Green Mobility Policy Briefing- June 10, 2022

Covered in this week’s Green Mobility Policy Briefing: The European Parliament vote in favour of banning combustion engine cars by 2035; the European Council adopts its position on three key legislative proposals relating to transportation; the Scottish Government announce intention to provide over £30 million in funding to accelerate shift to zero emission transport; and changes to the EU Emissions Trading Scheme to include the shipping sector.

European Parliament votes in favour of banning combustion engine cars from 2035. The mandate was passed on Wednesday, with lawmakers backing the final report on ambitious revisions to vehicle CO2 emissions standards legislation. The legislation, which is a key part of the ‘Fit for 55’ package, stipulates that carmakers’ should reduce their fleet emissions averages by 100% from 2035, maintaining the Commission’s original 2035 phaseout date. The European Parliament passed the legislation despite intense lobbying from German auto association VDA, who cite the uncertain rollout of charging infrastructure in their opposition to the target. The vote marked the end for the European People’s Party’s controversial alternative amendment, which instead targeted a 90% emissions reduction target by 2035, without a clear engine end date. In passing the legislation, the European Parliament approved intermediate emissions reduction targets for 2030, set at 55% for cars. Whilst a crucial step towards climate neutrality, lawmakers rejected calls from Dutch Liberal rapporteur Jan Huitema for an additional interim target in 2027, which in his view would further accelerate the production of zero emission cars. Following the vote, the European Parliament is poised to finalise the legislation, thus enabling negotiations with EU member states to commence. – By Sam Phelps

European Council adopts its position on key ‘Fit for 55’ legislative proposals relating to the transport sector. In a press release, European Transport Ministers published their ‘general approach’ to three key legislative proposals presented by the European Commission. The move represents an important step towards implementing the legislative package, which targets a 55% reduction in greenhouse gas emissions by 2030 compared with 1990 levels. For transport, which currently accounts for more than a quarter of EU emissions, the objective is more ambitious, targeting a 90% emissions reduction. The proposals in question are the deployment of Alternative Fuels Infrastructure (AFIR), FuelEU Maritime, and ReFuelEU Aviation. Each initiative aims to accelerate the deployment of low-carbon fuels and technologies in the transportation sector, whilst also ensuring sufficient access to compatible infrastructure, thus aiding the adoption of low-emission vehicles and ships. The Council retained many fundamental aspects of the Commission’s proposals, not least the scope and size of the targets for reducing transportation’s carbon footprint. However, the Council’s general approach did include amendments to some aspects of the proposals. Consistent across the proposals, the Council amended monitoring, reporting and verification procedures, enhancing governance of the new obligations. Reinforcing reporting obligations also enables effective monitoring of the effects of the regulation on the competitiveness of the EU sustainable fuel market. The Council also took steps to ensure low-carbon power supply requirements were consistent across the FuelEU Maritime and AFIR proposals, whilst simultaneously recommending an extension to the scope of eligible sustainable fuels. The Council’s general approach will now allow negotiations with the European Parliament to commence over the integration of the proposals into the ‘Fit for 55’ framework. – By Sam Phelps

Source: EAA (CC BY 2.5 DK)

The Scottish Government is providing over £30 million over the following year to accelerate the shift to zero emission transport. The announcement is in support of the Scottish Government’s Mission Zero for Transport, through which funding has incentivised a substantial increase in zero emission transport uptake. Over £165 million in interest-free loans have been awarded over the past decade, facilitating the sale of over 6,100 electric vehicles. According to Neil Leckie, Senior Programme Manager at Energy Saving Trust, these Low Carbon Transport Loans have been “instrumental” in lowering drivers’ carbon impact. Grant funding has also led to the provision of over 16,000 home and 1,500 business charging points respectively. The 2022/23 funding package seeks to prioritise people and businesses living in rural areas, who typically face higher costs than those residing in urban areas. Used electric vehicles, the taxi sector, and those operating light commercial vehicles as part of their business are all being targeted. Leckie stressed that grant funding would reduce the upfront costs involved in the operation of electric vehicles, making them “accessible to a wider audience”. Extending support for community transport schemes further reflects the Scottish Government’s commitment to a “just net-zero transition”. In an announcement of the following year’s funding, applications for which opened on 8 June, Minister for Transport Jenny Gilruth promised further support for already established zero emission ‘car clubs’. Their impact is clearly recognised, already covering 400,000 zero-emission miles across Scotland, with Minister Gilruth suggesting the project will “eliminate the need for individual car ownership”, whilst ensuring the benefits of modern electric vehicles can be enjoyed equitably. – By Sam Phelps

Changes to EU Emissions Trading Scheme (ETS) mean higher shipping freight costs, but some could win out. The EU proposes to include shipping in the ETS, meaning those transporting commodities on the water will likely face higher costs. However, in the coming years, those who are well prepared are expected to benefit from the new legislation. Market participants expect European trading giants and oil majors to gain an advantage from the new regulatory regime, as many have accumulated emission allowances due to their years spent trading in the emissions market. Larger charterers are also better positioned to negotiate lower allowance rates. In a press release, the EU sets out its intention to broaden the scope of the ETS to include shipowners, charters, and technical or commercial managers. Whilst increased costs represent a burden for ship charterers, introducing a carbon price in the maritime sector is crucial for reducing greenhouse gas emissions cost-effectively. Through the regulatory change, Brussels aims to establish the EU as a breeding ground for low emission vessels. – By Georgia King