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COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive on the deployment of alternative fuels infrastructure
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive on the deployment of alternative fuels infrastructure
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive on the deployment of alternative fuels infrastructure
/* SWD/2013/06 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive on the deployment of alternative fuels infrastructure /* SWD/2013/06 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive on the deployment of alternative
fuels infrastructure 1. General context 1. The White Paper “Roadmap
to a Single European Transport Area – Towards a Competitive and Resource
Efficient Transport System”[1] found that without the
significant uptake of alternative fuels, we cannot achieve the targets of the
Europe 2020 strategy and our climate goals for 2050. It therefore announces that
the Commission will develop “a sustainable alternative fuels strategy including
also the appropriate infrastructure” (Initiative 24) and ensure “guidelines and
standards for refuelling infrastructures” (Initiative 26). 2. Based on the consultation
of stakeholders and expertise gathered, the Commission has identified the
alternative fuels which have already shown a potential for long-term oil
substitution. 3. Deployment of alternative
fuels is hampered by (1) the high price of vehicles, (2) poor consumer
acceptance, and (3) lack of recharging /refuelling infrastructure, caused by multiple
market failures. 4. Previous initiatives have
addressed fuel production, vehicle technology, and marketing, but neglected the
build-up of the necessary infrastructure. 5. Ex-post analyses of
projects and policy actions have pointed out the lack of recharging/refuelling
infrastructure, and the inability of market forces to fill this gap, as a
fundamental barrier. Without removing this barrier, all other efforts risk to remain
ineffective. 6. Three alternative
transport fuels are particularly affected: electricity, hydrogen, and natural
gas (LNG and CNG). The other main alternatives to oil – biofuels and liquefied
petroleum gas (LPG) – are less concerned. 2. Problem definition 7. The Impact Assessment
finds that on the basis of projected market developments, the infrastructure
for electric, hydrogen and natural gas (LNG and CNG) vehicles is likely to
remain insufficient for what broad market take-up would require. This ‘minimum’
network is defined below. Electric vehicles (EVs) 8. A minimum
network for EVs should ensure: · the critical mass of production needed to achieve economies of
scale; · the projected deployment of EVs of approximately 6-8% of vehicle
sales in 2020. 9. The above criteria suggest
a benchmark number of 4 million EVs on the road in the EU by 2020, less than
half of the sum of the targets announced by Member States. 10. EVs will be mostly deployed
in urban areas, and therefore be distributed across the EU according to the
urbanisation of Member States. Market tests have shown that each EV needs two
recharging points (at home and at work), and about 10% of all should be
publicly accessible to address range anxiety. Hydrogen vehicles 11. For hydrogen, a
first step towards market opening would require linking existing and planned refuelling
stations. LNG in vessels and CNG and LNG in vehicles 12. The 83 maritime ports of
the TEN-T Core Network are the primary locations for the use of LNG in
shipping. Equipping with LNG also the inland waterway and road transport
corridors and assuring enough number of refuelling stations for CNG vehicles would
provide sufficient coverage in these transport modes as well. 3. Root causes 13. The Commission has
identified two main root causes: · Existing recharging/refuelling equipment cannot be connected and is
not interoperable in all related alternative fuel vehicles/vessels. The technology necessary for the construction of a network is
substantially mature. However, currently the standards are not common EU-wide, thereby
discouraging potential infrastructure investors, car manufacturers and
consumers. This leads to the fragmentation of the internal market. · Investment uncertainty hinders the deployment of
recharging/refuelling infrastructure for electricity, hydrogen and natural gas
(LNG and CNG). The business case for providers of
alternative fuels infrastructure is not yet established. The co-ordination
failure among vehicle manufactures, infrastructure providers, national
authorities and final users must be addressed. Initiatives that are
specifically addressed at promoting infrastructure appear necessary to break this
deadlock. 4. Analysis of subsidiarity 14. The right for the EU to act
in the field of transport is set out in Articles 90-91 of the TFEU, in Title
VI. 15. An
EU initiative in this field would be necessary since Member States do not have
the instruments to achieve pan-European coordination in terms of technical
specifications of infrastructure and timing of investments. 16. Vehicle and equipment
manufacturers need to produce on a large scale for a single EU market, and they
need to be able to rely on consistent developments across Member States.
Similarly, consumers and transport users are interested in pan-European mobility.
17. The
proposed action only addresses two transport modes (road and waterborne) for
which the development of a minimum necessary network cannot be achieved without
EU support. These sectors represent more than 80% of the modal split in freight
and passenger transport. In these sectors, alternative fuels are functional to
the reduction of oil dependence, GHG and pollutant emissions. 5. Objectives
of EU initiative 18. The
EU has agreed on binding targets on the share of renewable energy in transport fuels
(10% by 2020), and on a reduction of the CO2 intensity of the road transport
fuels (-6% by 2020). The 2011 White Paper announced a reduction of 60% of CO2
emissions by 2050 requiring also a significant uptake of alternative fuels. 19. The
general objective of this initiative is to ensure, within the current economic
climate, the provision of a sufficient infrastructure network, contributing
thereby to achieve the take-up of the alternative fuel vehicles’ and vessels’
market announced in the White Paper. 20. The
general objective can be translated into more specific goals (Table 1) Table 1: Problem tree: mapping problems and objectives Problem Based on planned investments of Member States and, the alternative fuel infrastructure for electricity, hydrogen and natural gas (LNG and CNG) is likely to remain insufficient to enable the uptake of alternative fuels. || General objective The general objective of this initiative is to ensure, within the current economic climate, the provision of a sufficient infrastructure network for alternative fuels, contributing thereby to achieve the take-up of the alternative fuel vehicles’ and vessels’ market announced in the White Paper. Problem driver 1 Existing recharging/refuelling equipment cannot be connected and is not interoperable || Specific objective 1 To make sure that recharging/refuelling equipment can be connected and are interoperable Problem driver 2 Investment uncertainty hinders the deployment of recharging/refuelling infrastructure for electricity, hydrogen and natural gas (LNG and CNG) || Specific objective 2 To ensure that investment uncertainty is reduced to a level breaking up the existing ‘wait and see’ attitude amongst market participants 21. The following operational
objectives have been defined: (1)
All recharging stations for EVs, hydrogen and natural gas (LNG and CNG) refuelling for road transport
vehicles, and LNG refuelling facilities for waterborne vessels can be connected, and are interoperable. (2)
The number of recharging points for EVs reaches
the values set out in Table 1, with at least 10% publicly accessible. Table 2: Minimum number of EVs charging points in each Member State (in thousands) MS || Number of charging points || Number of publicly accessible charging points BE || 207 || 21 BG || 69 || 7 CZ || 129 || 13 DK || 54 || 5 DE || 1503 || 150 EE || 12 || 1 IE || 22 || 2 EL || 128 || 13 ES || 824 || 82 FR || 969 || 97 IT || 1255 || 125 CY || 20 || 2 LV || 17 || 2 LT || 41 || 4 LU || 14 || 1 HU || 68 || 7 MT || 10 || 1 NL || 321 || 32 AT || 116 || 12 PL || 460 || 46 PT || 123 || 12 RO || 101 || 10 SI || 26 || 3 SK || 36 || 4 FI || 71 || 7 SE || 145 || 14 UK || 1221 || 122 HR || 38 || 4 (3)
Existing hydrogen refuelling stations are
connected via the TEN-T Core Network with a maximum distance of 300 km between
stations by 2020. (4)
LNG refuelling facilities for waterborne vessels
are available in all maritime ports of the TEN-T Core Network by 2020. (5)
LNG refuelling facilities for waterborne vessels
are available in all inland ports of the TEN-T Core Network by 2020. (6)
LNG refuelling stations for road transport
vehicles are available along the TEN-T Core Network with a maximum distance of 400
km between stations by 2020. (7)
CNG publicly accessible refuelling points are
available, with maximum distances of 150 km, to allow the circulation of CNG
vehicles Union-wide by 2020. 6. Policy options 22. The
Commission undertook an extensive consultation of stakeholders on various
policy options. A pre-screening of possible options was carried out on the
basis of the following criteria: consistency with general, specific and
operational objectives, technology neutrality and feasibility. 23. The Commission has
identified three policy options besides the ‘no policy change’ baseline
scenario and analised them in-depth. 6.1. Policy Option 1 24. Policy Option 1 represents
the future without any additional policy intervention to change current trends
(‘no policy change’ scenario). It takes into account all current legislative
and policy initiatives, national announcements for the deployment of infrastructure,
and the continuation of previous EU and Member States’ programmes and incentives. 6.2. Policy Option 2 25. The EU will issue
recommendations on the application of standards for alternative fuels
infrastructure. It will issue recommendations setting out basic criteria and
indicative targets for the deployment of infrastructure for
electricity, hydrogen and natural gas (LNG and CNG). 6.3. Policy
Option 3 26. The EU will set out
requirements for alternative fuels infrastructure for Member States. It will also
set out basic criteria for minimum infrastructure coverage, together with
binding targets for the most mature fuel technologies (electricity, and LNG for
waterborne transport). For hydrogen and natural gas (LNG and CNG) for road
transport, the targets would be indicative. 6.4. Policy
Option 4 27. The EU will set out requirements
for alternative fuels infrastructure for Member States. At the same time it
will set out basic criteria for minimum infrastructure coverage, together with
binding targets for electricity, hydrogen, LNG and CNG in road and LNG in
waterborne transport. 28. Under
any Policy Option, EU legislation would not specify requirements beyond the minimum
number and the technical standards. Member States would thus decide on the
regulatory framework, territorial localisation, and other implementation
measures. 7. Assessment of impacts Economic impacts 29. These Policy Options aim to
provide a fundamental condition for market up-take of alternative fuel vehicles
and vessels, but cannot ensure it without the concourse of the other
initiatives that are part of the overall strategy. 30. The assessment is based on modelling results quantifying
the ‘direct’ or ‘stand-alone’ benefits of the policy proposal, and on evidence
from other studies on the wider impact, when it is seen in combination with
other existing and forthcoming initiatives to promote alternative fuel
vehicles. 31. The ‘stand-alone’ costs of
the infrastructure deployment are shown on Table 3. Table 3: Estimated investments costs under each Policy Option[2] || || Number of additional charging points/fuelling stations || Policy Option 2 || Policy Option 3 || Policy Option 4 || thousands || Million € || || Electricity (Total) || 8,000 || 3,984 || 7,968 || 7,968 || of 90% private || 7,200 || 1,872 || 3,744 || 3,744 || of 10% publicly accessible || 800 || 2,112 || 4,224 || 4,224 || Hydrogen || 0.143 || - || - || 230 || LNG for vessels || 0.139 || 1,140 || 2,085 || 2,085 || LNG for trucks || 0.144 || - || - || 58 || CNG for vehicles || 0.654 || - || - || 164 || Estimated investment costs of infrastructure deployment || || 5,124 || 10,053 || 10,505 || Estimated retrofitting costs || || - || 45 – 50 || 90 –100 || Estimated total investments costs || || 5,124 || 10,103 || 10,605 32. Member States could
ensure implementation through a variety of measures (e.g. building codes,
conditions for parking lots permits, certification of the environmental performance
of businesses, facilitating cooperation between LNG companies and port
authorities) without necessarily involving public spending. 33. The approach for the cost-benefit
analysis does not take into account the benefits of reduced oil dependency,
increased competitiveness and better functioning of the internal market.
Nonetheless, even under the Policy Option 4, comparing the benefits of choosing
infrastructure deployment to the costs of other possible policies results in higher
than 1.5 ratios in all Member States. 34. The main macroeconomic
effect would be on reduced oil consumption and avoided fuel expenditure.
Avoided fuel use increases progressively over the decades 2010-2030 from about
610 million € per year in 2020 to about 2.3 bn € per year in 2030 under Policy
Option 2, 1.7 bn € per year in 2020 to 4.6 bn € per year in 2030 under Policy
Option 3, and 4.2 bn € per year in 2020 to 9.3 bn € per year in 2030 under
Policy Option 4. The estimated aggregate energy security benefit also increases
gradually. 35. The main difference in
macroeconomic impacts between Policy Option 2 and 3 consists in the different
probability of achieving the same results through recommendations or mandates.
Policy Option 2 is considered much less effective for the following reasons: ·
Many Member States have ambitious plans but have not undergone obligations. This leaves consumers and investors
with uncertainties and holds back market up-take; ·
The deadlock between the various market players
needs to be removed. This can only be done if there is a credible
commitment, which Member States’ plans, voluntary industry agreements and EU
recommendations are not providing. Market participants are aware of past
non-binding initiatives in this field that failed to produce the intended
result (e.g. Biofuels Directive[3]). 36. The difference between Policy
Option 3 and 4 is the smaller likelihood of deployment of a hydrogen refuelling
network in Policy Option 3. The high potential gains of Policy option 4 should
be assessed against the relatively small additional investment costs. Social impacts 37. The Impact Assessment finds
that investment into the build-up of infrastructure would be mostly placed in Europe, with direct economic benefits for the sectors involved in the infrastructure
build-up. 38. Additional employment, with
a wide range of job qualifications, will be created through investment into the
areas of construction, manufacturing, electricity, information and
communication technology, advanced materials, computer applications. In automotive
and refining sectors, shift to new qualifications will preserve employment on
the long term. Environmental impacts 39. Large environmental benefits
can be realised from deploying alternative fuels. The reduction is marginally
higher in Policy Option 3 relative to 4, due to increased emissions from LNG
trucks in Policy Option 4 in the medium-run. 40. Under Policy Option 2, NOx
emissions decrease by 1.4% by 2020, by 2.0% in Policy Option 3, and in Policy
Option 4 by 2.8%. Particulate matter emissions follow a similar pattern.
External costs for noise are reduced as well. Conclusions of the assessment of impacts 41. The analysis of impacts
shows that investing in a minimum recharging/refuelling network is the most
efficient way to promote alternative fuel vehicles. While infrastructure alone
has no major direct impact, an intervention on the refuelling/recharging
network can have large positive effect in combination with other initiatives
targeted at the introduction of cleaner vehicles. 42. Under Policy Option 4, the
benefits in terms of lower oil consumption amount to about 84.9 bn €, and lower
impact on the environment to around 15.4 bn €. Hence, the benefits clearly
outweigh the approx. 10 bn € needed for a minimum network. 8. Comparison of options 43. Effectiveness: The
objectives are fully achieved under Policy Option 4 for all alternative fuels
considered in the IA. Policy Option 3 differs only in the coverage of fuels. Policy
Option 2 has the greatest risk of not satisfactorily delivering. 44. Efficiency: The least cost can be associated to Policy Option 2, which
is however a result of lower effectiveness in the achievement of objectives.
While the costs of Policy Option 4 are higher than of Policy Option 3, the
potential benefits can outweigh this difference. 45. Coherence: Policy
Option 2 would likely result in lower investments. This outcome would
particularly penalise the environmental dimension. Policy Option 3 achieves the
most comprehensive limitation of trade-offs across the economic, social and
environmental fields. Policy Option 4 would represent a more risky option,
which can be considered to place more emphasis on the environmental dimension
with respect to the economic one. 9. conclusion 46. Policy Option 2 is
discarded, since it compares unfavourably with both Policy Options 3 and 4. 47. Policy Options 3 and 4 have
many elements in common. Preference is given to Policy Option 3 which better takes
into account the present economic constraints. 48. However, Policy Option 4 is
not discarded as its suitability is mostly influenced by existing technological
prospects that can change rapidly. This would increase its efficiency. 49. The overriding necessity
of giving clear signals to the markets would rather give larger merits to
Policy Option 4. If chosen, such a decisive step on EU level could accelerate
the market development of alternative fuels in general and ensure that
investments have a larger impact on economic growth in Europe. 50. Rapid implementation of the
necessary actions, with market comforting targets, can also strongly enhance
the momentum for the EU 2020 strategy. 10. Monitoring and evaluation 51. Monitoring and reporting will
be needed, building on existing reporting channels and additional information
collection through existing Joint Undertakings, Technology Platforms, and
expert groups. 52. Member States would most
likely need to set up national plans on the build-up of alternative fuels
infrastructure. 53. The Commission would submit
reports on the implementation and impacts of this Directive to the European
Parliament and the Council. 54. The reports would also
review the requirements in view of the technical, economic and market
developments, and propose adjustments as appropriate. [1] COM(2011) 144 final [2] The unit cost per smart private charging point can be
estimated to be around 520 €; while for a publicly accessible charging point it
is approximately 5,280 €. The cost of hydrogen refuelling station is 1.6
million €. The unit cost of a small-scale bunkering facility is 15 million €,
while the cost estimate used for LNG fuelling station is 400,000 €. [3] The Biofuels Directive 2003/30/EC established a
reference value of a 2% share for biofuels in petrol and diesel consumptions in
2005 and 5.75% in 2010. Member States were required to set indicative targets
for 2005, taking this reference value into account. The reports issued in 2009
as well as the Renewable Energy Roadmap (COM/2006/848) highlighted “the slow
progress Member States were making and the likelihood that the EU as a whole
would fail to reach its 2010 target. The Roadmap explained possible reasons for
this, which included the merely indicative nature of the national targets and
the uncertain investment environment provided by the existing legal framework.”
The Commission therefore proposed a more rigorous framework and legally binding
targets for 2020, as part of the Climate and Renewable Energy Package.