ChargeUp Europe input into the EU roadmap on the inception impact assessment for the revision of the Renewables Directive.
Introduction
ChargeUp Europe is an industry alliance acting as the voice of the electric vehicle (EV) charging infrastructure industry. ChargeUp Europe has been formed to accelerate the switch to zero emission mobility and ensure that people can have a seamless driver experience with access to high quality, readily available charging infrastructure across Europe.
As of today, our member companies – Allego, ChargePoint, EDP, EVBox, evway, Fastned, GreenWay and has.to.be - represent over 175.000 charging points in all 27 EU Member States.
Our member companies provide the hardware and the software infrastructure to charge all types of electric vehicles at all power levels. E-mobility will be instrumental in supporting the decarbonization of the transport sector in Europe. It is therefore crucial for Europe to develop an integrated policy framework to enable this transition and meet EU’s climate 2030 ambition.
Renewables Directive
The Renewables Directive is an instrumental piece of legislation to support the electrification of the transport sector and to power electric vehicles with renewable energy. For this reason, ChargeUp Europe supports the overall objective described in the Impact Assessment to “ensure that renewable energy sufficiently contributes to the achievement of a higher EU Climate ambition (…)” and the subsequent need to “ensure synergies with other legislation”.
The current Directive already sets mandatory targets for Member States to have a share of renewable fuels for transportation including renewable energy. The reality has however demonstrated that very few Member States actually take into account the share of renewable electricity used in transportation. While the Renewables Directive sets the right goals, it is still failing in providing the effective instrument to support widescale and fast electrification of transport through green electricity.
In that regard, ChargeUp Europe members recommend:
Keep and increase binding targets for Member States to have a share of renewable electricity for transportation.
Prioritize electricity over other green fuels in the reporting calculation methodology. Electrification of transportation is not only already happening but has demonstrated to be the fastest and most sustainable way to reduce GHG emissions for transport1
Propose a harmonized way of integrating electricity in fuels markets through for example national crediting schemes where CO2 emissions savings certificates /clean fuels credits could be traded between electricity suppliers, aggregators, charging point operators/owners of publicly available charging stations and fuel suppliers. Such a mechanism would put electricity on the same level of other fuels to compete to green the transport sector but also create a financial resource for electromobility service companies to set up the EV charging network of tomorrow, reducing reliance of public funding.
Renewable power credit scheme for EVs
Decarbonizing the energy system goes hand in hand with increasing the share of renewable energy to power electric vehicles. While the Renewables Directive set targets for Member States to use renewables sources for transport, we believe that there is an opportunity to better leverage the role that electricity from green sources could play.
In RED II, renewable electricity used directly in transport can count towards the 7% advanced fuels target. Renewable electricity is subject to multipliers (1 energy unit of renewable electricity used in road transport can count 4 times towards the target), whereas renewable electricity used in rail transport can count 1.5 times (the latter is voluntary). Countries must use the share of renewables in the national grid to claim the share of renewable electricity used in transport.
In the case where the charging installation is directly connected to a renewable energy generation facility, 100% of the renewable electricity can be counted. In many countries, the compliance mechanism for the RED target rewards only the use of liquid renewable alternatives - mainly biofuels. To reward the use of renewable electricity in transport, such a mechanism would allow for a technology-neutral and cost-effective implementation of the advanced target and would include and treat all renewable energy forms in an equal manner.
So far, the majority of EU countries have not incentivised the use of electricity in the same way they do with biofuels. Through the implementation of the new RED for the period 2021 to 2030, Member States have the opportunity to include renewable electricity in their compliance mechanism to reach a target for renewable advanced fuels.
California, Netherlands and Germany are three examples showing that such a system will diversify the options available to the RED obligated parties - fuel suppliers - for meeting their targets and allow them to use other options beyond biofuels. It will also generate new financial resources to support the decarbonisation of transport and energy systems. It will encourage the uptake of renewable electricity and provide an additional private financing route for the roll-out of electric charging infrastructure or targeted rebate programmes for purchasing EVs. The system could generate up to €5.9 billion of credit value in 2030 at EU level or up to €1.2 billion for a country like Germany2.
A crediting system is a key tool for creating a level-playing field between renewable electricity supplied to EVs and blended biofuels, enabling the most cost-effective compliance with RED II for fuel suppliers.
Unfortunately, EU rules do not propose a harmonised way of integrating electricity in fuel markets, but Member States have the possibility to set a dedicated crediting system in place. Such a national system would give companies that supply electricity to transport, aggregators or charging point operators/owners the opportunity to qualify for clean fuel credits which they can sell to fuel suppliers. On top of diversifying compliance options, this is an opportunity to implement the “polluter pays principle”: Fuel suppliers that deliver final transport fuels will need to purchase renewable electricity credits to reduce their GHG footprint, when in most cases these fuel suppliers don’t invest themselves in electric mobility or in the production of electricity as a transport fuel. At the same time, the system can create a direct financial flow to entities taking part in building electromobility services, without using public money.
HOW TO ENABLE SUCH SCHEMES?
Who is entitled to generate the credits? In the Dutch system, companies that deliver electricity to road vehicles and that have connections to the electricity grid exclusively for that purpose are entitled to credits. This means that in reality only a small share of very large charge point operators benefit (smaller ones have not opted for the system and are excluded by the system). The way the system is applied in California is different as it is centralized through the California Air Resources Board (CARB) who provides credits based on estimates for all entities delivering power to EVs (incl. private charging).
For non-residential areas, several entities such as EV fleet operators, charging point operators and car makers (e.g. through metered information on board the vehicle), can opt into the system and generate their own credits. This system applies not only to electric cars, but also to electricity used by buses, trucks, rail lines and forklifts. In Germany, fuel suppliers pool with utilities, which provide electricity for EVs in public (certified consumption) and private charging points (estimated consumption basis).
Functioning of the crediting system: Electricity can be traded as a renewable unit (as in the Netherlands) and is then subject to the RED multiplier or, as it is applied in California, where there is a carbon intensity target set for the fuel supplier which extends the scope of the system to all low carbon fuels (not only renewables). Companies can also demonstrate ‘carbon free’ charging (e.g. solar panels on charging sites) which increases the electricity credits they receive. In Germany, only utilities can sell their renewable electricity credits to fuel suppliers. Charge point operators, electro-mobility platforms, car manufacturers and individuals that own an EV cannot participate, which is a real burden to the system.
Allocation of the revenue: It is desirable that the revenue generated from such schemes would be allocated to the deployment of charging infrastructure and would at the same time decrease the need for public finance intervention for such networks. In Germany, the revenue from selling the credits stays with the utilities. The German scheme does not include any earmarking of revenues for promoting EVs. In the Netherlands there is no re-allocation of the funds to e-mobility projects. There is no provision in the legislation – national and EU - to do so. In California though, the revenue from selling credits is earmarked by utilities for rebate programmes including providing point-of-sale rebates to EV buyers or payments to customers owning an EV.
Ensure consistency with other EU legislation such as the “Energy Performance of Building Directive” and the upcoming “Renovation Wave”. As a large part of private EV cars charging is taking place at home or at work, it is of crucial importance to ensure the deployment of an EV charging networks in buildings. The current Renewables Directive already makes reference to the Energy Efficiency Directive in its art.15 “Art.15. “Administrative procedures, regulations and codes” and we encourage the addition of a specific reference to EU legislation (existing or coming) related to an obligation to pre-cable or install EV chargers in new or renovated building in Europe. We take this opportunity to also reiterate our previous recommendations that EU should also mandate EV charging infrastructure in existing buildings.
CONCLUSION
In conclusion, based on the EU Roadmap published for the Revision of the Renewables Directive, ChargeUp Europe recommends to opt for Option 4 “Amend RED II to translate into legal measures the actions in other energy strategies of the EGD”.
This legislation can support the electrification of the transport sector – through renewable power- which will be vital for the EU to reach its EU climate ambition but also overall to contribute to a better quality environment for all EU citizens and at the same time support the transition of the automotive industry in Europe.
See our input here.