Co2 regulation in europe english v4.1

2018/Thomas Puls
A compendium – Version 4.1
CO2 regulation in Europe

2CO2-Regulation in Europe
Megatrends
CO2 emissions
(Slides 5 – 12)
Fuels
(Slides 13 – 17)
Globalisation
(Slides 18 – 22)
Political
framework
Climate policy
(Slides 24 – 31)
Regulationdensity
and conflicting goals
(Slides 32 – 38)
Transportation
sektor
Transportation
today
(Slides 40 – 47)
CO2-emissions on
the road
(Slides 48 – 54)
Efficiencyon the
road
(Slides 55 – 63)
Regulationon the
road
(Slides 64 – 71)
Other sektors
Electricity
(Folie 72 – 78)
Industry
(Slides 79 – 82)
Households
(Slides 83 – 86)
Outlook
Limits of the system
(Slides 88 – 93)
Alternatives
(Slides 94 – 98)
14. Fourteen core
theses
(Slides 99 – 133)
Chapter overview

Climate protection
1. Europe’s share oftheworldwide
CO2 emissions is lowand
continuously decreasing. (100)
2. No solution without China:
Europe’s reductionofemissions is
being eatenup by growthin
emerging economies. (103)
3. Motor vehicles accountfor
approximately one-seventhofthe
CO2 emissions in the EU. Their
share intransportation emissions is
declining. (106)
CO2 regulationfor motor vehicles
4. New vehicles in Europehave becomeconsiderably moreefficient in
recent years.(108)
6. Europe has onceagain tightened thereins on the CO2 limitvalues for
motor vehicles and is requiring a furtherreduction ofCO2 within an even
shorter span oftime. (112)
5. CO2 legislationin Europeshows themoststringent targetvalues in an
internationalcomparison.(110)
8. Vehiclefleetlimitvalues under95 grams cannotbeachieved with
conventionalenginetypes, andthemarket success ofalternativeengine
types is stilluncertain. (116)
7. Der Pkw-Sektor istauch ohneeineweitereVerschärfung der CO2-
Grenzwertenach2020aufKurs, umdieZieleder EU-Klimapolitik bis 2030
zu erfüllen.(114)
9. EU environmental legislationis not coherentand, for a long time,had
other priorities than CO2 reduction.This had various consequences,
including anincreaseof CO2 emissions. (119)
10. Today’s CO2 laws regulateonly new vehicles, completely disregarding
the remaining vehicle fleet. (122)
11. An effectivereductionofCO2 emissions cannot address new vehicles
alone butmust takea much broader approach. (124)
Balance between climate
protectionand industrial
policy
12. The EU is targeting a 20%
industry shareofGDPfor the
year 2020. This goalis
presently a long way away,
since industrialand climate
protection policyarenotyet
aligned.(126)
13. The CO2 abatement costs
vary greatly between sectors
and are mostpronouncedin
the automotivesector. (129
14. Emissions trading as the
most economically efficient
form ofCO2 regulation can
easily be appliedto road
traffic. (131)
The core theses: Brief overview

4
1 Megatrends
2 Political framework
3 Transportation sector
4 Other sectors
5 Outlook
Agenda
CO2-Regulation in Europe
Megatrends
CO2-emissions Fuels Globalisation

Carbon reservoirs in in billions of tonnes
The carbon cycle
Soil 1.580
Surface water 1.020
Sediments150
Deep sea 38.100
Photosynthesis
and respiration Combustion
Gas exchange
between the ocean
and atmosphere
Dissolved
organic carbon
< 700
Sea organisms 3
Vegetation 610
Fossil fuels and cement
production 4.000
Megatrends
CO2-emissions Fuels Globalisation Politicalframework Transportation sector Other sectors Outlook
Atmosphere 750

Source:IEA, CO2 Emissions from Fuel Combustion– 2017
Emissions from fuel use, in millions of tonnes
CO2 emissions: Europe’s share sharply decreasing
10,3% 14,8%
28,1%
23,4%
23,2%
15,5%
19,6% 16,1% 9,9%
46,7% 45,9% 46,5%
1990 2002 2015
China USA EU Rest of the world
20 502 23 884
Compared to the year 1990, the
absolute CO2 emissions are
decreasing in the EU only.
Between 1990 and 2015 the EU
decreased the emissions by 823
Million tons.
In Asia in particular, emissions are
rapidly increasing except for
Japan.
The impact of European
regulations on global CO2
emissions continues to decline.
+32 294
Megatrends

Source: IEA, CO2 Emissions from Fuel Combustion – 2017
Emissions from fuel use* – Changes between 1990 and 2015 in
Millions of tonnes
Reduction in Europe, strong increase in Asia
While China shows an increase of
331 per cent during the years
1990–2015, the EU shows a
decrease of 21.5 per cent.
The gap is expanding: in 2014
alone, China’s emissions
increased by 110 million tonnes.
In 2015 there is a stagnation of
emissions in China.
India increased it’s emissions in
2014 by 170 million tonnes, even
more than in China. In 2015 there
is a strong increase in India.
+
-823.0
+ 1 536.6
+ 6 975.4
EU India China
* Correspondingto category1A according to the UNFCCC
classificationsystem
Megatrends

Sources:EEA, 2018 (v21);IEA, CO2 Emissions fromFuel Combustion– 2017
EU passenger cars – Relevant, yet not crucial
Relevant:Europe’s total passenger
car traffic 2016 emitted 538 million
tonnes ofCO2, an upward trend
compared to 2015.
Crucial?China,on the other hand,
is showinga strongupwards trend
in its use of fossil fuels – emitting
nearly 526 million tonnes of CO2 in
just three weeks.
Dynamic: between 2014 and 2015
the plus in China was about 9,1 per
cent, respectively60 millions of
tons.This corresponds to a value of
approximately 40per cent of the
emissions ofthe German traffic.
+
450
554 538
63
372
698
121
375
523
EU
passenger
cars traffic
China
road traffic
China
CO2 emissions in 21 days
CO2 emissions in millions of tons
Megatrends

9CO2 Regulation in Europe
Source:IEA, CO2 Emissions from Fuel Combustion – 2017
CO2 emissions for the year 2014, in millions of tonnes
10 countries, two-thirds of the CO2 emissions
532
549
552
586
730
1.142
1.469
2.066
4.998
9.085
Saudi Arabia
Canada
Iran
Korea
Germany
Japan
Russia
India
USA
China
Megatrends

10
* Forinformationonly;** Not including international airandmaritime traffic. These are not classified as nationalemissions inthe context of the Kyoto report
Sources:EEA, 2018 (v21)
Figures for 2016, as percentage CO2EQ
CO2 emissions in the EU 28
Transportationsector by mode of transport
07%
12%
48% 44%
26% 27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2016
Commercial
Vehicles
Passenger Cars
Civil aviation
Rail transport
Waterway
transport
Other
Int. Aviation
Int. Waterway
transport
Emissions according tosector
29,9%
21,3%9,9%
13,4%
10,8%
14,7%
Generation
of heat
and energy
Industry
Passenger cars
Other sectors
Other modes of
transport **
Agriculture
Megatrends

1.659 1.617
1.195
1.376
1.098
849
785
987
931
643
522
511
523
441
415
0
1.000
2.000
3.000
4.000
5.000
6.000
1990 2007 2016
Other
Households
Agriculture
Transportation
Industry and
construction
Power generation
-5.7%
11CO2 Regulation in Europe
Source:EEA, 2018 (v21)
Greenhouse gas emissions in the EU 28 by sector, in millions of
tonnes
Sector development
► Split development after the fall of
the Iron Curtain
► Traffic emissions increased quickly
after 1990, sinceEastern Europewas
integrated into the European
Economic Area. Emissions havebeen
decreasing since 2007, even in the
transportation sector, but began to
rise again in 2014.
► In the early 1990s, considerable
reductions werevisible in the
industry and energy generation
sectors. Their emissions levels
stagnated until around 2007, then
dropped with the economic crisis.
5,410
4,884
3,991
+
Megatrends

Global CO2 emissions are continuouslyincreasing, especially in
Asia.
CO2 emissions are declining only in Europe.
The reduction of emissions in Europe is hardly significant when
viewed against the increase of emissions in Asia.
Today, European regulations have relatively little influence on
global CO2 emissions, and the influence is continuingto decline.
From the perspective of climate research, it is the overall
volume of emissions at the global level which is relevant. The
country or specific source of the emissions is essentially
insignificant.
Summary: CO2 emissions
Megatrends

Kategorie 1
Kategorie 2
Kategorie 3
Kategorie 4
Diagrammtitel
Datenreihe 3 Datenreihe 2 Datenreihe 1
Fuels: Well-to-wheel emissions are what counts
Megatrends
CO2-emissionen Kraftstoffe Globalisierung PolitischerRahmen Verkehrssektor Andere Sektoren Ausblick
Fuel Consumption per
100 km (Vehicle
from compact-
class in NEDC)
price in€
per
TTW CO2 Emissions
In g CO2 / Km
WTW GHG-Emissions
In g CO2eq / km
price*
in Euro
per 100 km
Super E5 (conventional) 4,9 L 1,40 L
115,72 144,93 6,86 €
Diesel B7 (conventional) 3,9 L 1,14 L 102,86 128,74 4,45 €
PHEV (BenzinE5 + Conv.
Strom) 49,59 99,39 4,77 €
LPG (Remote well) 6,4 L 1,57 L 104,37 127,93 3,66 €
Natural Gas (H-Gas, EU-
Mix)
3,5 Kg 1,09 Kg
88,9 109,42 3,81 €
Electricity(D-Mix 2015) 12,7 kW/h 0,29 KW/h 0,0 74,55 3,71 €
Hydrogen (EU Mix) 0,97 Kg 9,50 Kg 0,0 134,2 9,22 €
Bioethanol E85 (wood) 5,88 L 0,99 L 112,31 35,91 5,81 €
Bioethanol E85 (grain) 5,88 L 0,99 L 112,31 119,69 5,81 €
Biodiesel B100 (Rapeseed) 4,29 L 1,43 L 121,41 85,99 6,13 €
Electricity(Regenerativ) 12,7 KW/h 0,29 KW/h 0,0 5,33 3,71 €
Hydrogen (Aircraft) 0,97 Kg 9,50 Kg 0,0 15,14 9,22 €
E-Gas (Regenerativ) 3,5 Kg - Kg 88,9 5,21 n.e.
Synthetical diesel (Reg.) 3,9 L - L
102,86 2,18
n.e. (not yet commercially
available)
NichtregenerativRegenerativE-Fuels
TTW:Tank-to-Wheel;WTW:Well-to-Wheel;CO2eq – CO2 Äquivalent
Comparison of emissions and alternative fuels

Source:Bloomberg, Baker Hughes (Stand April 2018)
But the supplyis already declining
Number of active drilling towers in the USA
Oil prices rise again in 2018
In US Dollar
High oil prices: Incentive for more efficient
motor vehicles
0
200
400
600
800
1000
1200
1400
1600
1800
02.01.09
02.07.09
02.01.10
02.07.10
02.01.11
02.07.11
02.01.12
02.07.12
02.01.13
02.07.13
02.01.14
02.07.14
02.01.15
02.07.15
02.01.16
02.07.16
02.01.17
02.07.17
02.01.18
0
20
40
60
80
100
120
140
160
03.01.00
03.01.01
03.01.02
03.01.03
03.01.04
03.01.05
03.01.06
03.01.07
03.01.08
03.01.09
03.01.10
03.01.11
03.01.12
03.01.13
03.01.14
03.01.15
03.01.16
03.01.17
03.01.18
Brent WTI
► Oil prices have greatly increased from the year 2000 till 2014.
► As a result of fracking in the USA, oil prices started to diverge in 2010.
► The supply side in the US is strongly linked with oil prices. Rising prices lead to an increase in active oil rigs
and vice versa.
+
Megatrends

► Fracking has strongly impacted the world marketfor fossilfuels.
► Favourable: TheGas price sank since 2005 clearly under the European level.
► The USA has greatly increased its domestic production of oil and naturalgas.
► Independency: This greatly reduced the USA’s need to import fuel.
US production and import of oil and
natural gas
Index, 1990 =100
Gasprice
in US-$ per 1,000m3
Fracking has changed the rules of the game
Fossil energy in the USA
0
50
100
150
200
250
300
350
1990 1993 1996 1999 2002 2005 2008 2011 2014
Gas production
Oilproduction
Gas import
Oilimport
0
50
100
150
200
250
300
350
400
450
500
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Europe
USA
+51%
+82%
-38%
-33%
+
15
Sources:Weltbank, Economic Monitor (GEM) Commodities, 2017;IEA, World EnergyStatistics
Megatrends

Various fuel types reveal a very different carbon footprint in the well-to-
wheel analysis. Today, electricity and natural gas are the alternatives with
the most favourable ratio of emission reductions to fuel costs.
The EU has a very high rate of dependence on imported energy carriers. This
leads to cases of political dependence. Avoiding such dependencies is a key
driver for European policy in the field of primary energy supply.
The development of oil prices creates innovative pressure on motor vehicle
manufacturers, since fuel consumption is a key selling point. Even without
regulation measures, customers would increasingly demand efficient
vehicles.
Summary: Fuels
Megatrends
16

*Partlyestimatesorforecasts bythe IWF
Source:Internationaler Währungsfonds
Share of the world GDP*
as percentage
1991 – 2017
The weights are shifting in the world GDP
0
10
20
30
40
50
60
70
80
90
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Advanced countries
Emerging and developing countries
► The dominance of the industrialised countries is crumbling.
► China’s significance is rapidly growing.
+
Megatrends
0
5
10
15
20
25
30
35
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
USA
China
Japan
Germany
EU-15 (without Germany)
17
Share of the world GDP*
as percentage

Source:UNCTAD, IWF, Weltbank, IW Köln
Index for economic relations, 1980 = 100
1980 = 100, nominal figures
Direct investments propel globalisation
► Globalisation means the
establishment of global
production structures
through direct
investments.
► Since 1980, the inventory
of direct investments has
grown at least five times
as fast as international
trade.
► Approximately one-third
of international trade is
already taking place in
corporate networks.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1980 1985 1990 1995 2000 2005 2010 2015
GlobalGDP Globale Exports of goods and services
Globaldirekt investments stocks abroad
+4481%
+930%
+662%
+
18Megatrends

The emphasisof the world economy is shifting more and more towardsAsia.
This trend is being fuelled by the establishmentof productionlocationsnear the
market.
Already today, the Europeanlocationsare in strong competitionwith the countries in
the growth regions, and many Europeanlocationsare losing ground.
The significance of regulationin Europe is decliningwith the significance of the
Europeaneconomies.
If Europeanindustriallocationsare to survive in terms of global competition,the EU
must provide better localconditions.
Summary Globalisation
Megatrends
19

20
1 Megatrends
4 Other sectors
5 Outlook
Agenda
CO2-Regulation in EuropePoliticalframework
Climatepolicy Regulatory density and trade-offs

Only Europe really joined in
Kyoto-Protocol
Kyoto signatories
Almost all of
the world’s
nations entered
into the Kyoto
agreement.
Politicalframework
Climatepolicy Regulatory density and trade-offs Transportation sector Other sectors OutlookMegatrends
+
21

Kyoto-Protocol
Kyoto signatories
with emission target
► Almost all of
the world’s
nations entered
into the Kyoto
agreement.
► Only a few
countries
accepted
emission
targets.
+
22Politicalframework

Kyoto-Protocol
► Almostall of the
world’s nations
entered into the
Kyoto agreement.
► Only a few countries
accepted emission
targets.
► Softtargets, in some
cases: countries of
the former Eastern
bloc merely aimed to
not exceed their
figures from1990.
+
Kyoto signatories
who kept their emission target

Stipulated reduction compared to 2005, as percentage
The EU plans to clearly increase its pace
► After 2020, the
non-ETS sector
is expected to
reduce twice as
much in 10 years
as it did during
the previous 15.
► The cost per
reduced tonne of
CO2 will increase
considerably.
-34%
2020
2030
-21% -10%
-43% -30%
-12%
ETS*-
Sektor
Non-ETS
sector
EU GHG target
(Basis: 2005)
 Emissions trading
 Establishment
of a market
stabilisation
reserve
 Avoidance of relocation
effects
How?  Incorporating
binding national
targets
 Supporting measures,
e.g. emissions
standards
+

Sources: BMWi, UBA, AGEB
The EU’s long-term targets, as percentage; base year 1990
The EU moves forward undeterred
-20%
20%
-20%
-21%
21%
-17%
-40%
27%
-27%
Target 2020 Forecast 2020 Proposal 2030
► The European
Commission
predicts that the
climate targets for
2020 will largely be
reached.
► Even if the restof
the world has not
joined in so far, the
EU plans to
increaseits tar-gets
considerably after
2020.
Reduction of greenhouse
gas emissions
Market share of renewable energy
on gross final energy consumption
Efficiency target: reduction
of energy consumption per
unit of GDP
+

Sources: BMWi, UBA, AGEB
German federal government reduction targets, as percentage; base year
1990
Ten years faster: The German federal government
exceeds EU targets
-28%
15%
-6%
-40%
18%
-20%
-55%
30%
Status 2016 Target 2020 Proposal 2030
► The German
federalgovern-
ment is currently
demanding addi-
tional efforts to
reach the target
for 2020.
► For the period
after 2020, the
stipulated pace of
change will
be dramatically
increased.
Reduction of
greenhouse gas
emissions
Market share of renewable energy
on gross final energy consumption
Reduction of
primary energy
consumption
compared to 2008
+

Sources: BMWi, IWKöln, KBA,UNFCCC, AGEB
German federal government reduction targets, as percentage
Buildings and traffic
-20%
2%
-10%
1.000.000
-11%
1%
4%
98.280
Target 2020 Status 2016
► The target value for
road traffic is 136–
141 million tonnes of
CO2; value in 2016:
160.2 million tonnes
of CO2.
► The building sector
will likely miss its
target considerably.
► On January 1st2018
53.861 battery
electric cars and
44.419 Plug-In-
Hybrids were
licensed.
Number of electric cars
Final energy
consumption compared to 2005
Rate of renovation p.a.
Energy demand compared to 2008
BuildingsTraffic
+
Fleet inJanuary2018

Globalclimate policy is currently experiencing a crisis.
The EU enthusiasticallyadvancedin the Kyoto process, but no one followed. Outside
the EU, only the transitioncountries met their targets, which were very soft in the
first place.
The EU will reach its climate targets – even after the economic distortionsfollowing
2008 – and plans to considerablyincrease its pace in climate protection in the period
after 2020.
The federal government wants to go further than the EU. While traffic emissions are
essentiallyon track, areas such as the buildingsector are far from being able to reach
its targets.
Summary Climate policy
Politicalframework
Climatepolicy Regulatory density and trade-offs Transportation sector Other sectorsn OutlookMegatrends
28

Source: Eurostat
The manufacturing industry’s share of the gross value, as
percentage
The EU industrial sector: Collapse rather than rebirth
► EU target: The
industrial sector is
expected to havea
20 per cent share
of the GDP in 2020
► Germany is
reaching this
target. The UK, Italy
and Francegive
causefor concern.
► Countries outside
of Europeare
improving quickly.
Europemust
respond in order to
secureits position.
EU target
for 2020
8%
10%
12%
14%
16%
18%
20%
22%
24%
2001 2003 2005 2007 2009 2011 2013 2015 2017
Germany Spain France Italy UK EU 28
+
Politicalframework
29

Sources:EU, Eurostat
Progress in noise and safety targets
► Since 1990, the EU has shown considerable progress and has set ambitious regulations concerning noise
emissions and safety.
► Additional sound reduction and safety devices bring extra weight and changes to the car body.
► The further targets result in a measurable overconsumption of new vehicles.
+
Traffic safety:Ambitious targets
Road traffic fatalities in the EU 27 countries
75.400
54.000
25.500
15.500
1991 2001 2016 Target 2020
-28%
-53%
-39%
Noise targets:Noise emissionsare expectedtodecline
by up to 75 per cent.
EU vehicle noise limit values in dB (A)
65
70
75
80
85
90
1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
2016
New measurement
Trucks > 150 kW
Trucks 75 - 150 kW
Trucks< 75 kW
Cars
Motorcycles
Trucks> 12 t, > 250 kW
Trucks> 12 t, 150-250 kW
Trucks> 12 t, < 150 kW
Trucks 3,5-12 t, > 135 kW
Trucks 3,5-12 t, < 135 kW
Cars> 200 kW, < 4 Sitze
Cars> 160 kW
Cars 120-160 kW
Cars< 120 kW
Areduction by3 dB
always represents
a halving ofthe
measurable
sound.
.
80 dB88 dB

* without international aviation and shipping traffic. ** includingagriculturalvehicles andfishing boats
Source: Annex I ofthe 2014 EMEPGUIDELINES FORREPORTINGEMISSIONSAND PROJECTIONSDATA UNDER THECONVENTION ON LONG-RANGE TRANSBOUNDARY AIR
POLLUTION v2.0, 2018
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
Cars Commercial vehicles Other traffic Industry
Public energy supply Agriculture Households Other sectors
-69%
-46%
-58%
-71%
Data for EU 28* in kilo tonnes, Nox emissions converted in NO2
Nitrogene oxide emissions dropped by 56 per cent
Politicalframework

* for information only;** without international aviationandshipping traffic. These are not regardedas national emissions.
Sources: Annex I of the 2014 EMEPGUIDELINESFOR REPORTING EMISSIONS ANDPROJECTIONS DATA UNDERTHE CONVENTION ON LONG-RANGE TRANSBOUNDARY AIR
Data of 2015, in per cent of the Nox emissions converted in NO2
Nitrogene oxide emissions in the EU 28
Transportation sectors by transport modes
14%
32%03%
10%
46%
23%
29% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2016
Comercial Vehicle
Passenger Car
Civil aviation
(national)
Rail traffic
Inland navigation
Other
Int. aviation*
Int. shipping*
Emissions sectors
16,5
17,2
27,4
17,5
13,6
5,2 2,6
Public energy supply
Industry
Cars
Other sectors
Other traffic**
Agriculture
Households
Politicalframework

Sources:ICCT, 2014;Kraftfahrtbundesamt (KBA), 2016, Deutsche Umwelthilfe (DUH), 2016, Auto MotorSport (AMS), 2015;Auto MotorSport (AMS), 2016;Bosch
The gap between RDE and laborotory is closing
Real-Driving-Emissions NOx – Fast progress
The firstRDE tests of
passenger cars were
conductedin 2014.
The performanceof
the up to date cars in
RDE tests is much
better.
The Values taken from
AMS show the same
model with two
engine generations
The technology to
meet the limit values
is on the market.
+
NOxing/km
Gap
CO2-Regulation in Europe 33
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
Euro 3 Euro 4 Euro 5 Euro 6
EU litmit value (Laboratory) ICCT (2014)
KBA (04.2016) DUH (09.2016)
AMS (11.2015) AMS (05.2016)
Politicalframework

Source:EEA – AirQualityStatistics, 2018
The 12 cities of the EU with the highest level of NO2-Immissions
in 2016
NO2: A European Problem
10 1
2
5
7
9
43
6
City 2016 in
µg/m3
2010 in
µg/m3
2006 in
µg/m3
London 89.1 98.3 110.6
Paris 83.2 95.5 91.1
Stuttgart 81.6 99.9 121.3
München 79.9 98.7 97.5
Marseille 79.3 82.6 87.9
Darmstadt 76.0 65.4 67.5
Lyon 71.2 89.8 n.a.
Athen 70.3 83.2 85.7
Turin 69.9 74.4 94.0
Haford 69.4 n.a. n.a.
Mailand 66.0 73.4 77.6
Reutlingen 67.0 88.1 n.a.
1
2
3
4
5
6
7
8
9
10
11
12
12
11
Politicalframework

* for information only;** ** without international aviation and shipping traffic.
Transportationsector by transport modesEmissions by sectors
Data of 2016, in kilo tonnes fine dust (PM10)
PM10 emissions in the EU 28
30,0%
5,3%
13,3%
7,0%
5,9%
32,8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016
Abrasion (breaks, tyres,
roadway)
Light duty vehicles
(exhaust pipe)
Heavy duty vehicles
(exhaust pipe)
Car (exhaust pipe)
Rail traffic
Navigation
Other
Aviation (total)*
Int. aviation*
735,8
349,8
377,7
85,8
128,8
75,0
327,7
Industry
Road (Exhaust)
Other sectors
Agriculture
Households
Road (abrasion)
Total
emissions**
2,080.61 kt
Politicalframework

* for information only;** ** without international aviation and shipping traffic.
Transportation sector by
transport modes
Emissions by sectors
Data of 2016, in kilo tonnes of ultrafine dust (PM2,5)
PM2,5 emissions in the EU 28
37,3%
5,8%
14,3%
7,4%
6,6%
20,6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016
Abrasion (breaks, tyres,
roadway)
Light duty vehicles
(exhaust pipe)
Heavy duty vehicles
(exhaust pipe)
Car (exhaust pipe)
Rail traffic
Navigation
Other
Aviation (total)*
Int. aviation*
682,5
185,7
97,4
85,2
60,5
48,7
193,9
Industry
Road (Exhaust)
Other sectors
Agriculture
Households
Road (Abrasion)
Total
emissions**
1,353.88 kt
Politicalframework

Source:Nature, 2013, Heft 493
Greater efficiency leads to more consumption– yet the
reduction effects prevail
Rebound effect: A real problem
► The idea of the rebound effect
is that more efficient vehicles
havelower operationalcosts
and are thus used more
heavily.
► The rebound effect is real and
can be proven, butit should
not be overemphasised.
► Simulations show that 30 per
cent of the reduction effect is
eaten up again as a result of
additional traffic.
► In spite of the rebound effect,
moreefficient technology still
pays off.
-7% +2%
Simulationof the energy consumptionof road traffic inthe USA
(in TWh), whenimplementing the targets for 2025
4.374
4.149
3.900
4.000
4.100
4.200
4.300
4.400
No targets Measures for
higher
energy
efficiency
Rebound
Effect
After measure
and rebound
Decreasedpetrol consumption
through more efficientmotor
vehicles.
-7% +2%
More routes are
travelledby car
+

CO2 reduction is only one of the traffic-related targets being
pursued by the EU.
In the past, traffic-related regulation measures were focused on
exhaust emissions and transportation safety.
Huge advancements have been made in regard to safety and
harmful emissions of motor vehicles; but this has resulted in a
higher consumption of energy.
The top priority for the future should be the reduction of CO2
emissions from motor vehicles.
Summary: Regulation density and conflicting
goals
Politicalframework
38

39
1 Megatrends
2 Political frame
4 Other sectors
5 Outlook
Agenda
CO2-Regulation in EuropeTransportation sector
Traffic today CO2-emissions road Efficiency road Regulation road

Source: Eurostat, Transport inFigures 2017
Trucks are facilitating the Single European Market
► The merging of the EU triggered tremendous growth in the area of freight transport.
► The creation of the Single European Market fuelled growth on both road and rail.
► Over 70 per cent of Europe’s freight is transported by truck.
► Since 2007, freight transport in Europe has decreased by 9 per cent.
+
Transportation sector
Politicalframework Other sectors OutlookMegatrends Traffic today CO2-emissions road Efficiency road Regulation road
Development of freight transport in the EU
1995 =100
1.289 1.722
388
418
237
263
0
500
1.000
1.500
2.000
2.500
80
90
100
110
120
130
140
150
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Freight transport in the EU
1995 and 2015 in tkm
1.914
2.400
Road Rail Other Total
40

Source: Eurostat, Transport in Figures 2017
High level of dynamics in air transport, but cars are the
backbone
► Strong growth in airtransport since the fall of the government monopoly.
► Considerable growth in rail transport since the EU started promoting national rail transport markets.
► Over 80 per cent of traffic is attributable to passenger transportation on roads. A stagnation has been evident
since 2004
+
3.937
5388
422
543,5
348
649
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
90
100
110
120
130
140
150
160
170
180
190
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
504 116
52125
5.329
Development of passenger traffic in the EU
1995 =100
Passenger transport in the EU
1995 und 2015 in pkm
6.554
Car Rail Air
187
Bus Motorcycle
41Transportation sector

Sources:EU, Trends to 2050, 2013;BMVI, Verflechtungsprognose 2030, 2014
in billionsof tonne kilometres
Trucks will continue to dominate the considerably growing transport market
Official forecasts for freight transport in 2030
► There is someevidence that the PRIMES Prognosis from2013 is outdated. Itpredicts an increase
in goods traffic between 2010 and 2015, whileit actually heavily decreased (Folie42).
+
Traffic forecast for GermanyTraffic forecast for the EU
337 429
393
602
1.764
2.399
0
1.000
2.000
3.000
4.000
2010 2030
+36%
+54%
+27%
62 77
108
154
437
607
0
200
400
600
800
1.000
2010 2030
Road
Railway
Waterway+39%
+43%
+23%

Quellen: Prognos, World Transport Report 2015//2016
in billionsof tonnes kilometres
Limited increase in road transport in comparison to the official prognosis
Current forecasts for freight transport in 2030
► The current prognosis covers 12 EU Countries with about 92 percent of total road transport. The coverage of rail
and inland waterways is less sufficient.
► Growth rates after 2015 hardly differ from the official forecast.
+
Traffic forecast for GermanyTraffic forecast for the EU
132,5 165
312
458
1.658
2.045
0
1.000
2.000
3.000
2010 2030
+23%
+47%
+25%
62 72
107
160
435
554
0
200
400
600
800
1.000
2010 2030
Road
Railway
Waterway+27%
+49%
+15%

Sources:EU, Trends to 2050, 2014;BMVI, Verflechtungsprognose 2030, 2014
in billionsof passenger kilometres
Cars will form the backbone of passenger transport for the long term
Official passenger transport forecasts for 2030
► Over the next 20 years, passenger transport will show a slower rate of growth than freight transport.
► Rail transport is expected to show substantial growth and to gain market shares.
► But: In passenger kilometres, between now and 2030, motor vehicle transport in the EU will increase by more
than the total rail traffic being transported in 2030.
+
Traffic forecast for the EU Traffic forecast for Germany
53 87
84 10078
83
902
992
0
200
400
600
800
1.000
1.200
1.400
2010 2030
Motorised
individual
transport
Public road
transportation
Railway
Air
+6%
+19%
+65%
+10%
527 888
496
714513
602
4.893
5.714
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
2010 2030
+18%
+49%
+69%
+17%

Source:ACEA, 2017;VDA ,2017
Existing vehicles are not covered by the regulation
Limit values affect only new vehicles
► Each year, only about 5 per cent of the vehicle fleet in the EU is replaced.
► Existing vehicles hold huge potential for CO2 reduction.
► That is why measures for replacing the existing vehicle fleet are essential
+
Approx. 15.1 million
new vehicles were
licensed in the EU in 2015.
Altogether, approx.
255 million cars
are licensed in the EU.

Sources:ACEA Report Vehicles inUse, 2017;ACEA Pocketbook 2017/2018
The existing vehicle fleet represents the
technology from 10 years ago
► Licensed cars in Europe are 9.6 years old, on average – and the trend is increasing.
► The average age of cars in several member states is more than 10 years.
► But: The best method for reducing CO2 is to speed up the rate at which existing vehicles are replaced.
+
Age of passenger cars in Europe
as percentage in 2015
Average age of licensed cars
in years
46
10%
14%
27%
49%
< 2 years
2 - 5 years
5 - 10 years
> 10 years
17,2
16,7
16,3
15,3
15,1
14,5
14,5
14,1
13,5
13,4
12,7
12,6
11,4
11,2
10,7
9,6
9,5
9,0
9,0
8,9
8,9
8,8
8,5
8,5
6,2

Sources:EEA, MonitoringCO2 Emissions fromnew passenger cars, 2016;ACEA, 2016
In its reduction of CO2, Europe relies on
diesel
► Since the mid-90s, Europe’s fleet of new vehicles has a growing share of cars that run on diesel.
► Diesel plays a significant part in Europe’s CO2 reduction progress.
► Diesel motors are primarily used in vehicles that are expected to have high mileage.
+
New car registrations in the EU 28 in 2016 Existing vehicle fleet in the EU in 2016
41,3%
55,8%
2,9%
Diesel Petrol Other
100% = 255 Mio. Cars in the stock
265.252
58.250
64.342
92.785
LPG
49,4%
47,0%
3,6%
Diesel Petrol Other
100% = 14,7 million new car
registrations
CNG
Plug-In
Electric

Road traffic is the indispensablebackboneof mobilityfor passengers and freight in
Europe.
According to official forecasts, the dominance of roads in Europe will not change
between now and 2030.
Since 2007, traffic volumes on the road havedeclined. Today, these volumes are
often below the projected levels; and even the official growth expectations must be
questioned.
The replacement of Europe’sexisting vehicles is an effective measure for reducing
emissions; but it will be another ten years before the more efficient new vehicles
dominatethe fleet.
Summary: Transportation today
Politicalframework CO2-emissions road Other sectors
Megatrends Traffic today Efficiency road Regulation road Outlook

90
100
110
120
130
140
1990 1995 2000 2005 2010 2015
EU 28 EU 15 without Germany Germany
115,7
103,9
132,8
122,2
117,6
128,7
Quelle:EEA, 2017 (v20)
CO2EQ-Emissions of road traffic, 1990 = 100
The turnaround came in Germany first
► Since 1999, emissions in Germany have declined by 24 million tonnes and are now on the levels of 1990.
► From 2000 on, an increase in emissions could primarily be seen in Eastern and Southern Europe.
► The turnaround in the EU 28 did not begin until the crisis of 2008.
► In the years 2014 till 2016 emissions increased significantly.
+
Politicalframework
Other sectorsMegatrends Traffic today Efficiency road Regulation road OutlookCO2-emissions road
49

Absolute CO2EQ-emissions, 1990 = 100
Car traffic in the EU: CO2-emissions rising again
100
105
110
115
120
125
130
1990 1995 2000 2005 2010 2015
road cars
128,3
122,2123,1
116,5
► Caremissions have shown a much lower rate of increase than overall road traffic emissions.
► Caremissions have largely stagnated since 2002 and have been rapidly declining in 2011 but they are rising again
since 2013.
+
50
Politicalframework

Source: EEA, 2018 (v21)
In millions of tonnes of CO2EQ
EU: Der Emissionsanteildes Güterverkehrs ist..?The share of emissions from
freight transport has significantly increased
► Since 2007, theCO2 emissions
of road traffic in the EU have
been declining. But since 2013 they
are rising again.
► Between 1990 and 2007, emissions
fromtruck traffic in particular saw a
rapid increase.
► Since 2007, emissions fromfreight
transporthavebeen declining again.
► The increase of emissions fromcar
traffic was relatively moderate.
Emissions havestagnated since around
2004 and havebeen declining from
2007 till 2012. Since2013 they are
rising again.
+0 200 400 600 800 1.000
1990 2007 2016
Total road traffic
Cars
Heavy and
Light –weight
trucks
+22%
+16%
+33%
Shift
1990 - 2016
-5,1%
-4,8%
-5,5%
Shift
2007–2016
Politicalframework

Source: EEA, 2018
Emissions from new vehicles decreasing rapidly
Country
Average CO2 emissions of
newly registered cars in
2016, in g per km
Change from
2007 to 2016,
as percentage
Portugal 104,7 -27,25
Netherlands 105,9 -35,98
Denmark 106,0 -33,73
Greece 106,3 -35,69
France 109,8 -26,51
Croatia 111,5 k.A.
Malta 111,8 -24,42
Ireland 112,0 -30,69
Italy 113,3 -22,59
Spain 114,4 -25,33
Belgium 115,9 -24,15
Slovenia 119,0 -23,86
Finland 120,0 -32,37
UK 120,1 -27,08
Austria 120,4 -26,03
Czech Republic 121,2 -21,47
Rumania 122,0 -21,32
Sweden 123,1 -32,30
Cyprus 123,5 -27,48
Bulgaria 124,8 -27,51
Slowakia 124,8 -18,21
Poland 125,8 -18,09
Hungary 125,9 -18,77
Luxembourg 126,1 -23,94
Lithuania 126,2 -28,05
Germany 126,9 -23,95
Latvia 128,9 -29,75
Estonia 133,9 -26,27
< 110 g per km
< 120 g perkm
< 125 g perkm
≥ 125 g per km
CO2 Emissionen
Higher
emissions in
the East. Five
EU countries
under 110
52
Politicalframework

Source:ACEA, 2016
CO2 emissions of new vehicles in the EU, as percentage
High-emission cars are being phased out
► The broad rangeof today’s new
vehicles already emits less than 130 g
CO2/km.
► Vehicles with high emissions are on
the decline.
► In 1995 80 per cent of the new cars
emitted morethan 160 g CO2/km.
► Vehicles with emissions under 95 g
CO2/kmare now entering the market.
► More than 1/10th out of the new cars
already meet the target for 2021.
+
97%
75%
22%
3%
25%
66%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1995 2008 2016
> 130 g 96 g - 130 g <95 g
53
Politicalframework

Soruce:EEA, Monitoring CO2 Emissions from newpassenger cars, 2018
CO2-emissions of new vehicles in the EU by engine type, in g of CO2 per km
Diesel- and petrol-powered vehicles are
reducing their emissions
► Petrol-powered vehicles are
showing greatadvancements
and are catching up with
diesel engines.
► But: Diesel engines dominate
moreamong larger vehicles,
while petrol engines
dominate among smaller
vehicles.
► The advancements among
diesel engines appear
stronger, sincediesel vehicles
spend more time on the road
each year.
+17000%16810%
16490%
16160%
15660%
14770%
14250%
13760%
13370%
12860%
12560%
12250%12170%
110
120
130
140
150
160
170
2004 2006 2008 2010 2012 2014 2016
Diesel Petrol
-25,2
-28,4%
54
Politicalframework

Source:ACEA, 2017, Reducing CO2 from trucks:progressinpractice – Third-partyassessment
Scientifically evaluated road test of comparable heavy trucks of different
years of construction for determining the real CO2 emissions
Heavy trucks: clear progress in practical test
1996: 436 PS
1992: 500 PS
1991: 405 PS
1994: 402 PS
1994: 514 PS
2016: 450 PS
2016: 500 PS
2016: 460 PS
2016: 460 PS
2016: 571 PS
Daimler
DEKRA
Scania
AVL
Volvo
AVL
MAN
TÜV Süd
Iveco
AVL
-22%
-1,10%
Reduktion of emissions peryear
Total difference inemissionsof old
and new
1
2
1
2
-25%
-1,04%
1
2
-19%
-0,76%
1
2
-31,5%
-1,45%
1
2
-21%
-0,95%
1
2
Politicalframework
55

The CO2 emissions of road traffic in the EU have been decreasing for years.
Compared to 1990, the emissions from truck traffic in particular increased
dynamically but have been decreasing again since 2007. Emissions from car
traffic have stagnatedsince 2004 and have shown a clear decline since 2007.
The increased distribution of more fuel-efficient new vehicles accounts for
the decline in car emissions.
The increased use of diesel engines – especially in the case of larger vehicles
– was a key driver in the reduction of emissions.
Summary: CO2 emissions on the road
Traffic today CO2-emissionsroad
Politicalframework Other sectors OutlookMegatrends Efficiency road Regulation road
56

Source:Odyssee Database, 2016
EU: Increased energy efficiency in road traffic
► The use of energy per unit of output has reduced considerably in European road traffic since 2000.
► But: Since 2007, truck traffic in the EU has relinquished a portion of its efficiency gains. Two new EU standards
related to the reduction of pollutants were introduced in this time period, which likely led to the increased
consumption of new vehicles.
► The increased efficiency of cars has accelerated considerably since 2007.
+
Politicalframework Other sectors OutlookMegatrends Traffic today Efficiency road Regulation roadCO2-emissions road
Trucks
in kWh/1.000tkm
0 125 250 375 500 625 750
2000 2007 2015
-10%
Change
2000 -2014Change
2007 -2015
-19%
-2,5%
-0,0%
0 100 200 300 400 500
2000 2007 2015
-8,4%
Cars
in kWh/1.000pkm
-11%-4,3%
-6,4%
57

248,65
209,94
24,34
63,1
Source:Odyssee Database Juli 2018
Increases in efficiency are obscured by growth in the quantity
of freight transported
EU freight transport between 2000 and 2016
Development of energy consumption by impact, in terawatt
hours (TWh)
More traffic Overall
impact
+29,8
Efficiency Other,
Modal shift
► More efficient vehicles
and routing help to offset
approximately the
increased consumption
resulting from other
factors.
► Modal shift effects play a
subordinate role with an
additional consumption of
29 TWH.
+

Source:Odyssee Database Oktober2017
More efficient vehicles have a growing impact on energy
consumptionlevels
Car traffic between 2000 und 2015
In terawatt hours (TWh)
Overall
impact
OtherMore traffic
+175,4
Energy
reduction
measures
+123,3
-391,9
► As a result of increasing traffic
volumes, energy consumption
in car traffic has increased
significantly since the year
2000.
► But: The dominant impact
came about through more
efficient vehicles.
► The total energy consumption
in the year 2015 was on the
same level as in the base year
2000.
+
203,7
59
9,3
-391,9
203,7

More efficient vehicles have a growing impact on energy
consumptionlevels
Car traffic between 2000 und 2015
2000 – 2007 in terawat hours (TWh)
Total
impact
+96,1
+85,6
Energy saving
measurements
Other
+144,6
More traffic
-155,2
► Around the turn of the millennium, additional traffic led to an increase in energy consumption.
This effecthas changed coursein the last seven years.
► During the second half of the reported period, the reduction effect became dominant against
the effectof additional traffic, driven by the increased distribution of more efficient vehicles.
+
2007 – 2015 in terawat hours (TWh)
Total
impact
-49,0
Energy saving
measurements
-80,5Other
-82,3
More traffic
+50,8

Sources:KBA 2016;EEA, MonitoringCO2 Emissions fromnew passengercars, 2016
Diesel ensures lower emissions from large
cars
Newcar registrations inGermany
Market shares by segment and engine type, in %
► Diesel is increasingly becoming the preferred engine for large vehicles that spend the most time on the road,
while petrol engines still dominate the smaller car classes.
► As a result of this trend diesel engines have become heavier (more powerful), and petrol engines have been
catching up in terms of standard fuel consumption. In 2016 a diesel carwas 300 kg heavier than a petrol car.
► Fuel efficiency has in fact improved at essentially the same rate for both engine types.
► Diesel remains a key means for reducing CO2 emissions.
+
Ø vehiclemass in kg
100
110
120
130
140
150
160
170
180
190
200
1.000
1.100
1.200
1.300
1.400
1.500
1.600
1.700
1.800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Ø CO2-Emissionsin g
Diesel Petrol
Increased efficiency 2004 –2016
Emission per kg vehicle mass
Diesel - 28,68%
Petrol - 28,12%
2%
11%
40%
73%
88%
63%
58%
7%
28%
74%
83%
28%
98%
89%
60%
27%
12%
37%
42%
93%
72%
26%
17%
72%
Mini
Small
Compact
Medium
Upper Medium
Luxury
Off road
Sports car
Mini Van
Large Van
Utility
Other
Diesel Petrol

Source: owncalculations
Where would Germany be without diesel?
CO2 emissions of newly registeredcars in 2016
By segment and engine type, in g per km
► Diesel emissions are lower than those of petrol in all vehicle segments.
► Diesel engines dominate the larger classes of vehicles.
► The emissions level of new vehicles would be significantly higher without the use
of diesel engines.
+
How wouldemissionlevels compare if a
portionof the diesel engineswere replacedby
petrol engines?
CO2 emissions in g per km
126,5
132,7
119,6
Real Petrol only Diesel only
0 20 40 60 80 100 120 140 160 180 200 220 240
Mini
Small
Compact
Medium
Upper Medium
Luxury
Off road
Sports car
Mini Van
Large Van
Utility
Other
Diesel
Petrol

2
4
6
8
10
12
0 25 50 75 100 125 150 175
1 Gear 2 Gear 3 Gear 4 Gear 5 Gear 6 Gear
Speed in km/h
Consumption
l/100km
Quelle:VW
Shifting gears early saves fuel: the fuel consumptioncurve of a
Golf 1.4 TFSI (90 kW) in relation to its speed
The driver determines the fuel consumption
► Fuel saving training courses: Following thecourse, participants used approximately 20 per cent
less fuel than before. In Germany alone, the reduction potential fromfuel-efficient driving is
estimated at 12 million tonnes of CO2.
► Gear shifting supportis particularly effective in urban traffic:when driving at a speed of 50 km
per hour, the test vehicle consumes 1.2 litres less in fifth gear than in third.
+

Make 3 on 2
Two long trucks are able to transport as much load as three
standard trucks.
Low fuel consumption
The long truck rides more efficient than other trucks.
Consequence: less fuel consumption per load.
Make 3 on 2 – Bigger Loading volume cuts
fuel consumption
Standard truck 1 Standard truck 2 Standard truck 3
Load
Standardtruck 1
Standardtruck 2
Standardtruck 3
+50%
+50%
16,5 m
Conventional semitrailer
17,8 m
Long semitrailer
Long truck
25,25 m
-10%
CO2
-25%
CO2
Route network
Long truck
Long truck1
Long truck2
Long truck 2Long truck 1

* Results from a field experiment of the federal government;loads were transportedwith a densityof 0,72 kg/dm3
(paper:0,8 kg/dm3
)
Source:BMVI
Long trucks: 15 per cent efficiency
improvements confirmed in practical test*
► Long trucks are significantly more efficient in transporting high load volumes than conventional semitrailers.
► The advance in efficiency of a good 15 per cent lasts als long as the load volume will be fully used.
► Heavy loads can be transported much more efficiently than with normal trucks.
► A long truck consumes more fuel than a conventional semitrailer. This does only pay for the carrier, if he moves
more load than the today‘s truck can carry.
+
Long truck Conventional semitrailer
gross vehicle weight: 40t
Load volume: 155 m3
Valued track section: 8,900 km
Ø Fuel consumption: 33.9 l/100 km
gross vehicle weight : 36t
Load volume : 100 m3
Valued track section : 10,700 km
Ø Fuel consumption : 24.1 l /100 km
2,81
0,21
3,37
0,24
Payload in l /100 tkm Volume in l/100 m3km
Transport efficiency
+15%

More fuel efficient vehicles have led to a considerable increase in the overall
efficiency of road traffic since the year 2000.
Increased traffic volumes have long prevented the more efficient vehicle
technology from actually lowering the overall level of emissions.
Diesel engines were a major driver of the increasing efficiency. They have
led to considerably lower emissions, particularly in the case of larger
vehicles.
Low-cost possibilities for increasing efficiency are being wasted. Fuel saving
training courses can reduce consumption by 20 per cent.
The licensing of larger trucks could also save a lot of fuel.
Summary: Efficiency on the road
Politicalframework Other sectors OutlookMegatrends Traffic today CO2-emissions today Efficiency road Regulation road
66

* In legislation process
Source:ICCT, 2018
in g CO2/km under the New European Driving Cycle (NEDC)
The most stringent CO2 target values for new vehicles
► The EU emission standard for 2021 is the most stringent standard in the world.
► Even in 2025 it is unlikely that any country on earth will have more stringent limit values than the one stipulated
by the EU for 2021.
► The limit values being discussed in the EU for the year 2025 would be up to 50 per cent lower than those in the
USA.
► In November 2017 the EU Kommission proposed to lower the limit value within the period of 2021 until 2025 by
15 per cent and to codify a minus of 30 per cent until 2030.
+
*
67
80
100
120
140
160
180
200
220
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
US EU Japan China
205
172
187
152
118
115
151
213
2020 2021 2022 2023 2024 2025
95
117 105
125
97
81*
Actual levels for 2002 – 2016 Adopted for 2020–2025

80
100
120
140
160
180
200
1100 1200 1300 1400 1500 1600 1700
Fiat Renault
Toyota
Ford
VW
Opel
Mazda
Hyundai
BMW
Daimler
EU: Fleet 2006
EU: Targetcurve
2015
EU: Targetcurve 2021
9 years
6 years
Actual levelsof 2016
Audi
Sources:EU, EEA
in g CO2/km
CO2 target values for 2021: High demands on
the automotive industry
 Independent of vehicle weight, manufacturers of large cars have to show greater reductions than high-volume manufacturers.
 In the nine years from 2006 to 2015, a reduction of the averageemissions by 30 g CO2/km was required of new vehicles – from
160 g CO2/km down to 130 g CO2/km .
 Speeding up the pace: In the six years from 2015 to 2021, averageemissions must be reduced by 35 g CO2/km – from 130 g
CO2/km down to 95 g CO2/km. For 2025 a suggestion has been raised by the commission of 81 g CO2/km, that is a minus of 14 g
CO2/km in four years.
+
Average weight of new passenger cars in kg
130
95
160

Source:EU Kommission DGTransport, WeeklyOil Bulletin
Fuel tax per litre, in euro
– status as of: 18. June 2018
High CO2 emissions mean high payments:
91,2
89,2
85,4
82,7
74,9
74,9
73,4
73,4
72,6
71,0
70,4
70,4
69,7
68,3
67,5
67,4
65,2
64,4
62,9
61,7
61,4
59,4
59,1
58,1
55,9
55,0
51,9
49,7
0 30 60 90 120
United Kingdom
Italy
France
Belgium
Ireland
Sweden
Netherlands
Finland
Portugal
Estonia
Slovenia
Denmark
Greece
Croatia
Cyprus
Germany
Malta
Czech Republic
Slovakia
Austria
Hungary
Latvia
Romania
Spain
Poland
Lithuania
Bulgaria
Luxembourg
Diesel
107,4
103,0
102,5
97,7
95,4
94,9
94,6
93,1
90,4
88,7
87,9
86,5
81,3
80,4
79,3
78,8
74,9
72,2
71,3
70,9
70,2
69,2
65,2
64,6
63,9
61,9
61,0
55,3
0 30 60 90 120
Netherlands
Greece
Italy
Finland
Portugal
France
Denmark
Sweden
United Kingdom
Germany
Ireland
Belgium
Slovakia
Croatia
Slovenia
Estonia
Malta
Czech Republic
Latvia
Austria
Cyprus
Spain
Lithuania
Luxembourg
Hungary
Romania
Poland
Bulgaria
Petrol

Sources:EU, UBA, WeeklyOil Bulletib, own calculations
CO2 from cars comes at a high cost in the EU
► From2021, fullpenalty fees will apply to
car manufacturers who do not reach their
specific target.
► If a car drives 200,000 km, a reduction by
1g/kmcorrespondsto an emissions
reduction of 200 kg over the life of the
vehicle.
► Based on this assumption, the
manufacturer will pay a penalty of 475
euros per tonne of CO2.
► This costis considerably higher than what
others haveto pay.
+
A penalty of 95 euros will apply for each gramthat
exceeds the target, for each vehicle sold. This corresponds
to approximately 475 euros per tonne of CO2
CO2-Prices
in euros pro tonne
475
367
145
80
30
13Carbon credits (as of
April 2018)
Carbon credits (target
for 2020)
Damage costs 2010
(UBA)
Damage costs 2030
(UBA)
Petrol Taxation (EU
average)
Emission standard for
cars

Source:IKA Aachen
The potential for further reduction exists but
is becoming harder to achieve
1 HCCI
2 Thermoelectricgenerator
3 Variable compression
4
Lightweightconstruction
(comprehensive)
5 ImprovedEGR
6
Directinjectionw/stratified
charge
7 Cylinderdeactivation
8 Full hybrid
9 Micro-hybrid
10 Dual clutchtransmissions
11 Homogeneousdirectinjection
12
Fullyvariable valve control
system
► Due to the technologies needed for boosting efficiency, new vehicles will cost approximately 2,700 euros more
in 2020.
► This expense will be offset, however, by savings resulting from lower fuel consumption. These savings are spread
across the entire life of the vehicle (17 years on average); so, the first customer will only enjoy part of this
benefit but will carry the full cost of the new technologies when purchasing the vehicle.
+
Research Pre-development Series development Series
Petrol engines (compact class)
CO2 reduction potential in %
Technology costs in €
1
2
46
8
9
10
11
0
5
10
15
20
25
30
0 1.000 2.000 3.000
Diesel (compact class)
CO2 reduction potential in %
Technology costs in €
2
3
4
5
7
8
9
10
120
5
10
15
20
25
30
0 1.000 2.000 3.000

Source:ev-sales.blogspot, 2018
New vecicles BEV/PHEV: 199.822 New vecicles BEV/PHEV: 62.170
New vehicles and top-selling models of the year 2017
Electric cars: hardly any global models
1. Tesla S
2. Chevrolet Bolt
3. Tesla X
4. Toyota Prius PHV
5. Chevrolet Volt
1. Renault Zoe
2. BMW i3
3. Mitsubishi Outlander
4. Nissan Leaf
5. Tesla S
1. Volkswagen EGolf
2. BMW i3
3. Tesla X
4. Mitsubishi Outlander
5. Tesla S
1. BAICEC Series
2. Zhidou D2 EV
3. BYD Song PHEV
4. Chery eQ
5. JAC iEV6S/E
World 2017
1.224.103
Market
share
1.1%
Market
share
2.4%
Market
share
2.1%
Market
share
39.2%
New vecicles BEV/PHEV: 306.143 New vecicles BEV/PHEV: 600.174

Market share forecasts for electric vehicles
7%
30%
18%
36%
8% 9% 12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Current forecasts for the global market share in the year 2025
Bloomberg
08/2017
PWC
01/2018
All
forecasts
predict ahigher
market share in
Europe
Typically
BEV and FCEV
Make up for 55 to 60
Percent of the
electric vehicles.
73
FAST 2030
05/2018
BEV/FCV
only
These numbers include BEV, FCV and PHEV
Market
driven by the
demand side
KPMG 01/2017 Deloitte 02/2017
Fast
Learning
curve
Regulated
Marktet
Slow
Learning
curve

Source:EU Komission, Own calculations
Emissions from PHEV are
calculatedon the basis of
the emissions in combustion
operationsand of the
electric coverage of the car.
Firstly the PHEV participates
in the Europeantesting cycle
(NEDC) in combustion
operations.
Then it runs the cycle driven
on electrical energy as long
as the battery lasts.
Depending on the such
determined coverage of the
car a pro rata deduction
from the emissions in pure
combustion operationsis
applied.
0
10
20
30
40
50
60
70
80
90
100
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77
Electric coveragein kilometers in NEDC testing cycle
Emissions calculations for PHEV
Allocatedemissionsincombustionoperationsinpercent
Witha 25 km
Electric coverage
of the car
the deduction
of 50
per cent
is applied.
CO2-Regulation in EuropeTransportation sector

Source:TU Graz, 2018
CO2emissions of a middle class car with different drive versions
and speed
Speed makes the difference
0
50
100
150
200
250
0 20 40 60 80 100 120 140
CO2ing/km
v in km/h
HBEFA cycles with 0 % gradiant
Euro 6 diesel Plug-In-Hybrid Tank-to-Wheel
Euro 6 petrol Plug-In-Hybrid Well-to-Wheel

Source:IEA, Co2-Emissions fromFuel Combustion, 2017, own calculations
657
540
771
456
315
450
489
9
0
100
200
300
400
500
600
700
800
900
CO2 emissions of power production and electric cars
Electricity mix will decide on climate friendliness
CO2 emissions or power production
in gCO2/kWh
131
108
154
91
63
90
98
2
0
20
40
60
80
100
120
140
160
180
With a fuel consumption of 20 kWh/100km
an electric car emits … gCO2/km

Source:Bloomberg, MBI
Lithium is highly
reactive and is
therefore traded
in the form of
lithium
carbonate.
Currently the
demand is
growing much
faster than
supply.
Only four plants
account for 80 per
cent of the
worldwide
production of
lithium.
Price indices of lithium are rising
0
5.000
10.000
15.000
20.000
25.000
01.01.2009
01.06.2009
01.11.2009
01.04.2010
01.09.2010
01.02.2011
01.07.2011
01.12.2011
01.05.2012
01.10.2012
01.03.2013
01.08.2013
01.01.2014
01.06.2014
01.11.2014
01.04.2015
01.09.2015
01.02.2016
01.07.2016
01.12.2016
01.05.2017
01.10.2017
01.03.2018
Asia Lithium Carbonate CIF Swa Europe Lithium Carbonate CIF S
North America Lithium Carbonat

Source:Bloomberg
Bargain prices for
cobalt have risen
since March 2015 by
a good 200 per cent.
Cobalt is mostly a by-
product of the nickel
and copper mining.
Falling prices of
nickel and copper
dampen cobalt
production.
Bargain prices for important raw materials
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
01.01.2010
01.06.2010
01.11.2010
01.04.2011
01.09.2011
01.02.2012
01.07.2012
01.12.2012
01.05.2013
01.10.2013
01.03.2014
01.08.2014
01.01.2015
01.06.2015
01.11.2015
01.04.2016
01.09.2016
01.02.2017
01.07.2017
01.12.2017
01.05.2018
LME COBALT SPOT ($) LME NICKEL SPOT ($) LME COPPER SPOT ($)

Source:Bloomberg Intelligence, 2017
50%
6%
10%
26%
10%
Energy storage Chemical syntheses Lubricants Glass/Ceramic Other
Demand for lithium in the year 2016 according to specific application
Lithium: Batteries dominate demand

Source: MBI E-MobilityMaterials, Nr. 13 2017
58%
33%
40%
16%
0%
0%
10%
20%
30%
40%
50%
60%
70%
Graphit Anode S Mangan 99,7% Neodymoxid 99% Terbiumoxid 99,9% Dysprosiumoxid 99%
Relevant raw materials increase in price
Change in prices from January 2017 to March 2018 in per cent
CO2-Regulation in Europe 80Transportation sector

Source:UBS Evidence Lab, Mai 2017
33,9%
0% 10% 20% 30% 40%
Lithium
Cobalt
Graphit
Nickel
per year… per cent of the
reserves would be eaten up.
the demand for raw materials
would be … per cent higher.
In a world with 100 per cent of electric cars of present design …
New battery types are required
2.511%
1.928%
264%
118%
0 500 1.000 1.500 2.000 2.500 3.000
Lithium
Cobalt
Graphit
Nickel

Source:Bloomberg Intelligence, 2017
57
86
177
10
18
46
36
35
49
0
50
100
150
200
250
300
Q1 2017 Q4 2018 Q4 2021
China USA Other countries
Cell production in GWh, consisting and developing
Battery cells: China propels capacity building

The EU has waived the world’s most stringent CO2 emission levels for cars. In 2021,
the limit values will be one-third lower than those of the USA.
CO2 emissions from road traffic are priced higher by the EU than emissions from
other sources.
The “low-hanging fruits” have already been picked – and it will become more
expensive in the future.
The manufacturersof large vehicles, in particular,have to graduallyfocus on the
switch to electric powertrains. But: Today,the market run-up for electric cars and
plug-in hybridsis slowing down. And no one knows how the market for these
vehicles will develop in the future.
Summary: regulation on the road
Regulation road
Politicalframework Other sectors OutlookMegatrends Traffic today Efficiency roadCO2-emissions road
83

84
1 Megatrends
4 Other sectors
5 Outlook
Agenda
CO2-Regulation in EuropeOther sectors
Power Industry Households

85
In the EU, the emissions from public heat and power generationare approximately
15 per cent less than the levelsin 1990.
› More efficient power plantsand a changing power mix help to cover the
overconsumption.
Power generationunderlies Europeanemissions trading. Emissions trading consists
of two components:
› A prescribed cap on emission volumes that will continuouslydecrease up to the
year 2020.
› A tool for distributingthe burden (trade). The market for carbon credits ensures
that the EU will meet the prescribed emission volumes at low costs.
CO2 in other sectors: power generation
Other sectors
Power Industry HouseholdsPoliticalframework Transportation sector OutlookMegatrends

CO2EQ- emissions of publicheat and power generation, 1990 = 100
The reduction can be credited to Eastern
Europe in particular
60
70
80
90
100
110
120
1990 1995 2000 2005 2010 2015
EU 28 EU 15 Eastern European Acces Countries
97,3
71,0
61,4
108,5
75,9
Other sectors

-344.1400.5
593.5
Source:Odyssee Database July2018
in Terawatt hours (TWh) of primary energy use; changes from 2000 – 2016
Power generation – consumption of fossil
primary energy declining
Overall
impact
Power Mix
-649.3
Electricity
consumption
More efficient
fossil power
plants
 Electricity consumption in
Europe is persistently
increasing.
 Yet fewer fossil primary
energy carriers are being
consumed.
 Power generation is not an
end in itself; it facilitates
production and
consumption in the
industrial sector and in
homes.
+
87Other sectors

Sources:EU, DIW
Volume of carbon credits in the EU Emissions Trading System (ETS), in millionsof
tonnes
Cap: A government-prescribed reduction
► Specific:The emissionstargetof -21 percent issure to be met onaccount of the decreasingcap.
► Apportioned:The initial auctioningof 20 per centis expectedtoincreaseto60 percent by 2020.
► Flexible:Itisnotstipulatedwhichtrade participantwill bringabout the reduction.
+
1000
1200
1400
1600
1800
2000
2200
2400
2005 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2030
Ziel
2030
3rd trade
period cap
2nd trade
period cap
1st trade
period cap Discussed
reduction
rate after
2020
-2,2%
-21%
Reduction rate by 2020
-1,74%
88Other sectors

Trade: Emissions trading ensures an efficient
distribution of the reduction burden
► In the example above, Plant 1 renders the entire reduction but has three-fourths of the costs reimbursed through
emissions trading. The example shows that both plants save thousands of euros compared to a restriction on
emissions.
► The specific distribution of the reduction burden arises from the carbon credit price and the particular reduction
costs.
► Participants with high abatement costs help to finance other participants’ reduction efforts.
+
Exhaust
up to
now,
in tonnes
Permiss-
ible
exhaust
in the
future,
in tonnes
Reduc-
tion
costs
per
tonne
Total
costs
5,000 4,500 20 10,000
5,000 4,500 50 25,000
10,000 9,000 35,000 Gesamt
Exhaust up
to now,
in tonnes
Permiss-
ible
exhaust
in the
future,
in tonnes
Carbon
credits
received,
in tonnes
Reduc-
tion
costs per
tonne
Achieved
reduction,
in tonnes
Cost for the
reduction
Trade,
in
tonnes
Trade
in euros
Total
costs by
trade
5,000
Insg.
9,000
4,500 20 1,000 20,000 5,000
5,000 4,500 50 0 0 15,000
10,000 9,000 9,000 1,000 20,000 500 15,000 20,000
15,000500
Plant 1
Plant 2
Case 1:
Emissionrestrictions
Case 2:
Emissions trading:Carboncredit price at 30 euros per tonne
89Other sectors

-1
-3
18
54427
357 356
303
0
50
100
150
200
250
300
350
400
450
-10
0
10
20
30
40
50
1990 2000 2010 2015
 Powergeneration:CO2 emissionsare stillonthe rise,inspite of the increasingshare of renewable energies.
 The reason:Renewable energiesare,inparticular,replacingnatural gasandcoal-firedpowerplants;nuclearenergyuse is
alsodeclining. Lignite isfillingthe resultingbaseloadgap.
 The subsidisationof renewable energieshasresultedinanincreasedvolatility of supply. Thisfrequentlyresultsinsurplus
powerthathas to be exportedoutside the countryata cheaprate.
Source:Arbeitsgemeinschaft Energiebilanzen2018, EEA 2018 (v21)
Power generation and trade in GermanyPower mix
The subsidisation of renewable energies leads to an increasing
export of electricity
Germany’s energy transition: Unexpected results
+
GHG-Emissions inMio. tCO2
Balanceoftrade in TWH
90
31,1 25,7 23,0 22,5
27,7
29,4
22,2
25,6
24,8
18,5
14,1
3,6 6,6
16,6
33,3
5,5 4,9 5,6 4,3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2000 2010 2017
Others Renewable Natural gas
Hard coal Nuclear energy Lignite
Other sectors

The CO2 emissions of the industrialsector have declined by one-fourth in the last 20
years.
› Increased efficiency: Emissions in the industrial sector decreased by one-third per euro of
added value.
The industrialsector is governed by variousregulations:
› Electricity consumption is subject to emissions trading and a high rate of taxation. In the
USA, industrial energy costs only about half as much as the EU average.
› The EU Ecodesign Directive sets maximum tolerances for the energy consumption of
consumer products such as lamps and household appliances. Products that do not meet the
standard have to be removed from the market. The most noticeable target: light bulbs.
CO2 in other sectors: industry
Other sectors
91

Improved efficiency: One-third fewer
emissions per euro of added value since
1995
kg CO2/Euro2005
CO2 emissions in the industrialsector are
declining: -25% since 1995
in millions of tonnes of CO2
► Regulation:The largestshare of CO2 emissionscausedbyindustrialactivitiesissubjecttoemissionstrading.
► Increasedefficiency:The emissionsperunitof grossvalue have decreasedbyagoodthirdsince 1995.
► Deindustrialisation:The movementof industrial activitiesoutof manyEuropeancountrieshasresultedinadecrease of
CO2 emissionsinthe EU.
+
CO2-Intensität
CO2-Intensität
inkl. Strom
Other sectors
Industry in the EU 28: Decreased emissions,
greatly improved efficiency
92
0
200
400
600
800
1.000
1.200
1.400
1.600
1990 1995 2000 2005 2010 2015
Through power
consumption*
Other
Steel
Chemicals
Food
Paper
0,0
0,1
0,2
0,3
0,4
0,5
0,6
1995 2005 2015
-45%
-47%

* For informationonly
Sources: Eurostat 2018, BDI
In cent pro kWh for companies with a consumptionof 20 to 70 gigawatt hours
Industrial energy prices in the second half of
2017: Much less expensive in the USA
 Industrial energy prices in
Europe are much higher than
those of international
competitors.
 The biggest difference is in
comparison to the USA, where
a kWh costs approximately
45 per cent less than in Europe.
 The highest prices apply in the
UK and Italy. But for totally
different reasons.
 Recoverable taxes – such as VAT
– are viewed as transitory items
for the company.
+
93
0 2 4 6 8 10 12 14 16 18
UK
Italy
Belgium
Portugal
Germany
Spain
Austria
Poland
France
EU 28
Czech Republik
France
Netherlands
Sweden
China*
India*
USA*
Product price
Non-recoverable tax
Recoverable tax
Other sectors

Household CO2 emissions have decreased by 13 per cent since 1990.
› In the same reporting period, the number of households and the living space per person
increased substantially.
The key to future emission reductions is in the area of heating.
› Heating constitutes 70 per cent of a household’s total energy consumption.
› In spite of the EU Ecodesign Directive, consumption has greatly increased through the use of
electric appliances, since households contain an increasing number of them.
The installation of new heating units results in very low CO2
abatement costs, but it rarely pays off for home owners without
subsidisation.
CO2 in other sectors: Households
Other sectors
94

Energy savings
Households: Decreasing CO2 emissions
despite higher demands in living spaces
CO2-Emissions
in millions of tonnes
 Nearlyhalf of householdemissionsfall underemissionstrading.
 The trendis leaningtowardsmore householdsandlargerapartments,whichincreasesemissions.
 Besidesemissionstrading,householdsare impactedbyelectricitytaxesandenergyconsumptionregulationsfor
buildings.
+
Changes in householdenergy consumption
between2000 and2016
in terawatt hours (TWh)
Direct CO2 emissions fromhouseholds (heating, hot water)
Emissions fromhouseholdelectricityconsumption
Overall impact
Other
-1.203,8
Larger living spaces
More electric appliances
per household
Climatic faktor
More households
+503,7
Other sectors
95
0
100
200
300
400
500
600
700
800
900
1000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
-23%
-26%
-71.7
-58.0
+196.6
+377.4
+516.2
+70.7

Significant progress per square metre of
living space
1990 = 100
The heating system is the key to lower
emissions
in terawatt hours (TWh)
Energy consumption:
the potential lies in the heating market
► Heating systems consume about 70 per cent of the final energy in households.
► Advancements in heating efficiency are almost entirely eaten up by increased living space.
► Electric appliances only play a minor role; however, due to the increasing number of appliances per household,
overall energy consumption has risen by 45 per cent since 1990.
+
96
0
500
1.000
1.500
2.000
2.500
3.000
3.500
1990 2000 2015
Heating Hot water
Cooking Electric appliances
60
70
80
90
100
110
1990 1995 2000 2005 2010 2015
Energy consumption for light per m2
Energy consumption for heating per m2
Other sectors

97
1 Megatrends
4 Other sectors
5 Outlook
Agenda
CO2-Regulation in EuropeOutlook
Limits ofthe system Alternatives Core theses

Limit values for cars: Only indirect influence
on actual CO2 emissions
► Today, Europe regulates a car’s emissions potential in grams per kilometre.
► However, the actual target is the avoidance of CO2 emissions in tonnes.
► There is no direct connection between emissions potential and actual emissions. The real impact is determined
by the user.
► Result: Today’s regulation is not precise and does not correspond to the regulation in other sectors.
+
Outlook
Limits ofthe system Alternatives Core thesesPoliticalframework Transportation sector Other sectorsMegatrends
!
Assumptions
 Underthe New EuropeanDriving
Cycle (NEDC),abetter
transmissionwillsave 4g CO2/km.
 The transmissioncostsan
additional 200 euros.
 In Europe, anaverage car travels
approximately200,000 kilometres
duringitslifetime.
CO2 savings, intonnes:
4 g/km* 200,000 km= 800,000 g =0.8 tonnes
Investment costs, ineuros per tonne:
200 € / 0.8 tonnes =250 € per tonne
98

* Extrapolationfrom publishedreports ** Calculatedbased onthe average value of the respective line.
Sources: AGFW, IKA Institut für Kraftfahrzeuge Aachen, EU
Expensive CO2 avoidance leads to excess
burden
Problem:CO2 avoidance in cars is
already comparativelyexpensive
CO2 avoidance in cars is expensive and would
be cheaper to obtain in other sectors
 The reduction costs differ greatlyfrom sector to sector.
 The avoidance of car emissions by means of improved technologies is relatively expensive, and these costs will continue to
increase.
 Sector-based reduction targetslead to high additional costs in the economy.
 In the EU Emissions Trading System (ETS), permissible emissions are offset by carbon credits. One credit allows the emission of a
tonne of CO2.
 The trade with carbon credits ensures that the emission volume stipulated by the EU is generatedwhere the reductions are least
expensive
+
0 100 200 300 400
Manuf. figures 2014*
IKA Aachen 2012
IKA Aachen (2016)
IKA Aachen (2021)
Hydroelectric power
Wind power
Carb. credit price today
Target price for 2020
Cars
Electricity
In € per tonne
5.338
150
500
1.250
8.688
750
Cars
Carbon credits
Hydroelectri…
Wind power
Cars
Carbon credits
Assumption: CO2 emissions in Europe are to be reduced by 25 million
tonnes. Comparison of the resulting costs today and in 2020 in millions of
euros**
Heute
2020
99
CO2 market
Outlook

Source:Daimler
Absolute car emissions
in millions of tonnes of CO2
Relative car emissions
in g CO2/km
Based on model calculation. With today’s regulation, an emissions reduction of 30 per cent is
achievable between 2005 and 2030. This corresponds to the EU target for non-ETS sectors
Efficient new vehicles impact the vehicle fleet
 The average consumption ofthe existing fleet is only gradually reacting to the more efficient new vehicles.That is why a difference can be seen between the
emissions ofnew vehicles and the entire fleet.
 The gap will close once most ofthe older vehicles with higher emissions are taken off the roads.
 Based on a conservative estimate, the ongoing replacement ofold vehicles willresult in car traffic emissions in Europe decr easing by approximately 30 per cent
by 2030, compared to the year 2005.
 Until 2014, the fleet was dominated by vehicles built before 2005.Several million ofthese vehicles willstillbe on the road in 2030.
 The advancements ofrecent years will long continue to have an impact on the vehicle fleet. Even ifnew vehicles were to hardly show improvements after 2021,
the fleet emissions would continue to decrease.
 In regard to cars, the EU target can be achieved with the existing regulation
+
90
110
130
150
170
190
2005 2009 2013 2017 2021 2025 2029
New vehicles
Entire fleet
40gr
22gr
0
100
200
300
400
500
600
2005 2009 2013 2017 2021 2025 2029
Vehicles built before 2005
Vehicles built since 2005
-32%
100Outlook

Sources:EU, UN
WLTP: Depiction of a car ride,
based on worldwideaverages
NEDC: Introduced in 1996 to calculate
exhaust emissions
WLTP: A new test requires new limit values
► A testcycle shouldfacilitate legally compliantcomparability.
► There are various cyclestoday. The EU and Chinause the NEDC,while the USA andJapan have their owntests.
► The figuresoncar emissionsdependheavilyonthe testcycle;theyare not simplyconvertible.
► Trialsshow thathigheremissionslevelsare identifiedinthe WLTPthanin the NEDC. With the introductionof the WLTP,the
regulationof limitvalueswillhave tostart completelyafresh.
► But: EvenWLTP is“only”a test.Itfacilitatescomparabilityunderstandardisedconditions;hence,itrepresentsan
approximationof global drivingbehaviour,yetdoesnotdetermine avalue thatisachievable in all contexts.
+
0
20
40
60
80
100
120
140
0 200 400 600 800 1000 1200 1400 1600 1800
The WLTP is
intended to apply
globally. Manufacturers’
test costs are expected
to be reduced through
the implementation
of the WLTP.
Speed in km/h
0
20
40
60
80
100
120
140
0 200 400 600 800 1000 1200 1400 1600 1800
Low Middle High Extra high
Time in seconds
101Outlook

102
Limits of standardization in RDE consumptionmeasuring
RDE Tests: wide dispersionevenwith maximum standardization
1 Expected dispersion of the results: 8 gCO2/kmMeasurement technology
• Standardised PEMS-systems per vehicle(homogeneous within the measuring organisation)
• Calibration of the PEMS-system by aligning with test bed measurments
• But:the achievable measurement inaccuracy using the up-to-datetechniqueliesaround±2,5 per
cent.
Ein einzelner Wert kannnur einen Mittelwert
darstellen.
2 Environment &driver Expected dispersion of the results: 10 gCO2/km
• Defined environmentalconditions (moderatetemperatures, favourableweather, gentle wind at
maximum)
• Trained driver, who refer to the shift point display and create reproducableresults
• But:Slight variations, for example inwind and driving style lead to visible deviations.
3 Route Expected dispersion of the results: 12 gCO2/km
4 Vehicle
• Trips on a referenceline in the sametime and driving direction
• No fixed time slots but adaption to comparabletraffic volumeon the referenceline
• But:density of traffic, average speed andshares of start/stopare not reproducable.
• Comparablevehicle, as far as the status of running-in, technical upgrades, inflation pressureetc. is
concerned
• Comparableuse of vehicles: additional load, electrical consumers, window opening or driving mode
• But:reactions toenvironmental conditions( e.g. temperature) affect the consumption.
Expected dispersion of the results: 6 gCO2/km
CO2-Regulation in EuropeOutlook

The system of regulating limit values levels exhibitsstructural problems.
Inaccurate:The greatest disadvantageis the lack of precision, since the regulations
affect potentialemissionsrather than actual emissions.
Expensive: Technology-drivensavingsin road traffic represent one of the most
expensive possibilitiesfor reducing CO2 emissions.
Long-dated: It will still take years before the full impact of already-achieved
improvementsis reflected in statistics.
An acute continuationof the regulationof limit values does not currently appear
very promising. Alternativesto the current system must be sought.
Summary: Limits of the system
Outlook
Limits of the system Alternatives Core thesesPollitical framework Transportation sector Other sectorsMegatrends
103

 Vehicle limit values only regulate potential emissions.
 The actual emissions aredetermined justas much by drivers as by the infrastructure.
To reduce emissions, drivers and the government need to be involvedin the process
Improved regulation: Emissions standards for vehicles
fall too short
+
Integrated approach: Include all areas in the regulation process
 Optimisation of combustion engine
 Alternative fuels
 Lightweight construction
 Switching to electric powertrains
 Use of digitalisation (avoidance of
parking-related traffic)
 Route
(how much?)
 Driving style
(how?)
 Vehicle selection
(with what?)
 Infrastructure conditions
 Construction site management
 Promotion of transmissions
and fuels that produce fewer emissions
 Replacement of existing vehicles
Total emissions in tonnes =
Consumption in litres * Emissions factor in kg CO2/litre * Mileage
DriverAutomotive industry Government
Outlook
Limits of the system Alternatives Core thesesPoliticalframework Transportation sector Other sectorsMegatrends
104

 An integrated approach prevents rebound effects and can considerably increase savings.
 Various instruments are needed in order to enhance all potential savings.
Source:ACEA
Estimate based on road freight traffic
Integrated approach: Future regulation must cover all
areas
+
Kraftstoffe
Vehicle-related measures
Vehicle Trailer Tyres Alternative fuels
Vehicle operation
Operation Infrastructure Fleet replacement
 Efficient
engines
 Aero-
dynamics
 Assisted
driving
systems
 Permissible
size(more
transport
volume)
 Aerodynamics
 Lightweight
construction
 Assisted
driving
systems
 Low-
resistance
tyres
 Air pressure
controls
 Super
Singles
 Second-generation biofuels
 Synthetic fuels
 Natural gas (LNG)
 Driver
training
 Route
planning
 Volume
utilisation
 Improved
infrastructure
(road closures,
detours)
 Telematics
 Congestion
control
 Replacement of
Euro 0–III vehicles
(approx.5% additional
fleet replacement)
CO2-emissions
CO2-
Emissionen
-6% -2,5% -13%+ + = -21,5%
105
Fuels
Outlook

One stop towards an integrated approach would be the inclusion of road traffic in emissions
trading. Fuel consumption can be precisely calculated in emissions. Heavy trucks cannot be
integrated in the existing system of limit values; this is not a problem in emissions trading. The
question remains as to who should make the carbon credits available
Emissions trading in road traffic: Is that
possible?
Pros
Cons
Upstream – Tankstellenbetreiber
The corresponding carbon credits must be purchased for
every litre sold.
 1L Benzin = 2,3 kg CO2
 1L Diesel = 2,6 kg CO2
Easy to implement technically
Little demand from the well-financed
Actual emissions are limited
It only indirectly addresses those who are actually
generating the emissions. The connection to the
driver is the price signal, as in the case of a fuel tax.
+
+
–
+
Midstream – Autohersteller
When a new vehicle is sold, a volume of carbon credits
must be purchased that corresponds to the car’s
expected emissions in its lifetime.
 In the case of 130 g CO2/km und 200.000 km: carbon
credits for 26 tonnes
Little demand from the well-financed
Inaccurate: The purchased amount represents
a theoretical volume.
The manufacturer only determines the
potential emissions, not the actual emissions.
The manufacturer only has an indirect
influence over actual CO2 emissions.
+
–
–
–
106Outlook

The inclusion of road traffic in emissions trading offers certain
benefits
Emissions trading: A useful supplement
 Simple: The necessary amount of carbon credits
per tank filling is easy to calculate. The required
purchase can be paid for with the fuel.
 Inexpensive for the driver: Based on the EU’s
targeted price of 30 euros per carbon credit in the
year 2020, a litre of petrol would cost 7 euro cent
more.
 Inexpensive for society: The abatement costs of
road traffic are far above 30 euros per tonne.
Emissions are avoided where it is cheaper to do
so.
 But: Since the transportation sector would be
purchasing so many carbon credits, other sectors
would have to substantially step up their
reduction efforts. Good judgment will be
necessary in order to avoid an overload in the
other sectors.
 Thus: Emissions trading is a useful supplement to
today’s limit values.
+ETS Filling Station
Main Street 111, 12345 New Town
Station no. : 000000000xyz
Station tax no. : 13/456/xyzxyz
Company taxno. : 01 234 56789
Receipt no.1234/005/00001 03.03.2021 9:22
Card payment
*Super 65,13 EUR A #*
* Pump 03 43,45 l 1,499 EUR/l #*
*EU-ETS carbon credits 3,04 EUR #* C*
* 43,45l x 2,33 kg CO2/l = 101,24 kg CO2
* x 30,00 EUR/Credit for 1.000 kg CO2
Total 68,17 EUR
Type Net VAT Gross
A: 19,00% 54,73 10,40 65,13
C: 0,00% 3,04 0,00 3,04
Thank you for your visit. Have a safe trip!
107Outlook

The inclusionof road traffic in emissions trading serves as a useful supplement to the
prevailingsystem of limit values.
› Emissions trading would increase the precision of the regulation,since it factors in
the influence of the driver on the emissions that are produced.
› Emissions trading would also apply to freight transport – an area that is difficult to
incorporatein the current system of limit values.
› Emissions trading would lead to lower reductioncosts for the overalleconomy,
since road traffic would enter the carbon credit market as more of a buyer.
But: Oil prices continue to create pressure to innovate,but there are several factors
that speak in favourof setting a new limit value for the long term.
Summary: Alternatives
Ausblick
Grenzen des Systems Alternativen KernthesenPolitischerRahmen Verkehrssektor Andere SektorenMegatrends
108

The core theses: Brief overview
109
Climate protection
1. Europe’s share ofthe
worldwideCO2 emissions is low
and continuouslydecreasing.
(100)
2. No solution without China:
Europe’s reductionofemissions is
being eatenup by growthin
emerging economies. (103)
3. Motor vehicles accountfor
approximately one-seventhofthe
CO2 emissions in the EU. Their
share intransportation emissions
is declining. (106)
CO2 regulation for motor vehicles
4. New vehicles in Europehave becomeconsiderably moreefficient in
recent years.(108)
6. Europe has onceagain tightened thereins on the CO2 limitvalues for
motor vehicles and is requiring a furtherreduction ofCO2 within an
even shorter span oftime.(112)
5. CO2 legislationin Europeshows themoststringent targetvalues in
an internationalcomparison.(110)
8. Vehiclefleetlimitvalues under95 grams cannotbeachieved with
conventionalenginetypes, andthemarket success ofalternative
engine types isstill uncertain.(116)
7. Even without a further tightening oftheCO2 limit values after2020,
the motor vehicleindustry is stillon track to meet the EU’s climate
policy targets by 2030. (114)
9. EU environmental legislationis not coherentand, for a long time,
had other priorities thanCO2 reduction.This had various
consequences, including an increaseof CO2 emissions. (119)
10. Today’s CO2 laws regulateonly new vehicles, completely
disregarding the remaining vehicle fleet. (122)
11. An effectivereductionofCO2 emissions cannot address new
vehicles alonebutmust takea much broader approach. (124)
Balance between climate
protection and industrial
policy
12. The EU is targeting a
20% industryshare of GDP
for the year 2020. This goal
is presently a long way
away, since industrial and
climateprotection policy
are not yetaligned. (126)
13. The CO2 abatement costs
vary greatly between sectors
and are mostpronouncedin
the automotivesector.
(129)
14. Emissions trading as the
most economically efficient
form ofCO2 regulation can
easily be appliedto road
traffic. (131)

Europe’s share of the worldwide CO2 emissions is
low and continuously decreasing.
Core theses: Climate protection
1
Outlook
Core thesesAlternativesPoliticalframework Transportation sector Other sectorsMegatrends Limits of the system

Source:IEA, CO2 Emissions from Fuel Combustion– 2017
Emissions from fuel use, in millions of tonnes
CO2 emissions: Europe’s share sharply decreasing
10,3% 14,8%
28,1%
23,4%
23,2%
15,5%
19,6% 16,1% 9,9%
46,7% 45,9% 46,5%
1990 2002 2015
China USA EU Rest of the world
20.502 23.884
► Compared to the year 1990,
the absolute CO2 emissions
are decreasing in the EU only.
The decline in the year 2015
amounts to 823 Million tons.
► In Asia in particular, emissions
are rapidly increasing except
for Japan.
► The impact of European
regulations on global CO2
emissions continues to
decline.
+32.294
Outlook

Source: IEA, CO2 Emissions from Fuel Combustion – 2017
Emissions from fuel use* – Changes between 1990 and 2015, in
millions of tonnes
Reduction in Europe, strong increase in Asia
While China shows an increase of
approximately 331 per cent
during the years 1990–2015, the
EU shows a decrease of 21,5 per
cent.
China still postet a growth in 2014
by a good 110 million tons.
Whereas in 2015 emissions
stagnated in China.
India increased it’s emissions in
2014 by nearly 170 Millionen
tons, that is more than China.
Also in 2015 emissions continued
to grow in India.
+
-823,0
+ 1.536,6
+ 6.975,4
EU India China
* Entspricht derKategorie 1A nachUNFCCCKlassifikation
Outlook

No solution without China: Europe’s reduction of
emissions is being eaten up by growth in emerging
economies.
2
Outlook

Sources:EEA, 2018 (v21);IEA, CO2 Emissions fromFuel Combustion– 2017
EU passenger cars: Relevant, yet not crucial
CO2 emissions,in millions of tonnes
Relevant: Europe’s total
passenger car traffic emitted a
good 526 million tonnes of CO2
in 2015; that is an increase
compared with 2014.
Crucial? In just three weeks
China emits through its use of
fossil fuels more CO2 compared
to the car traffic in the EU – a fast
growing trend.
Dynamic: Between the years
2014 and 2015 the plus in China
amounted to around 9,1 per cent
or 60 millions of tonnes. this
corresponds to about 40 per cent
of the emissions on German
roads.
+
450
554 538
63
372
698
121
375
523
EU
Passenger car
traffic
China
Road traffic
China
CO2 emissions in 21 days
Outlook

Motor vehicles account for approximately one-seventh
of the CO2 emissions in the EU. Their share in
transportation emissions is declining.
3
Outlook

* Forinformationonly;** Not including international airandmaritime traffic. These are not classified as nationalemissions inthe context of the Kyoto report.
Figures for 2016, as percentage CO2EQ
CO2 emissions in the EU 28
Transportationsector by mode of transport
7,2%
12,1%
47,7% 43,7%
26,4% 27,5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2016
Commercial
Vehicles
Passenger Cars
Civil aviation
(national)
Rail transport
Waterway
transport
Other
Int. aviation*
Int. seafaring*
Emissions according tosector
29,9%
21,3%9,9%
13,4%
10,8%
14,7%
Generation
of heat
and energy
Industry
Passenger
cars
Other
sectors
Other modes of
transport**
Agriculture
Outlook

Absolute CO2EQ-emissions, 1990 = 100
Car traffic in the EU: CO2-emissions rising again
100
105
110
115
120
125
130
1990 1995 2000 2005 2010 2015
road cars
128,3
122,2123,1
116,5
► Caremissions have shown a much lower rate of increase than overall road traffic emissions.
► Caremissions have largely stagnated since 2002 and have been rapidly declining in 2011 but they are rising again
since 2013.
+
117
Outlook

New vehicles in Europe have become considerably
more efficient in recent years.
Core theses: CO2 regulation for motor
vehicles
4
Outlook

Co2 regulation in europe english v4.1

Co2 regulation in europe english v4.1

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Co2 regulation in europe english v4.1

Similar to Co2 regulation in europe english v4.1 (20)

More from I W

More from I W (20)

Recently uploaded

Recently uploaded (20)

Co2 regulation in europe english v4.1