Government submits four Union communications to Parliament outlining positions on EU climate initiatives for transport

The Government submitted four Union communications to Parliament on 30 September 2021 concerning legislative proposals for transport. These communications address the tightening of CO2 emission limits for motor vehicles, development of a distribution infrastructure for alternative fuels, and an increase in the use of alternative fuels in aviation and maritime transport.

The legislative proposals are a response to the broader Fit for 55 climate package published by the European Commission in July. The communications set out the principal contents of the EU proposal and the associated position of the Government.

1. Stricter CO2 limits required for new passenger cars and vans

The Regulation imposing CO2 emission limits on new passenger cars and vans seeks to increase the supply of zero- and low-emission vehicles, affecting the type of motor vehicles manufactured in the European Union.

The Commission is proposing a substantial tightening of current limits. The limit for new passenger cars in 2030 would require automotive manufacturers across the European Union to reduce CO2 emissions by 55 per cent compared to 2021. The current reduction target is 37.5 per cent. The corresponding target for new vans would be 50 per cent instead of the current 31 per cent. The Commission further proposes a new limit of 100 per cent for both passenger cars and vans by the year 2035. This would end all manufacturing of cars and vans powered by internal combustion engines, meaning diesel and petrol vehicles, by the year 2035.

The Government supports the CO2 emission limits proposed by the Commission for 2030 and 2035. Ambitious limits will also improve the selection of zero-emission vehicles available in Finland. While the Commission initiative does not consider gas-fuelled cars, in view of its whole life-cycle emissions, biogas will remain a climate-friendly option that promotes a circular economy. Future preparatory work should accommodate production of gas-fuelled cars and not impose obstacles to their manufacture. Other initiatives of the Fit for 55 package should also promote the use of biogas for transport and the construction of a distribution infrastructure.

2. Ambitious targets for alternative fuel distribution infrastructure are worth supporting

The Commission is seeking to develop an EU-wide alternative fuel distribution infrastructure, and is therefore proposing more ambitious binding rules that would be directly applicable in the Member States. The proposed Regulation would apply to all modes of transport.

Requirements for road transport:

- an electrical charging infrastructure for light and heavy vehicles

- distribution of hydrogen to road vehicles

- LNG distribution

Requirements for maritime and air transport:

- LNG distribution for maritime transport at ports

- shore-side electricity distribution at harbours and airports

Member States would have to ensure development of a charging infrastructure that keeps pace with alternative propulsion systems. For example, electric charging stations would have to be provided at distances not exceeding 60 kilometres apart along the TEN-T core network by the year 2025. This requirement will be extended to the TEN-T road network by the end of 2030. A charging station for heavy vehicles will be required every 60 kilometres on the TEN-T core network by the end of 2025 and every 100 kilometres on the comprehensive road network by the end of 2030. The proposal also calls for the construction of hydrogen filling stations at intervals of 150 kilometres on the TEN-T core network and on the comprehensive road network by the end of 2030.

The proposed Regulation would also introduce new requirements to ensure user-friendliness of charging and refuelling services. These requirements include providing information, transparency and non-discrimination in pricing, and uniformity of payment methods.

The Government welcomes these ambitious common EU targets for an alternative fuel distribution infrastructure and stresses the importance of enabling electric motoring everywhere, regardless of place of residence or travel route. National flexibility may be needed for heavy transport in sparsely populated areas with long distances and low traffic volumes.

Requirements for hydrogen filling stations must be treated with caution. There is currently no demand for hydrogen fuel in transport, and the Commission's objective of a dense refuelling network may be challenging to achieve within the proposed timetable.

The proposal for maritime and inland waterway transport includes welcome minimum requirements for shore-side electric power at harbours, and for liquefied gas distribution at seaports. The objectives of increasing the availability of shore-side electric power for aviation are worthy of support, but should give consideration to airport traffic volumes.

3. Increased use of renewable fuels in aviation is welcome

The Commission proposal seeks to increase the use of renewable aviation fuels and put an end to the sustained rise in emissions from aviation. The proposal includes harmonised statutes governing the use and distribution of renewable aviation fuels in the European Union. The Commission proposal would not only impose a duty on fuel producers to distribute renewable fuels, but also require airlines to use these fuels. The proposed admixture obligation would begin at two per cent in 2025 and gradually increase to 63 per cent by the year 2050. Electro-fuels would be subject to their own sub-obligation from 2030 onwards.

Finland supports measures at EU level to increase the use of renewable aviation fuels. The measures must be taken in a manner that effectively reduces emissions from aviation and gives consideration to aviation sector operating conditions and the accessibility of Member States. It is important to study the impact of the proposal together with other initiatives that affect aviation emissions and industry costs. While the uniform EU statutes proposed by the Commission will have a positive impact, Member States should retain the option of setting emission targets that are even more ambitious than those proposed.

4. Competitiveness impacts of using renewable fuels in maritime transport must be considered

The Commission is also proposing measures to increase the use of alternative fuels in navigation. Fossil fuels currently account for more 99 per cent of fuel used in this sector. The Commission proposes a gradually decrease in the greenhouse gas content of vessel fuels from a target of -2 per cent in 2025 to -75 per cent by the year 2050. Container ships and passenger vessels would also be required to use shore-side electricity while in port as of the year 2030.

While Finland supports measures at EU level to increase the use of renewable fuels, they must be taken in a way that effectively reduces emissions and gives consideration to the competitiveness of Member States. The proposal may significantly impact Finland's foreign trade and competitiveness, due to the high cost of alternative fuels. It will be important to study the joint impact of the proposal together with other initiatives that affect maritime emissions and industry costs. Finland welcomes the obligation to use shore-side electric power at harbours.

What is the Fit for 55 package?

European climate law commits the European Union to achieving a reduction in emissions of at least 55 per cent of the 1990 level by the year 2030, and to reaching climate neutrality across the entire European Union by the year 2050. The Fit for 55 EU climate package includes twelve legislative proposals to help implement the emission reduction target.

The proposals for transport concern CO2 emission limits for cars, an alternative fuel distribution infrastructure, increased use of alternative fuels in aviation and maritime transport, a broadening of the scope of emissions trading to include road and maritime transport, and enhancement of current aviation emissions trading. Other factors affecting transport include the Effort-Sharing Regulation, the Social Climate Fund, the Energy Taxation Directive, the Renewable Energy Directive and the Energy Efficiency Directive.

What's next?

Union communications are considered in the Grand Committee of Parliament, which receives opinions from the relevant specialised committees.

Consideration of the legislative proposals has begun in working groups of the Council of the European Union. Negotiations will continue until at least 2022. The first statutes are expected to take effect in 2024.

The Government will also submit Union communications to Parliament on the remaining legislative proposals of the Fit for 55 package in the coming weeks. The subjects of these communications will include joint emissions trading for fuels used in road transport and heating of buildings, emissions trading for navigation, and emissions trading for aviation.

Inquiries:

Johanna Juselius, Special Advisor to Minister Timo Harakka, tel. +358 50 372 7062

Päivi Antikainen, Director of Unit, Ministry of Transport and Communications, tel. +358 50 382 7101, paivi.antikainen(at)gov.fi