Are we leaving innovative power behind?
In an interview published by the trade journal Automobil Industrie, David Bothe, Director in the competition and automotive practices at Frontier in Cologne, advocates a broad mix of drive technologies to ensure that e-fuels contribute to climate protection. David Bothe said it was ‘important to rethink existing regulations in order to promote innovation and to avoid planned economy action.’
Innovative technology mix needed – not only in Europe
It will be impossible to reach the ambitious climate targets in the automotive sector by using only one technology. In the past, competition has often proven to be an important driver of technological progress and innovation.
Although electrification certainly plays an important role here, achieving the targets will not be possible with electrification alone. The fact that only 1% of 250 million passenger cars on Europe’s roads today are e-vehicles, and half of those are hybrid vehicles with combustion engines. Given this statistic it “shows the enormous size and importance of the task ahead” said David Bothe.
A mix of e-fuels and increased e-mobility could help to solve this problem in the long run. Capacity from currently “stranded renewable energy” in Europe – and around the world – could be used to contribute to the energy turnaround in the automotive sector. In principle, there is enough renewable energy available at a global scale. The bottleneck is the capacity to harness, transport and store the energy. In this respect, e-fuels offer clear advantages: They are easier to transport and can therefore be used, for example, in attractive locations where energy sources are currently "stranded", i.e. there is no direct demand for energy from these countries (e.g. South America or North Africa). This might also require less investments in infrastructure and storage.
Countering regulatory micromanagement
Today’s level of regulation by both the EU and its member states sometimes resembles the characteristics of a ‘planned economy’, David said. In the past, ‘companies used to compete with other suppliers and had to manage their technological and market risks whereas today they simply built what regulation requested, irrespective of their clients’ needs or competitive advantages’. But, David continued, ‘behavioural economics had shown how important having a choice is for the end customer to accept certain measures’.
The new coalition government of Germany has a commitment in its agreement, that all suitable technologies should be able to compete for the optimal mix of solutions to achieve climate neutral mobility - this might be a first step in regulatory climate protection.
The luxury of an inflexible legal framework
Time is running out, but a rapid introduction of alternative technologies is not yet in sight. This, David continued, was a ‘result of a very strict and inflexible legal framework, leaving large parts of the automotive and fuel industries’ innovation power unused’. This is a luxury we definitely cannot afford any longer if we want to tackle climate change’.
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