How The EU Ban On Combustion Engine Cars Affects The Automotive Industry?

In July 2021, the European Union rolled out an ambitious proposal to effectively ban the sale of new petrol and diesel cars from 2030 onwards. Hoping to accelerate the switch to zero-emission electric vehicles (EVs), the Fit for 55 package was an aggressive legislation to combat greenhouse gas emissions.

The European Commission proposed cutting carbon dioxide emissions by 55% cut by 2030 – compared to 2021 levels. These measures were tougher than the existing climate policy framework that targeted a 37.5% reduction.

VHR's Automotive & Motorsport experts look at the real-world effects of the ban, understanding the impact it will have.

Not everyone is on board with the new legislation -

The ACEA (European Car Industry Association) strongly suggests that banning combustion engines for EVs is not a feasible way forward, believing that hybrids and hydrogen-powered vehicles must be included in this transition. Additionally, the ACEA countered a 100% reduction in carbon dioxide emissions by 2035 - after which it would not be possible to sell new fossil fuel-powered cars in the bloc.

A threat to Europe’s thriving car manufacturing industry -

Electric cars indeed take less time to build but the difference isn’t as drastic as one may assume.

Where a combustion engine car’s transmission, exhaust system and motor have over 1,400 components, an EV’s engine and battery pack have approximately 200 components. However, while an EV lacks fuel lines and radiators, they do require additional assembly steps that a combustion engine does not require. A visit through the Magna Steyr assembly plant noted that the battery pack installation of an EV I-Pace required more steps and additional line workers for its installation compared to its gasoline version.

Since installation and systems are very different to a combustion engine, re-skilling is crucial if carmakers are to support the many European communities that rely on manufacturing factories.

Effect on the transport sector

Much of the new legislation has been proposed with the transport sector in mind – an industry that Europe has long struggled to decarbonise.

Going green and forcing a transition to cleaner fuels and technology would drastically alter the business operations of most transport companies. To assist and encourage the adoption of zero-emission cars, the EU Commission has proposed increasing fuelling and charging points along key routes. This would help alleviate one of the biggest concerns with electric vehicles; range. The EU’s targets are bold, with aims of adding charging points every 60 kilometres and hydrogen refuelling stations every 150 kilometres.

In aviation, Adina Vălean, the EU Transport Commissioner recommends that a green jet fuel mandate be imposed on all aircraft's refuelling at EU airports. This would make it mandatory for all kerosene to have a minimum of 5% sustainable aviation fuel by the end of the decade.

With shipping, the FuelEU Maritime regulation proposes increased sustainable maritime fuels and setting a greenhouse gas limit on ships that dock at any of the bloc’s ports.

There are currently no end-of-life plans

An important question arises as to what happens to the old internal combustion cars that will be pushed out of the market and deemed obsolete when the ‘Fit for 55’ legislations are rolled out. Currently, the legislation package does not include any details on end-of-life plans for the vehicles scheduled to be phased out.

The EU’s second-hand market remains undeveloped when compared to the US and many segments of the bloc’s society can only afford cheaper used vehicles. To ensure that the new legislation is all-inclusive, there must be support networks that ensure the transition is smooth and assured for all.

Hydrogen’s potential mustn’t be ignored

Other proposals mention the potential of hydrogen-powered vehicles for future use. However, there is no conclusive way forward on the subject and it is unclear what types of vehicles could be powered by hydrogen.

Although there is a strong hydrogen push by some car manufacturers including Toyota and Hyundai, there is still a lot of scepticism about the real-life viability of hydrogen-powered vehicles. The dangers of refuelling as well as the huge infrastructure challenge remain two of its biggest obstacles. Currently, the EU has about 200 hydrogen stations and 2,000 hydrogen-powered vehicles.

However, the vast benefits of hydrogen mean it should not be so easily dismissed, especially with carmakers developing fuel cells that are lighter and smaller. A future where European roads feature both hydrogen and electric vehicles would be an ideal – and green - way forward.

A growing need for clean electricity

As the world commits to decarbonisation, electricity demand is expected to grow. A report by the International Energy Agency forecasted demand to grow by 5%. Roughly half of this demand will be met by fossil fuels like coal – which may bring CO2 emissions to record levels in 2022.

Meeting this increased demand will require a large infrastructure revamp and increased use of renewable sources of energy. If EV's are to take centre stage on EU roads, expect consumers to charge vehicles at home with multifamily stations while businesses, supermarkets and gas stations will scale up charging infrastructure. Obviously, for an EV only mandate to be successful, there must be equitable and convenient charging options.

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