EU Energy Transition Threatens World’s Second Biggest Car Industry’s Export Market; Africa Opportunity Noted (5)

June 8, 2022 — By Mathew Carr

The speed and nature of the European Union energy transition could damage the exports of its key carmaking industry if politicians get it wrong, according to a leading lawmaker.

The EU could lose ground to others seeking to take market share in the auto market from Europe, said Christian EHLER, Member ITRE Committee on Industry, Research and Energy, at a press conference.

The EU is considering higher carbon prices and a carbon border adjustment for imports. It wants to phase out free carbon allowances and use that adjustment to protect industry instead.

The options was winding down free allowances and installing the adjustment were starting 2026 or 2028, according to environmental committee lawmaker Pascal Canfin. Agreement wasn’t reached and a compromise might be struck anytime from this afternoon to July, he said.

A new emissions trading system for road transport and buildings is under live debate. Germany is considering collaborating with nations in Africa to produce clean fuels such as green hydrogen, speeding their transition and the world’s.

Meantime, some emerging nations are worried the planned carbon border adjustment mechanism, or CBAM, might be industry protection dressed up as climate action. The World Trade Organization ministerial from June 12-15 will discuss seeking to make global trade more green, a meeting that’s running alongside the UNFCCC intersessionals.

Some measures were rejected today by EU lawmakers.

Law on the aviation segment of the carbon market was voted through.

Ehler signalled Europe could protect its exports by focussing on cleaner or purely electric vehicles…or vehicles that may make sense in nations with cheap synthetic fuel, where vehicle infrastucture systems are still being built. It’ll probably be cheaper to make synthetic fuels in countries such as those in Africa, he said.

“It’s very likely that in Africa, for example, the production of synthetic fuels due to the sun and the potential to produce them is a much more likely answer to individual transport.

“And since we have an export industry, I think it is very self centred perception that the European solution is the solution of the rest of the world.

“But we are the car manufacturer of the rest of the world. [CarrZee note: only China produces more — see below] And what we’re going to see is that the Chinese and other parts of Asia are now focusing on our export markets because they do know that the infrastructure equation is not solved in Africa and other parts of the world...

“Their potentials to produce much cheaper synthetic fuels, they might see that as the solution and the question is simply whether we cut completely the potential of the car industry for foreign markets, or not.

“And that’s not an effort to pollute any more, it’s simply that it should stay technology open in order not to mess up the potential of the one of the biggest employers in Europe.

“And I think that’s the rationale … We’re not one wanting to prolong the combustion engines in Europe. That’s not the case but we don’t want to die down or to kill the technology ambitions and the technology potential of our car industry.”

see below
see below
Ehler — this morning

(WARNING: this report was produced with the help of artificial intelligence)

NOTE

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