Alternative fuels already exist, and in many cases the technology is mature enough for market deployment. But there is still a gap between successful demonstration projects and deployment in the real market, which the private sector does not yet bridge.
Their full-scale deployment has been held back by the high retail cost of such vehicles, low levels of consumer acceptance and a lack of infrastructure for recharging and refuelling.
Consumers will only reach this market if they can buy these vehicles at a reasonable price and if there is sufficient and accessible infrastructure so the vehicles can run. Without it, this market will not succeed, despite the huge investments that have been made.
At the moment, we are trapped in a self-perpetuating cycle
Investors are unsure about these new markets and do not put their money into alternative fuel infrastructure because there are not enough vehicles and vessels to use it. In turn, these vehicles are not offered by manufacturers at competitive prices because there is not enough consumer demand; consumers do not buy the vehicles because the infrastructure is lacking.
This goes a long way to explaining why EU citizens do not yet feel confident enough to switch to other technologies. We need to kick-start these new markets so consumers, industry and business can begin to benefit.
If the infrastructure were made more widespread - not just in a few cities, but across Europe – consumers will gain confidence that these technologies are ready.
Today, Europe’s network to supply electricity, hydrogen and natural gas for transport is simply not sufficient to enable market take-up, which is why I am proposing a comprehensive long-term strategy for alternative fuels.
The idea is to provide a reliable legal environment to stimulate private investment in a new market. To create EU-wide conditions to boost customer acceptance, we need to set targets to build the necessary infrastructure and make it compatible everywhere.
Take electric propulsion, one of the main long-term options to substitute oil for short to medium distances. With their high energy efficiency and zero tailpipe emissions, electric vehicles could radically change the way mobility is organised, particularly in urban areas.
Ultra-clean silent buses and delivery vehicles powered by electricity would also improve the quality of urban life.
Much of the infrastructure needed for deploying electric vehicles does exist, but charging points have to be available. For electric vehicles, a minimum number of charging points should be required in each EU Member State by 2020 and at least 10% of these should be publicly accessible.
Liquefied Natural Gas is the only fuel that will reasonably allow ships and waterborne transport to meet emissions targets. But market take-up is mostly in the planning stage and fuelling facilities are very limited. They should be made available for waterborne vessels in Europe’s major sea, river and canal ports, and for road vehicles along the main motorways.
If there is to be a true single market for alternative fuels, there must also be common standards for infrastructure so people can operate and recharge their cars in the same way across in Europe. That means standardised methods of payment at fuelling stations, for example the same types of fuel nozzles and electric plugs. Consumers today must use different adaptors, while investors and manufacturers pay retrofit costs to adopt new recharging and refuelling systems.
This new customer base and market has great potential for European business and manufacturers. Today’s world market share of electric, natural gas and hydrogen vehicles is very limited, but it is definitely set to grow. So this is a good opportunity for EU car and transport equipment manufacturers to become world leaders in this burgeoning sector and to raise their global competitiveness. In turn, this will stimulate economic growth in Europe and create more employment, particularly in small and medium-sized enterprises.
The largest barrier to accelerating build-up of future transport fuels is uncertain demand from manufacturers, investors and consumers. It is now time to give clear signals to all of them by creating conditions to get these fuels and vehicles properly on the EU market.
Siim Kallas, Vice-President of the European Commission, responsible for transport