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Environment

Electric cars will treble market share this year as most carmakers on track to meet EU emissions targets - analysis

EU Reporter Correspondent

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Electric cars will treble their market share in Europe this year as a result of EU car CO2 targets, new analysis shows. Despite the pandemic, EV sales have surged since 1 January, just as the emissions standards kicked in, and will reach 10% this year and 15% in 2021. Transport & Environment (T&E), which analysed sales in the first half of 2020 as well as carmakers’ compliance strategies, said it shows ambitious CO2 standards work but there's a risk EV momentum runs out of steam after 2021 due to lax EU targets for 2025 and 2030, writes Eoin Bannon.

Julia Poliscanova, senior director for clean vehicles at T&E, said: “Electric car sales are booming thanks to EU emissions standards. Next year, one in every seven cars sold in Europe will be a plug-in. EU manufacturers are back in the EV race, but without more ambitious CO2 targets in 2025 and 2030 to spur them on, they'll run out of steam as soon as 2022.”

PSA Group, Volvo, FCA-Tesla and BMW Group are already complying with the EU’s target for average emissions of new cars, based on their sales in the first half of 2020, T&E’s analysis shows. Renault, Nissan, the Toyota-Mazda pool and Ford have a small gap to close of 2 grams of CO2 per km. The sales of the Zoe alone in 2020 will knock off 15g of CO2 to help ensure Renault complies.

While further away, the Volkswagen Group (5g), Hyundai-Kia (7g-3g), Daimler (9g) and Jaguar-Land Rover (13g) should cross the line either through their compliance strategies of selling more plug-in vehicles, by pooling emissions with other companies, or both. Daimler is expected to close much of the gap by selling more of its plug-in hybrids, including the E-Class, C-Class, A-Class and GLC – sales of which have grown rapidly this year.

But while electric cars’ market share will go from 3% to 10% this year, and to 15% next year, we may expect to see it at only 20% four years later if the current CO2 regulation is not revised, the analysis shows. Norway shows how fast the EV market can grow: from 6% of sales in 2013 to almost 50% five years later, in 2018.

Worryingly, sales of lucrative but highly-polluting SUVs crept up to 39% in the first half of 2020. This is encouraged by a loophole in the EU regulation whereby selling heavy vehicles actually gives carmakers laxer CO2 targets. Also, half of all the electric cars sold today are “fake electric” plug-in hybrids that are rarely charged and emit 2-4 times more CO2 in the real world than the lab tests show.[1] T&E said the EU needed to set 2035, at the latest, as the end date for sales of combustion engines - including current PHEV technology.

Julia Poliscanova concluded: “The electric car is finally entering the mainstream in Europe but SUV sales are still growing like weeds. The only way to kill off highly-polluting vehicles is to give carmakers a clear end date now. Cars that run on biofuels, fake electric engines or fossil gas emit CO2 and shouldn’t be allowed on the market after 2035.”

See: The ICCT, Real-world usage of plug-in hybrid electric vehicles: Fuel consumption, electric driving, and CO2 emissions, (2020).

Also: T&E, UK briefing: The plug-in hybrid con, (2020).

Read more:
Report: Mission (almost) accomplished - Carmakers' race to meet the 2020/21 CO2 targets, and the EU electric cars market

Also available in FrenchGermanItalian and Polish.

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Climate change

Executive Vice President Frans Timmermans attends Petersberg Climate Dialogue

EU Reporter Correspondent

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Today (7 May), Executive Vice President Frans Timmermans participates in the 12th Petersberg Climate Dialogue, an annual high-level political meeting of over 30 ministers from around the world, co-hosted by the German government and the COP26 Presidency. The meeting will start at 14h CEST  today with remarks by UN Secretary-General António Guterres, Federal Chancellor of Germany Angela Merkel and UK Prime Minister Boris Johnson. Their speeches will be live-streamed here. This year's Petersberg Dialogue will focus on the preparations for the upcoming COP26 climate conference in Glasgow. It will address pressing issues such as enhancing countries' climate-resilience and adaptation capacity, scaling up international climate finance, and promoting transparent international carbon market rules. The meeting will be held virtually for the second year in a row due to the ongoing COVID-19 pandemic. The Commission will publish Executive Vice-President Timmermans' remarks climate finance on Friday here. For more information see here.

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Environment

EU sets plan to promote rapid green transition of key industries

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The European Union aims to help industries slash greenhouse gas emissions by promoting a rapid expansion of investment in low-carbon technologies, partly through schemes with easier state aid rules, according to a draft policy plan seen by Reuters, writes Kate Abnett.

The EU's target to become climate neutral by 2050, helping curb dangerous global warming, will require a green transition in industrial sectors through a take-up of technologies like renewable hydrogen fuel and energy storage.

A draft of the European Commission's industrial strategy, to be published on Wednesday, outlines how Brussels will help speed investments in those strategic areas, plus others such as raw materials and semiconductors.

The EU is considering ways to support and speed up the rollout of Important Projects of Common European Interest (IPCEI), where member states can pool resources for strategic technologies, the draft said.

IPCEIs allow EU governments to fund projects under easier rules pertaining to state subsidies and for companies to team up on projects that would be too large or risky for one firm alone.

"These projects could accelerate needed investments in the fields of hydrogen, 5G corridors, common data infrastructure and services, sustainable transport, blockchain or European Digital Innovation Hubs," the draft said.

It said some EU states plan to use money from a 672-billion-euro EU COVID-19 recovery fund towards these multi-country projects. Member states must spend 37% of their respective share of recovery funds to support climate objectives.

The Commission is also considering a support scheme, called "contracts for difference", that would guarantee a CO2 price to a project developer regardless of EU carbon market prices.

This could encourage investments in technologies like hydrogen produced from renewable energy. EU carbon prices soared to record highs on Tuesday, but remain far below the price at which analysts say renewable hydrogen could compete with the fossil fuel-based alternative. Read more.

The industry plan slots together with other EU measures to steer cash into green technologies, including its recently-agreed system to classify sustainable investments, and planned environmental standards for electric car batteries sold in Europe.

Brussels will also announce details this summer of a plan to impose carbon border costs on imports of polluting goods. That aims to level the playing field for EU industry and overseas firms by exposing them both to the same carbon price.

The draft industrial plan, reported by Reuters last week, updates a strategy the EU conceived before the COVID-19 pandemic heightened scrutiny of Europe's dependence on foreign suppliers in strategic areas. Read more.

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Agriculture

Commission extends flexibilities of Common Agricultural Policy checks for 2021

EU Reporter Correspondent

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With restrictions still in place across the EU, the Commission has adopted rules to extend to 2021 flexibilities for carrying out checks required for Common Agricultural Policy (CAP) support. The rules allow the replacement of on-farm visits with the use of alternative sources of evidence, including new technologies such as satellite imagery or geo-tagged photos. This will ensure reliable checks while respecting the restriction of movement and minimizing physical contact between farmers and inspectors.

Furthermore, the rules include flexibility around timing requirements for checks. This allows member states to postpone checks, notably to a period when movement restrictions are lifted. In addition, the rules comprise a reduction of the number of physical on-the-spot checks to be carried out for area and animal-related measures, rural development investments and market measures. These rules aim to ease the administrative burden of national paying agencies by adapting to current circumstances while still ensuring necessary controls for CAP support. More information on the CAP's management and control systems is available here. More information is also available here.

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