 2030 public chargers will have the capacity to supply 97% of the energy trucks needed. This is also in line with EU law that dictates member states install at least one truck charging hub on major motorways every 60-100km. However, in slight opposition to the T&E analysis, the European Automobile Manufacturers Association (ACEA) are demanding four times the public charging capacity, wanting 30 minutes of charge point usage a day in contrast with T&E wanting a usage of 4 hours a day. Regardless, it is clear new mandates are required to dramatically reduce the amount of CO2 emissions produced by trucks. Although they account for just 2% of vehicles on the road, they are responsible for over a quarter of CO2 emissions within EU road transport. Fabian Sperka, Vehicles Policy Manager at T&E has stated: “not only will the EU’s new infrastructure law provide enough charging for the proposed 2030 CO2 standards, but it also enables lawmakers to go further.”. – Zoe Picton 

European Green Deal: New EU-Norway Green Alliance to deepen cooperation on climate, environment, energy, and clean industry. On the 24th of April, the EU and Norway established a new Green Alliance, signed in Brussels by Ursula von der Leyen, President of the European Commission, and Jonas Gahr Støre, the Prime Minister of Norway. This alliance has been formed to strengthen joint climate action, environmental protection efforts, and cooperation on the clean energy and industrial transition, while also offering a tool to reach the commitment of 55% greenhouse gas emission reductions by 2030, and climate neutrality by 2050. These are key objectives to ensure keeping within the 1.5C limit of global temperature rise under the 2015 Paris Agreement. This is only the second Green Alliance created, following the EU-Japan one in 2021. These are particularly important because both parties are obligated to align their domestic and international climate policies to commit to the goal at hand. Some of the priority areas of this specific EU-Norway Green Alliance include decarbonising the transport sector; increasing regulatory and business cooperation; consolidating existing collaboration; and working together to promote sustainable finance and investments. – Zoe Picton