VW & Shell Partner To Fund New Study Arguing Against EU Fuel Efficiency Targets

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Originally published on EV Obsession.

Update: At the bottom of the article is a response from a Shell representative on this story, and my reply.

With the European Union’s planned new fuel efficiency targets looking more and more likely to be implemented, VW and Shell have apparently partnered to fund a new study arguing against the measures, according to recent reports.

The new study argues that rather than imposing stronger fuel efficiency standards on the industry, that the European Union should instead rely on “greater use of biofuels, CO2 car labelling, and the EU’s emissions trading system.” I wonder what possible reasons VW could have for that preference?

Volkswagen logoAs it stands, the European Union is planning to implement two new fuel efficiency targets (for 2025 and 2030) in order to help meet some of the terms of the agreements made at the recent COP21 climate change talks in Paris.

The Guardian provides more:

In reality, such a package would involve the end of meaningful new regulatory action on car emissions for more than a decade, EU sources say. But Shell insisted it is not trying to block an EU push for electric cars.

Ulrich Eichhorn, VW’s new head of research and development, said that plug-in hybrids and more efficient vehicles were “building blocks” for the future, but that “higher shares” for biofuels would be needed in the meantime. He told a meeting in Brussels: “Modern diesel and natural gas engines will absolutely be required to deliver CO2 targets until 2020 and they will also contribute to further reductions going on from there.”

In meeting the Paris goals, “societal costs need to be minimized to keep our industrial strength and competitiveness,” he said.

The Auto Fuels Coalition study, written by Roland Berger, makes a series of highly pessimistic assumptions about the costs of fuel efficiency improvements, and equally optimistic ones about greenhouse gas emissions from biofuels. A recent EU study found the dirtiest biofuels three times more polluting than diesel.

As noted by an insider source (with the European Union) that spoke with the UK-based paper, clearly the German internal combustion engine (ICE) manufacturers has decided that allies in the oil industry are now becoming prudent: “These two industries have realized they have a shared interest. When you saw who was paying for the study, you knew what the answer would be.”

A Shell spokesperson commented as well: “Nothing in the report can be interpreted as seeking to block electric vehicles.”

What exactly is the purpose, if not to block electric vehicles?

(Hat tip to Rich)

Update: Here’s a response from a Shell representative on this matter:

Shell is not seeking to block electric mobility. In fact, Shell has been active in supporting the transition to electric vehicles through its 3 pilot projects in California, Germany and the UK, focused on working with customers to establish how charging of EVs can be successfully integrated to the power grid.  The additional load from charging an EV represents c.50-75% of an average residential household load to the grid – if left unmanaged, this can destabilise the grid by charging at existing peak demand times as well as missing the potential to charge at times when renewable sources of energy e.g. solar and wind are plenty.  Since 2013, Shell has worked with partners and fleet customers to shift the charging of EVs to both avoid times when there is most demand and high costs to customers and take advantage of when supply is abundant, helping to keep the grids balanced as the level of intermittency and unpredictability increases alongside the introduction of more renewable power sources.  Shell is now seeking opportunities to commercialise its expertise in support of charge post infrastructure for BEVs. The trials with BEVs have proven it is technically and economically possible to manage the charge to the vehicle at times of energy surplus, and have resulted in a number of “firsts” in the power markets. 

The report referred to in this article, prepared by an independent consultant on behalf of a coalition comprising Shell and nine other companies (fuel providers and automakers), identified a variety of different transport decarbonisation options for the EU, including electric. It factored in customer acceptance, infrastructure needs, technical achievability and cost to society elements. It identified that electric vehicles will take time to make a material impact to decarbonisation in EU and that based on the modelling it will occur after 2030. It suggests that the most cost-effective way to achieve the EU 2030 CO2 reduction aspiration is through current policies, together with more biofuels and hybrids. Nothing in the report can be interpreted as seeking to block electric vehicles.

The report also illustrates that to achieve the 2050 targets the EU will need battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs) and other ultra-low carbon vehicle and fuel options.

And here’s my response:

Thank you for the information. I will update the article with your response as an addendum. 

However, I feel like there are some obviously incorrect assumptions made in the report. An image caption in the Guardian article captures one of the key ones:
  • The industry study assumes a lack of public appetite for electric cars, despite 400,000 pre-orders for Tesla’s new Model 3
Is the assumption that there isn’t appetite due to people not buying enough of the poorly marketed, dealer-handicapped, Supercharger-lacking (despite an offer from Tesla to let other automakers partner with them on this important component), low- to medium-range gasoline/diesel models turned into electrics and plug-in hybrids? If it is based on that rather than genuine efforts like Silicon Valley startup Tesla has put forward (which is crushing the options from conventional automakers), then I can see how such an absurd conclusion as “electric vehicles will take time to make a material impact to decarbonisation in EU and that based on the modelling it will occur after 2030” came about.
The suggestions that “greater use of biofuels, CO2 car labelling, and the EU’s emissions trading system.” would trump compelling electric cars with Supercharging capability is laughable at best, so I’m not confident I’d get very useful responses on this study if this was somehow considered a logical conclusion to highlight….
But let me know if I’m missing something important here.

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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