COVID-19 Set To Hasten UK Ban On Sales Of Gasoline And Diesel Cars

The pandemic is hitting hard economies worldwide, but it is also an opportunity to jumpstart an economic recovery to achieve the net-zero emission ambition of the United Kingdom, according to the Committee on Climate Change (CCC), the UK's top advisory panel on climate change. The UK – which last year became the first major economy in the world to enshrine into law its target to reduce its greenhouse gas emissions to net-zero by 2050 – has a historic opportunity to rebuild its economy in line with the energy transition and in line with its ambitions to be a net-zero economy in three decades, the committee said in its annual report to Parliament.

Apart from rebuilding the economy by turning it greener, the committee's report calls on the government to bring forward the date for phasing out the sale of gasoline and diesel vehicles to 2032 at the very latest.

The UK government – under previous advice from the committee – is consulting whether to move up the date for phasing out sales of diesel and gasoline-powered cars, including hybrids, from the original plan of 2040 to 2035 or sooner.

"The Government is currently consulting on bringing forward its 'Road to Zero' ambition to phase-out the sale of petrol and diesel cars. Our assessment is that the date should be brought forward to 2032 at the latest, as currently planned in Scotland," the committee's report reads.

The industry met the new report with mixed reactions, with some associations saying that the market would simply not be ready for such a phase-out plan by 2032, others saying that hybrids shouldn't be included in the ban, and another group opining that the UK will need more than a government pledge in order to implement a 2032 ban on gasoline and diesel sales.

Incentives and Infrastructure

The committee itself admitted in the report that subsidies for zero-emission vehicles should be kept in place, while the electric vehicle charging infrastructure will need targeted support to be able to expand and accommodate the growing EV fleet.

Lack of infrastructure and vehicle range are among the top concerns of consumers considering an EV purchase.

Government support and favorable policies could address the lack of charging infrastructure, but widespread adoption of EVs, not only in the UK but everywhere, will also depend on zero-emission vehicles reaching price parity with their closest gas or diesel-fired competitors. An EV sales surge will also need a marked shift in consumer preferences toward zero-emission, which could come from the growing environmental awareness and, of course, from a growing number of choices and price parity with internal combustion engine (ICE) vehicles.

In terms of more and more choices, EV makers and the legacy carmakers will offer around 500 EV models globally by 2022, despite some possible delays during the COVID-19 crisis, according to estimates from BloombergNEF (BNEF).

In a few years, there will be many choices, but incentives and infrastructure could be more decisive factors in consumer preference for EVs, alongside price.

Is UK's Road to Zero Transportation Plan Achievable?

The committee's recommendation for phasing out the sale gasoline and diesel vehicles by 2032 is achievable, Alfonso Martinez, managing director of leasing firm LeasePlan UK, said, as quoted by InsideEVs.

"The industry has made terrific progress over the past three to four years, not just in the range of models but in the improvement of technology and decrease in price. Therefore, a 2032 deadline should be entirely achievable target if we continue to progress with urgency and an emboldened attitude," Martinez said.

However, he noted that infrastructure needs to expand--vastly--to meet consumer needs.

Another organization, the British Vehicle Rental and Leasing Association (BVRLA), is not so sure that a 2032 ban is achievable.

"It is too early to say whether 2032 is a realistic target date for the entire new car and van market to go zero-emission," Toby Poston, the BVRLA's director of corporate affairs, said.

The Society of Motor Manufacturers and Traders (SMMT) believes that the UK will need to support EVs with long-term policies if it wants to go down the 'road to zero.'

"We need a long term and ambitious policy package that safeguards industry and jobs, allows people from all income groups and regions to adapt and benefit, and, crucially, does not undermine sales of today's low-emission technologies, including popular hybrids, all of which are essential to deliver air quality and climate change goals now," SMMT Chief Executive Mike Hawes told the Financial Times.

EV Registrations Boom in UK

In June, new car registrations in the UK slumped by 34.9 percent year on year, but the registrations of battery EVs and hybrids soared by 73.3 percent, SMMT data showed this week. The overall UK car market began a tentative restart after more than two months of lockdown, the organization noted.

"Many of June's registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable," Hawes said.

COVID-19 clouds the short-term outlook, but it could be an opportunity for the UK and other developed economies to start thinking about how they can 'build back better' a greener economy and reduce transportation emissions.

By Tsvetana Paraskova for Oilprice.com