The recent back-flip by the European Union (EU) of its proposed banning of sales of new ICE (Internal Combustion Engine) vehicles by 2035 is a prime case why governments and regulators, should not attempt to pick winners when it comes to technology and technological solutions for industry.
The EU made its original decision to ban sales of new ICE vehicles by 2035, presumably based on social pressure and/or ill-informed advice.
The automotive industry’s voice was largely ignored, well at least initially.
As the legislation to ban ICE vehicle sales was being developed, one prominent EU country, Germany, realised that the impromptu ban would scuttle several promising zero emission vehicle technologies.
Germany, followed by a number of other EU countries, including Italy, Poland, Bulgaria and the Czech Republic, objected to the proposed ICE ban.
Together, these countries forced significant changes to proposed legislation, that saw the original ICE ban melt away. However, the carbon abatement outcome of the original plan has been retained.
So how did such an ill-conceived plan eventuate in the first place, why did the plan unravel and what is the EUs new position on ICE-powered vehicles?
The original European plan to ban the sale of new ICE engine vehicles by 2035 was developed in June 2022 by the European Commission and had initial support from all EU parliaments.
The proposed new rules would not mean that all cars on the road have to produce zero CO2 emissions by 2035.
The draft plan did not affect existing cars. If a consumer purchased a new ICE vehicle prior to 2035 they would be able to drive it until the end of its lifespan.
But, because the typical life span of a motor vehicle in Europe is 15 years, there was a need to start the exclusive sale of new zero emission vehicles in 2035 in an aim for all cars to be CO2 neutral by 2050.
However, the plan limited new vehicle sales from 2035 onward to be only battery, or hydrogen, electric.
Vehicle manufacturers objected to this, arguing that other technologies could also provide a carbon neutral transport solution. In particular, ICE engines powered by green hydrogen and renewal fuels.
Further, vehicle OEMs pointed out that the EUs grand plan was most likely unachievable, with the pathway to mining enough raw materials to manufacture only battery, or hydrogen, electric vehicles by 2035, as yet unknown.
While plans for the electrical power generation and the transmission grid expansion that would be required across Europe to support the peak demand for recharging the number of battery electric vehicles that the original 2035 zero emission plan would spawn was also unidentified by European governments.
The German Government saw that the issues raised by industry were valid and that the original proposal was technology limiting and Germany, along with some other concerned EU countries argued for an alternate plan.
A plan that would be driven by outcomes and not by specific technologies.
The new plan that was agreed to by the 27-nation European bloc in late March 2023 now acknowledges the broader benefits that renewable fuels can provide, both across the existing vehicle fleet as well as new ICE powered vehicles, with the potential of significantly reducing road transport sector CO2 emissions.
The final plan ended weeks of discussions following the pushback by Germany and some other EU countries, who rightly pointed out that the original proposal was technology limiting.
The key element of the bloc’s new climate plans is that 2035 will mark the start of sales for 100 percent zero emission vehicles and new fossil fuel vehicle sales will be banned. This means that battery electric, or hydrogen fuel cell vehicles will need to be sold beyond 2035.
However, the changes to the original plan will now also allow the sale of new ICE powered vehicles that run on carbon-neutral fuels, or ICE engines that even run on green hydrogen.
The plan is now about the emission result and not the specific technology required to achieve a zero-emission outcome.
Let this EU about-face be a lesson to governments across Australia, not to attempt to pick winning technologies, but rather set the policy outcomes that they require and let industry come up with a range of technical solutions to achieve those targets.
Tony McMullan CEO,
Truck Industry Council
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