E-mobility should be at the center of transport-related stimulus packages, leading economic recovery for the sector.

Transport has received a lot of attention recently as it is one of those “hard-to-abate” sectors and, even worse, the related emissions have actually been rising steadily in past years, which does not square well with the EU’s renewed climate ambition. As a result, the EU decided to address transport in its Green Deal and the aim is to swiftly move away from fossil fuels to alternative options. To this end, the Commission is planning to review the Alternative Fuels Infrastructure Directive (AFID), a measure from 2014 that was meant to promote the uptake of alternative fuels with minimum requirements for infrastructure deployment that were, however, based on Member States’ own approximations of their needs. The hope is that the new AFID will exclude fossil fuels, as the 2014 version included LNG and CNG, and that it will promote zero-emissions mobility exclusively with mandatory and clear minimum targets for infrastructure deployment.

However, consumers have started to see the numerous benefits of e-mobility by themselves and demand has been on a steady rise since last year. Countries such as Norway have even seen the demand for electric vehicles (EVs) surpass the demand for fossil cars. In the first months of this year, before Covid-19 brought our economy to a stop, EV sales in the EU had doubled compared to last year, to reach 6% in 2020. This is already in line with the estimated 3-7% needed to comply with the 2020 CO2 target.

The Green Deal is a great step in the right direction. Its planned series of measures that should be progressively rolled out in the coming months and years (among which is AFID) are vital measures that could not come too early. However, some transport stakeholders have seized the Covid-19 crisis as an opportunity to attempt to postpone or water down the promised clean transport measures. Indeed, a group of car manufacturers have called for a delay of upcoming CO2 standards, citing the standstill provoked by this crisis as the cause for their limited ability to comply with future stricter standards. Alongside policy asks, this demand was accompanied by a plea for financial support for the automotive sector.

As with other sectors, the transport sector needs to be supported in this difficult time, and workers must be protected from both the coronavirus and the ensuing economic crisis. However, the use of public funds to support this industry has to come with strings attached. Stimulus packages aimed at the transport sector should also be in line with the Green Deal (as we’ve already mentioned in #EUGreenRecovery). This is an opportunity to ensure that a vast amount of investments is channeled into clean transport.

Several climate and environment stakeholders have, in parallel, called for economic recovery to be in line with the Green Deal and to support the energy transition. They remind us that, while the economic downturn will affect the total number of cars sold, this does not have an impact on CO2 compliance as this is measured with fleet averages. This means that what matters is the type of cars sold, not the numbers and that there is no rationale for delaying CO2 standards. Further, the 2008 crisis showed that, facing an economic downturn, consumers will favor less powerful and thus lower-emitting cars.

Indeed, there are lessons to be learned from the previous economic crisis and the stimulus packages offered then. At the time, generous loans where directed towards the EU car industry with no clear indication of how this recovery cash should support climate goals. There was a will to use these loans to support the development of clean cars, but without clear goals and targets they ended up funding the development of supposedly green diesel vehicles. And later came the diesel gate scandal to teach us that lesson.

Alongside incentives for car manufacturers, the whole e-mobility ecosystem has to be supported. Indeed, the jobs to be gained in the switch to e-mobility are more spread out across the value chain (compared to fossil cars). Looking at the 2030 horizon, we found that over half of these jobs are downstream of the manufacturing stage in the installation, maintenance and operation of charging infrastructure. Further, the latter segments represent local, skilled and (obviously) green jobs. Unlike manufacturing jobs, they inherently cannot be delocalized and rely on skilled workers, often employed by SMEs.

Finally, in the context of this health crisis, it is worthwhile to remember that e-mobility means zero-emission mobility, and, crucially, does not contribute to polluting the air we breathe. Air pollution is already the cause of hundreds of thousands of deaths every year, and that’s before being linked to airborne viruses such as Covid-19. It is worth highlighting that e-mobility also encompasses maritime transport and that electric solutions (such as shore-side power or fully electric ferries) are available to curb the vast amount of particulate matter associated with large ships docked in ports, which are often within or in the vicinity of urban centers. Alongside air pollution, noise pollution can be drastically reduced by switching to electric engines. And the latter can be fitted not only to cars, but also to construction machinery, a great source of noise pollution in cities. A switch to e-mobility will reduce air and noise pollution and the associated health risks for our citizens, especially for city-dwellers.

Several measures have already been floated such as VAT exemptions for EVs, tax benefits for corporate fleets, scrappage schemes to get rid of polluting vehicles, or green bonds. The transport sector will need financial assistance to recover from this health crisis, and the foremost priority has to be the job security of the 2.6 million of autoworkers in Europe. But, as we have seen, this can easily be reconciled with climate objectives, and the both can be symbiotically incentivized.

As our leaders are still working out the details of the upcoming stimulus packages, it is important to remind them of the failures of 2009 and ensure that recovery assistance is aimed at zero-emissions mobility. While the challenge we are facing is unprecedented, there is an opportunity here to shape the sector as it is being reconstructed in the aftermath of the crisis.

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