UK oil industry calls for low carbon fuels under zero emission vehicle mandate

The UK's downstream oil industry group UKPIA has called on the government to allow low-carbon fuels, such as hydrogen-based e-fuels, to count under the UK's target of making all new cars based on "zero carbon" technologies by 2035.

Starting next year, the UK's zero emission vehicle (ZEV) mandate will require vehicle makers to ensure at least 22% of their new car sales and 10% of new vans are zero emissions in 2024. The target then rises each year to 80% for cars and 70% for vans in 2030, and to 100% for both by 2035. Designed to boost sales of electric vehicles to decarbonize the transport sector, the mandate would only allow ZEVs with no exhaust emissions such as battery or fuel cell electric vehicles after 2030.

In response to a government consultation on the Zero Emission Vehicle Mandate which closed May 24, UKPIA said it believes vehicles powered by low-carbon liquid fuels such as e-fuels or hydrogen can meet the required emissions reduction requirements. As a result, it called for a "technology neutral" approach to achieve the most efficient path to net zero.

"Vehicles with no tailpipe emissions will have a hugely important role in decarbonizing the UK's transport sector and we have provided constructive feedback so that the government's mandate can support their rollout," UKPIA CEO Elizabeth de Jong said in a statement. "However, as the EU has already acknowledged, use of low carbon fuels can also meet sustainability requirements and offer combustion engine vehicles a route to net zero."

UKPIA's call comes after Germany forced the European Commission in March to allow the use of synthetic fuels, or e-fuels, in a move that stymied the EU's hopes of ending sales of new gasoline and diesel cars by 2035.

EU policymakers had previously sidelined e-fuels from new vehicle emission rules over their questionable environmental credentials and much higher costs of production.

Although not yet produced on a commercial scale, e-fuels combine green hydrogen made from renewable sources, water and captured CO2 to form an alternative to bio-derived liquid fuels such as biodiesel or ethanol.

S&P Global Commodity Insights analysts estimate that plug-in electric vehicles will displace about 1.4 million b/d of gasoline and diesel demand in Western Europe by 2035, rising to around 2.1 million b/d in 2040.