Mark’s EU Week for Transport
Mark speaking at the Global LNG Bunkering Summit in Amsterdam
The word revolution is overused, especially in transport, but what’s happening now in terms of moving away from fossil fuel powered transport, on both sides of the channel and across the globe, is nothing short of a revolution, on par with the invention of the internal combustion engine. This transport revolution is already generating huge challenges, but also huge opportunities, especially for those that adapt early and work innovatively to develop and deploy the technology decarbonisation requires along the entire supply chain.
For the first time global ambitions and lofty goals are being replaced by detailed and time defined laws. The UK has launched their ‘Transport Decarbonisation Plan’, a plan to decarbonise the entire transport system in the UK, and has just published their ‘Powering Up Britain: Net Zero Growth Plan’, and the EU has launched their ‘Fit for 55 Package’, and a series of other measures, such as the ‘Net Zero Industry Act’. And of course, in the US we’ve seen the launch of the ‘Inflation Reduction Act’. All of these are currently producing an unprecedented volume of new, complex and increasingly inter-related regulations and new taxes, charges and public resources, to force and fund the shift to zero carbon transport.
What does it all mean in practice? Well, the most significant example of the scale of the ambition is the legal requirement to ban the sale petrol and diesel cars, in the case of the UK by 2030, except for certain new hybrid cars which can be sold until 2035. The EU’s plan sets 2035 as the end date for new fossil fuel car sales, with the exception for e-fuels.
Similar laws are being prepared and agreed now for ships, aircraft, lorries, buses and coaches. For example, EU ETS will be extended to most larger ships, irrespective of flag, entering EU ports from next year, and will continue apply to all intra-European flights – including departing flights to the UK and Switzerland – but the free emission allowances will be phased out by 2026. Meanwhile, ICAO’s CORSIA will apply to extra-European flights to and from third countries participating in the global scheme from 2022 to 2027.
Just in the past few weeks new detailed EU laws on the provision of recharging and refuelling stations for alternative fuels has been agreed, together with rules for the compulsory use of alternative fuels for shipping, including new requirements for onshore power, and a revised Renewable Energy Directive.
Many of these regulations will directly apply to UK interests, particularly if you wish to trade with or operate within the EU or EEA, and the EU’s standard setting global impact means that the UK has little scope to diverge. Indeed, the recently adopted Windsor Framework will now bring the EU and UK in general, and regulatory co-operation and alignment in particular, much closer together. And in any event to succeed in achieving our climate ambition, of limiting the global temperature rise to 1.5°C to prevent catastrophic climate change, we must work together through UK initiatives such as the Accelerating to Zero Coalition (A2Z), which is working to ensure all sales of new cars and vans being zero emission globally by 2040, and by no later than 2035 in leading markets.
This revolution is being televised, but it’s still fiendishly hard to track. Consequently, one of our priorities this year is monitoring these regulatory developments and providing our members with comparative analysis and insight, so they can stay on top of, and play their full part in delivering this historic shift to zero carbon transport.
1. UK publishes Powering up Britain: Net Zero Growth Plan
The UK Government has published an ambitious plans to scale up affordable, clean, homegrown power and build thriving green industries in Britain, titled ‘Powering up Britain: net Zero Growth Plan’. The document, drawn up after the High Court ruled the government’s existing plans were not sufficient to meet its climate targets, brings forward more detail about the UK’s plan to reach net zero, such as providing a strong focus on carbon capture and storage. The document includes an entire chapter on transport, which discusses progress in decarbonising aviation and maritime, and shows how the government intends to further accelerate the pathway towards decarbonised aviation and maritime sectors. The transport elements of this plan build on the previously published Transport Decarbonisation Plan published in 2021.
2. EU published Net Zero Industry Act
The European Commission has published a proposal for a regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act). The proposal sets a goal for the EU to domestically produce at least 40% of the technology it needs to achieve its climate and energy targets by 2030. The proposed law aims at speeding up permitting and increasing access to finance for clean tech. Supported technologies include solar, wind, batteries and storage, heat pumps and geothermal energy, electrolysers and fuel cells, biogas/biomethane, carbon capture, utilisation and storage, and grid technologies.
3. UK government opens consultation on zero emissions vehicles
The UK government has opened a consultation on ‘A zero emission vehicle (ZEV) mandate and CO2 emissions regulation for new cars and vans in the UK’, which will be open until 24 May 2023. Following the technical consultation on the design of the ZEV mandate for new cars and vans in June 2022 and the green paper on a new road vehicle CO2 regulatory framework in July 2021, the Government is now seeking views on the final proposed regulatory framework.
According to the consultation description, the following specific elements are being consulted on:
– the level of ZEV uptake (trajectories)
– how allowances and credits could be allocated and used
– flexibilities including banking, borrowing and transfers between schemes
– derogations and exemptions
– how to regulate the non-ZEV portion of the fleet
– how the ZEV mandate and non-ZEV CO2 regulation interact
4. The Renewable Energy Directive, Fuel Maritime EU and the revision of the Alternative Fuel Infrastructure reach trilogue agreement
Three files form the EU’s ‘Fit for 55’ package, the revision of the Renewable Energy Directive, FuelEU Maritime and the Alternative Fuel Infrastructure Regulation, have reached trilogue agreement during the last two weeks.
The provisional agreement for the revision of the Renewable Energy Directive the share of renewable energy in the EU’s overall energy consumption to 42.5% by 2030 with an additional 2.5% indicative top up that would allow to reach 45%. On transport, the agreement gives the possibility for member states to choose between:a binding target of 14.5% reduction of greenhouse gas intensity in transport from the use of renewables by 2030 or a binding share of at least 29% of renewables within the final consumption of energy in the transport sector by 2030. The agreement also sets a binding combined sub-target of 5.5% for advanced biofuels (generally derived from non-food-based feedstocks) and renewable fuels of non-biological origin (mostly renewable hydrogen and hydrogen-based synthetic fuels) in the share of renewable energies supplied to the transport sector. Within this target, there is a minimum requirement of 1% of renewable fuels of non-biological origin (RFNBOs) in the share of renewable energies supplied to the transport sector in 2030.
The provisional Fuel Maritime agreement, increasing the reduction targets for the greenhouse gas intensity of energy used on board by ships as from 1 January 2035 and introducing measures to encourage the use of renewable fuels of non biological origin (RFNBO). The proposal aims to put maritime transport on the trajectory of the EU’s climate targets for 2030 and 2050 and should play a fundamental role in delivering on the European climate law.
The provisional agreement for the Alternative Fuel Infrastructure Regulation sets in place more recharging and refuelling stations for alternative fuels to be deployed in the coming years across Europe enabling the transport sector to significantly reduce its carbon footprint.
5. Timetable of key EU dates for transport and supply chain developments:
- 13 April 2023: Next TRAN Committee meetings of the European Parliament.
- 1 June 2023: Meeting of EU transport ministers (Transport Council).
UK Transport in Europe (UKTiE)