Clean Power for Transport”: develop infrastructure in line with demand

The Clean Power for Transport package aims to promote infrastructure for supplying alternative fuels as a contribution to a 60% reduction in GHG emissions from transport by 2050. An original Commission proposal included binding national and EU-wide targets for minimum levels of infrastructure for “clean fuels” such as hydrogen, Liquefied Natural Gas (LNG) and electricity.

But the European Parliament’s Transport committee and European Council representatives agreed a new version on 26 March 2014. The key points were as follows:

Electricity for cars Member States should install an appropriate number of recharging points in urban and suburban areas by the end of 2020.
Ashore electricity for ships Ashore electricity supply should be installed as a priority in ports on the TEN-T (Trans-European Transport Network) Core Network and in other maritime and inland ports by the end of 2025, provided the benefits are higher than the costs.
Hydrogen If Member States decide to include hydrogen in their policy frameworks, then those states should have an appropriate number of refuelling stations to enable smooth circulation by the end of 2025.
LNG for trucks An appropriate number of refuelling points should be installed by the end of 2025, at least along the existing TEN-T Core Network, unless the costs are disproportionate to the benefits. That will enable heavy-duty LNG vehicles to move throughout the EU.
LNG for ships An appropriate number of refuelling stations should be installed in TEN-T Core Network maritime ports by the end of 2025. Deadline for TEN-T Core Network inland ports: end of 2030.
CNG An appropriate number of CNG refuelling points should be installed to allow CNG motor vehicles to circulate in urban and suburban areas by the end of 2020. This should be done for the TEN-T Core Network by the end of 2025.

The Parliament-Council compromise agreement calls for governments to drive the deployment of infrastructure through their national policy frameworks over the period 2020 to 2030. The Commission will oversee the national plans. Private investment is expected to play a key role in the infrastructure deployment, but support measures by Member States are possible too, so long as they comply with EU state aid rules.

The European Parliament formally adopted a legislative resolution on alternative fuels infrastructure resulting from the compromise agreement on 15 April 2014. The agreement requires EU-wide standards (such as a common plug) for electric vehicles, standardised refuelling equipment and consumer information – all based on methodology to be established by the Commission. Member States will have to define national policy frameworks, such as national targets and objectives, which set minimum requirements for alternative fuels. (The Commission had initially proposed mandatory targets set by the EU.) They will be able to choose whether or not to include hydrogen as an alternative fuel. Member States will have two years to adopt national provisions to comply with the Directive.

As of March 2016, FuelsEurope positions itself as a defender of affordable mobility as a key contributor to the quality of life of European citizens, which is intrinsically linked to economic growth. Even though alternative technologies are increasingly used in transport, refined products continue to be – and will be for many years – the prominent energy source, due to a combination of factors such as superior energy density, easier transportability/storability, established infrastructure and comparatively lower cost (before carbon cost and taxes).

FuelsEurope wants to point out that transport is a contributor to GHG emissions, meaning that all transport fuels and energy will produce GHGs to a varying extent based on the emissions generated during their life cycle. It is therefore important to recall that the taxation of petroleum products, and notably transport fuels, represents a very significant revenue flow to the State budget, and alternative transport fuels are not currently subject to similar level of taxation.

Well-to-wheel analysis

Well-to-wheel analysis is a method of accounting for GHG emissions over the entire lifecycle of a source of energy used for transportation. Despite the name, well-to-wheel analysis can also be applied to energy that may not come from oil (such as electricity) and to transport that is typically not wheel-based, such as aviation and marine.

The purpose of well-to-wheel analysis is to ensure that attempts to lower GHG emissions do not result merely in shifting emissions between sectors, industries and geographies. The analysis examines scientifically the GHGs emitted from the production of an energy source all the way through to its consumption in transport, and can thus help compare emissions for biofuels, electricity, fossil and other fuels. Well-to-wheel analysis can thus form the basis for coherent targets for both the energy and transport industries and for the design of policy tools that are cost effective for society as a whole.

In petroleum-based transport fuels such as gasoline and diesel, for each unit of energy, approximately 15% of GHG emissions occur in the fuels’ production phase, while about 85% occur during consumption (see diagram). For electric cars, however, the GHG emissions are entirely in the phase until the energy is in the battery (the equivalent of well-to-tank for a petroleum-based car), and they will depend on how the electricity is produced.

FuelsEurope’s position

Setting EU wide standards for equipment and consumer information is good sense. However, FuelsEurope does not support mandates on infrastructure. For re-fuelling infrastructures to be used effectively, alternative vehicles must be affordable and accepted by consumers. Mandates have a bad record in picking the best solutions with the lowest costs for society: the market does this better and should be allowed to choose a pool of solutions in a technology-neutral framework that will not waste resources. There is currently no business case for a widespread introduction of the potential alternative fuels options, and FuelsEurope believes that there are cheaper ways to achieve emissions reduction much more cost-effectively (e.g. the vast potential for further progress in the energy efficiency of internal combustion engines) until new technologies prove they can truly compete in the market.

 FuelsEurope also believes that the Commission’s proposal focuses too much on infrastructure and does not take sufficient account of the need for a competitive and sustainable EU economy. In addition, the proposal ignores the loss of tax revenue from fossil fuels – €270 billion in 2011 – and does not consider how Member States will compensate for this loss or how they can tax other fuels and energy sources consistently: electricity for example is currently taxed at very low rates compared to road transport fuels where tax is on average about half of the pump price of fuel.

Furthermore, financing of the new infrastructure is not addressed. For private capital to participate in appropriately staged infrastructure development, a business case must be made where those that invest get a fair chance for return on investment.