Published on October 18th, 2018 | by Zachary Shahan0
Exclusive: Angela Merkel Put Heat On Automakers To Electrify Faster
October 18th, 2018 by Zachary Shahan
There has been a little bit of a positive surprise in the past two weeks in Europe. The European Parliament voted a couple of weeks ago to support a 40% reduction in CO2 emissions from transport by 2030, a notably more aggressive transportation emissions cut than the 30% reduction target the European Commission had proposed. That led to a compromise decision to make the target 35%.
Update: A commenter adds this important point:
The European Commission proposed a 30% reduction target.
The European Parliament proposed a 40% reduction target.
The Council, after much internal debate and negotiation, finally decided on a 35% target, which is the one mentioned in this article as final.
But the truth is that the target is not yet decided. Now that all 3 institutions have formulated their negotiating position the “trilogues” (negotiations between the 3 institutions, with the Commission acting as a mediator) will start. The target will be confirmed only when the three institutions agree on a common text. But the balance of power during the trilogues is very tilted towards the Council and the Parliament, not the Commission, whose proposal will practically be ignored.
If I have to predict, I’ll say there’ll be a compromise between the Council’s and the Parliament’s positions, so unless the Parliament negotiates really hard, the most probable target we’ll get will be somewhere between 37% and 38%.
Exclusive intel I’ve collected from the inner circles of this world is that this was the first time when such a vote came up that German Chancellor Angela Merkel didn’t call the relevant EU policymakers in order to push for the weaker targets. In other words, through her silence on the matter, Merkel gave the policymakers nearly explicit permission to vote for the more aggressive targets. My understanding is that her perspective on such policies runs the show, and her decision to not lobby on behalf of the automakers was not only a first but also unexpected. (Perhaps she missed a calendar reminder?)
Although this move (or lack of a move) by Merkel came as a surprise, it is not a huge surprise if you look back at a few statements from Merkel and her right-hand man, Peter Altmaier.
In April 2018, Altmaier, Germany’s Economy Minister, emphasized strongly that German auto manufacturers needed to invest into electric vehicle tech in the “two-digit billion amounts,” and noted that he wasn’t sure why there had been such a holdup on such serious investments. That “two-digit billion” figure didn’t even count batteries, which he said needed similar investments.
That statement, of course, was no mistake or offhanded remark — Altmaier doesn’t throw comments like that around without a purpose — and it also echoed comments he made in 2017 and comments made by Merkel herself. In August 2017, Merkel stated that German automakers needed to “see the writings on the wall.” She added, “I cannot name a specific date now, but the approach [banning ICE vehicles] is right, because if we invest more in charging infrastructure and technology for e-cars fast, a general transition will structurally be possible. … Otherwise, foreign companies will come one day and show how it’s done, how e-cars are made. I would like to avoid that.” She also stated, in a speech in Dortmund, “Large sections of the auto industry have gambled away unbelievable amounts of trust. This is trust that only the auto industry can restore. And when I say ‘the industry’, that is the company leaders.”
A week after all of those comment from Merkel, Altmaier had similarly strong words. “If the automobile industry doesn’t grasp the fact that it has to invest more in electric vehicles, especially in cities, then it will be very hard to defend combustion engines — gasoline and diesel — over the long term. We must do all we can now, so that the best electric cars are built in Germany.”
Of course, this is an argument we at CleanTechnica have been making for years, but no better than in the recent article “Tesla, An Uncomfortable Wake-Up Call For Germany. All Hands On Deck!” We even published a German version of that article, “Tesla, ein unbequemer Weckruf für Deutschland. Alle Mann an Deck!“
However, despite those strong words noted above from Altmaier and Merkel, there have been concerns that they would continue to act softly on automakers where it mattered.
Altmaeir just recently proposed a way of helping the automakers that involved taking the battery risk and investment off their hands, via €2 billion in government-funded projects.
In August 2017, Merkel claimed diesel cars were still needed to achieve climate targets, and in March and April of this year, she downplayed the possibility of diesel vehicle bans and even said the federal government was looking for ways to avoid them.
Nonetheless, despite what is surely constant pressure from the auto lobby, Merkel decided to stay out of the Parliamentary vote on the 2030 CO2 emissions target and thus left the door open for the more aggressive 40% by 2030 goal, which led to the compromise 35% target.
That said, given our climate crisis, true leaders working to move us into a clean future have argued that 35% doesn’t cut it.
“Today’s decision by EU governments is disappointing for the planet. It shows how far the Commission and some member states have shrunk from climate leadership putting carmakers interests first despite the dire warning of the effects of dangerous climate change,” Greg Archer, Director of Clean Vehicles at Transport & Environment (T&E), said. “But this is not over, the forthcoming negotiations with the European Parliament can still achieve an ambitious deal that puts the EU on track towards limiting warming to 1.5 degrees and is also good for jobs, cleaner air and consumers.”
T&E also noted that, “in the past year, global carmakers with European marques have invested seven times more in electric vehicle production in China than in the EU. Higher reduction targets will speed up the transition to low and zero-emission cars and create more than 200,000 net additional jobs by 2030 in both the car sector and in the wider European economy.”
Despite the need for stronger cuts and the auto industry’s bad habit of slow-walking the revolution and complaining all along the way, my understanding is that it’s the earlier reduction targets and penalties for missing them that have BMW and VW execs a bit freaked out. After the Parliament’s vote, EURACTIV noted, “Parliament reintroduced a penalty system or malus for manufacturers that fail to meet those benchmarks. The Commission had actually removed that measure from its proposal following lobbying from the German car industry.” Perhaps the German automakers thought they’d be able to skate at a comfortable pace to 2030, at which point most of the execs would probably be retired anyway, right?
We have more coming shortly on Volkswagen’s hysterical, unhinged response, but I’ll close with some superb comments from Mr. Archer, who presented after me at AVERE’s AEC2018 conference today and had a few specific lines that I thought warranted a much broader audience.
Greg Archer — Director, Clean Vehicles, Transport & Environment — explains the real story for German auto manufacturers if they don't electrify quickly. It is not what VW's CEO has been saying. AVERE's #AEC2018
Posted by CleanTechnica on Wednesday, October 17, 2018
— AVERE (@AVERE_EU) October 17, 2018