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Green Cars

The European Green Cars initiative is one of the three PPPs included in the Commission's recovery package. The envelope for this initiative is foreseen at €5 billion to boost to the automotive industry in a time of economic hardship, and support the development of new, sustainable forms of road transport. Of this financial envelope, € 4 billion will be made available through loans by the European Investment Bank (EIB), and € 1 billion through support to research, with equal contribution from the Seventh Framework Programme for Research (FP7) and from the private sector. The scope of this initiative is broader than the two other PPP, and research is just one part of it. Several coordinated calls for research proposals should be launched in July this year. These financial support measures will be supplemented by demand-side measures, involving regulatory action by Member States and the EU, such as the reduction of car registration taxes on low CO2 cars to stimulate car purchase by citizens.

Developing greener road transport

Greening road transport is necessary to achieve EU and world targets in emissions reductions. In the EU, 19% of total EU greenhouse gas emissions and 28% of CO2 emissions in 2005 are linked to the transport sector. More than 90 % of total EU transport emissions are due to road transport. While total EU emissions declined, transport emissions increased continuously between 1990 and 2005 due to high growth in both passenger (28 %) and freight transport (62 %).

Research is the way to develop the sustainable transport methods we need. Such "eco-innovation" will serve both to protect the environment, and to offer competitive advantage to those seeking to create new innovation-driven markets.

Measures contained in the European Green Cars Initiative

The European Green Cars Initiative contains three streams of action:

  • R&D, mainly through FP7 grants for research on greening road transport. Budget: € 1 billion, of which € 500 million from the Commission, matched by € 500 million from industry and Member States
  • Support to industrial innovation through EIB loans. Budget: € 4 billion (in addition to existing loans)
  • Demand side measures & public procurement, such as reduction of circulation and registration taxes for low-CO2 cars

Despite its name, the Green Cars Initiative is not only for passenger cars. Under the Green Cars Initiative, the research topics include:

  • Research for trucks;
  • Research on greening internal combustion engines;
  • Research on bio methane use;
  • Logistics, transport system optimisation; and
  • Research on electric and hybrid vehicles, notably research on:
    • High density batteries;
    • Electric engines; and
    • Smart electricity grids and their interfaces with vehicles.

Next steps

Under FP7, four Calls should be launched in July 2009 to implement the Green Cars Initiative, with an overall budget of around € 100 million. The Commission's Directorates-General for Research, Transport and Energy, and Information Society will each launch Calls that focus on electrification of road transport, along with a fourth, joint call on Electric Batteries. In other words, the funding for road transport projects under FP7 in 2010 will all be focused on the electrification of road transport and research into hybrid technologies; a critical mass which is expected to produce a step change in innovation in these technologies.

In the following FP7 Calls, in 2011, the topics for projects to be funded should broaden to the other areas of the Green Cars Initiative: research into trucks, internal combustion engines, logistics, and intelligent transport systems. In 2011, there could be also a Joint Call on “smart grid and recharging systems” between several services of the Commission.

EIB loans

In addition to grants received from FP7 funding, organisations involved in transport research can also apply for loans from the EIB. These will be the best tools for projects that involve greater risk.

Two EIB loan mechanisms will provide the bulk of financing under the EGCI:

  • The Risk-Sharing Finance Facility (RSFF); and
  • The European Clean Transport Facility (ECTF); a loan instrument which has been specifically designed for the transport industry.

The RSFF is a guarantee fund for research, development and innovation. The scope of eligible activities extends from “traditional” investments in basic or applied research and demonstration activities, to equipment and soft investments such as R&D operating cost, salaries of researchers, management and support staff, and IPR acquisition or protection costs. Any organisation can apply for an RSFF loan – large corporations and SMEs, universities and research institutes, publicly or privately owned.

While the RSFF is a financing instrument that existed before the current financial crisis, the ECTF has been created in response to the crisis and its effect on the transport industry, aimed specifically at transport research, and at one research goal: lowering emissions in transport. The European Clean Transport Facility will support investments in research, development and innovation aimed at emission reduction and energy efficiency in the European transport industry.

Both the RSFF and ECTF loans are attractively priced, and with long maturities.

Other existing EU research actions in greening transport

The Hydrogen and Fuel Cells JTI

The EGCI, focusing as it does on electrification of road transport, is complementary to the Hydrogen and Fuel Cells Joint Technology Initiative launched last year. This public-private joint technology initiative (JTI) will implement the EU target-oriented research and development to support the broad market introduction of these technologies. Founding members are the European Community and a non-profit association of European industry interests composed of a major share of Europe's fuel cells and hydrogen companies of all sizes from micro to large multinationals. The Commission is expected to fund 470 M€ from the Seventh Framework Programme for a period of six years which will be at least matched by industry contributions.

Past collaborative projects

The objectives of the European Green Cars Initiative are achievable: under EU-financed projects under FP6, for example, a research project entitled POMEROL developed and tested a new lithium ion car battery which, as well as producing no greenhouse gas emissions, achieved a charge of close to 3000 watts per kilo, for a cost of only € 20 per kilowatt of energy produced. The ILHYPOS and HyHEELS projects, meanwhile, developed four different hybrid architectures, from small to medium sized vehicles, which are both technologically innovative, and cost competitive for mass production. These and more technological developments can be deepened with the financing support of the European Green Cars Initiative, to produce a step change in research in order to bring to market the sustainable transport systems in the next decade.

Future ERA-NET+¹

Member States have also expressed a desire to work more closely together to support research into eco-innovation for road transport. The European Commission is therefore preparing to launch a new tool to support the coordination national research programmes – an "ERA-NET Plus" action – in road transport greening. This will allow Member States' own research funds to align their research strategies and issue joint calls for proposals, supported by EU financing.

¹ An ERA Net is a scheme dedicated to support the coordination and networking of national and regional research programmes from different EU Member states and FP7 Associated countries