The often forgotten larger, heavier cousins of passenger cars: Europe's CO2 regulation for vans
There were remarkable developments in the passenger car market in 2020 despite the pandemic: new electric car registrations soared, and fleet-average CO2 emissions fell at the unprecedented rate of about 1 g/km per month when manufacturers finally changed course to meet the 95 g CO2/km target. But what happened in the light commercial vehicle (LCV) arena? It is true that LCVs, a.k.a. vans, currently account for a relatively low share of CO2 emissions from road transportation (about 12%), but their contribution has been on the rise since 2014 and it is now apparent that the 2020 LCV target was not ambitious enough to encourage the transition towards a zero-emission fleet. In light of the imminent review of post-2020 CO2 standards, it is definitely time to pay some attention to cars’ larger, heavier cousins.
In 2020, 1.7 million new LCVs reached European roads. This is 14% less than in the previous year, as the first COVID-19 pandemic wave in Europe in the spring of 2020 caused a significant drop in van sales. Figure 1 compares total monthly new LCV registrations (bar width) and monthly shares of electric vehicles (EVs) among new LCV registrations (bar height) in 2019 and 2020. As shown in the figure, new van registrations shrunk in April and May 2020 to about 31% and 56%, respectively, of the levels in the corresponding months in 2019. In the second half of 2020, the pace of van sales recovered—in fact, 4% more new vans were sold during this period than during the second half of 2019.
As also illustrated in Figure 1, electric models have yet to make a breakthrough in the market, having had an average market share of just above 2% in 2020, compared to an 11% share in the passenger car market in the same year. Still, electric model van sales in 2020 were about 28% higher than in the previous year and exceeded 3% in the month of December. Battery electric models account for the vast majority of the electric van fleet, making up 93% of total 2020 new EV sales. The other 7% were gasoline plug-in hybrids. So far, conventional diesel vans continue to monopolize the market with a 93% share of new registrations in 2020.
In 2020, a type-approval CO2 emissions target of 147 g/km (NEDC) came into force for the new European van fleet, replacing the 2017 175 g/km target. Unlike cars, LCVs did not benefit from a one-year phase-in period, but rather 100% of the fleet had to comply with the target in 2020. Official CO2 monitoring data from the European Environment Agency has not been published yet but data from the commercial provider Dataforce does allow us to take stock of 2020.
According to preliminary CO2 data for 2020 and assuming manufacturers’ fleets are as heavy as in 2019 (no mass data for 2020 is yet available), most of the top-selling manufacturers appear to have met their specific 2020 targets, although by a small margin in many cases (see Figure 2). Only the new Renault-Mitsubishi pool missed its target, despite leading the EV market—about half of all new EVs sold in 2020 were sold by the pool—with an EV share of almost 6%. Daimler, second in terms of EV sales and with an EV share slightly over 2%, complied by the narrowest of margins. At the other end, Toyota and MAN-SAIC comfortably met their targets.
At the fleet level, preliminary data indicates that average type-approval CO2 emissions decreased to about 153 g/km in 2020, after they backslid between 2017 and 2019 from 156 g/km to 160 g/km, respectively. At the same time, the average mass of the new LCV fleet has been generally increasing for years as Class III vans (the heaviest, with an average mass of around 2,100 kg) have been gaining popularity—currently, roughly 60% of all new van registrations belong to this class. The fact that targets are mass-adjusted (i.e. the heavier a manufacturer’s fleet, the higher the CO2 target) explains the distance between last year’s average type-approval CO2 emissions and the target value of 147 g/km. If, as expected, the 2020 fleet-average mass is close to 2019 levels and thus about 5% higher than the target reference mass of 1,766 kg, the actual 2020 average target would be around 156 g/km, 6% higher than the official fleet target.
Our data indicates that, on average, manufacturers reached the 2020 target with a combined market share of battery electric, conventional hybrid, and plug-in hybrid vans below 3%, conventional diesel van efficiency roughly at 2017 levels, and zero eco-innovation credits. Clearly, the bar was not set low enough to bring a much-needed change to the LCV market. In fact, back in 2014, the German courier Deutsche Post/DHL decided to decarbonize its fleet by producing its own battery electric vans because there were no appropriate models on the market. Earlier this year, the company announced that production will not be discontinued as had initially been planned, one reason being that there are still no suitable alternatives. This story may sound anecdotal but one of DHL’s models, the StreetScooter Work L, is among the three most-sold electric van models in Europe. Apparently, in the absence of a strong CO2 regulation, van manufacturers have had little incentive to add EVs to their product ranges—after all, CO2 targets could be largely met with conventional vans.
New European LCV registrations have seen remarkable, steady growth over the past decade and the LCV stock is projected to grow by almost 50% by 2050. Up until now, however, vans have usually taken second place to cars in policy and public debates. Obviously, despite their growing number, vans are far outnumbered by cars. In any case, a number of policies, such as national decarbonization targets, have either left vans out of their scope or have been primarily focused on cars, failing to spur the decarbonization of the LCV fleet.
Type-approval CO2 standards, a key policy instrument, seem to be an example of the latter. There has been a mismatch between the stringency of CO2 targets for LCVs and the potential for improving their efficiency. For reference, current fleet-average CO2 emissions amount to about 153 g CO2/km while NEDC standards as low as 90 g/km –100 g/km could be achieved with either no or only modest levels of electric vehicle penetration. In addition, the current single mass-based limit value curve approach, which is already problematic in the case of cars, is entirely inappropriate for vans, whose mass frequency distribution is not uniform but shows three peaks corresponding to each of the three weight classes. Shifting to two curves, one for the lighter classes and one for the heaviest or, even better, setting two fixed targets could prevent reasonable standards from again turning into a paper tiger.
In a few weeks, the European Commission will put forward a proposal for a revision of the post-2020 CO2 regulation for cars and vans. If Europe is to meet its Green Deal target, ambitious policies across all transportation subsectors are crucial. For LCVs and passenger cars, that means a reduction of at least 70% by 2030 as well as supporting interim targets to avoid delays in the uptake of zero-emission and efficiency improvements of conventional vehicles, plus a revision of the current mass adjustment approach. Overall, the review is an excellent opportunity to bring LCVs, the passenger car’s heavier cousin, into the spotlight and align the regulation with their technology potential and Europe’s climate change mitigation goals.