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New European energy policy effectively bans the sale of new petrol and diesel cars and vans in the EU from 2035 in a bid to speed up the switch to electric vehicles (EV) and reach climate neutrality by 2050

Photo: Adobe Stock

The European Union (EU) has announced a raft of energy policy this past week, including new road transport emissions rules, a clearer definition of what constitutes ‘green’ hydrogen, and revisions to energy performance in buildings regulations.

Among the new developments, the European Parliament formally approved a law that will effectively ban the sale of new petrol and diesel cars and vans in the EU from 2035 in a bid to speed up the switch to electric vehicles (EV).


The new rule, part of the ‘Fit for 55’ package, calls for auto manufacturers to achieve a 100% cut in CO2 emissions from new cars and light commercial vehicles sold from 2035, effectively making it impossible to sell new fossil fuel-powered vehicles in the EU from that date. Intermediate emissions reduction targets for 2030 are set at 55% for cars and 50% for vans (compared to 2021 levels).


However, not all EU member states are happy with the rule, with Italy reportedly calling for the target to be reined back to 90% from 2035 in order to give the auto industry time to adapt.


Meanwhile, the European Commission (EC) has proposed ambitious new CO2 emissions targets for new heavy-duty vehicles (HDVs) that are claimed to be responsible for over 6% of total EU greenhouse gas (GHG) emissions and more than 25% of GHG emissions from road transport. It is proposing a 45% reduction in emissions (compared to 2019 levels) from 2030, 65% from 2035 and 90% from 2040.


To stimulate faster deployment of zero emission buses in cities, the EC has also proposed making all new city buses zero emission as of 2030.


Some green groups were disappointed with the proposed CO2 emissions targets, with Transport & Environment (T&E), for example, saying the plan ‘would make the bloc’s net zero climate goal impossible’. The group has been campaigning for stricter targets, with a 2035 cut-off for the sale of internal combustion engine (ICE) powered HDVs.


New green hydrogen rules

The EC also published detailed rules to define what constitutes ‘renewable’ hydrogen, also known as ‘green hydrogen’, adopting two inter-related Delegated Acts under the Renewable Energy Directive (RED) in a bid to make sure that all renewable fuels of non-biological origin (RFNBOs) are produced from renewable electricity.


It is hoped the new rules will provide regulatory certainty to investors and contribute to meeting objectives under the REPowerEU Plan, which targets the production of 10mn tonnes of green hydrogen and the import of 10mn tonnes into the EU by 2030.


The first Act defines the conditions under which hydrogen can be deemed an RFNBO, clarifying the principle of ‘additionality’. It states that renewable hydrogen must be produced solely with power from additional renewable energy plants and during the same period in which the electricity is generated. Furthermore, hydrogen production should only take place in the area of the associated renewable power plant.


While initial electricity demand for hydrogen production will be negligible, it will increase towards 2030 with the mass rollout of large-scale electrolysers, says the EC. It estimates that around 500 TWh of renewable electricity would be needed to meet the 2030 ambition in REPowerEU of producing 10mn tonnes of RFNBOs. This ambition is reflected in the EC proposal to increase the 2030 target for renewables to 45%.


To take into account existing investment commitments and allow the sector to adapt to the new framework, the ‘additionality’ rules will be phased in gradually and designed to become more stringent over time.


The second Delegated Act provides a methodology for calculating lifecycle GHG emissions for RFNBOs. The methodology takes into account GHG emissions across the full lifecycle of the fuels, including upstream emissions, emissions associated with taking electricity from the grid, from processing, and those associated with transporting these fuels to the end-consumer. The methodology also clarifies how to calculate the GHG emissions of renewable hydrogen or its derivatives in case it is co-produced in a facility that produces fossil-based fuels.


The new rules also recognise the role of nuclear on the road to decarbonisation, with France exempt from the ‘additionality’ rule for renewable hydrogen as long as the country’s electricity mix emits less than 18 gCO2eq/MJ – an objective considered easily attainable by France thanks to its fleet of 56 nuclear reactors.


France has long been calling for hydrogen to be defined as ‘green’ when produced from nuclear electricity, not just from renewables.


Energy performance of buildings
The energy performance of buildings has also come under the spotlight this past week, with the European Parliament’s Industry, Research and Energy Committee adopting measures to substantially reduce GHG emissions and energy consumption in the EU building sector by 2030, and make it climate neutral by 2050. The measures also aim to increase the rate of renovations of energy-inefficient buildings and improve information on energy performance.


The adopted text sets some very ambitious targets: all new buildings should be zero emission from 2028, with new buildings occupied, operated or owned by public authorities getting there from 2026; while all new buildings should be equipped with solar technologies by 2028, where ‘technically suitable and economically feasible’, and residential buildings undergoing major renovation have until 2032 to comply.


Residential buildings would have to achieve at least energy performance class E by 2030, and D by 2033. Non-residential and public buildings would have to achieve the same classes by 2027 and 2030 respectively.


A number of buildings would be excluded from the new rules, such as national monuments and buildings with special architectural or historical merit.


According to the EC, buildings are responsible for 40% of the EU’s energy consumption and 36% of GHG emissions.


However, some environmental organisations believe the changes to the Energy Performance of Buildings Directive (EPBD) do not go far enough. The European Environmental Bureau (EEB), for example, noted that a last-minute change meant the rules allow ‘almost unlimited use of gas to heat EU buildings as part of “hybrid systems” and gas boilers will maintain their presence in homes until 2049 – crumbling any hope of meeting EU 2030 climate goals’.