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EU plans carbon credits, not quotas to promote EVs

EVs

The European Union proposal will address some issues with EVs, including battery development and lack of charging infrastructure.  Nissan photo.

Automakers call for conditional compliance based on consumers’ demand for EVs

According to a Reuters report, a proposal by the European Union to increase the use of electric vehicles will focus on carbon credits that automakers can use to offset emissions targets, rather than quotas.

The proposal is expected to be released on Nov. 8, according to Reuters’ sources.  In it are new standards for cars and vans beyond 2020 aimed to help the EU achieve its goal of a reduction in greenhouse gas emissions of at least 40 per cent of 1990 levels by 2030.

The sources tell Reuters that the European Commission’s draft law will call for a 25-35 per cent reduction in average CO2 emissions in passenger car fleets by 2030 and 30-40 per cent for vans.

Final target figures will be determined during a high-level discussion among EU commissioners, closer to the release of the proposal.

So far, European carmakers are lobbying for a 20 per cent cut and are calling for compliance to be based on consumer demand for EVs.

But, in the wake of Volkswagen’s dieselgate, EU regulators are facing pressure to put in place tougher controls over car industry emissions.

The EU proposal addresses some concerns manufacturers have over EV infrastructure.  The plan calls for €800 million in funding to be divided amongst governments, regions and cities to build charging stations.  As well, €200 million will be earmarked for battery development between 2018 and 2020.

According to Reuters sources in the US and EU, the carbon credit initiative was inspired by discussions with California regulators.  Many see California as home to the leading laboratory for policy on EVs.

In a shift from California’s zero-emissions policy, the EU plan does not include mandates, nor will the carbon credits be tradable.

Instead, the credits will be based on carmakers’ performance against a benchmark for sales of low-emissions vehicles as a percentage of their fleets, according to Reuters’ sources.

“Beyond setting a general emission-reduction target for cars and vans, we are considering, for the first time, different kinds of incentives to accelerate the penetration of clean vehicles … Personally, I do not like mandates or quotas,” said Europe’s climate commissioner Miguel Arias Canete.

He added that a crediting system without production quotas will “allow a more flexible approach, which would provide a continuous incentive for innovation.”

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