In a recent article published by Transport & Environment (T&E), author Fedor Unterlohner delves into the contentious debate surrounding the European Commission’s proposed carbon correction factor for HGV emissions regulation.
The European Commission’s introduction of new CO2 targets for HGVs and buses earlier this year has sparked varied reactions across the industry. Lorry manufacturers have expressed satisfaction with the new regulations, which require a 90% reduction in climate emissions from new vehicle sales by 2040, exempting 20% of heavy-duty vehicle sales from the regulation.
T&E, among other environmental groups, has taken a more critical stance, particularly towards the intermediate CO2 targets, such as the proposed 45% reduction in emissions by 2030. Unterlohner points out that truck manufacturers have already set more ambitious targets, aiming for over 60% of HGV sales to be electric or hydrogen-powered by the end of this decade.
The oil and gas industry, however, has raised objections to the Commission’s decision to exclude a 'carbon correction factor’ for alternative fuels from the CO2 regulation. T&E, in line with most truck manufacturers, opposes this regulatory loophole. The article provides an insight into the multifaceted arguments against including alternative fuels in the CO2 regulation.
One of the central arguments presented by Unterlohner pertains to economics. HGVs are long-term capital assets that can accumulate over a million kilometres in their operational lifetime. This means that energy and fuel costs significantly impact the total cost of ownership (TCO). The article contends that directly electrifying trucks would require less green electricity than running combustion lorries on e-fuels.
This would result in a potential increase in the TCO by as much as 50%, even when considering the cheaper production of e-fuels in North Africa.
The author suggests that claims implying hauliers’ dependence on alternative fuels for competitive reasons might not hold up to scrutiny, given the economic implications involved.
The essay further highlights that, since the regulation primarily applies to vehicle manufacturers, there is no guaranteed way to control how lorries or buses will be refuelled once they enter the fleet. Additionally, e-fuels, as an alternative, may not significantly reduce air pollutant emissions. The author emphasises the intricacies and challenges of regulating the fuel sources used once vehicles are in circulation.
The availability of e-fuels and advanced biofuels is also scrutinised. Unterlohner points out that EU lawmakers have prioritised these fuels for the aviation, shipping, and industry sectors. Mandates set forth in recent legislation on renewable energy sources suggest that the volume of renewable fuels of non-biological origin (RFNBOs) available for the transport sector will remain limited. The essay cites T&E’s analysis to suggest that these mandates may only meet the 1% binding target for RFNBOs under the Renewable Energy Directive (RED), even as the e-fuels lobby concurs with these estimations.
T&E therefore is on the opinion that the proposed introduction of a carbon correction factor into CO2 standards would not stimulate the introduction of additional alternative fuels. Instead, it is suggested that it would lead to double-counting and crediting fuels that are already incentivised and mandated under the RED.
The essay claims that this accounting manoeuvre would essentially lower the CO2 targets for manufacturers, thereby reducing the pressure on them to produce and sell zero-emission trucks in compliance with regulations.
Unterlohner refers to analysis by the International Council on Clean Transportation (ICCT), which estimates that the implementation of the carbon correction factor could result in 0.3 million fewer zero-emission vehicle sales until 2030 and 1.3 million fewer until 2050, reducing emissions savings by 200 megatons of CO2 by 2050.