This article is part of our special report All aboard: EU policy train builds up steam after summer.
Europe’s transport sector, already hard hit by the coronavirus outbreak, faces a crucial and possibly defining end to 2020. EU and global targets will start to bite, while new technologies will face a challenging acid test.
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🚗. Roads 🚲
Binding CO2 emission targets for cars and vans wrap up this year. Manufacturers have to meet an average fleet emission benchmark of 95g per kilometre or face potentially substantial financial penalties.
Some firms have ramped up electric vehicle sales to drag their emissions down, while others like Fiat-Chrysler have entered pooling agreements with specialists like Tesla. CO2 output actually spiked in 2019, suggesting that some carmakers will not make the grade in time.
At the beginning of the virus crisis, manufacturers sounded out the European Commission about an extended deadline, citing the cooling effect the pandemic is having on car sales, but the idea was swiftly ruled out by the executive.
The reporting period for the EU’s stricter 2030 target kicks in at the end of the year. As part of its Green Deal, the Commission suggested that the legislation could be reviewed ahead of time to contribute more to the bloc’s environmental push. Late-2020 will shed more light on that prospect.
Fiat-Chrysler and Peugeot’s proposed merger is being scrutinised by the EU‘s antitrust authorities, which suspect that the tie-up could distort the van market. The carmakers’ executives insist a deal will still be done at the beginning of 2021.
Cycling has become more popular during the pandemic and city administrations across Europe have installed new facilities and infrastructure to tap into a new found love of two wheels. But it remains to be seen whether it is a passing fad or something more long-term.
The Benelux countries called on the EU as a whole to make cycling a pillar of any post-crisis recovery planning. The end of the year could show whether temporary bike lanes are made permanent and if people are willing to keep pedalling through the colder months.
A comprehensive sustainable mobility strategy – billed as the transport pillar of the bloc’s Green Deal – is currently on the Commission’s drawing board and is due to be published in Q4.
Airline were hit hard by the virus and have been bailed out to the tune of more than €30 billion by European governments. However, the long-term shocks caused by the down-time are still yet to become clear and bankruptcies could yet take hold, despite state aid.
Coronavirus case numbers continue to flare up across the EU and although tourists and holidaymakers have returned to the skies, the number of passengers is significantly lower than in recent years. Whether a recovery takes hold by the beginning of 2021 will be critical for the financial stability of many airlines.
Passenger rights are still in focus too, as a number of countries that failed to ensure firms were refunding ticket holders in good time were threatened with legal action by the Commission. An assessment of whether a warning was heeded is still due.
Aerospace giant Airbus, US rival Boeing and engine-maker Rolls-Royce have all suffered too. Job cuts have been announced but more might be in the offing if the sector’s outlook does not improve in late 2020.
Europe’s aviation safety agency will also have to decide whether to re-certify Boeing’s grounded 737 MAX aircraft, as US-approval edges nearer. The regulator intends to carry out its own test flights, in a break with established inter-agency cooperation.
2021 is earmarked by the EU institutions as the ‘Year of Rail‘ so preparations for that will get well underway in the latter half of this year. Expect more declarations from the Commission, Parliament and Council in that regard.
Night-trains and high-speed travel have captured the public imagination in recent months, with the sector benefitting from a rare ‘virus dividend’. Look out for more announcements from rail companies about resurrecting old services or starting new routes.
Negotiations on an update to EU-wide rail passenger rights stalled before the summer break under the Croatian presidency and are set to start up again under the Germans. Sticky issues like compensation and disabled access remain obstacles to a final deal.
Earlier in the year, 25 European countries signed a declaration urging more cooperation on international train travel. Whether that will remain just a piece of paper full of good intentions could be revealed in the tail-end of the year.
The cross-Channel Eurostar service should start its direct London-Amsterdam return service and start showing whether or not it will be a short-haul flight killer. It took a significant share of the Paris-London route and the firm aims to do the same with the Dutch route.
Brexit negotiations are still yet to confirm the fate of the Eurostar service, as jurisdiction over the tunnel still has to be hammered out. The transition period ends on 31 December.
EU officials will negotiate how the shipping sector should be folded into the bloc’s carbon market – the Emissions Trading Scheme (ETS) – as policymakers rally round the idea of making vessels in Europe pay to pollute.
MEPs will vote in plenary after the summer break on a draft report put together by the Greens’ Jutta Paulus, who will then enter talks with the Commission and Council on how to achieve the ETS expansion.
The timeframe will depend on if member states insist on the Commission producing a new, time-consuming impact assessment and how complex the chosen methodology ends up being.
Talks will also continue at the International Maritime Organisation (IMO) on the global picture of shipping and how the sector can cut its environmental footprint, although meetings are likely to remain in virtual format for the rest of the year due to the pandemic.
Shippers in the vanguard of innovation, such as Danish giant Maersk, might also give more indication about technology advancements, such as hydrogen or ammonia-fuelled vessels.
The latest attempt to create a ‘European champion’ will also be decided on by the Commission, which is still assessing the validity of a merger proposal between two of Europe’s biggest shipbuilders. A decision is expected by the end of the year.
The European Space Agency (ESA) was granted a bigger-than-requested budget by its member countries last year but fell short of achieving the same feat when EU government heads brokered a deal on the next multiannual financial framework (MFF).
That deal still needs to secure approval from the European Parliament, where the space sector has some influential MEP advocates. Additional spending might yet figure in a list of compromises sought by lawmakers if their blessing is withheld.
Bigger budget or not, the European Commission is looking to supercharge space policy, according to Commissioner Thierry Breton, who is already looking long-term at where Europe can lead in the sector.
Arianespace, the firm that builds the rocket launchers used by ESA to put satellites into orbit, aimed to debut its new vehicle, the Ariane 6, this year but the launch was delayed until early 2021 due to the pandemic.
After Elon Musk’s SpaceX managed to put US astronauts into space – the first time a private company has done so – eyes have turned to how Europe will respond and whether ESA will pursue independent launch capabilities. The direction of travel could become clear this year.
🔋 Technology ⚡
Transport’s greenhouse gas emissions are still increasing and given the EU’s climate action commitments, the race is on to reverse that trend, with technology advancements the main weapon in the fight.
In the road transport sector, electric vehicles are taking more of the market and analysts predict sales will keep increasing through to the end of the year.
A recently published EU hydrogen strategy also aims to boost the fuel’s uptake in challenging areas like heavy goods vehicles. Late 2020 could be the time for countries to make good on their interest in investing in the technology.
Battery power is likely to keep attracting interest. The Commission is expected to sign off on a multi-billion-euro package of investment put together by numerous member states, specifically targeted at building factories and fuelling R&D.
The EU executive will also kick off a review period of the bloc’s Battery Directive, which manufacturers see as crucial to improving recycling and reuse initiatives.
A review of the bloc’s renewable energy rules is also in the offing; the Commission opened a feedback period that runs until late September. An earlier-than-anticipated update is touted to focus on transport, as well as other areas like heating and cooling.