Revision of EC legal framework to enhance alternative fuels infrastructure development

Challenge

The European Commission (EC) (DG MOVE) commissioned a team led by Ricardo, with support from partners E3M and TEPR, to deliver an evaluation of the Alternative Fuels Infrastructure Directive (AFID) (2014/94/EC), adopted in 2014. 

This work involved assessing the Directives’ effectiveness towards:

• the development of a network of alternative fuels infrastructure (including electric chargers, hydrogen refuelling stations for light and heavy-duty vehicles and for electricity supply in airports and ports) across the EU; 
  the costs associated with this; and 
• the ongoing relevance in view of the evaluation of EU policies to support decarbonisation of the transport sector,
• the objectives of the EU Green Deal and the Fit for 55 initiatives. 

This study took place between September 2019 and October 2020. 

The evaluation was followed by an impact assessment support study between November 2020 and September 2021. The aim of this study was to assess and compare a range of policy measures and options intended to address the weaknesses and limitations of the existing legal framework. This is in addition to supporting faster and more comprehensive development of the alternative fuels infrastructure network across the EU, in line with EU policy objectives intended to drive interoperability and ease of use. 

The Commission selected Ricardo’s team on the basis of our extensive technical experience in electromobility as well as our track record in the delivery of evaluation and impact assessment support studies. This expertise was combined with the modelling capabilities of our partners E3M (now part of Ricardo), that used the PRIMES-TREMOVE model to support the analysis and quantification of the impacts of the Directive as part of the evaluation and the assessment of the proposed alternative policy options, as part of the impact assessment. 

Approach

As a first step, Ricardo provided a comprehensive evaluation of the effectiveness, efficiency, relevance, coherence and added value of the implementation of the AFID to date. To help assess the impacts of the Directive, we combined the quantification of impacts using the PRIMES-TREMOVE model with extensive data collection and analysis gathered through desk research and stakeholder input from interviews and surveys (with industry, consumers and authorities). This allowed us to identify the contributions of the Directive but also its weaknesses and limitations. 

Findings from the evaluation were used to inform the Commission’s thinking with regards to defining the nature of the issues to be addressed and identify relevant policy measures to achieve transport decarbonisation objectives. The team utilised knowledge gained from other studies and stakeholder input to define targets for the minimum level of deployment of alternative fuels infrastructure, in line with the expected evolution of the fleet of alternative fuelled vehicles. The PRIMES-TREMOVE model was used to assess the expected environmental and economic impacts and the costs of the alternative measures and targets considered. Ricardo’s team also assessed the expected contribution and costs of measures to ensure both interoperability of charging infrastructure and ease of use for vehicle users. Following this, the different aspects of the analysis were combined to provide a conclusion on the preferred policy option, its expected benefits and costs, and the mechanisms to support implementation and monitor its performance. 

Results

The Commission used Ricardo’s team’s analysis as a basis for the proposed revision of the AFID and the adoption of the AFIR, with a number of binding targets that were submitted as part of the FIT for 55 package in July 2021. The proposal went through various stages of EU negotiations and the revision was formally approved by both the European Parliament and the Council on 25 July 2023, with no significant changes from the option initially identified. The final act was signed on 13 September 2023. Member States have 24 months from this date to transpose it into national law. 

The new regulation will contribute to significant reductions in carbon dioxide (CO2) and air pollutant emissions, by supporting the uptake of low and zero emission vehicles necessary to achieve transport decarbonisation by 2050. In monetary terms, this would equate to a reduction in external costs from CO2 emissions of up to €445 billion (in present values), while the reduction in the external costs of air pollution is estimated at €75 billion. These benefits are multiple times greater than the expected costs for the deployment of the infrastructure and other associated costs. 

The revised option is expected to create certainty on the minimum level of infrastructure to be deployed that can have a positive impact on both low and zero emission vehicle and vessel development and related business models, and the development of more innovative recharging and refuelling technologies.