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New CO2 emissions targets for heavy-duty vehicles: what will happen to renewable liquid fuels?

The European Commission has proposed new CO2 emissions targets for new heavy-duty vehicles (HDVs) from 2030 onwards. Indeed, trucks, city buses and long-distance buses are responsible for over 6 per cent of total EU greenhouse gas (GHG) emissions and more than 25 per cent of GHG emissions from road transport.

The Commission is proposing phasing in more substantial CO2 emissions standards for almost all new HDVs with certified CO2 emissions, compared to 2019 levels, specifically 45 per cent emissions reductions from 2030, 65 per cent from 2035 and 90 per cent from 2040. Furthermore, to stimulate the faster deployment of zero-emission buses in cities, the Commission is proposing to make all new city buses zero-emission as of 2030.

“To reach our climate and zero pollution goals all parts of the transport sector have to actively contribute,” said Frans Timmermans, Executive Vice-President for the European Green Deal. “In 2050, nearly all of the vehicles on our roads have to be zero-emission. Our Climate Law requires it, our cities demand it and our manufacturers are gearing up for it.”

What about renewable liquid fuels?

As noted by FuelsEurope, this proposal forces manufacturers to move almost entirely to battery and fuel cell vehicles from 2040. And despite being an ambitious target, it seems quite impossible to reach and disruptive even. Currently, 98 per cent of HDVs run on liquid fuel which allows great flexibility of logistics (1,500 kilometres range) and great security of supply (over 90 days EU-wide fuel stocks). According to the association representing the interest of 38 companies manufacturing and distributing liquid fuels, technologies for battery-electric and fuel cells trucks are developing fast and have a big decarbonisation potential. But today there is only a tiny fraction of 1 per cent of electric or fuel cell trucks in operation worldwide, in pilot programmes.

“Given the clear uncertainty of the availability of batteries from Europe, charging infrastructure and additional renewable electricity and the clear potential for liquid renewable fuels to be part of the long-term solution, it is astonishing that the Commission forces a huge system change on European logistics with apparently such limited evidence of viability and effectiveness, and when renewable fuels could clearly be part of the solution too,” said John Cooper, Director General of FuelsEurope.

In fact, according to FuelsEurope’s Members, we cannot forget the importance of renewable fuels like renewable biofuels which already account for 7 per cent of all road fuel volume, meeting the sustainability standards defined in the RED.

The Commission has also other goals

However, the Commission’s proposal has also other goals: first, in line with the REPowerEU objectives, this proposal will lower the demand for imported fossil fuels and enhance energy savings. Also, it comes at a time when the US has implemented the Inflation Reduction Act, which specifically applies to the EV market.

In fact, the EV supply chain ranks second on the Act’s funding list, with 23 billion US dollars allocated to transportation. Batteries for electric vehicles must be produced in the US, Canada or Mexico, leaving Europe less competitive. Companies such as Tesla, Iberdrola and Safran are already planning to move some of their operations from European soil to the US. Thus, the fact all manufacturers must switch almost entirely to battery and fuel cell vehicles could be a tool to incentivise Europe’s competitiveness.

It is a double-edged sword because the US Government’s Blueprint for Decarbonisation of Transportation sees a future for renewable liquid fuels. Incentivising battery manufacturers could then make Europe lose those companies manufacturing and distributing liquid fuels. We shall see what the response of the transport industry will be.

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