EU CO2 regulation for trucks and buses: vehicles are not the bottleneck, it’s all about enabling conditions
The EU is moving forward with revised legislation on CO2 reductions for trucks, buses, and coaches, collectively known as heavy-duty vehicles (HDVs).
HDVs are vital for keeping essential goods, people, and the economy moving. They differ from passenger cars not only by size and weight but also by their individuality. They are tools serving a myriad of different uses, often tailored to the specific needs of logistics and public transport operators. As such, the legal framework to decarbonise HDVs with highly diverse applications must differ from that for light-duty vehicles such as cars and vans.
European policymakers are currently discussing the most ambitious and far-reaching legislation for HDVs globally, and truck and bus manufacturers are ready to play their role in decarbonising this essential sector. But in a B2B market where trucks and buses are tools to run independent businesses, transport operators will only switch to zero-emission models if they can operate them as seamlessly and as profitably as conventional diesel models.
While zero-emission HDVs are in series production for an increasingly wide range of uses, key factors essential for their market uptake – which are outside manufacturers’ control – are holding back their rollout in the EU. The lack of a dense network of suitable charging and refilling stations, effective carbon pricing measures, and a framework that supports and incentivises transport operators to transition swiftly are stymying vital demand for zero-emission models.
For instance, while the intent of the EU’s Alternative Fuels Infrastructure Regulation (AFIR) is commendable – setting ambitious targets for member states – it falls short of needs. It is anything but certain that the electric charging and hydrogen refilling infrastructure for HDVs will be available in time. Even where sufficient (electricity) grid network capacity is available today, timely implementation will be challenging. Furthermore, if permitting procedures are required to upgrade or access high-voltage networks, today’s implementation planning periods must be significantly accelerated.
Even if EU member states meet AFIR’s targets, a significant infrastructure gap will remain. To achieve the CO2 reduction targets proposed for vehicle manufacturers by 2030, 50,000 publicly accessible chargers (35,000 of which must be MCS (Megawatt Charging Systems) and 700 hydrogen refilling stations (with a daily capacity of two tonnes) are required. In the face of these challenges, several manufacturers are even jointly investing in the ramp-up of truck-suitable charging infrastructure, but more must be done.
Similarly, a full range of support measures, including purchase incentives to invest early in zero-emission trucks and buses and the necessary charging/refilling infrastructure (also at private/semi-public depots), could also help alleviate the higher cost burden of zero-emission models and shore up much-needed demand in a strictly B2B market. Public procurement also plays a decisive role, as seen in urban bus investments. Even without regulation for vehicle manufacturers, the share of zero-emission buses has increased rapidly over the last few years thanks to strong demand-side measures.
Another key factor driving transport operator investment decisions is the total cost of ownership (TCO). Transport operators will only consider investing in battery-electric or hydrogen-powered vehicles if they can be operated as profitably as conventional vehicles. However, upfront investment costs will remain higher for zero-emission models than conventional ones. As long as fossil fuels, such as diesel, remain more cost-competitive than climate-neutral power sources, transport operators will not switch to zero-emission models.
Equally ambitious regulatory initiatives are needed that encourage and support transport operators to consider the benefits of zero-emission vehicle investments in their CO2-emission calculations. The CO2 regulation’s targets are minimum targets, which vehicle manufacturers can and will want to exceed if there is actual demand. The very least truck and bus manufacturers can ask for in a sensible policy framework is that enabling conditions are monitored very closely and annually to ensure everyone – upstream and downstream – is on the same trajectory.
Aside from better addressing enabling conditions, EU policy makers should also reconsider the proposal for new vehicle groups, such as medium lorries, heavy trucks with special axle configurations, buses, and coaches, which will become subject to CO2 reduction targets. The proposed CO2 reduction targets for these vehicle categories compared to a 2025 baseline are highly unlikely to be achievable. Therefore, wherever possible and where CO2 data are available, a new, earlier baseline (eg 2020), should be established.
The CO2 regulation’s key principle should remain: only vehicles with a CO2 value determined by the European Commission’s Vehicle Energy Consumption Calculation Tool (VECTO) should have reduction targets. Currently, only vehicles above five tonnes have officially determined CO2 values. Therefore, the scope of the regulation should be clarified accordingly.
Lastly, there is no doubt that the combustion engine will continue to play a long-term role in several heavy-duty applications. Therefore, Europe should pursue a pragmatic, progressive, and technology-neutral approach that ensures scalable solutions serve as the global pacesetter. The proposed CO2 rules for HDVs focus on the supply side only, which relies on vehicle manufacturers instead of stimulating market demand from customers. A healthy balance between both is essential for the climate-neutrality transition.
While zero-emission HDVs are in series production for an increasingly wide range of uses, key factors essential for their market uptake – which are outside manufacturers’ control – are holding back their rollout in the EU.