In July 2021, the European Commission unveiled the Fit for 55 package—a revised set of climate and energy laws intended to help Europe achieve a 55 percent net reduction of greenhouse gas emissions by 2030. With transport accounting for about a quarter of Europe’s CO2 emissions, it’s no surprise that this new package means big things for electric mobility. With more stringent emissions targets in place, governments are introducing many laws and incentives to accelerate the shift to sustainable mobility.
Before we dive into exactly what these changes mean for drivers, let’s quickly recap how this package came about. Back in 2019, the European Commission presented the European Green Deal: a framework of regulations and legislation aiming to transform Europe into the first climate-neutral continent by 2050.
However, following an in-depth impact assessment, it emerged that under current legislation only 60 percent of this target would be met by 2050. The European Commission proposed the Fit for 55 package to meet the interim climate targets necessary to reach complete climate-neutrality by 2050. With 12 legislative initiatives, eight of which are updates to existing laws, and a second package expected for December 2021, it’s a comprehensive building block to achieve the Green Deal’s ambitious 2050 climate goals.
So, now you’ve got the bigger picture, let’s take a look at what this legislation could mean for drivers and how it will impact the mobility industry as a whole.
In a historic first, the European Commission has proposed a complete phase-out of ICE vehicles by 2035—only five years later: This means that if the EU gets their wish, by 2035 all new cars on the European market must be zero-emission vehicles. As it’s practically impossible to build an ICE vehicle emission-free, this effectively signals a phaseout of ICE vehicles in Europe.
The pending phase-out date for ICE cars will ensure that the EU stays at the forefront of global uptake for electric vehicles by stimulating the automotive industry to intensify electrification efforts. Several prominent automakers—such as Audi, BMW, Volkswagen, and Volvo—have already pledged to halt or drastically reduce ICE vehicle production and investment in a similar time frame.
This means that you can not only expect to see many more EVs on the roads in the coming years, but also a wider model variety than ever before. The phase-out of ICE vehicles will also positively impact the cost of going electric: as the automotive sector shifts towards a clean mobility solution and electric vehicles become mainstream, we can expect both new electric vehicles to become more affordable and the second-hand EV market to flourish, providing current and future EV drivers with a wider, and more affordable than ever, choice.
A new structure for transportation fuel tax rates
The revised climate laws also aim to adjust or remove outdated tax exemptions and incentives for the use of fossil fuels. By taxing the most polluting fuels the highest, the package aims to encourage consumers to choose cleaner alternatives like—you guessed it—electric vehicles.
This proposal introduces a new structure of tax rates based on the energy content and environmental performance of the fuels and electricitymeasured in Euros per Gigajoule (GJ).
A GJ is a term that originates as a metric energy measure for natural gas and is the equivalent to 1 billion joules of energy—one GJ of natural gas has the same amount of energy as 27 liters of fuel oil, 39 liters of propane, 26 liters of gasoline or 277-kilowatt hours of electricity.
The new structure of tax rates of fuel for transportation is as follows:
€10.75/GJ: Fossil fuels such as gas oil and petrol, and non-sustainable biofuels
€7.17/GJ: Fuels such as natural gas, LPG, and non-renewable fuels of non-biological origin
€5.38/GJ: Sustainable, but not advanced biofuels
€0.15/GJ: Electricity as a transportation fuel
Under this new proposal, the tax applied to electricity as a fuel will be the lowest possible.
The package establishes fair market conditions for electric mobility in the transition to clean mobility. In doing so, the proposed legislation tackles some of the bottlenecks that currently act as a deterrent to new actors entering the market and remove incentives for unsustainable transportation fuels.
For the average driver, these changes will mean that the price of petrol and diesel at the pump is likely to increase, while prices for electricity as a transport fuel will become more competitive.
A bigger and better charging infrastructure
To accelerate the uptake of EVs, Fit for 55 proposes binding targets to improve the deployment of publicly accessible charging infrastructure. Each Member State is now required to create a National Policy Framework for developing its charging network. Through regular assessments of fleet growth and existing infrastructure, these frameworks aim to guarantee each country’s charging networks can meet demand when and where it’s needed.
Additionally, the amount of charging infrastructure installed in public places will be linked to the amount of EVs on the road. To make this possible, Member States will need to ensure that there is at least 1 kW of publicly accessible charging power per EV (including plug-in hybrids) in their country. This means that EV drivers in countries that are currently underserved in terms of EV charging infrastructure can expect to see many more charging stations in public places.
The new package comes on top of the already announced European Green Deal commitment of hitting an Europe-wide milestone of one million charging stations across the continent by 2025 (compared to only 285,800 available in 2020). It also promotes a common European plug standard, improvements to payment processes, and better access to charging networks.
Ultimately, all of the legislation aims to improve the electric driving experience for all. With more charging stations, better cross-border connectivity, and more EVs throughout the continent, recharging on (long-distance) trips will become quicker and more convenient than ever before.
The regulation highlights that price transparency is crucial to ensure seamless and easy recharging and refueling, and establishes minimum requirements. This means drivers can look forward to accurate price information displayed before they start a charging session as well as a complete breakdown of price composition. This way, drivers will know exactly what they are paying for when charging their car.
The aim here is to make the charging experience as easy and convenient as possible.
Drivers will benefit from:
user-friendly payment methods;
real-time status insights of publicly accessible charging infrastructure;
A growing e-roaming market.
This will result in convenient payments and roaming capabilities, knowing charger availability before making your way to it, and recognizing if your vehicle is compatible with the charging station.
Additionally, accessibility for all drivers—including people with disabilities and the elderly—is also taken into consideration. Charging stations should be designed in such a way that they can be used by as much of the public as possible. In line with this, we expect things like screen height, cable weight, and space around charging stations will become more standardized to increase accessibility.
The Fit for 55 package introduces the requirement of smart charging—a set of intelligent functionalities that make charging more energy-efficient and cost-effective. Smart charging helps to stabilize grids, manages and reduces energy consumption, and allows charging infrastructure to connect to renewable energy sources.
For drivers, a digitally connected and smart charger means real-time control of the charging session, optimized information of availability and status of a charger, and an optimized overview of charging times and costs.
When put into practice, this translates into more power in the hands of EV drivers over their charging sessions.
Vehicle to grid
What’s more, the Renewable Energy Directive introduces the possibility of a requirement for Vehicle-to-Grid (V2G) functionalities, based on the assessment of each Member State.
This means that V2G technology, which allows electricity to be fed back into the grid from the battery of electric vehicles, is one step closer to becoming a reality and that consumers could soon be able to have even more control over their energy consumption.
EV batteries could soon act as storage for excess electricity and discharge it back to the grid at the consumer’s command, allowing them to cut down on electricity prices by better managing their consumption.
A bright future ahead for Europe and EV drivers
The Fit for 55 package and the European Green Deal are both promising for the future of electric mobility in Europe. As governments and vehicle manufacturers adopt legislation to meet these stricter CO2 targets, there’s no doubt that we will see an unprecedented rise in the number of EVs and accessible and smart charging infrastructure on Europe’s roads.