Transition to e-mobility could help revitalise Europe’s growth and reduce air pollution but challenges remain along the way
Brussels, Tuesday 20th February 2018 – Europe could improve its net GDP and create 206,000 net additional jobs in 2030 through the transition from a mobility system fuelled with imported oil to one that is driven by renewable energy. The transition to e-mobility would allow the EU to cut its spending on oil imports by €49 billion in 2030. It will also help reduce CO2 emissions from cars by 88% by 2050 and in parallel help cut air pollution from causing 467,000 premature deaths in Europe every year. This shift will achieve the double bonus of tackling climate change and air pollution (1) and creating a much-needed economic stimulus.
These are some of the conclusions of a new report – Fuelling Europe’s Future: How the transition from oil strengthens the economy (2) – released today by a consortium of stakeholders in the European mobility sector, including leading car manufacturers, industry associations, trade unions, consumer groups and civil society, convened by the European Climate Foundation (3). The technical analysis carried out by consultancy Cambridge Econometrics is the output of constructive and transparent exchange of views on the technical, economic and environmental issues associated with the development of low-carbon technologies for cars and a shift from imported oil to domestically produced electricity and hydrogen.
However, the report warns, the transition towards clean mobility cannot be successful without profound changes to the technologies used to power vehicles. Cleaner fuels such as electricity and hydrogen will need to become the norm. Charging infrastructures and electricity grids will need to be modernised as part of sector coupling and efforts will have to be made to ensure workers who are currently producing legacy technologies are retrained for quality jobs in producing clean technologies.
- Thanks to E-mobility, Europe could cut its spending on oil imports by €49 billion in 2030, according to the report’s central scenari At present, the European Union imports 89% of its crude oil, the vast majority of which is used for transport fuel. Replacing imported oil with domestically- produced energy will keep many billions of euros re-circulating in the European economy.
- EU economy will be strengthened: In all three scenarios explored, the transition to e-mobility leads to a mild increase in GDP. Overall, there is a net increase in EU GDP as a result of making the fleet of cars more efficient to meet the EU’s 2020 CO2 standards, equivalent to an additional 0.1% of annual GDP in 2030. Further innovation to meet future climate goals would further increase national GDP after 2025. This leads to an 0.2% increase in annual GDP in 2030 and a 0.5% increase by 2050.
- By 2030, e-mobility will help create 206,000 net additional jobs in Europe, but this should not be allowed to mask the significant transformational changes. Efforts must be made to ensure workers who are currently producing legacy technologies are retrained for quality jobs in producing the technologies of the future. From 2030 onwards, the structural changes become much more profound and uncertain. For example, the location of future battery manufacturing will have a significant economic impact, but what proportion of the battery value chain will be located in Europe is difficult to predict.
- Health: A scenario where by 2030 a quarter of new vehicle sales are zero emissions vehicles (ZEVs), a quarter are fully hybridised and the remaining half of the fleet become mild hybrids, Europe would be on track to reduce CO2 emissions from cars by 88% by 2050 (from around 605 MT per annum in 2018 to about 70 MT per annum in 2050). This improvement to technologies would cut NOx from cars from around 1.3 million tonnes per year to around 70,000 tonnes per year and hence help cut air pollution from causing 467,000 premature deaths in Europe every year.
- Impact on consumers: The purchasing cost of Zero emissions vehicles and diesel/gasoline cars would be almost equal by 2030. In 2020, battery-electric and fuel-cell electric vehicles are projected to be more expensive than diesel and gasoline vehicles and their hybrid variants. However, by 2030 the difference in price will be narrowed as diesel and gasoline cars become more expensive to meet air pollution and CO2 limits and as ZEVs achieve scale economies. There is a convergence in costs in our central case, although not complete parity by 2030.
- Investment in Grids and Chargers: Investments in transport infrastructures are needed but the benefits are likely to outweigh the costs. Up to around €23 billions of cumulative investment in electric vehicle charging infrastructure could be required in Europe by 2030, of which €9 billion would cover publicly accessible chargers. While electricity grids will need modernisation, smart charging could be used to mitigate the costs. Taking Germany as an example, instead of an increase of peak demand by 22 GW in a worst-case scenario in 2050, smart charging can avoid such an increase almost completely. The costs of implementing smart charging can be more than offset by the value created by connected electric vehicles providing services to the network operator. By 2030, the smart-charging benefits per electric vehicle would be around €100 per year.
Pete Harrison, Transport Programme Director, European Climate Foundation “It is not every day that you reach consensus between industry and civil society, but in this case, all agree that the European auto industry needs to remain at the cutting edge of clean technology innovation to remain competitive in a rapidly evolving market. This consensus-based project also shows that Europe’s economy will profit from the transition from a mobility system fuelled with imported oil to one that is driven by domestically-produced renewable energy. However, there are many transition challenges along the way, including for workers, and care must be taken that nobody is left by the roadside.”
Jean-Philippe Hermine, Environment VP, Groupe Renault. “This valuable study is the result of a collaborative and fruitful job between major players of the Transport and Energy sectors. The electric vehicle is a mature and fast spreading solution. Neither the climate nor the air quality can wait. This study highlights also their positive contribution to the European economy in terms of wealth and employment. It is now time for all to combined efforts and accelerate this positive transition.”
Monique Goyens, Director General of The European Consumer Organisation (BEUC). “Civil society groups and businesses are on the same page that decarbonising our transport is an opportunity for Europe. Consumers will most definitely benefit from a change to low carbon transport. For example, cleaner cars will lower fuel consumption costs, better protect the environment and improve public health. We urge policy-makers to take note of today’s research and adopt ambitious measures at the EU and national level to spur this transition.”
Luc Triangle, General Secreatry, IndustriAll European Trade Union. “Decarbonisation of transport will have a huge impact on the employment structure of the sector. New jobs will be created, especially from the move to hybrid vehicles over the next decade, but others will be lost in the longer term as we move to battery electric cars. This requires permanent monitoring in order to anticipate the social consequences of structural change. This study is extremely useful in this respect.”
Eric Sebellin, VP Hydrogen Energy Markets, Air Liquide. “The transport sector is responsible for a large share of carbon dioxide and particles emissions. Reducing vehicles’ carbon footprint is a necessity to make our cities a better place to live in. Hydrogen is part of the solution and an essential resource to achieve the transition towards low-carbon energy system because it can be used to store and transport wind, solar and other renewable electricity, notably to power transportation. Enabling rapid large-scale deployment of zero-vehicles, through a combination of battery-electrical cars and hydrogen-powered vehicles, will make mobility cleaner while bringing benefits for economic welfare in Europe.”
Patrik Ragnarsson, Senior Manager Automotive & Transport Group, European Aluminium. “The shift towards low carbon mobility has an impact on many areas of the economy. This report brings a lot of understanding to some of the potential challenges that lies ahead like investments in charging infrastructure, power generation and battery production. The aluminium industry is continuously innovating and we are determined to work together with all stakeholders to find solutions to future societal needs.”
Michel Derdevet, Secretary General, Enedis. “This report demonstrates that the transition towards a low-carbon mobility requires a holistic and European approach. The distribution network is a major vector of this clean mobility revolution. In order to better facilitate the energy transition, we need to optimise the public charging infrastructure development which will limit the need to reinforce the network at local level. We also need to foster the “smart charging” development which will considerably reduce the connection costs and length of the charging stations to the distribution grid.”
Greg Archer, clean vehicles director, Transport & Environment (T&E). “Europe is lagging behind in the electromobility race and for the sake of our economy and environment needs to catch up. We need ambitious goals to drive carmakers to produce and sell more zero-emissions vehicles in Europe, not just in China, where their efforts are currently directed in order to keep manufacturing jobs at home. This report shows that low carbon cars are good for jobs, drivers and the environment – but zero carbon cars are better! Setting a 2025 target for new car CO2 emissions, as proposed by the European Commission, is a key milestone in the race to become the leaders in decarbonising cars.”
Rene Schroeder, Executive Director, EUROBAT. “The report confirms the importance of hybridisation and electrification and the contribution of batteries, also for jobs and growth. It is clear that to decarbonise our transport sector we will need to keep working on the development of all battery technologies for different vehicles in Europe, from start stop and mild hybrid to full electric vehicles.”
Folker Franz, Senior Vice-President, ABB. “ABB is committed to writing the future of clean transport. Technological advances in e-mobility are accelerating, and Europe needs a rapid expansion of high-capacity charging infrastructure now. It is also time to think about the effects of electric vehicles on power grids: the industry and policy-makers need to work together on smart charging, targeted network upgrades and deployment of new digital solutions that better match electricity consumption and demand.”
Notes to the Editor:
- Including the EU’s contribution to emissions from international aviation and shipping, transport emissions now represents 27% of the EU total, making it the biggest emitting sector. As such, it has a key contribution to make to decarbonising the European economy if Europe wants to fulfil its commitments under the Paris agreement.
- Fuelling Europe’s Future: How the transition from oil strengthens the economy: https://europeanclimate.org/wp-content/uploads/2018/02/FEF_transition.pdf
- Renault-Nissan, the European Consumer Organisation (BEUC), IndustriAll European Trade Union, Air Liquide, European Aluminium, Enedis, Transport & Environment (T&E), EUROBAT, ABB, BMW, Lease Europe, Michelin, Valeo, ETUC. The information and conclusions in this report represent the contributions of the different stakeholders, but should not be treated as binding on the companies and organisations involved.
- Low-carbon cars in Europe: A socio-economic assessmen (technical report): https://europeanclimate.org/wp-content/uploads/2018/02/Fuelling-Europes-Future-2018-v1.0.pdf
Audrey Gueudet, Senior Strategic Communications Associate, European Climate Foundation, M +32 494 03 20 27, email@example.com