Is EU playing with our net zero future?

By Martin Lundstedt, President and CEO Volvo Group and Chairman of ACEA Commercial Vehicle Board

We are powered up and on our way towards rapid decarbonization of road transport in Europe, its biggest transformation yet and a technological turning point in its history. Growing fleets of battery-electric trucks are now running across Europe's highways. Commuters travel through our cities in electric buses and urban construction sites with zero-emission machines operating in near total silence. We are on track for Europe to be the first and only world region to go fully fossil-free by 2040.

But our ambition and this development are now in political limbo with the Euro Vll proposal for new pollutant emission standards for trucks and buses. As both a leader of a global manufacturer of trucks and buses — and representing the EU commercial vehicle industry in my role as Chairman of ACEA (European Automobile Manufacturers' Association (ACEA)) — I am deeply worried.
 

Let's look at why we believe Euro VII in its current form will actually slow down the transition to zero-emission transport and climate neutrality.

As it stands today, the proposal completely neglects the rapidly accelerating shift to zero-emission vehicles and ignores the effect of coming future CO₂ targets for heavy-duty vehicles. Recent studies, which take account of our industry's decarbonization trajectories, have shown that Euro Vll will only provide very marginal additional benefits to air quality.

Euro Vll sets major roadblocks for manufacturers, and our partners in the supply chain, to continue with their rapid shift to zero emissions. To comply with the proposal, truck makers would be forced to move substantial engineering and financial resources from battery- and fuel-cell electric vehicles back to the internal combustion engine. It would not only put the brakes on our rapidly advancing electromobility roadmap but potentially set it into reverse gear. It is not good for the industry, not good for the climate, and certainly not good for people's health and well-being.

In its justification for the Euro Vll proposal, the European Commission states that only 1 in 10 of all new trucks will be zero-emission by 2030, and not even every second new truck will be battery- or fuel-cell electric by 2040. But those of us in the industry aim much higher. At Volvo Group we are committed to net zero greenhouse gas emissions across trucks, buses, construction equipment, and marine solutions by 2040. We are already moving from words to action with series production of electric trucks, buses, and construction machines. In fact, all truck manufacturers under the umbrella of ACEA have concluded that carbon neutrality by 2050 implies that by 2040 all new commercial vehicles sold must be fossil free and the new zero-emission powertrain technologies will have to become the backbone of road freight transport.

It has always been the case that technology — whether we are talking about battery-electric, fuel-cell electric, or hydrogen-powered trucks — is only one part of the solution for delivering sustainable transport. Coherent policy is the other. Our sustainable transition, and the speed of it, heavily relies on an articulated policy framework that includes the right charging and refueling infrastructure, supportive and well-synchronized vehicle regulations, and a comprehensive carbon pricing mechanism.

We need a streamlined, holistic approach to the massive transition to zero-emissions that our industry is undertaking. Euro Vll and CO₂ standards for heavy-duty vehicles cannot be looked at in isolation from one another. Indeed, the CO₂ standard for trucks will require massive investment in electrification, which in turn, will also tackle emissions of particulates and NOx.

While other regions are providing massive incentives to support the transition, Europe is trying to regulate its way towards zero-emission mobility, and that is not even being done in a harmonized way in the EU.

Euro Vll comes at a time when major markets like the US are establishing a policy framework which aims to accelerate the transition to fossil-free alternatives by creating an attractive investment environment. The Inflation Reduction Act (IRA) in the US creates massive incentives to focus on battery-electric and hydrogen powered vehicles.

ACEA's truck manufacturers are truly global companies with their home bases in Europe. We want Europe to lead the transition.
 

So, what is the way forward?

Our net zero future hangs in the balance — and the positive momentum of the EU Green Deal is grinding to a halt — while policymakers are set to debate a proposal which threatens to leave us without an effective policy approach focused on decarbonizing road transport.

Now it is up to the European Parliament and member states to define their positions on the Euro Vll proposal. They have the chance to support Europe's truck makers in implementing a policy framework that helps us and our customers accelerate our transition, focusing on accelerated fleet renewal and prioritizing investments in zero-emission vehicles, which will have a far bigger impact on both air quality and CO₂ emissions. We trust that they will ensure a balanced approach, supporting the transport sector on the road to zero-emission vehicles.

 

The decisions that will be taken will have an impact. Let's make sure they are positive for Europe.

Martin Lundstedt, President and CEO Volvo Group and Chairman of ACEA Commercial Vehicle Board

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