VW CEO criticizes EU decision for tighter CO2 standards for vehicles by 2030

5 November 2018
5 November 2018, Comments Comments Off on VW CEO criticizes EU decision for tighter CO2 standards for vehicles by 2030

The Chairman of the Volkswagen Group Board of Management, Dr. Herbert Diess, has criticized the decision by EU environment ministers to tighten CO2 standards for vehicles by 2030, calling it a drastic measure which would result in alarming drawbacks for German car manufacturers in global competition.

Diess says a further cut in CO2 emissions by 35 percent on average would mean “a painful revolution instead of a manageable transition.”

According to Diess’ reckoning, one-third of the vehicle fleet on the road by 2030 would have to be all-electric in order to achieve a 30 percent reduction in fleet CO2 emissions by the same year. “And if a 40 percent cut for the transport sector were to come into effect, over half of the vehicle fleet would have to be all-electric by 2030. A transformation at that speed and with those implications is barely manageable, because it would mean approximately a quarter of the jobs at our plants would disappear in a good ten years – a total of around 100,000 jobs.”

At the same time, Diess commented on the way politics is dealing with coal-based power. “We are investing billions in electrifying our vehicle fleet because we believe that is the way forward. And yet capacity for developing lignite, by far the most environmentally harmful form of power generation, is being expanded (…) A large-scale lignite power station emits as much CO2 as nine million diesel cars.” In his words, it is “completely incomprehensible that people today are even contemplating expanding a lignite mining area”, and he expressed his sympathy for the Hambach Forest demonstrators. “There’s no sense whatsoever in putting electric cars on the road if at the same time we generate the electricity to power them from lignite. We would then be using coal instead of oil to power our vehicles and producing more CO2 than we do today.”

In this context, Diess also underscored the importance of modern diesel drives for climate protection. “In terms of the CO2 balance, electric cars in Germany will not be able to keep up with diesels for long distance travel any time in the foreseeable future. In effect, you aren’t going electric, you’re switching to coal-based power. The reason for that is the power mix. A battery that is manufactured using coal-based electricity generates five tonnes of CO2 during the production process alone. And if you then power your EV by coal-generated electricity, e-mobility becomes sheer madness.”

Turning to the threat of driving bans for older diesel vehicles, Diess warned against exaggerated scaremongering. “There is absolutely no reason for driving bans. Nitrogen oxide pollution has been reduced by 70 percent since 1990, even though traffic has increased by 50 percent. In the last year alone, the situation improved by 12 percent, even in particularly heavily polluted cities like here in Stuttgart. So looking ahead, the problem in cities is being resolved as the fleet undergoes renewal. Diesels are getting better from one generation to the next.”

Diess took the opportunity to recap the various efforts and offers of car manufacturers. “Last year, we bought and scrapped more than 210,000 vehicles fitted with Euro-4 diesel engines or older. In their place, new, clean cars are now our roads.” The CEO reiterated the benefits of Volkswagen’s software updates which enable an immediate 25 to 30 percent reduction in nitrogen oxide emissions – and are much cheaper than a hardware upgrade: “€100 as opposed to €3,000.” In fact, the costly upgrade for the installation of new SCR catalytic converters – ten technician hours – could even prove counterproductive. Diess quoted a recent study from Forschungszentrum Jülich (Jülich research center) which established that the present storage catalysts work better in the cold, whereas the newer SCR catalytic converters in the exhaust stream of the engine require a minimum temperature of 250 degrees. Diess also announced the prospect of “very attractive offers” for customers interested in exchanging their vehicles. “For example, you can exchange a 10-year-old used Passat with Euro-4 for a newer, used petrol car. The calculation would look like this: a residual value of around €6,000, plus a €4,000 swapping incentive and very reasonable finance for the new car, if required.”

Diess was critical of the fact that public perception is currently being swayed by emotional exaggerations and oversimplified accusations which distract attention from the very diverse responsibilities for combating air pollution. “In the eyes of the public, there is one culprit for nitrogen oxide: cars and the car industry. (…) That’s convenient, because nobody is asking whether municipal authorities themselves are doing enough to improve air quality for their citizens.” In contrast, Volkswagen is spending more than €34 billion on electrification and other sustainable technologies. “After Tesla, we are the mobility company that has committed the most to e-mobility. So I believe there’s a misconception about the automotive industry that is also shared by politicians.”

On a self-critical note, the CEO admitted that the auto industry responded too late on the issue of air quality in cities. “We should have been quicker to see that although nitrogen oxide levels were falling, they were not falling fast enough.” In spite of that, thresholds are already largely met today. “We will also meet the targets at most critical points in a few years, so there will only be a delay in a few cities. That isn’t satisfactory, but it isn’t a fundamental problem because we know we will get there.”