COP27 drew to a close last week, a year on from the UK holding Presidency and leading the breakthrough Declaration on accelerating the shift to zero emission vehicles (ZEVs) in leading markets by 2035. As we leave this year’s Conference, however, even with the UK Presidency now formally launching the Accelerating to Zero Coalition, our leadership in the EV world is met with fierce competition from global markets. In absence of clear decisions on reducing emissions, this is further compounded by a stark warning from the UN Environment Programme that current emissions reduction pledges may still remain insufficient to meet the Paris Agreement’s 1.5 degree warming target for 2030.
Government’s commitment to ban the sale of new petrol and diesel cars and vans from 2030 positions the UK as likely to be one of the fastest G7 countries to decarbonise passenger road transport, with electric vehicles (EV) holding a 14% share of the country’s new car market as of September 2022. However, in between the political turmoil and global impacts of the cost-of-living crisis and Russian invasion of Ukraine, international competitors have anticipated the coming boom in the EV world and have been investing heavily in creating policies to exploit this market. The US Inflation Reduction Act’s EV measures are particularly commendable with the EV Tax Credit conditional upon battery mineral extraction, component manufacturing and assembly supporting domestic production.
Today, 80% of vehicles produced in the UK are exported. If we are to meet the narrative of an EV leader and reap the climate, automotive and energy system benefits of the EV transition, Government must deliver a strong and ambitious ZEV Mandate.
The Zero Emission Vehicles Mandate
The ZEV mandate is Government’s defining policy tool to directly reduce the impact of road transport emissions on the climate. It hinges on successful delivery of an uptake trajectory that is driven by the urgency to meet the carbon budgets. Given that any 10 year analysis carries a level of uncertainty, by and large with underperformance, climate science demands ambition to be set as the only acceptable target at this stage of the climate crisis. Therefore, Government must refrain from assuming that anything less than the Climate Change Committee’s own analysis on the ZEV uptake trajectory is required to meet the carbon budgets. A ZEV mandate beginning with a 30% target for cars in 2024 will achieve this goal, with flexibility given only to serve delivery of the necessary levels of decarbonisation.
As a pioneering technology, an ambitious mandate for EVs brings forward benefits for the automotive industry and consumers. To miss this chance would be manifesting a lost opportunity.
Early mass uptake will send clear signals to the market and attract investment along the domestic EV supply chain. This will invite vehicle and battery manufacturing to be located within the country where it has been seen to decline of late, most recently with BMW moving production of the Electric Mini to China from 2024. Ambitious supply targets will also future-proof green employment, ensuring the UK electric automotive industry’s long-term resilience and ultimately increasing the UK’s competitiveness on the European and global stage. Finally, with charging infrastructure often deployed ahead of demand, an ambitious trajectory is a key incentivising policy tool that will send clear signals to the market to deliver the level of infrastructure required across the country.
However, the benefits of EV uptake do not conclude in the automotive industry, and therefore neither does the necessity to deliver an ambitious mandate end with the transport sector.
Mass uptake of EVs and their associated charging infrastructure is vital to our entire Net Zero transition, conferring benefits for the whole energy system. Smart EV charging and vehicle-to-grid technology enable demand side response flexibility services, a key highlight in the British Energy Security Strategy for balancing the grid, and lowering costs for both the electricity system and for all consumers, including those without EVs. Ofgem estimates that both technologies functioning together have the potential to reduce peak demand by 32GW by 2050, which is equivalent to the generation capacity of ten Hinkley Point C power stations. Alongside Government progressing enabling conditions for smart charging and industry creating incentives for its uptake via market-wide half-hourly settlement and time-of-use tariffs, network operators continue to reinforce the grid, and low carbon heating providers and local authorities plan with expectations for increased electrification of heating and vehicles taken together in the consumer home.
The energy sector is investing heavily in a future system which depends, partly, on mass EV uptake for its delivery at lowest cost to consumers. The potential of a UK ZEV Mandate is enormous, however, ultimately, if it does not facilitate ambition and strength, its existence, to begin with, can be questioned.
This article was initially published in Business Green.