The 27th Climate Change Conference (COP27) was held at the Sharm-El-Sheikh, Egypt between 6-20 November 2022. The conference brought together countries to discuss actions to be taken to achieve the world’s collective climate sustainability goals, as previously agreed under the Paris Agreement and Convention. The underlying theme of the summit was “Together for Implementation.”
An objective of COP27’s Sustainable Goal Plans was to stabilize and reduce GHG emission levels to align with the penultimate goal. With COP27 as a catalyst propelling the drive to limit the rises in global temperature to 1.5 degrees to pre-industrial levels, the automotive industry is one of the major key players affecting this change.
An open letter from PATH stressed that the transport sector is the strongest contributor, responsible for 27 percent of the global carbon emissions, with road vehicles accounting for nearly three-quarters of this number.
The Future Of The Automotive Industry With COP27:
The most noteworthy trend in the automobile industry was the global shift to Electric vehicles (EV). Mercedes Benz CEO, Ola Kallenius had told CNBC that the future of automotive was EV.
The rise in Electric vehicles could be responsible for reducing these greenhouse gas emissions (GHG) by half by 2030. Auto giants like Ford have already announced plans for restructuring for EV.
Prior focal topic predictions expected COP27 to roll out a common target date to phase out fossil-based polluting vehicles, echoing the Paris Agreement, but it failed to do so. The Global Witness campaign group declared that the delegates linked to fossil fuels at COP27 had risen 25 percent from the previous summit.
“An influence of protecting the fossil-fuel industry was found across the board”, said Laurence Tubiana, architect of the Paris Agreement.
The 2022 summit at the African continent launched the “Accelerate to Zero (A2Z) Coalition” at the UK pavilion. The COP26 held in Glasgow under the UK presidency had launched the Zero Emissions Vehicles (ZEV) Declaration and was the precedent for the A2Z Coalition. Since COP26, there has been a global increase of 95 percent across the EV Market and yesteryear’s summit also saw the pledge to become carbon neutral by 2050 by the controversial measure of carbon offset.
The A2Z Coalition initiative works towards all the sales of the new cars being zero emission, not longer than 2035 in leading markets and 2040 globally. This platform brought 200 stakeholders showcasing their commitment to making transitions to zero-emission vehicles.
“Accelerating the transition to a sustainable transport sector needs to be a top priority for businesses and governments. We invite more states to come forward with ambitious commitments to zero-emission vehicles for cleaner air and economic growth.”
~ Nigel Topping, UN Climate Change Champion for the UK.
Forbes stated that the COP27 presidency had prioritized sustainable transport as a point of key focus for the climate conference. At the “Solutions Day” event held on 17th November 2022, COP27’s Egyptian Presidency launched an initiative aimed at decarbonising urban transport systems, globally. It’s called Low Carbon Transport for Urban Sustainability (acronym LᶜO₂TUS) which brought sustainable mobility, prominently on the agenda of the summit.
Challenges For The Automobile Market:
The fortuity of zero-emission vehicles (ZEV) dominating the future generation of the automotive market, is quite clear with the EV Market leading the success.
The push to transition to green travel under the microscope of COP27 poses daunting challenges to the automobile industry. Climate experts believe that the world needs to transition five times faster for passenger EVs, and this renews targets of the production for the vehicles.
BloombergNEF’s ZEV Factbook cautioned the industry on the slowing down of progress on the new commitments to zero-emission vehicles, from automakers and governments, alike.
“The automotive industry takes its role in the reduction of pollutant emissions and CO2 very seriously.”
~ Oliver Zipse, CEO of BMW.
According to the UK Climate Change Committee, the switch from combustion vehicles to obtain 2050’s ambition of net zero, emphasizes that 55 percent of all light-duty vehicles (cars, motorbikes, and vans) must be battery-powered by 2032. This simply translates to 23 million vehicles in ten years’.
A recent study from Volkswagen Financial Services UK found that the rising costs of fossil fuels like petrol and diesel have prodded consumers to consider buying EVs seriously, for the first time.
The current challenges faced by the automotive industry indicate that the demand for EVs is heading in one direction:
- Ongoing issues in the supply chain are causing shortages in new E-vehicles.
- Rising fuel and energy prices in the volatile economy are no secret and are treading barriers by swaying the purchasing decisions of potential customers – even for those who want to make use of the economic benefits of EVs. This makes the delay of a confident purchase, imminent. People are keen to be “greener” but there are more pressing financial reasons at bay.
- Misconceptions and less awareness among consumers about electromobility are factors to be considered. 65 percent of people think that EVs are likely to depreciate sooner as they may lose value with a degrading battery. These misperceptions need to be addressed to progress towards the surge in the adoption of EVs.
- The affordability of EVs is still a broad concept with automakers trying their best to provide affordable EVs despite the high costs of electric batteries.
Final Words:
The climate change policies may slow down, but as COP27 accentuates the global efforts to achieve the goals of climate change, the automotive industry must strive to continue to innovate and raise awareness for boosting mass zero-emission adoptions.
