Europe’s upcoming CO2 standards for trucks will be the first of their kind. Policymakers need to build enough flexibility into the legislation so that manufacturers can adapt as the process and technologies evolve, writes Joachim Drees.
Joachim Drees is CEO of MAN Truck & Bus. He is currently chairman of the Commercial Vehicle Board of Directors at the European Automobile Manufacturers Association (ACEA).
The Environment Council meeting of 20 December will try to reach a general approach on the first-ever CO2 emission standards for heavy-duty vehicles (HDVs) in Europe. Vehicle manufactures have expressed concern about going too far with this regulation. This apprehension does not mean legislation in undesirable, but that caution is necessary due to the high degree of uncertainty about what is possible to achieve.
Both the Commission and European Parliament have already asked for ambitious reduction targets and the legislative process has been carried out in record time. The speed of the legislative process may portray the idea that there is consensus on how to achieve reductions in CO2 emissions from HDVs and that industry simply needs a final push from legislation to adopt the necessary reduction measures.
However, the reality is that the whole debate has been carried out on the basis of assumptions about the future uptake of technologies that have not yet been deployed, which explains the apprehension from industry.
Trucks developed and manufactured in the European Union today are the cleanest and most fuel efficient in the world. This same technology is then exported to other parts of the globe, thus maximizing the positive impact of European technology for the environment. All of this has been accomplished without a dedicated piece of legislation addressing CO2 emissions for HDVs.
The main driver of CO2 reductions until now has been the need to lower fuel consumption. Since fuel represents about one third of operating costs for a truck in Europe, any small gains can represent a significant market advantage for a truck manufacturer. As fuel consumption decreases, so does CO2 emissions, and the high level of competition in the European market has ensured that new technologies are quickly deployed to fuel competition in the sector.
The success of the competitive market until now in no way means Europe does not need CO2 HDV standards. However, it does show that we are not starting from zero when it comes to CO2 reductions. This is an important point that is often forgotten and industry ends up being accused of not wanting to deploy the necessary technology to achieve further reductions. That is simply not true.
The introduction of legislation certainly puts added pressure on manufacturers to take risks, which always come at a cost. The role of policy makers then becomes to achieve the right balance between ambition and reality, without asking manufacturers to take risks that could jeopardize an essential and very competitive industry.
Take the example of electrification as a strategy for achieving CO2 reductions. There is general consensus that this will be a key technology in the future and both the Commission and the European Parliament have made assumptions about its uptake in order to achieve their proposed reduction targets.
However, these vehicles are not yet readily available in Europe and there is currently zero charging infrastructure for electric trucks, which is different than for passenger cars. Most manufacturers are working hard on developing these vehicles but since trucks are working tools, clients will only buy them if they know the necessary charging infrastructure is in place.
This means the deployment of such vehicles will not happen overnight and since nobody has any experience with how fast the market will respond to these tradeoffs, there is a tremendous amount of risk in any forecast about the potential contribution of electric vehicles to scheduled CO2 reduction targets.
In addition to the high level of uncertainty regarding future technologies, there is today no certified baseline of where we stand on current CO2 emissions. This baseline will only be available after the introduction of the VECTO tool, which will measure CO2 emissions from trucks in a harmonised way beginning in 2019 and will produce its first official results in late 2020 at the earliest.
This means the legislative process for establishing the first-ever CO2 standards is being conducted without us even knowing what is the starting point. This creates a lot of anxiety among manufacturers. How can someone determine whether it is possible to achieve a reduction target if they do not know what the starting point even is? This coupled with the uncertainty about the technologies that will be necessary to achieve any reduction makes this whole process very risky.
What is at stake here is not whether or not Europe should use legislation to reduce CO2 emissions from HDVs, but the setting-up of a process that will ensure the long-term potential for both CO2 reduction and the existence of a competitive HDV industry.
This means the upcoming CO2 standards need to include enough flexibility to allow manufacturers to adapt as the process evolves, while continuing to deploy the most appropriate technologies that can tackle CO2 head-on. In short, it is important not to let ambition trump reality.