Sunday

4th Dec 2022

Infrastructure rules threaten alternative fuels bill

The debate in Brussels over how to develop viable alternatives to petrol and diesel boils down to a version of an age-old question: what comes first, the chicken or the egg?

The conundrum facing lawmakers is that motorists do not buy electric or gas powered vehicles for the simple reason that it is too inconvenient to charge or fill up their tank. Meanwhile, companies do not invest in new filling stations or charge points because there is not enough demand.

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  • Commission plans could see electric charge points and filling stations in Europe's most remote areas (Photo: EUobserver)

Resolving this question is one of the aims of the draft directive on alternative fuels currently being discussed by MEPs and ministers.

But the legislation is in danger of falling into the unwanted category of files that governments agree with in principle, but object to in practice.

The most contentious item relates to the requirement for minimum infrastructure targets.

Under the plan published by the EU executive in March, by 2020 the directive would require: hydrogen refuelling points every 300km, liquefied natural gas (LNG) filling stations every 400km; fuelling points for compressed natural gas (CNG) every 100km, and liquefied petroleum gas (LPG) points every 150km.

Nearly all member states are worried that the bill could force them to push large sums of public investment into building an infrastructure network for which there is no market demand. They are also sceptical of the notion that building the network will inevitably lead to more customers using alternative fuels.

For his part, Carlos Fidanza, the Italian centre-right deputy charged with drafting parliament's position, wants to go further by adding targets for LPG and linking the infrastructure requirements to population.

Under his plan, one filling station for Hydrogen, LPG and CNG would be needed per 250,000, 150,000 and 100,000 people respectively.

Like the EU executive, MEPs say that the alternative fuels market, which accounts for less than 10 percent of transport fuels, cannot develop without infrastructure.

“If we want to give certainty to investors then we have to set binding targets at national level,” Fidanza said at a recent breakfast hearing with lobbyists and lawmakers, adding that “we are at the crucial point in the negotiations with council (member states)."

Fidanza added that he had chosen to go beyond the commission target for liquefied petroleum gas (LPG) and that the parliament's transport committee had agreed that “we need to establish an LPG network across the EU.”

Critics say that this 'one-size-fits-all' approach would result in filling stations being built in remote areas of Sweden and Finland where population density is amongst the lowest in the world. Meanwhile, gas and electricity provision would still be insufficient to cope with demand in cities.

Both the commission and parliament say that the plans are not intended to impose new costs on governments, arguing that private sector investment and EU cohesion funds should be able to cover the costs.

Financial incentives are needed to attract enough investment to take the strain from the public purse, argues Jeffrey Seisler.

Chief executive of Clean Fuel Consulting, a Washington DC and Brussels-based lobby group, Seisler also warns that the timeframe for implementation is “unrealistic and won't be met.”

A council official working on the file told this website that if the parliament continues to insist on binding targets, governments will “dig their own trenches” in opposition, dimming the prospects of a compromise.

Leaving the targets as drafted by the commission in the annex of the bill is “out of the question,” the official added, although a possible compromise could involve negotiating targets for each individual member state.

But with next May's European elections rapidly approaching, it is MEPs who are most anxious to get the directive on the statute books before the end of the legislative term.

The transport committee will adopt its negotiating position on the file in November. For their part, governments have only recently begun their discussions on the directive and are not expected to agree a negotiating mandate before mid-December.

It is this factor that could see the parliament blink first.

Dim prospects for EU energy tax reform

The logic behind a European Commission's proposal on energy taxation is based on the concept of "fuel neutrality" but it could hurt alternative fuels the most.

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