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Fuelling the Future: a transition to e-mobility will result in significant benefits to Europe’s economy

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By 2030, Europe could improve its net GDP, create 206,000 additional jobs and reduce spending on oil imports by €49 billion through the transition to e-mobility. This will have the added benefit of reducing CO2 emissions from passenger cars by 88% by 2050 and significantly cutting air pollution, currently causing 467,000 premature deaths in Europe every year.

These are some of the conclusions of a new report – Fuelling Europe’s Future: How the transition from oil strengthens the economy – released by a consortium of stakeholders in the European mobility sector, including leading car manufacturers, industry associations, trade unions, consumer groups and civil society, convened by the European Climate Foundation.

Element Energy worked alongside Cambridge Econometrics to carry out the analysis which covered the technical, economic and environmental issues associated with the deployment of low carbon technologies and the shift from imported oil to domestically produced electricity and hydrogen

Key findings of the report are:

  • Europe could cut its spending on oil imports by €49 billion in 2030, according to the report’s central scenario. At present, the European Union imports 89% of its crude oil, the vast majority of which is used for transport fuel. Replacing imported oil with domestically produced energy will keep many billions of euros re-circulating in the European economy.
  • The European economy will be strengthened: In all three of the scenarios explored, the transition to e-mobility leads to an increase in GDP resulting from a reduction in consumer spending on fuel and reduction in foreign imports.
  • By 2030, e-mobility could help create 206,000 net additional jobs in Europe. However, efforts must be made to ensure workers who are currently producing legacy technologies are retrained for quality jobs in producing the technologies of the future. The report finds that from 2030 onwards, the location of future battery manufacturing will have a significant economic impact.
  • Health: In the central scenario CO2 emissions from cars are reduced by 88% by 2050. NOx and particulate matter emissions are also cut significantly with NOx emissions from cars forecast to be reduced from 1.3 million tonnes per year in 2017 to 70,000 tonnes per year in 2050. This dramatic reduction in air pollution will have important health impacts – currently there are 467,000 premature deaths a year in Europe as a result of air quality issues.
  • Impact on consumers: The purchasing cost of Zero emissions vehicles and diesel/gasoline cars will converge by 2030. By 2030 the price difference will be narrowed as diesel and gasoline cars become more expensive due to regulatory limits and as ZEVs achieve economies of scale. There is a convergence in costs in our central case, especially when considered on a 4-year total cost of ownership basis.
  • Investment in Grids and Chargers: Significant infrastructure investments are needed but benefits are likely to outweigh the costs. Up to around €23 billion of cumulative investment in electric vehicle charging infrastructure could be required in Europe by 2030, of which €9 billion would cover publicly accessible chargers. While electricity grids will need modernisation, the implementation of smart charging could be used to mitigate the costs. This will have the effect of reducing the increase in peak demand to just 3 GW (from 21 GW in a worst-case scenario). The costs of implementing smart charging can be more than offset by the value created by connected electric vehicles providing services to the network operator. By 2030, the smart-charging benefits per electric vehicles are expected to be around €100 per year.

If you would like more information about the services Element Energy can offer in this area, please contact Celine Cluzel.

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