Make sure vehicle decarbonisation is a win for labour as well as climate, says EESC to EU legislators

The European Economic and Social Committee (EESC) backs the Commission's proposals on CO2 emissions from passenger cars and commercial vehicles as a balanced compromise between the objectives of climate-neutral mobility, the innovation capacity of the European automotive industry and preserving quality jobs. However, the EESC draws attention to potential challenges to employment, which depends on the pace of the structural transition in the automotive industry.

Although the Commission assumes there will be a beneficial impact on employment, there are also dangers, says Dirk Bergrath, who drafted the EESC's opinion on the Commission's proposal. By strengthening the competitiveness of the EU automotive industry, the Commission expects to stimulate employment and create an additional 70 000 jobs by 2030. Meanwhile, Mr Bergrath stresses that the number of jobs depends on various scenarios. If the structural transition does not lead, as expected, to plug-in hybrids but directly to less structurally complex electrified vehicles, the employment sector would be affected in a negative way, explains Mr Bergrath.

The EESC emphasizes that the structural transition towards alternative powertrains, digitalisation and networking, and autonomous driving should be accompanied by industrial policy measures. The EU cohesion policy supports regions lagging behind, but now the transition in the automotive industry is affecting many of the richest regions, take for example Barcelona, the north of Italy, which are very important areas for the automotive sector, says Mr Bergrath.

The European car industry currently employs around 2.3 million workers directly in vehicle manufacturing and another 10 million indirectly. Initial results of a study by Fraunhofer IAO show that, in the best case scenario, around 10-12% of jobs involving powertrains will be lost by 2030 as part of the technological switchover. That would amount to between 25 000 and 30 000 jobs in Germany alone. The same would be true for an accelerated phasing out of diesel technology, which, due to the greater complexity, particularly of the supplied parts, has a 30-40% greater bearing on employment than petrol engine parts. Risks to employment are also emerging as a result of digitalisation and the increased delocalization of production to other regions of the world.

The EESC believes that it is vital to ensure that the skills and qualifications of car industry workers are improved and updated, since the structural transition could lead to new trends for new qualifications. For instance, the production of electric cars would require employees to gain extensive skills in areas such as electrical engineering, electrochemistry or behavior of materials.

The EU is among the world's biggest motor vehicle manufacturers and a leader when it comes to private investment in research and development. Currently, it seeks to establish an EU Battery Alliance with the aim of building a European battery supply chain for electric vehicles, but the EESC calls for more affirmative action. Europe has an advantage in combustion engines and we must make sure that its competitive edge on alternative powertrains is not lost to the US or China, says Mr Bergrath. According to the European Automobile Manufacturers Association, despite a constant growth in the use of alternative fuel vehicles, in 2017 this type of cars accounted for 5.7% of the EU market. 

In order to support a sustainable and regionally balanced decarbonisation of the transport sector, the Commission plans to allocate €800 million from the EU budget to improve the infrastructure for cars driving on alternative fuels. Meanwhile, the EESC believes that any fines, under both the existing and the new regulation, should be used to support the sector and its workers through the transition towards low-carbon products.

Furthermore, the EESC considers the planned interim target for 2025 of a 15% emission reduction to be very demanding, especially knowing that the required changes to combustion engines are at the cutting edge of technology. Since alternative fuel vehicles still play a minor role in the EU market, achieving the set goal by 2025 will be especially difficult for light commercial vehicles, which have longer production and development cycles, says the EESC. Mr Bergrath emphasizes the importance of a proper mid-term assessment, which will determine if an adaption reduction targets for 2030 is needed. This regulation could be part of helping the industry to be innovative, says the rapporteur.

The European Commission's proposal seeks to reduce CO2 emissions by around 170 million tons in the period from 2020 to 2030. In October 2014, the EU set a binding goal of reducing emissions across the EU by at least 40% compared with 1990 levels, and to do so by 2030. This target is based on the global medium-term objectives of the Paris Agreement on climate change.

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