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22.06.2020

Accounting for renewable fuels in EU fleet targets – One path to lower CO2 emissions

The fleet targets set by EU CO2 emission legislation for new vehicles are an important element of the EU climate strategy // For the transport sector in Germany, a reduction of greenhouse gas emissions by 40 - 42 % compared to 1990 levels is aimed for by 2030 // BMWi and Frontier Economics now present a detailed concept for the crediting of CO2 reductions from synthetic and advanced alternative fuels (SAAF) within the framework of the EU performance standards for new fleet

As part of the 2015 Paris Agreement, EU member states have committed to reducing their CO2 emissions. For the transport sector in Germany, a 40-42% reduction is envisaged by 2030, compared to 1990 levels. With that in mind, the European Commission has been tasked with putting in place measures to reduce road transport sector emissions effectively and efficiently. One important measure is amending the EU Regulations of CO2 emission performance standards for new vehicles (fleet targets).

The fleet target regulation that is applicable to all new road vehicles in the EU does not differentiate between fossil fuels and synthetic or advanced alternative fuels (SAAF),despite the latter having a much lower or often no adverse effects on the climate.As a consequence, any vehicle with combustion engine is treated within the fleet targets as polluting, even when it is in fact running on carbon-neutral fuel. Being aware of this shortcoming of the current regulation, the fleet regulation already includes a provision to consider alternative fuels in future revisions.

The consulting firm FrontierEconomics was commissioned by the Federal Ministry for Economic Affairs and Energy (BMWi) to produce a report detailing options on how to account for CO2 reductions from SAAF in the context of EU fleet targets. The recently published report proposes a SAAF crediting system that creates a level playing field among wide-ranging emission-reduction technologies to reduce road transport sector emissions effectively and efficiently. This design could serve as a template for a future revision of the fleet targets.

The proposed system is based on the following principles:

  1. Building on the existing sustainability certification scheme for transport fuels under the Renewable Energy Directive RED/RED II – a certification system ensures sustainability criteria are met and no double counting occurs.
  2. Providing equal opportunity in emission-reduction options for road transport by broadening the scope for car manufacturers (OEMs), with the SAAF-crediting system.
  3. Ensuring the transport sector contributes to climate change efforts by reducing CO2 emissions – the SAAF crediting model offers manufacturers an alternative way to reducing emissions and can therefore avoid penalties and generate incremental mitigation contributions.
  4. Maintaining affordable individual mobility through reducing costs to achieve fleet targets, resulting in lower-priced vehicles.

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