POLITICO Pro Morning Mobility: Hydrogen at Farnborough — German consumers vs. Tesla — Engine car tax

Presented by GE.

POLITICO Pro Morning Mobility
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By MARI ECCLES

with Josh Posaner

PRESENTED BY

GE

— We look at hydrogen‘s potential in decarbonizing aviation as companies including easyJet and Rolls Royce throw their weight (and cash) behind it.

— German consumers have launched a case against Tesla in Berlin, claiming the company doesn’t advertise its vehicles properly when it comes to CO2 emissions.

— Germany could be heading for a carrot-and-stick scheme that imposes higher taxes on combustion engine cars to make electric options more attractive.

Good morning, and welcome to Morning Mobility. Good news for Morning Mobility fans! Whereas we usually take a break for Belgium’s national holiday on July 21, tomorrow we’ll still be bringing you all the news out of Farnborough’s airshow in the U.K. in a special edition of the newsletter.

Tips to jposaner@politico.eu, hcokelaere@politico.eu and meccles@politico.eu Tweet us @joshposaner, @hclae and @marieccles.

DRIVING THE DAY

HYDROGEN DEALS: The question of sustainable aviation is on everyone’s mind at the Farnborough airshow in Hampshire, especially amid a fierce heat wave that saw the U.K. breaks all time temperature records Tuesday. After focusing on sustainable aviation fuels (SAFs) in Tuesday’s newsletter, today we’ll be looking at the sector’s other decarbonization options.

Betting on hydrogen: Tuesday saw short-haul carrier EasyJet and manufacturer Rolls Royce announce a joint “H2Zero” plan to develop hydrogen engines. The goal is to demonstrate that hydrogen could be used in passenger planes as of the mid-2030s, with ground tests scheduled for the end of the year. “The technology that emerges from this program has the potential to power easyJet-size aircraft, which is why we will also be making a multi-million pound investment into [it],” said easyJet CEO Johan Lundgren.

Looking ahead: Rolls Royce had already announced Monday it would be running engine tests with hydrogen. CEO Warren East explained the company is planning for a future beyond SAFs: “We’ve concentrated a lot on drop-in synthetic fuel because that’s an essential transition technology, because hydrogen probably won’t be ready … for a long time; however, we can’t just focus on transition technology and never get there.” The industry, he said, must “start putting together the building blocks to make hydrogen-powered flight a reality.”

Why hydrogen? It’s popular with environmentalists, provided it’s “green,” i.e. produced in a sustainable way. Several campaign groups have been pushing for hydrogen (and electric) planes to be named specifically in EU green aviation files to encourage investment and growth in the sector.

The challenge: But not everyone sees hydrogen as the industry’s savior, given that it’s prohibitively expensive and comes with some logistical challenges. Jim Hileman, chief scientific and technical adviser for the environment at U.S. Federal Aviation Administration regulator, laid out what he saw as the problem. “[You have to] bring hydrogen to the airport in gaseous form, and then you have to find a way to compress it on site, in these very space-constrained places, taking massive amounts of energy to do this,” he told a Farnborough panel Monday. ”That’s a fascinating challenge.”

Other avenues: While SAFs and technological advancements such as hydrogen-powered or electric planes are generally seen as the main options for decarbonizing aviation, there are alternatives. One is tweaking air traffic management to allow for more efficient flight paths; the other is offsetting emissions, which is a thorny issue. While some in the industry disagree with offsetting, the tactic is generally supported by airlines who have few options at the moment.

Different kind of offsets? On Monday, EasyJet along with Lufthansa, Air France-KLM, IAG, Air Canada, Virgin Atlantic and Latham — as well as planemaker Airbus — all signed a “letter of intent” to discuss buying carbon removal credits from 2025 to offset flight emissions. Airbus has partnered with 1PointFive, which says it will build a direct air carbon capture facility in Texas that it claims can remove up to 1 million tons of CO2.

What’s it all about? Direct Air Capture technologies extract CO2 from the atmosphere, which can then either be stored permanently or used in other ways, such as in combination with hydrogen to produce e-fuels. But Transport & Environment says carbon removal technologies are the industry’s “new get-out-of-jail card for reducing emissions.” The NGO’s aviation director, Jo Dardenne, said: “Creating credits out of storing CO2 is not going to solve aviation’s climate problem. Direct air capture of CO2 should instead be used for the production of e-fuels.”

UK

Sticking with SAFs: Amid all the decarbonization talk at Farnborough, the U.K. on Tuesday announced a “Jet Zero” strategy to reach net-zero aviation by 2050 that relies heavily on SAFs. Whitehall is aiming for a 10 percent mandate by 2030, double the EU’s current target.

I have a write-up here

Brexit vibes: U.K. Transport Secretary Grant Shapps has previously called for international cooperation on decarbonizing the industry, telling the COP26 climate conference in Glasgow last year that “we saw what happens when nations work together.” On Tuesday, he drew attention to the U.K.’s ambition to lead on SAFs: “Europe is going for 5 percent. So you know where to invest if you want to get ahead in the game — here in the U.K.” The U.K. may find it easier to entertain such ambitions as it’s opting for a wider definition of “sustainable” than the EU.

**A message from GE: GE is developing technologies to reduce CO2 emissions for a more sustainable future of flight. This includes innovating advanced new engine architectures such as open fan through the CFM International joint venture, megawatt-class hybrid electric propulsion, advanced new engine core designs, and supporting alternative fuels research. Learn More.**

CARS

GERMAN CONSUMERS LAUNCH TESLA CO2 CASE: The Federation of German Consumer Organizations (VZBV) has filed a case against Tesla at a local court in Berlin, citing EU rules to claim the company doesn’t advertise its vehicles properly when it comes to CO2 emissions. The gravamen of the complaint is that Tesla makes a lot of money (reportedly around €1.5 billion in 2020) by pooling with other carmakers to help them meet their EU-mandated CO2 emissions targets. Such pooling arrangements, under the EU’s standing car and van CO2 emissions standards legislation, allowed the likes of Fiat to avoid painful fines for selling too many polluting vehicles. “The reality is … vehicles from other manufacturers are allowed to emit what Tesla cars save in terms of CO2,” the association said about the electric carmaker’s side-business of selling emissions credits. “And Tesla makes money from it.”

Stopping Sentinel: The consumer group also said Tesla’s in-car Sentinel system, which monitors suspicious activity around vehicles with the use of cameras, violates the EU’s GDPR data legislation. That isn’t made clear to motorists, VZBV said, adding that it had already warned Tesla of the infraction.

BERLIN MULLS ENGINE CAR TAX: Germany could be heading for a kind of bonus-malus scheme, which would levy higher taxes on combustion engine cars to make electric options more attractive — if the Greens get their way. According to Handelsblatt, Economy Minister Robert Habeck has outlined a plan to supercharge electromobility that calls for “a CO2-dependent climate tax for new car registrations in combination with a continuation of the e-car premium.” The document reportedly cites Volkswagen’s ID.3 and ID.4 models as vehicles that could be cheaper than a combustion engine alternative such as the Golf.

Playing politics: Habeck’s Greens, which are in coalition with the Social Democrats and liberal Free Democrats, have been at odds with the latter over how to support the transition. FDP leader Christian Lindner has loudly opposed e-car subsidies, while his party also rejects measures to reduce the use of cars.

How to make the change: Carrot-and-stick methods have “proven incredibly effective in markets such as France and Sweden in reducing average CO2 tailpipe emissions,” according to Matthias Schmidt, a Berlin-based analyst. Schmidt notes that Germans pay a vehicle registration tax averaging only €26.30. “Germany … appears far detached from reality under its current system when one looks at neighboring markets such as Denmark where these initial registration fees stretch well into the thousands,” he said.

SELF-DRIVING CAR PLANT: BMW reckons it’s made a technological breakthrough that will allow incomplete cars to move autonomously through assembly plants (and presumably make thousands of production lines redundant). The technology relies on factory sensors to guide “blind” vehicles, as opposed to the onboard cameras that autonomous cars use for navigating streets. BMW will initially use the technology to shift cars from the end of assembly lines to parking areas for onward shipment, but believes it can eventually be employed earlier in the production process.

PIT STOPS

Airbus expects the supply chain crisis gripping the global aerospace industry to last until next year, its chief exec Guillaume Faury told the FT in an interview.

The International Civil Aviation Organization has blamed Belarusian officials for a hoax that grounded a Ryanair flight and led to the arrest of a dissident journalist last year. AFP has a write-up.

Traffic on two key Brussels tram lines was interrupted by Tuesday’s heat, according to Bruzz.

You can listen to our Twitter Space on the political implications of the heat wave in parts of Europe here.

The U.K. objects to merger plans regarding French high-speed rail. More from us here.

**A message from GE: GE shares another of the top innovations and industry-leading efforts in the march toward net-zero. Hybrid electric … it’s in GE’s DNA. GE has been advancing electrification of aircraft and engine systems for years. During this time, GE engineers matured individual components of a hybrid electric system, including motors, generators and power converters. Now, the jet engine maker and aircraft systems company will take what it’s learned in laboratories about making an integrated electric machine, and ready it for ground and flight tests planned for the mid-2020s. Through the Electrified Powertrain Flight Demonstration (EPFD) program with NASA, GE will mature a megawatt class hybrid electric powertrain to demonstrate flight readiness for single-aisle aircraft using a modified Saab 340B testbed and GE’s CT7 turboprop engines. GE is partnering with Boeing, which will support the program’s flight tests and has selected BAE Systems to design, test and supply energy management components. Learn More.**