EN Official Journal of the European Union C 51/37

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee — A European strategy on clean and energy efficient vehicles’

COM(2010) 186 final

2011/C 51/08

Rapporteur-General: Mr MORGAN

On 28 April 2010 the Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee - A European strategy on clean and energy efficient vehicles

COM(2010) 186 final.

In view of the renewal of the Committee's term of office, the Plenary Assembly has decided to vote on this opinion at its October plenary session and has appointed Mr MORGAN as rapporteur-general under Rule 20 of the Rules of Procedure.

At its 466th plenary session, held on 21 October 2010, the European Economic and Social Committee adopted the following opinion by 183 votes with 14 abstentions.

1. Conclusions and Recommendations

1.1 The EESC supports the development of an EU strategy on clean and energy efficient vehicles. This will meet EESC concern about hydrocarbon depletion, carbon emissions and atmospheric pollution. It is essential that the strategy be holistic. Nothing will be gained if pollution and emissions are simply transferred to electricity generation and vehicle production or if bio strategies lead to bio damage such as deforestation. EU compliance with the Kyoto targets has been compromised by road transport; this strategy is overdue.

1.2 In the next two decades, vehicles powered by internal combustion engines (ICVs) will still be the most important mode of transport, so the EESC would expect the strategy to incentivise breakthrough technology for ICVs as well as the more innovative forms of propulsion. It is too early to make definitive technology choices. In this phase we must let ‘all the flowers grow’.

1.3 The strategy must enhance the global competitiveness of the EU automotive industry. Regulations should ensure that vehicles become progressively ‘clean and lean’ but future competitiveness will also depend on radical ICV innovation in cars, buses and HGVs in addition to electric vehicle (EV) development.

1.4 The development of EVs has been an ambition for more than a century, but various issues, especially battery life, have meant that EVs have not been a viable alternative to ICVs. The environmental question has changed the ground rules. The more EVs that can be brought into service, the better will be the environmental performance of both manufacturers and users. In the meantime, small ICVs can contribute to the reduction of urban congestion.

1.5 In July the EESC approved an opinion by Mr Osborn– CESE 429/2010 fin – Towards the wider uptake of electric vehicles. The recommendations of that opinion are adequately addressed by the Strategy.

1.6 This is an EU strategy, but its success depends on Member State (MS) national and local government policies, their industrial capacity and consumer affluence and attitudes. It is inevitable that implementation will proceed at different speeds, given that MS are at very different starting points. It is essential that the more advanced cities and states step up to the challenge of the USA and Asia.

1.7 European society must be involved in making the strategy work. Directive 2009/33/EC engages the public sector. Companies in the private sector must be engaged through their environmental reporting. Individuals who make buying decisions, whether for personal or company cars, should receive a mixture of financial incentives and disincentives to steer them towards clean and efficient vehicles.

1.8 Since most of the transport used by EU institutions is for short range journeys in Brussels, Luxembourg and Strasbourg, the EESC believes that there is an opportunity for EU institutions to develop an exemplary clean and efficient transport plan.

1.9 The EESC would emphasise the scale of the investment needed in future distribution networks and physical facilities in order to replace trillions of dollars invested in the hydrocarbon economy.

1.10 The following recommendations are taken from section 5 below:

1.10.1 EU and MS should support ICV R&D for innovative small vehicles and revolutionary production systems and remove obstacles to market entry.

1.10.2 Targets similar in scope to those in force for car manufacturers should also apply to heavy duty vehicles.

1.10.3 Programmes for clean and efficient HGVs and buses should be supported consistently until the vehicles are competitive in the global market place.

1.10.4 Since biofuels are expected to satisfy 7 % of EU fuel needs by 2020, the EESC urges the Commission to confirm this target or modify its policy.

1.10.5 MS should encourage manufacturers and potential users to innovate with gaseous alternative fuels.

1.10.6 MS should incentivise early adoption of EVs so that the take-up of EVs in the EU does not fall behind the other regions.

1.10.7 Major automotive manufacturers should be encouraged to start up and scale up battery manufacture in Europe.

1.10.8 The Commission must ensure that the standards bodies move quickly in respect of EV.

1.10.9 The Commission and MS must work together to secure future supplies of scarce rare earth elements and noble metals.

1.10.10 The long term strategy for hydrogen FCVs should include other options in the event that FCVs do not prove to be viable.

1.10.11 Public authorities, public service undertakings and large public and private companies should operate under guidelines and targets for fuel consumption and emissions.

1.10.12 Guidance should be set for the various criteria to be used for procurement under Directive 2009/33/EC.

1.10.13 Public and private company reporting of hydrocarbon usage and CO2 emissions should be modified to identify the transport content.

1.10.14 The global action plan lacks a WTO component.

1.10.15 Representatives of civil society with a commitment to environmental issues should be included in the new high level CARS21 group.

1.10.16 As the EU refines its approach to industrial strategy, the automotive industry should be one of the first sectors to be addressed. The EU needs to establish a strong governance structure with an urgent mission to drive forward regulatory changes and incentive measures and to mobilise the necessary investment and market creation.

1.10.17 The EU should not to be left behind. The Commissioners involved have to get their act together while the countries, companies and research facilities with the necessary resources must act urgently. This Action Plan must be seen as a call to arms.

2. Introduction

2.1 The Commission's strategy aims to provide an appropriate and technology neutral policy framework. In the short term it is twin track, involving both internal combustion engines (ICVs) and battery electric vehicles (EVs).

2.2 The ICV strategy is itself twin-track. It requires the further improvement of conventional petrol and diesel engines as well as the introduction of alternative fuels including both liquid biofuels and gaseous fuels. Gaseous fuels requires modified ICVs, dedicated on-board fuel storage and an appropriate distribution network; biofuels do not.

2.3 The EV strategy includes battery electric vehicles (EV) such as the Nissan LEAF, hybrid electric vehicles (HEV) such as the Toyota Prius and plug-in hybrid electric vehicles (PHEV) such as the Chevrolet Volt. The HEV is not a true electric vehicle because it cannot be plugged into an electric power source.

2.4 If the R&D in hydrogen technology is finally successful, the ultimate electric vehicle will be powered by hydrogen fuel cells - the FCV (Fuel Cell Vehicle).

3. Commission Action Plan for Green Vehicles (The Action Plan)

3.1 Regulatory Framework

— Type approval for two- and three-wheelers and quadricycles.

— Implementing the Regulation on CO2 emissions from cars by 2011.

— Marketing of ‘green additionality’ of vehicles.

— Regulating the fuel consumption of mobile A/C systems.

— Additional measures on CO2 and pollution emissions.

— Revision of test cycle to measure emissions.

— An inventory of measures offering environmental benefits.

— Amended Directive on noise emissions.

— Sustainability criteria for biofuels.

— A strategy for clean, efficient heavy duty vehicles.

3.2 Research and Innovation

— Improvement of conventional engines, electric drive trains, battery technologies, hydrogen technologies.

— Simplified rules for research grants.

— Long term research strategy.

— EIB support.

3.3 Market Uptake

— Guidelines on MS financial incentives.

— Revision of energy taxation Directive.

— Guidance to MS on vehicle taxation.

— Monitoring implementation of Directive on clean and energy efficient vehicles.

— Research into consumer expectations and buying behaviours.

— Amended Directive on car labelling.

— Electromobility demonstration project.

3.4 Global Issues

— International cooperation, especially standardisation.

— UNECE harmonised regulation.

— Raw materials initiative in respect of scarce rare earth elements and noble metals.

3.5 Employment

— European Sectoral Skills Council.

— European Social Fund.

3.6 Mid-Term Review of Emissions Legislation

— Emission performance standards for new passenger cars in the 2020 and 2030 perspective.

— Reducing CO2 emissions from light commercial vehicles in the 2013 and 2020 perspective.

4. Specific Actions for Electric Vehicles

4.1 Safety

— Electrical safety requirements.

— Crash safety requirements.

4.2 Standardisation of charging interface

— Development and implementation of the standard.

— Interaction with global standards development.

4.3 Infrastructure

— Refuelling infrastructure.

— Investment in infrastructure and services.

4.4 Power Generation and Distribution

— Life-cycle approach.

— Low carbon energy sources.

— Load management.

4.5 Batteries

— End of life vehicles/Recycling of batteries.

— Research on batteries.

— Transport of batteries.

4.6 Governance

— CARS 21 High Level Group to be relaunched to address the barriers to market uptake of alternative technologies.

— European Climate Change Programme (ECCP) – strategy on CO2 reduction to be implemented.

— White Paper on European transport policy.

— Internal Market – avoid fragmentation and ensure critical mass.

5. EESC Perspective on the Action Plan

5.1 Conventional ICV Improvement

5.1.1 The EESC supports the improvement of ICVs and, in particular, the measures relating to CO2 and pollution emissions, the revision of the test cycle to measure emissions, R&D improvement of conventional engines, incorporation of vans into the scope of the regulations and the mid-term review of emissions legislation.

5.1.2 Advanced materials offer considerable scope for innovation in the design and manufacture of small cars. Revolutionary new production processes are now emerging based on the use of these materials. New company formation is being stimulated in the automotive industry. These are challenging the established players. Such innovations deserve to be backed by R&D support and new entrants should be assisted by the rigorous application of competition law to the automotive industry.

5.1.3 The EESC is pleased that the Action Plan targets fuel consumption and CO2 emissions from heavy duty vehicles. Any plan must target this segment of the market, starting with buses, heavy goods vehicles and special purpose vehicles such as those for garbage collection. Targets similar in scope to those in force for car manufacturers should also apply to heavy duty vehicles and, as with cars, targets should be extended to users.

5.1.4 With so many heavy vehicle manufacturers domiciled in Europe, there is scope for constructive cooperation between users and producers to develop new and innovative vehicles. There are examples already in Asia, America and Europe of pioneering projects such as low carbon emission buses (LCEB) which use 30 % less fuel and produce 35 % less CO2. Hydraulic hybrid vehicles (HHVs), which take power from braking, can be 30 % more efficient and work very well in stop-start applications like garbage collection. There are many hybrid electric projects. Some MS are using seed money to support this sort of innovation, often by subsidising the experimental vehicles. Programmes of this sort should be supported consistently until competitive vehicles are coming down the production line and European manufactured export orders are being won.

5.2 Alternative ICV Fuels

5.2.1 The Commission's biofuels programme is reported to be in disarray. The present situation has been characterised as a war that pits the European Commission's agriculture experts against its climate experts, and Europe's auto and farming lobbies against environmentalists. The debate involves the relatively new concept of ‘indirect land use change’. It centres around the potential impacts on the global environment that would be caused by the land use change needed to provide the crops to meet EU biofuel targets. Since biofuels are expected to satisfy 7 % of EU fuel needs by 2020, the EESC urges the Commission to confirm or modify its policy. The policy may only be fully viable when technology finally delivers the second generation of biofuels

5.2.2 The Communication highlights the restrictions which apply to gaseous alternative fuels such as LPG, CNG and Biogas. Vehicle engines and fuel tanks have to be modified and accessible refuelling facilities are needed. However, these conditions can be satisfied where multi-vehicle fleets operate within the range of a depot. Some private companies and many public authorities and public service undertakings can satisfy these conditions. In addition to requiring public authorities and companies to introduce clean and efficient vehicle programmes, MS should encourage manufacturers and potential users to innovate in this area in order to meet their targets.

5.3 EV, HEV, PHEV

5.3.1 Mr Osborn's opinion was visionary. It defined the preconditions for a substantial switch from ICVs to EVs in the market for private cars. The reality is that such a switch will not happen in the short term, so the campaign for green cars needs to be more broadly based.

5.3.2 As Bain & Company has pointed out, EVs are the iPhones of the auto industry. Before the iPhone, mobile phone users worried about battery life. Because iPhone apps are a revolution, users accept that their phones will need charging every day. The EV experience is so very different from driving an ICV that EV early adopters are not expected to worry about the limited range of the EVs and PHEVs coming to the market in 2011 and 2012.

5.3.3 Early adopters will buy EVs as second cars. They will be used for commuting to work by road, for parking at railway stations, and for neighbourhood mobility. The range will be adequate for a day's driving. The EV battery can be recharged overnight from the domestic power supply in the owner's garage.

5.3.4 Battery charging at the place of work can extend the daily range. No complex charging infrastructure is needed. International standardisation is hardly needed with the present range limitations. The load on the electricity grids should be minimised by overnight charging which can use electricity which would not otherwise be used at night.

5.3.5 Many Member States, including the UK, France and Germany, will offer generous incentives to electric car buyers. Although EVs will still priced at a premium to ICVs, even after the subsidy, the appeal of the technology and the life style statement being made by the owner should be enough to support the up-take of initial production volumes. In addition, owner commitment will be reinforced by free parking, freedom from congestion charging and other inducements provided in the urban environment.

5.3.6 While the EESC endorses the proposal to provide guidelines for MS financial incentives, it urges MS to incentivise early adoption so that the take-up of EVs in the EU does not fall behind the other regions where incentives are also available.

5.3.7 The main cost component of an EV is the battery. For automotive use, the key issues are size, weight, capacity, safety, efficiency, reliability and longevity.

5.3.8 The strategic problem for the EU is that it has no major battery manufacturers, although Nissan plans implants in the UK and Portugal. Battery technology will become extremely sophisticated and its importance will increase because it will be the main factor affecting vehicle performance and competitiveness. Europe must be represented in this industry. The EESC recommends that the major automotive manufacturers work together to start up and scale up battery production in Europe. The new CARS 21 Group should consider this.

5.3.9 There are many ramifications to the battery business which will need to be addressed: warranties, replacement, exchange and leasing as well as end of life procedures, salvage, waste disposal and re-use. EU companies need to be in this business.

5.3.10 In the longer term, EV drivers will need access to recharging networks. The city-wide schemes being pioneered in, for example, London and Paris, and the country wide schemes being developed in Denmark and Israel should provide valuable input to the plans out-lined in 4.2 and 4.3 above. Given China's drive for the electrification of five cities, it is imperative that the EU moves quickly, especially in respect of standards.

5.3.11 Raw material supply features in the Action Plan. Japan and South Korea are negotiating concessions and joint ventures in South America. South Korea has a $12 billion investment linked to aid in Bolivia. There is no evidence that the EU is equally well placed. The Commission and MS should work with EU domiciled mining companies to secure future supplies.

5.4 FCV

5.4.1 The EU is financing research into a future hydrogen economy and the development of FCVs. In previous opinions the EESC has endorsed the Commission's hydrogen strategy. Nevertheless, according to some observers, the hydrogen economy concept will not work. They point out that there is no practical source of hydrogen, no good way to store hydrogen, and no good way to distribute hydrogen. Many of the problems with hydrogen stem from its physical and chemical properties. It is possible that technology cannot resolve these problems. Accordingly, the EU strategy should include options in the event that FCVs do not prove to be viable in the longer term. It is too early to make technological choices. In this phase we must ‘let all flowers grow’.

5.5 Public Sector, Private Sector and Individual Engagement

5.5.1 Motor manufacturers have fuel economy and emissions targets which apply overall to the range of vehicles which they produce. The EESC recommends that public authorities, public service undertakings and large private companies should also be operating under guidelines and targets for fuel consumption and emissions. This is one way to incentivise the use of gaseous alternative fuels, but the opportunity is far greater than that.

5.5.2 The EESC is pleased that Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles will come into force in late 2010. However, the EESC would have liked to see guidance set for the various criteria to be used for procurement and also a process whereby these criteria become more demanding over time. Such criteria should be incorporated as soon as possible and the EESC would like to see them in force before the planned review in two years' time.

5.5.3 Following the public sector example, the EESC would also like to see company reporting of hydrocarbon usage and CO2 emissions modified to identify the transport content so that progressive improvement can be measured.

5.6 International Competitiveness

5.6.1 The international situation is difficult. America, China, Japan and South Korea each have a single minded government intent on exploiting the clean and efficient transport opportunity. The EU has a 27 minded government, each having very different industrial and financial capacities and very different levels of affluence in their societies. Because green transport is radically different from what has gone before, it effectively resets industrial advantage to zero and so allows a China to overtake a Japan, especially since China's industry is sheltered by import tariffs. The EU must not be left behind. The Commissioners involved have to get their act together while the countries, companies and research facilities with the necessary resources must act urgently. This Action Plan must be seen as a call to arms.

5.6.2 Paragraph 3.4, Global issues, is of vital importance but it lacks a WTO component. In these revolutionary new circumstances, EU business needs market access without protectionist barriers.

5.7 Governance

5.7.1 The Commission will reinstate the CARS 21 High Level Group. The report prepared by the original Group was approved by the automotive industry but was criticised by environmental groups who felt that it failed to deliver a ‘clean’ and ‘lean’ strategy for new cars. In the new High Level Group, representatives of civil society with a commitment to environmental issues should be introduced as a counterweight to the interests of the industry.

5.7.2 China, Korea and the USA are forging ahead with innovation, development and investment in this field. Europe is in danger of being left behind, a victim of short-sighted conservatism and timidity amongst established industrial players and lack of political vision and leadership on the Governmental side. If the European industry is to avoid this fate the Union needs to establish a strong governance structure integrating progressive business, political and civil society leaders with a single-minded and urgent mission to drive forward the necessary regulatory changes and incentive measures and to mobilise the investment and market creation that is needed.