EU Commission Proposes First Ever HDV CO2 Standards

Earlier today, and as expected, the European Commission presented a legislative proposal setting the first ever CO2 standards for heavy-duty vehicles (HDVs) in the EU as part of a comprehensive package of measures. According to DG CLIMA, HDVs account for 25% of road transport CO2 emissions in the EU and are projected to grow by 9% alone between 2010-2030.

The overall legislative package, part III of the Commission’s “Europe on the Move” program,  is specifically directed and connected to meeting Paris Agreement targets. For those outside the EU and perhaps less familiar with the legislative and regulatory history, below is a timeline of actions the Commission has taken on mobility as it pertains to vehicles.

Timeline of the Commission’s Actions on Mobility

The Commission has proposed targets for average CO2 emissions from new HDVs as follows:

• In 2025,15% lower than in 2019
• In 2030, at least 30% lower than in 2019

The targets are translated into manufacturer specific CO2 emission targets in grams of CO2/km, which are defined on the basis of their fleet composition and characteristics. The targets will apply to four main groups of HDVs which account for about 65% to 70% of total emissions. The European Automobile Manufacturers’ Association (ACEA) had lobbied for a 16% reduction between 2019-2030, with a 7% target in 2025.

The 30% target for 2030 is aspirational and will be determined as part of the review to take place in 2022. The Commission says the review aims to (1) determine the target for 2030, (2) extend the scope to other groups of heavy-duty vehicles, i.e. buses, coaches, smaller lorries and trailers, (3) review the effectiveness of the modalities for implementation, for instance the incentive system for zero and low emission vehicles.

The legislative proposal also includes the following:

• Incentives for ZEVs and LEVs: An incentive system for zero- and low- emission vehicles, a system of “super credits” to help accelerate the market development for these vehicles. The proposal defines a “zero-emission heavy-duty vehicle” as a vehicle either without an internal combustion engine or with an internal combustion engine that emits less than 1 g CO2/kWh or that is emitting less than 1 g CO2/km1. A “low-emission heavy-duty vehicle” is a vehicle with specific CO2 emissions of less than 350 g CO2/km. This covers vehicles emitting less than about half the average fleet emissions. Manufacturers will benefit from “super-credits”. Each ZEV is counted as 2. Each LEV is counted up to 2 according to its CO2 emissions. To limit the risk of weakening the CO2 targets, a safeguard is foreseen so that the average emissions of a manufacturer are not lowered by more than 3% due to the super credits gained, according to the Commission.

• Zero Emission Buses: Zero emission buses, coaches and small lorries can also qualify for super credits with a lower cap of 1.5%, but are not included in the legislation. The reason is that their emissions are not yet certified under the Commission’s Certification legislation. But they will ultimately be included. The Commission says:

“Short-term action is needed. Many European cities are very interested in changing to zero-emission buses in particular to improve air quality. However, they face difficulties to finance new fleets of clean buses and also to find EU manufacturers. At the same time, the market is booming in China where there are already 200,000 electric buses in operation, with strong Chinese manufacturers. If EU manufacturers want to keep a competitive edge on buses, a market for clean buses is needed in Europe within the coming five years.”

• Real-World Emissions: The collection, publication and monitoring of real-world fuel consumption data reported by manufacturers, based on mandatory standardized fuel consumption meters will be required.

The Commission also proposed other measures in addition to the HDV CO2 standards that included those on road safety, autonomous mobility, fuel prices, weights and measures, among others. With respect to autonomous mobility, the Commission will support R&D and testing under its Horizon 2020 program with an investment of EUR 300 million. In addition, it will invest another EUR450 million under  the  Connecting Europe Facility to support digitization in transport in support to automation.

Lastly, there is an action plan to ensure the sustainability of batteries (the plan has not been posted yet). The Commission notes, “The Commission is committed to create a competitive batteries ‘ecosystem’ in Europe. Batteries are a key enabling technology for electro-mobility and energy storage. Europe has what it takes to become a world leader in sustainable battery technology. We are acting fast to establish an innovative, competitive and sustainable battery value chain, with large-scale battery cells production at its core.”

Improving HDV Efficiency Globally

What about HDV efficiency elsewhere? To date, only a handful of countries have set HDV fuel economy/GHG standards: Canada, China, Japan and the U.S. and each of these countries is in the process of setting tougher standards that will take effect around the 2020 timeframe. Mexico, India and Korea are looking to introduce them in the next year or two. The Global Fuel Economy Initiative (GFEI) has called for a 35% reduction in average fuel consumption of new HDV vehicles globally by 2035.

Road freight in heavy-duty trucking today accounts for more than 35% of transport-related CO2 emissions, and around 7% of total energy-related CO2 emissions, according to IEA. Tailpipe CO2 emissions  by region from 2000-2015 are shown by region in the figure below. Notice that emissions increased by nearly 50% in this time period, most notably in China, India, Latin America, Africa and the Middle East. This trend is expected to continue as these regions continue to grow economically which will further push freight travel and fuel consumption.

Tailpipe CO2 Emissions from Road Freight Transport by Region, 2000-2015

According to IEA, without further policy efforts, oil demand from road freight vehicles is set to rise by 5 mb/d to 2050. In its Reference Scenario, global road freight activity is expected to increase by a factor 2.4, driven by robust GDP growth, bringing up oil demand. Emerging and developing countries in Asia, in particular China and India, account for about 90% of the net increase in road freight oil demand over the projection period, equivalent to around 30% of total oil demand growth from all sectors.

Global HDV Fuel Demand

The global demand for freight transport continues to grow as economies grow and this will especially be the case in emerging economies in Asia and Africa. Thus, improving the fuel efficiency of HDVs is an increasingly important objective for policymakers and transport advocates around the world. Oil demand growth from road freight transport has outpaced that of all other sectors from 2000 onward, according to the IEA.

Road freight transport relies primarily on diesel, which accounts for more than 80% of its oil use; road freight alone accounted for about 80% of the global net increase in diesel demand since 2000. It makes up about half of global diesel demand today and, if left unchecked, will continue to grow significantly. According to the International Energy Agency’s (IEA’s) World Energy Outlook, energy demand is expected to increase 30% over the 2015-2040 period and as Figure 15 shows, much of that increase will come from diesel and jet fuel sorely needed for the road freight, aviation and maritime sectors.

Change in Global Oil Demand by Sector, 2010-2040, New Policies Scenario

Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.