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Energy, Environment & Transport Pro Brief |
| Wed 30 October 2024 | View online
Estimated reading time: 4-5 minutes |
| Good morning , And welcome toWednesday 30 October’s daily Energy, Environment and Transport Pro Brief.
Today we explore a failed German bid to launch flying taxis - and see what it means for Europe’s industrial strategy dreams.
And after months of discussions, EU tariffs on Chinese EVs are finally upon us.
Here are our other top stories for the day:
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| | German air taxi failure showcases industrial strategy challenges |
| Jasper Steinlein looks at the bankruptcy of German air taxi start-up Lilium this week, which spotlights Europe’s difficulty in rolling out new technologies and creating industrial champions.
The company filled for bankruptcy after a parliamentary committee rejected further public funding, and despite apparent backing from Chancellor Olaf Scholz and Finance Minister Christian Lindner for a state-backed €50 million loan.
While there is broad political consensus in Europe on the need to support new clean energy technologies, experts note that industrial strategy can be challenging to implement.
This is especially true for public funders who must make rational choices about which technologies and companies are most likely to economically address a societal problem and, therefore, be successful.
In Germany, politicians were keen to pose with the flying taxi prototypes from Lilium and Volocopter, another domestic start-up company. Their flying taxi prototypes at trade shows and summits made a visually compelling case for Germany’s engineering prowess and potential to combat urban traffic.
Some experts, however, have questioned the viability of electric air taxis long before Lilium's challenges. Concerns have been raised about whether VTOLs (vertical take-off and landing aircraft) can truly deliver on their environmental promises, as the technology’s environmental sustainability is closely linked to how the technology is used.
For example, a study by the University of Michigan found that for trips under 35 kilometres, VTOLs carrying a pilot and three passengers produce more emissions than a petrol car.
This suggests that using these vehicles as air taxis could imply higher overall emissions, as, on average, a Berlin taxi only covers 150 kilometres per day, consisting of multiple shorter trips.
"Electric VTOL (eVTOL) aircraft are unlikely to reduce traffic congestion in the EU because of how expensive each air taxi trip would be," Jayant Mukhopadhaya, a senior aviation researcher at the think tank International Council on Clean Transportation (ICCT), told Euractiv.
Even when public funders select what seems to be the ‘right’ technology, development and scale-up do not always go as planned.
Volocopter, for instance, promised to be the first provider of electric air taxis in Europe, aiming to launch a service for the Paris Olympic Games. In the end, however, the company only completed a brief demo flight across the estate of Versailles.
Overall, however, the uncertainties of industrial strategy are not all negative, and unexpected positives can emerge.
"One potential co-benefit of developing eVTOL aircraft (...) could be that the battery technology demands eVTOL could push forward the state-of-the-art in creating lighter batteries," says Mukhopadhaya, referring to a crucial piece of technology for the energy transition.
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| IEA’s Fatih Birol tells Danes to focus on offshore wind manufacturing |
| Addressing an industry crowd in Sønderborg, Denmark yesterday, the IEA director stressed the need to focus on clean energy technologies, “in which Europe has the chance to have a good position.”
For other technologies, “we have to admit that we missed the train, and we cannot run after them,” he added, citing solar as his chief example.
Birol, who hailed Denmark as the birthplace of wind turbines, listed just two technologies to focus on: offshore wind - where the EU can “definitely be an important, if not leading player in the world” and “electricity grids, transformers and electric equipment.”
Notably absent: onshore wind, an industry increasingly under pressure by Chinese manufacturers, and an unusual omission for Birol, who typically argues for support for the entire wind industry. [NK]
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| | Tariffs on Chinese EVs to kick in tomorrow |
| Yesterday the Commission confirmed tariffs of up to 35.3% on Chinese-made electric cars, wrapping up a consultation launched last October to establish whether Beijing's subsidies had undercut European competition.
The duties are on top of the current 10% duty on imports of electric vehicles from China.
A senior Commission official told reporters in Brussels that persisting "broad disagreements over each and every fact" and "legal argument" around the original issue of subsidies - and how these were characterised - motivated Tuesday's decision.
"It seems that there is a clear and imminent threat of our car industry not making the transition to electric vehicles," the official continued, and “Therefore there is really no alternative, in our view, to what we have done."
On Monday, China’s Commerce Ministry accused Brussels of attempting to bypass Beijing by negotiating with individual carmakers.
Another Commission source defended the EU’s right to engage in individual discussions with carmakers on setting out a minimum sale price - a trade-related agreement also referred to as "price undertaking".
The Commission official also said that "rebasing" the negotiations around the matter of price undertakings had actually "allowed both sides to work on a solution that is more promising" - after discussions on the issue of subsidisation "did not go anywhere."
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| | Renewed Belgo-Irish, Franco-German push for trillion euro EU ‘supergrid’ |
| What everyone now knows: the current energy grid was designed for fossil fuels, not renewables.
Yesterday evening Belgian energy minister Tinne Van der Straeten launched in Brussels an updated handbook promoting the idea of an EU electricity super grid, which would transfer large volumes of renewable power across the continent, to where it is most needed.
The document was co-written by Irish experts Kevin O’Sullivan and the late Dr Eddie O'Conner, who championed the concept for 20 years.
Van der Straeten hailed the concept as being “in line with Europe's ambition to lead the green energy transition and deliver affordable, clean energy to all its citizens.”
The estimated cost of the super grid is high: €1 trillion, “but crucially (it) will pay itself back in less than 10 years,” the authors said.
So, what we need is “determined and intense collaboration across the continent,” they added.
Something that some French and German MPs apparently understand. On 2 December, they will present a joint resolution for a common electricity grid. [PM]
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| EU boosts power export capacity to Ukraine |
| European TSOs have boosted the capacity of power interconnectors to Ukraine by almost 25%. Up to 2.1 GW of power can flow to Ukraine at a given instant “during this winter,” said association ENTSO-E in a statement yesterday.
The new limit will apply from 1 December and is crucial to protect the besieged country’s electricity supply.
Concerted Russian attacks on power plants have eliminated 9 GW of Ukraine’s power generation capacity.
Upping the limit is possible by relaxing conservative safety-related assumptions – combined with the power line’s ability to carry more electricity in winter, Euractiv understands.
From March 2025, TSOs will review the upgrade monthly and deliberate whether to uphold it.
Nikolaus J. Kurmayer’s wrote a 15 October article on Ukraine’s looming power shortfalls and the steps that can be taken to limit the fallout. [NK]
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| | | Since the EU election in July, ‘technology neutrality’ has been one of Brussel’s favourite soundbites, second only to ‘competitiveness’.
For Commission President Ursula von der Leyen, it is clear – the green deal will continue, but with a ‘technologically neutral’ approach.
But what is clear in principle can often be fuzzy in practice.
Euractiv wants to know what you think. The principle may be sound, but is it useful? And is it absolute or are there times when it should be broken?
Follow this link to share your views, by close of business today.
Euractiv will publish the best responses, in Friday’s Pro Brief. [DC]
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| | Think-tank: Gas demand goes down, infrastructure investment stays |
| So far this year, European gas demand fell around 70 TWh relative to the same period in 2023, EU watchdog ACER found in September – and demand is set to drop further in the years to come.
Yet according to Jan Rosenow of the think tank Regulatory Assistance Project (RAP), “in many countries gas network operators plan to maintain or even extend existing gas grids,” citing a new analysis on gas infrastructure released today.
Conducted jointly with Germany’s Öko-Institute, the report finds that Austria, Belgium, Germany, Italy and the UK “lack clear guidelines for decommissioning gas grid areas” – often, closing gas pipes is even prohibited. [NK]
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| | EIB and WWF partner up on nature-based solutions |
| Yesterday, the European Investment Bank (EIB) and NGO WWF announced a partnership to accelerate climate adaptation through nature-based solutions (NbS).
The four-year agreement signed at the COP16 global biodiversity talks in Colombia should boost projects that restore and protect biodiversity in sectors such as agriculture, energy, and urban resilience.
“Europe’s adaptation to climate change lags far behind what is needed,” said EIB Vice-President, Ambroise Fayolle in a press release.
“Partnerships with organisations like WWF with a strong presence on the ground are a relevant way for us to help deliver tangible results on a large scale,” he added.
WWF will set an ‘Incubation facility’ for Nbs projects, while the EIB is committed to guide the mobilisation of funding for these projects.
The announcement makes no explicit mention of the AAA rated bank injecting its own funds into these projects.
According to the UN Environmental Programme, Nbs are “dramatically underfunded.”
Yesterday’s announcement is not the EIB’s first involvement with Nbs. Its June2023 publication lists various options to attract private investment into Nbs activities, including the creation of carbon or biodiversity credits, reduced insurance premiums and ecosystem service taxes. [BM]
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| | Czechia’s, Rolls-Royce team up for modular nuclear reactors |
| | Audi to shut production at Brussels EV factory in February |
| Audi plans to stop making electric vehicles at an embattled factory near Brussels at the end of next February, the German carmaker and union representatives said yesterday.
Audi, a subsidiary of crisis-hit Volkswagen, earlier this year announced its intention to shut production of its high-end Q8 e-tron model at the site in Forest, south of the Belgian capital, but had not previously communicated an exact date.
"Audi Brussels has confirmed that as of 28 February 2025, there will be no more production of the current model, and therefore activities will end," Ludovic Pineur, of Belgian union CNE, told AFP.
Audi also said it was in talks with a new - but yet unnamed - potential investor interested in manufacturing small utility vehicles in Forest, added Pineur.
The full story is on Euractiv’s website.
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| | | | | Today’s brief was brought to you by Euractiv’s Energy, Environment & Transport team |
| | | | | Today’s briefing was prepared by the Energy, Environment and Transport team: Donagh Cagney, Paul Messad, Nikolaus J.Kurmayer, Jasper Steinlein and Bárbara Machado. Share your feedback or information with us at digital@euractiv.com. |
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