Is Europe's energy and car industry so determined to reduce carbon emissions

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As German coal-fired power stations restart, the European Parliament is examining in committee and then in plenary the famous "taxonomy" which designates what, in terms of electricity production, can be considered green and what cannot be supported as such. For the automotive industry, which needs more and more electricity not only to run vehicles but also to produce batteries, this debate is crucial. France, which is already struggling to defend its "low carbon" competitive advantage, must be able to preserve it. Strangely enough, this will only be possible politically if we accept that French nuclear power is treated unfairly like German gas.

Our German neighbours, who until recently were not far from giving us lessons in ecology and energy policy by extolling the merits of their EnergieWende, have, through the voice of their minister, Robert Habeck, an ecologist who joined the government last December to decarbonise the German economy, announced that they were going to extend the life of coal-fired power stations. 

The war in Ukraine is directly responsible, but the failure of the German energy policy that Angela Merkel wanted since the early 2000s is much more profound and was highlighted well before 2022. Marc Deffrennes and Samuele Furfari, two retired senior officials from the European Commission's Directorate-General for Energy, explain it clearly in Contrepoints: from an environmental point of view, the use of intermittent renewables has led to a growing use of gas, whose contribution has risen from 60 to 94 TWh in 20 years; from an economic point of view, the Germans have financed the development of renewable energy production to the tune of 1,000 euros per family per year for the past 20 years. 1,000 per family per year over the past two decades, and the consequences of their choice have gone far beyond Germany since, via the European electricity market, the authors write, 'since the price of electricity is set by the last kilowatt-hour produced to meet demand, it is the price of gas - replacing nuclear power in Germany (and soon in Belgium) - that sets the price of electricity'. Finally, in terms of security of supply, the last pillar of an energy policy worthy of the name to be considered, the least that can be said is that German politicians have not been very far-sighted in geopolitical matters.

It so happens that, when it comes to cars, one might imagine that some consequences would be drawn from this negligence, but this is not the case. Indeed, those in favour of a 360° analysis of the issue of decarbonisation of transport are quick to point out that, because of the energy-intensive nature of battery manufacture, the BEV leaves, when compared to a petrol or diesel vehicle, with a 'carbon debt' that it will only pay off after a few years. Obviously, this debt is reduced when gigafactories can use low-carbon electricity and increased when the reverse is true. So, when asked why the Hauts de France region was chosen to build the Envision Gigafactory, Ayumi Kurose, the project director, naturally puts forward this argument, in addition to the proximity of the Douai and Maubeuge factories: the production of the batteries will be able to be carried out with the lowest carbon electricity in Europe. This advantage could be exploited by the whole ecosystem, which would eventually include the two other Gigafactories of ACC and Vektor as well as, it is hoped, following what P. Varin is proposing, a refining and recycling activity that is also fairly energy-intensive. The argument seems to make sense: if the priority of priorities is decarbonisation, then the European map of Gigafactories should reflect the environmental vices or virtues of national electricity production systems.

The Ministry of the Environment provides the evidence and tells us that, on average in the EU, the production of one kWh of electricity generates CO2 emissions that have fallen by 41% since 1990 to 317 g CO2/kWh in 2018.  
The paper adds: 
"Although this trend is found in almost all EU countries, emission levels vary greatly between them. Emissions are high in countries where coal is still important, such as Germany (430 g CO2/kWh) or even more so in Poland (781 g CO2 /kWh). Conversely, they are lower in countries that have developed nuclear and/or renewable energies, such as France (mainly nuclear) or Sweden (mainly renewable energies).

The logic would therefore be for battery factories to flee Poland or Germany and move to Sweden, France or even the UK, which is twice as virtuous as Germany in this respect. 

Needless to say, this is not the case and the map of Gigafactories and especially their development projects follows that of the assemblies and/or the aid that the States grant to attract them. Thus, ACC (now a 1/3 subsidiary of Stellantis, Total and Mercedes) will certainly have its first major factory in Douvrin (end of 2023) but the other two Gigafactories announced will be German (end of 2025) and Italian (2026), knowing that the CO2 emissions for the production of one kWh are in the order of 350 g in Italy, i.e. a little less than in Germany but three to four times more than in France

Northvolt, a company born in Sweden, has a clearer credo on this subject. Its boss, Paolo Cerruti, states: 
"To succeed in being competitive with the Asian markets, there is no point in challenging them on the question of costs. So we decided to go where they have difficulty keeping up with us: sustainability. And to create the greenest battery in the world."
He adds: 
"In Sweden, for example, the price of energy, which accounts for 10-12% of the price of a battery, is four to eight times cheaper than in the Shanghai or Shenzhen area."  This is reflected in the fact that the first two factories were Swedish because of the logistical proximity to mainland car manufacturers on the one hand and the availability of clean, cheap energy on the other. The third, announced in March, will be German but, Northvolt says, 
"Powered by Germany's cleanest electricity grid, Northvolt Drei is able to produce the cleanest batteries in continental Europe." 

These are just the six gigafactories that have emerged directly from the European PIIECs, which should be enforcing low-emission requirements for battery manufacturing and are struggling to do so. Most of the projects are outside this framework and LG, Samsung or SKI have paid little attention to these considerations by setting up in Poland or Hungary. Similarly, Tesla, CATL or QuantumScape have chosen Germany. Meanwhile, following the European Parliament's vote to ban internal combustion vehicles by 2035, the debate in Brussels is currently focused on the famous taxonomy. Let's remember that it is about knowing the best way to ensure the transition to carbon neutrality by 2050 by classifying the projects that deserve to be supported as such and those that do not. From this point of view, it is now clear to everyone that what is true for the automobile and transport will be true for all sectors or activities: even if we make progress in terms of frugality and make activities less energy-intensive, decarbonisation will systematically imply turning our backs on fossil fuels and making greater use of electricity production, which will have to be increased significantly and rapidly. Typically, what will happen with our cars will also be true for the heating of our homes or offices: even if we are better insulated, by abandoning gas or oil heating, we will need more electricity.

If we consider that this is an emergency that cannot be met in the next two decades with a rapid increase in the production of renewables alone, then rather than taking the risk of finding ourselves in the impasse in which Germany finds itself, we can argue that preserving nuclear power by doing the necessary work on our old plants and/or building new ones can be defended: If the emergency is climate and the problem is not to be ecological in general but to reduce our CO2 emissions, then it is better to keep these plants in the mix rather than to exclude them.

It is understandable that this argument has been developed by France, for which nuclear power constitutes 40% of the mix. It is also understandable that most EU countries (except Sweden, which is at 30%, and the Czech Republic, at 17%) do not follow France's lead, and that since they have no plans to build power plants and no national nuclear industry to defend, they do not wish to classify nuclear power in the category of projects compatible with the low-carbon objective. It is because this political reality has become apparent that France has sought a compromise and, by haggling with the Germans, has proposed to the Commission to make a "gas-nuclear" package so that, under certain conditions, power plant projects using these two sources are classified as "green". In a way, the fact that, with the Ukrainian crisis, the Germans have to restart their coal-fired power plants gives reason to this taxonomy. 

This was not the case in the European Parliament last week, where two major committees voted against the European Commission's plan to include gas and nuclear power among the "green" energy sources in the European Union in order to attract investment. The die has not been cast, as the plenary vote will not take place until early July. The Greens will do everything they can to ensure that what they consider to be a guilty "greenwashing" operation fails. They won't necessarily win, as Les Echos reports:  
"MEPs from central Europe, states that are playing big with the inclusion of nuclear and gas, are under-represented in the two committees that voted, but will be well represented in the plenary."

This leaves the Council, where "a dozen states are opposed to the inclusion of nuclear power, others refuse to include gas, but neither side is able to obtain the qualified majority needed to reject the compromise that was so difficult to reach.
Obviously, from a French perspective, nuclear power should be included and gas should not be included. The problem is that, no more than it was possible for France to obtain a moderation of prohibitionist ardour, it will only be possible to maintain the competitive advantage that France - like Sweden - may have in using its energy mix to host Gigafactories and relocate part of the lost assemblies if the typology includes nuclear, and gas with it. It will then be necessary to preserve a difference in energy costs and to somehow make the total carbon footprint of electric vehicles on the market worthwhile. The automotive industry and its manufacturers can no longer avoid having their issues directly included in the energy choices of the EU and the States. In 2022, France should be at ease in this context. The constraints linked to the balance of the famous Franco-German couple mean that this is not the case.

The weekly column by Bernard Jullien is also on www.autoactu.com.

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