The EU's vision: across the continent, cars will be able to tap into electric plugs and hydrogen, LNG and CNG refuelling stations

How Europe is shaping its future road transport fuel mix

With its new "clean fuels strategy" the European Commission is proposing the rollout of a standardised charging infrastructure that is supposed to finally unleash the long-awaited, large-scale introduction of electric cars on the European market. In addition, Brussels wants to see the build-up of a network of hydrogen, LNG and CNG refuelling stations for cars, trucks and ships. The goals are to reduce Europe's dependence on expensive oil imports, create jobs and decarbonise the transport sector. The initiative comes at a crucial moment for the transport sector, as biofuels, thus far the only successful renewable alternative to oil in road transport, are facing uncertainty as a result of new sustainability proposals. Sonja van Renssen reports from Brussels.

What's thrown a spanner in the works is the issue of indirect land-use change (c) Friends of the Earth Europe

The current share of renewable energy in transport in the EU is 4.7%, less than half of the 10% target that has been set under the EU's 2009 renewable energy directive for 2020. Virtually all of this renewable energy (4.4%) comes from biofuels. Other "green" alternatives, such as electricity and hydrogen, have hardly made any headway so far. Indeed until recently, member states had been planning to meet nearly all of their 10% target with biofuels. What's thrown a spanner in the works is the issue of indirect land-use change (ILUC), i.e. the phenomenon of forest being (indirectly) displaced by biofuel crops, which according to experts can make biofuels worse for the environment than fossil fuels.

In October last year, the European Commission unveiled proposals to tackle this problem. These would cap food-based biofuels (virtually all biofuels to date) at 5%. The idea of a cap at around this level is supported by Germany, France, Finland, Sweden, Slovenia and Cyprus. Others want to go further and introduce "ILUC factors" - these reportedly include Belgium, Denmark, the UK and the Netherlands. The European Parliament is just starting to debate the issue, but having called for ILUC factors in the past, it may be expected to toughen, not weaken, the Commission's proposal.

A parliamentary hearing took place on 20 February and ILUC is the main topic on the agenda for EU energy ministers when they meet in Brussels this Friday. However these debates will resolve themselves, it seems clear that first generation biofuels will have a smaller share of the European transport market in 2020 than expected.

Filling the gap

The question is what will fill the gap? The Commission is clear that it should not be oil. In a new alternative fuels strategy, called the "Clean Power in Transport Package", presented on 24 January, it points out that 84% of European oil for transport is imported with a bill of up to €1 billion a day in 2011. This has obvious security of supply and economic implications. The Commission cites research showing that about 700,000 net additional jobs could be created by 2025 through the introduction of "greener" cars. Most of the technologies that make cars greener are made in Europe. And then there is of course the EU's target of a 60% reduction in greenhouse gas emissions from transport by 2050, set out in its 2011 transport white paper, as well as the aim to reduce air and noise pollution.

The central element of the new package is a Directive mandating the roll-out of a standardised charging infrastructure for electric vehicles. The logic is simple: charging stations are not being built because there are not enough vehicles; vehicles are not sold at competitive prices because there is not enough demand; and consumers do not buy vehicles because they are expensive and the charging stations aren't there. With policy initiatives to date focused on fuels and vehicles, the Commission decided it was time to break this vicious circle with an infrastructure initiative.

In its new directive "on the deployment of alternative fuels infrastructure" the Commission proposes to mandate the rollout of a specific number of electric charging points in each of its 27 member states by 2020. The figures, which range from 150,000 in Germany to 1,000 in Malta, are calculated based on each member

"What the EU has proposed for electric charging is more comprehensive than any member state so far"
state's share of the total European car fleet, their level of urbanisation (since electric cars are thought of mainly in an urban context), and the total number of electric vehicles expected in Europe in 2020, times two since each vehicle is assumed to require at least two charging points. Crucially the Commission assumes a fair spread of electric vehicles across the continent i.e. it does not distinguish between member states that currently have plans for electric cars and those that don't. Nor does it consider the development of infrastructure to date. Ten per cent of the total number of charging points would have to be publicly accessible.

As well as mandating an infrastructure rollout, the Commission proposes to legislate for one standard plug: "Type 2", which is the most widely used plug in Europe today. France is the only country using a different one.

The required investments represent €8 billion of a total of €10 billion in investments in alternative fuel infrastructure forecast to be needed to 2020. But the proposals do not neglect other fuels. The Commission proposes a dedicated action plan for the development of LNG in shipping: it wants LNG refuelling stations in all 139 major EU ports (maritime and inland) by 2025.

LNG refuelling stations would also have to be installed every 400 kilometres along Europe's biggest roads, to be used by trucks. Compressed Natural Gas (CNG) stations, which already cater to some one million vehicles, would have to be installed at maximum distances of 150 kilometres. For hydrogen, which is still much smaller scale, the Commission proposes requiring the 14 member states that already have refuelling stations to build more at distances of no more than 300 kilometres apart to create an interconnected network under a single standard.

The only fuels which are not affected by the proposal - because they do not require any new infrastructure - are biofuels, liquid petroleum gas (LPG) and synthetic fuels.
The Commission believes that member states can deliver everything "without necessarily involving public spending". They should rely instead on integrating infrastructure requirements into building codes, parking lot permits, fuel station concessions, procurement regulations, certification of business environmental performance, and access and charging laws. Member States are asked to develop national alternative fuels strategies to describe their plans.

Scaling up

Hydrogen, natural gas and electric vehicle advocates have all warmly welcomed the proposals. "The Clean Power proposal aims to address the main barrier to market - lack of a European-wide refuelling infrastructure network," said Pierre-Etienne Franc, Chairman of the Board of NEW-IG, an industry

"If biofuels cannot deliver so much, we'll have to do more on the side of fossil fuels"
association promoting fuel cell and hydrogen technology. "It addresses the main bottleneck of our industry," concurred Matthias Maedge, EU Affairs Manager and Head of the Brussels Office at the Natural & bio Gas Vehicle Association (NGVA Europe). "The LNG and CNG road targets are very likely to be achieved even before implementation into national law because we now have the political statement we needed." Avere France, representing electric vehicle stakeholders from carmakers to infrastructure providers, called the rollout targets "a positive signal" for its entire value chain that would turn electro-mobility into a "European reality".

What is the scale of the challenge? At least one form of natural gas, CNG, is already very well developed in parts of Europe, with few additional filling stations probably needed in Italy, Germany, Austria, Switzerland, The Netherlands and Sweden. In other countries, such as France and Spain, the infrastructure is on its way. "This is about filling gaps, not necessarily building several hundreds of new stations from scratch," explains Maedge.

LNG in contrast, is at an earlier stage of development, with only 38 road filling stations in Europe to date. But here too the road targets are "easily achievable", says Maedge. There is a strong business case because the fuel is envisaged for trucks travelling up and down Europe's main transport routes. LNG for shipping and hydrogen are at a still earlier stage of development.

"What they've proposed [for electric charging] is more comprehensive than any member state so far," says Ron van Erck, European Public Affairs Director at infrastructure specialist Better Place (see EER's recent interview with ex-CEO Evan Thornley for more about the company and its European vision). Apart from the rollout targets, Van Erck welcomes the standardised plug and the proposal to enable separate electricity billing for cars and households. This would let a company like Better Place provide a full service inclusive of electricity and give it the access it wants to long-distance drivers, which it believes are the most lucrative market segment. In view of its long-distance focus, Better Place suggests introducing a distinction in how different types of charging points - slow, fast and battery switch stations - count towards the rollout targets, based on their refuelling capacity.

At least two debates are expected: over the standardised plug and public funding. Opposition to the plug is expected from France, with Avere France already pointing out that national choice must be respected and adapter cables for interoperability exist. A second debate is over public funding support for the infrastructure roll-out. Despite the Commission's insistence that no public money will be required, some industry players in the electric vehicle sector are not so sure. One potential source of funding is the EU's Connecting Europe Facility, which was severely cut however, as part of the EU recent budget deal for 2014-20. It remains to be seen exactly what funds will be available under this.

Pressure on oil

There is a second EU target driving the European fuel mix however, and that is the target for fuel suppliers to reduce their greenhouse gas emissions by 6% by 2020, relative to 2010, under the so-called fuel quality directive.

The central element of the new package is a Directive mandating the roll-out of a standardised charging infrastructure for electric vehicles (c) Pike Research
One could think that the controversy around biofuels would be good news for the oil sector, but the reverse appears to be true: it has increased the pressure to reduce emissions from oil. "If biofuels cannot deliver so much, we'll have to do more on the side of fossil fuels," points out Nuša Urbancic, from NGO Transport & Environment.

This particularly impacts oil that is derived from oil (or tar) sands, future imports of which are expected from Canada. This is the second big fuel debate taking place in Brussels. Already in October 2011, the Commission, after a long internal battle, published a proposal attributing higher greenhouse gas emissions to oil sands (and other "unconventional" fuels). But member states remained deadlocked on the plan a year later. The issue was then temporarily shelved with the Commission's announcement that it would undertake a fresh impact assessment. This is now due any moment, together with a revised proposal, although rumours of fresh delays can be heard.

Already the sparks are flying again in the lobbying circuit. Europia, the organisation for oil refineries in Europe, has published a new position paper making an old case: the greenhouse gas content of all fossil fuels sold in the EU should be described by a single, fixed default value calculated as an EU average. Oil from oil sands is still oil, Europia argues, and singling them out would effectively amount to their exclusion from Europe. This would have strongly negative consequences for refineries' competitiveness, security of supply and even the global climate (Europia points to a new study from oil consultancy Wood Mackenzie showing that the Commission's plans could actually increase net global emissions).

But NGO and industry sources say the Commission is unlikely to drop its plan of assigning a separate default value to oil from oil sands. The debate, rather, is about how to implement such a measure, through what reporting requirements for fuel suppliers.

What do oil companies think about the new alternative fuels strategy? Their Brussels-based
"You start by charging cars and in the end you have a service platform"
representatives, including Europia, are still formulating responses. Companies that produce both oil and gas will be looking at the potential additional value and trade-offs of a new gas infrastructure. On a more practical note, oil companies are wondering about potential costs if electric charging points are to be deployed at petrol stations for example. So far this has not typically been the case.

Customer is key

But the biggest question is, to what extent the Commission's proposals will influence consumer behaviour and re-shape the habits of drivers. "If you'd asked me what are the two key issues for deploying electric vehicles... I'd have said infrastructure and awareness," says Muriel Desaeger, senior principal technologist for energy at Toyota Motor Europe. The current proposal may speed up infrastructure investments, she believes - and lead to mass production of electric vehicles - but will people buy them? Toyota dropped plans for the widespread launch of a battery-powered electric car last autumn to stay focused instead on its hybrids. Plug-in hybrids do not require people to change how they behave; fully electric cars do, says Desaeger. Similarly she says hydrogen and natural gas powered vehicles will need to breed familiarity.

"Value-added services will be the key to success," said Thomas Weber, Sales Director at Bosch Software Innovations GmbH, at a conference in Brussels just over a year ago. "You start by charging cars and in the end you have a service platform." Different players are likely to emerge in the electric infrastructure business, from energy companies such as SSE, which is currently installing electric charging points in London and Scotland, to dedicated specialists such as Better Place, perhaps car leasing companies such as Athlon, and equipment manufacturers like Bosch and Siemens. At the heart of any offering will be a service. "Selling electricity is not where the money is," said Weber. Because electric charging is so different to regular refuelling in terms of time and location, it offers an opportunity to completely reshape the customer relationship.

The next job for the EU is to start telling a positive story about alternative fuels, say their advocates. "The EU has a role to tell the story of societal benefits: energy independence, innovation, jobs - that message is not

"The EU has a role to tell the story of societal benefits: energy independence, innovation, jobs - that message is not yet out there"
yet out there," says Desaeger. Without proper communication, there is the risk of rejection led by fear of the unknown, she warns. German motorists roundly rejected the gasoline-biofuel blend E10 because they feared it would damage their engines. The main demand-side policy driver is the Commission's proposals to set CO2 limits for cars and vans in 2020. Even if in the short-term the greatest emission cuts come from improvements to the internal combustion engine and more hybrids, these targets ultimately lay the foundations for a European transport system less dependent on oil. And a more competitive, cleaner Europe.

 

A new report by Dutch research institute CE Delft, commissioned by environmental groups and released in January, suggests that it is feasible to replace oil in road transport by a mix of electricity and biofuels produced from waste and residues. But cutting energy use must be the first priority, it says: demand for transport should be reduced, system efficiency increased (including through modal shift) and vehicles should use less fuel. If energy efficiency improved by a fifth by 2020, compared to business-as-usual, the EU could meet its 10% renewables in transport target without any land-based biofuels at all, the authors calculate.

 

Electric charging Points/vehicles per Member State

Members States Existing infrastructure(charging points) 2011 Proposed targets of publicly accessible infrastructure by 20201 Member States' plans for nos of electric vehicles for 2020 
Austria 489 12,000 250,000
Belgium 188 21,000 -
Bulgaria 1 7,000 -
Cyprus - 2,000 -
Czech Republic 23 13,000 -
Germany 1,937 150,000 1,000,000
Denmark 280 5,000 200,000
Estonia 2 1,000 -
Greece 3 13,000 -
Finland 1 7,000 - 
France 1,600 97,000 2,000,000
Hungary 7 7,000 -
Ireland 640 2,000 350,000
Italy 1,350 125,000 130,000 (by 2015)
Lithuania - 4,000 -
Luxembourg 7 1,000 40,000
Latvia 1 2,000 -
Malta - 1,000 -
Netherlands 1,700 32,000 200,000
Poland 27 46,000 -
Portugal 1,350 12,000 200,000
Romania 1 10,000 -
Spain 1,356 82,000 2,500,000
Slovakia 3 4,000 -
Slovenia 80 3,000 14,000
Sweden - 14,000 600,000
 United Kingdom 703 122,000 1,550,000