A measuring hose for emissions inspections in diesel engines sticks in the exhaust tube of a Volkswagen Golf 2,0 TDI diesel car at a garage in Frankfurt an der Oder, eastern Germany. Picture: SUPPLIED
A measuring hose for emissions inspections in diesel engines sticks in the exhaust tube of a Volkswagen Golf 2,0 TDI diesel car at a garage in Frankfurt an der Oder, eastern Germany. Picture: SUPPLIED

Brussels — EU consumers may do as much as regulators to propel the region’s car sector into the electricity-powered age foreseen by Tesla, according to the EU’s industrial policy chief.

European Commissioner Elzbieta Bienkowska said the EU had had a "breakthrough moment" after Germany-based Volkswagen (VW) admitted in 2015 that it fitted diesel engines with software to cheat US checks on smog-causing discharges of nitrogen oxides. This deeply affected "the emotions in society toward emissions and cleaner cars", she said.

"Diesel cars are finished," Bienkowska said in an interview in Brussels on May 24. "I think in several years they will completely disappear. This is the technology of the past."

The vehicle-emissions scandal may help the EU gear up for a technological revolution in road transport. Europe is seeking to retain leadership in the worldwide market for passenger cars in the face of competition from the US, where Tesla is based, and China, which accounts for about half of electric-vehicle sales.

Tighter rules

VW’s cheating, which the US uncovered and led Germany to order an EU-wide recall of 8.5-million VW vehicles, pushed the world’s number one car maker into a crisis and left policy makers in Europe scrambling to patch up regulatory holes that threatened a "clean-diesel" strategy dating to the 1990s.

Bienkowska’s services were subsequently notified of possible engine-management irregularities in more diesel cars, including some made by Fiat Chrysler.

The issue has been politically thorny in Europe because around half the cars in the region are powered by diesel — which causes more urban pollution than petrol while having less global-warming impact — and because many member states have struggled to meet clean-air goals meant to reduce human sicknesses and premature deaths.

"People have realised that we will never have completely clean — without NOx [nitrogen oxides] — diesel cars," said Bienkowska.

Last week, EU governments backed a revamp of the rules for authorising car models in the 28-nation bloc. The European Commission, the EU’s regulatory arm, won the power to fine car makers up to €30,000 per faulty car and order recalls as part of the more centralised market oversight, becoming more like the US Environmental Protection Agency.

Car maker ‘arrogance’

Bienkowska said "arrogance" by car makers, coupled with their traditionally close ties to national governments, meant the draft law was initially greeted as if the industry wrongdoing had been insignificant. Gradually, she said, attitudes changed.

"I am really a little bit less frustrated than I was a year ago," said Bienkowska. "During this denial phase, it was awful."

Adding to the optimism is an initiative by the commission and industry to spur the development in Europe of batteries for electric cars, including through financing. European companies seeking to get a foothold in the market include BMW, Daimler, BASF and Vattenfall.

"We want to have the first batteries produced in Europe, but also the whole value chain," Bienkowska said. "It’s the kind of a project that a single member state cannot afford."

Individual European companies are doing their part too.

VW, which aims to sell as many as three-million all-electric cars annually by 2025, has awarded €40bn in contracts to battery producers. The deals take the company to within striking distance of its target to lock down €50bn in supplies.

European electric-vehicle sales, now about 1.5% of all new registrations on the continent, will rise to about 5% in 2021 and take off from 2025, according to Bloomberg New Energy Finance.

EU policy to fight climate change may also play a role, albeit in a more nuanced way than China’s approach of imposing quotas. A draft European law to tighten caps on car discharges of carbon dioxide offers incentives for vehicle makers to shift to electric vehicles.

In the meantime, Bienkowska must continue to tackle the haziness and headaches of the diesel age. She’s stepping up legal threats against several EU countries, including Germany and Italy, for lax enforcement of the previously agreed European rules meant to ensure car makers heed nitrogen oxides limits.

Bienkowska is also urging a number of EU nations, particularly in Eastern Europe, to increase recalls of vehicles suspected of failing to meet nitrogen oxides standards. At present, eight member countries have mandatory recalls in place.

"We have member states like Romania, Slovakia and Poland where the recall rate is extremely low," she said. "We don’t want those parts of Europe to be full of old diesel cars."

Bloomberg

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