EU wants to stimulate EVs and ‘punish’ ICE even more
European Commissioner Frans Timmermans, EVP for the Green Deal, has plans to stimulate the transition to electric vehicles even more. At the same time, polluting engines (ICE) will be taxed increasingly.
In an interview with the Financial Times, Timmermans explains that it’s time to act if the EU wants to reach its target of a 55% reduction of CO2 by 2030 and be climate neutral by 2050.
New rules in the pipeline
According to Mr. Timmermans new, more stringent emission rules will be applied for the new cars put on the market in the following ten years. Manufacturers will also have to pay for putting polluting engines on the market.
“We will have to act on two levels if we want to favor the introduction of electric vehicles,” says Timmermans. First, on the 14th of July, the EU Commission will propose 10 different measures to obtain that result as quickly as possible.
The EU wants to install a system where distributors of oil or gas will pay a higher price through a system of emission trade. The aim is that companies will be forced to look for less polluting alternatives.
The European citizen won’t be taxed directly for his use of energy. Still, it’s almost certain that the distributors will recalculate their prices to compensate for the emission rights they will have to pay.
Of course, the European Parliament and the 27 member states will have to agree with it afterward. But, according to Timmermans, the car industry has now really embraced the idea that it has to become very low on CO2 emissions.
“There will always be discussions on the pace of the transition, but I’m convinced that everybody knows which way we have to follow.”
The poorest regions have criticized the principle of the polluter paying the bill in the EU. The planned measures would hurt the citizens/consumers with the smallest revenue most.
Those people don’t have the necessary means to go for the electric transition or opt for green transport alternatives. That’s why Timmermans also wants to convince the EU to install a system that supports those who are the most hit by the new rules.
“The sense of urgency about the climate isn’t the same throughout Europe,” Timmermans admits. “If your first worry is to be able to reach the end of the month financially, the future of the earth is not something one thinks about every day.”
Kathleen Van Brempt (Vooruit), Belgian MP in the European Parliament, is also worried: “By starting a trading system on emissions, the cost for the common consumer will rise without there being affordable alternatives,” she says in the newspaper De Tijd.
“To make the Green Deal a success, we have to invest a lot more so that everybody can profit from it.” In Belgium, consuming oil, gas, or burning wood is hardly taxed. However, the Belgian taxpayer is taxed six times more for electricity, the biggest difference throughout Europe.
The car industry reacts
Due to the fusion plans of FCA and PSA into Stellantis, Stellantis CEO Carlos Tavares has been very quiet the latest months, but now he’s on it again. In a week, he has to present his electrification plan for the Stellantis group.
In a reaction to the EU rules to be “significantly strengthened”, Tavares points out that there is a big chance that ICE cars will be phased out earlier. “The 2035 line will probably win,” he says. “Moreover, there are a growing number of local authorities which want to go even quicker.”
“We would be blind and deaf not seeing or hearing what is happening around us,” Tavares continues, ” but we have to take responsible and future-proof decisions.”
He points out that the investments in R&D and gigafactories to produce the batteries are gigantic. “In 2025, I will probably need a 250 GWh production capacity; right now, only 48 GWh are being built (in France, Germany, and Italy).
Will the consumer follow?
Tavares is even more worried about the reaction of the consumer. “The consumer will follow if two conditions are fulfilled, but that’s not the case right now,” he points out.
“Regarding charging infrastructure, Europe is building up the delay. Secondly, at the moment, it’s not yet feasible to offer affordable electric cars for the customer and at the same time economically profitable for the manufacturer.”