Policy options for sustainable mobility: the road to decarbonisation

Author(s): Andrei Marcu, John Cooper, Chiara Cavallera

ERCST’s paper focuses on regulatory aspects in the area of climate change. It does not attempt to determine the contribution of climate change regulation to the current situation, but rather to put forward new ideas on how climate change objectives can be better achieved, therefore, the focus is on policy options to meet climate change objectives. The goal is to create a policy environment that attracts and retains investment in advanced vehicle technologies, sustainable fuels, and supporting infrastructure, thereby strengthening the EU’s industrial base and ensuring that the transition to climate neutrality also delivers economic and social benefits.

Takeaways
There are a number of overall takeaways that we can highlight:
•⁠ ⁠Electrification, especially from low-carbon and renewable sources, has a clear advantage for climate impact, for intrinsic co-benefits such as clean air, noise pollution, the inherent efficiency of electric powertrains, and also falling costs of power generation from wind and photovoltaic solar sources. This is a clear direction of travel and market forces are likely to embrace electrification for a majority of road transport applications. But where a choice is possible for manufacturers and customers/users, other innovative alternatives could emerge where cost-effective.
•⁠ ⁠Certain sectors are still technologically challenged in moving from molecules to electrons, e.g. aviation and maritime. Competitive solutions may develop differently across markets depending on technological readiness, cost-effectiveness, and customer preferences.
•⁠ ⁠While electrification is likely to dominate in the road sector, the main challenges need to be recognized: public/customer/user take-up issues linked to charging infrastructure and costs. Also, availability of low-carbon energy in the face of increasing electricity demand from the overall increase in electrification, in some jurisdictions. These challenges are real, and the pace of the transition cannot be separated from the KPIs related to the success in meeting these two challenges. It may lead to promises that we cannot keep to the population in need of transportation.
•⁠ ⁠To ensure a sustainable transition all options need to be kept on the table in a manner commensurate with the real speed of decarbonization, the different technologies used, appropriate for different applications, and market adoption of these technologies. For illustration purposes, aviation (especially long-haul flights, heavy cargo) and military will continue to utilize molecules, and biofuels and synthetic (e-fuels) are likely to provide the needed solutions. So far, aviation and maritime policies have mostly failed to support e-fuel and advanced biofuels project investment. This is a missed opportunity. The fuels industry has consistently stated that enduring demand from road transport is necessary to support of development of these high-technology-risk projects.
•⁠ ⁠Enabling flexibility for the sustainable transition, such as crediting for low carbon materials, can also provide a good impulse to help launch markets for low carbon products. As well as steel, other sectors such as aluminum and plastics may benefit from comparable mechanisms, encouraging investment, innovation, and the scaling of low-carbon solutions across a wider range of materials.
•⁠ ⁠The steps that are being taken need to be decisive and clear, as they will give signals to both consumers and producers. Flexibility needs to be meaningful and enduring, as temporary measures are not investable. Overall direction needs to be clear, with environmental targets, but with the how left to the producer and customer. Technology neutrality is now enshrined in the Climate Law and letting markets and innovators respond to these signals will ensure efficient, scalable, and timely decarbonization.
•⁠ ⁠The outcome that matters is the concentration of CO2 in the atmosphere, which as a matter of policy should require that all regulation is based on LCA principles, not one that relies on a narrow methodology pre-determining a single technology. This aligns with the objectives of the Paris Agreement, which focuses on limiting global temperature rise rather than prescribing specific technologies, emphasizing that policy should prioritize effective emissions reductions while allowing flexibility in how different sectors achieve decarbonization. It is also consistent with the “Net-Zero” objective of the green deal as this simple expression describes a LCA methodology.
•⁠ ⁠The Industrial Accelerator Act introduces new elements in the EU regulatory framework. While creating demand for low carbon products is necessary to complement existing policies, it may also increase costs, and its long-term effects remain uncertain.