of the funds made available by the subsidy reform will be re-channelled to support development of charging infrastructure.

As of January 2019, investment in newly built independent enterprises producing ICE cars and ICE car companies (listed by the Chinese government) with poor energy consumption performance are banned (China's National Development and Reform Commission, Ministry of Science and Technology & Ministry of Finance and Industry, 2019).12

European Union

The key policies that are expected to drive the transition to electric mobility in the European Union are summarised in Table 2.6.

Table 2.6. Overview of EV and EVSE policies in the European Union, 2018/19

Notes: g CO2/km = grammes of carbon dioxide per kilometre; HDVs = heavy-duty vehicles.

Vehicle policies

In April 2019, the European Parliament adopted new CO2 emission standards for LDVs such that new cars in 2030 need to reduce CO2 emissions per km by 37.5% compared with the 95 grammes of CO2 per kilometre (g CO2/km) (NEDC) requirement for 2021, and new vans by 31% compared with the 147 g CO2/km (NEDC) requirement for 2020 (EC, 2019a). This is a strengthening of the standard adopted only two years earlier, in 2017, when the European Commission reinforced the CO2/km emission standards with a 15% reduction for new vehicles in

12 Companies producing ICE passenger vehicles cannot circumvent the regulatory limitations restricting ICE investment by starting to producing ICE commercial vehicles, and existing ICE car companies will not be allowed to relocate to other provinces (except for the projects which are listed in the Regional Development Plan by the central government, or the projects whose ownership structure remains unchanged).

PAGE | 71

IEA. All rights reserved.

2025 and a 30% reduction in 2030 (IEA, 2018a). The regulation allocates a specific emissions target for each manufacturer. EV production thresholds are set to encourage the sale of more zeroand low-emission vehicles, including BEVs and PHEVs. Manufacturers exceeding production shares of 15% of zeroand low-emission cars and vans in 2025, and in 2030 production shares exceeding 35% for cars and 30% for vans, will be rewarded in the form of a less strict overall CO2 target (up to 5%) (European Council, 2019a). Both PHEVs and BEVs are able to benefit from this lower overall stringency.13

In February 2019, the European Parliament and the European Council reached a provisional agreement on the first-ever CO2 emission standards for heavy trucks (EC, 2019b). In the targets, average CO2 emissions from new heavy trucks need to be 15% lower by 2025 and at least 30% lower by 2030, relative to 2019. The 2030 target is binding, but is subject to review in 2022 (European Parliament, 2019a; European Council, 2019b; ACEA, 2019; Transport & Environment, 2019a).14 The agreement also includes an incentive scheme allowing manufacturers that reach 2% market share of zeroand low-emission vehicles to benefit from a relaxed stringency of the overall CO2 emissions standards, and allows for the use of super credits to meet the 2% market share threshold, but only in 2025 .

The European Union is also stimulating the market for zeroand low-emissions vehicles by encouraging their use in public procurements. In February 2019, the European Council and the European Parliament reached a provisional agreement on a revision of the Clean Vehicles Directive of 2009 (2009/33/EC) (European Council, 2019c; European Parliament, 2019b). The reform increases the minimum target levels for public procurement for clean LDVs, trucks and buses for 2025 and 2030.15 The binding requirements are expressed as minimum percentages of clean vehicles in the total number of road transport vehicles covered by the aggregate of all procurement contracts and public service contracts. The specific minimum percentages differ by country. For LDVs, member states must reach a share between 17.6% and 38.5% by 2025. For buses, member state targets range from 24% to 45% (2025) and from 33% to 65% (2030) and half of the minimum target for the share of clean buses has to be fulfilled by procuring zeroemissions vehicles (i.e. buses without an internal combustion engine). For trucks, targets range from 6% to 10% (2025) and from 7% to 15% (2030).

13The extent to which BEVs can benefit depends on their CO2/km tailpipe emissions. For PHEVs it depends on their all-electric range and on a corrective factor that enhances their capacity to generate credits. This has been flagged as an issue that may effectively reduce the overall ambition of the European Union policy (Transport & Environment, 2019b). Other issues recently flagged in this

regard include an allowance to increase the overall of g CO2/km threshold thanks to multiplicative factors applied to zeroand lowemissions vehicles sold in 14 EU countries that have nascent markets, as well as the inclusion of Norway, which aims to have 100%

zero-emissions cars by 2025, for the accounting of the g CO2/km average across the European Economic Area (Transport & Environment, 2019b).

14The new regulation applies, in a first step, to four subcategories of large heavy-duty trucks covering about 70% of the total emissions of the truck fleet. Trucks, other than large heavy-duty ones, and intercity buses will not be subject to the CO2 reduction requirements for 2025, but should be taken into account for the purpose of the incentives given to zero and low-emissions vehicles. In 2022 (and for the 2030 requirements), the scope of the regulation will be extended to include other vehicle types such as smaller trucks, urban and intercity buses, and trailers.

15For LDVs, the proposal provides a definition of clean vehicles based on combined CO2 and air pollutant emissions thresholds. For heavy-duty vehicles, it uses a definition requiring the use of alternative fuels which serve as a substitute for oil and have the potential to contribute to the decarbonisation and enhanced environmental performance of the transport sector. These include electricity, hydrogen, liquid biofuels, synthetic and paraffinic fuels, natural gas (including biomethane) and liquefied petroleum gas, and exclude fuels produced from high indirect land-use change-risk feed stock for which a significant expansion of the production area into land with high-carbon stock (European Parliament, 2019b; EC, 2014).

PAGE | 72

IEA. All rights reserved.

Several European countries also recently implemented or updated incentive schemes for electric mobility. In 2018, 33 European countries (26 within the European Union) had a national EV incentive for passenger cars. Italy is the last big European country to implement a purchase incentive for electric cars. At the end of 2018, Italy proposed a “bonus-malus” incentive policy for the 2019-21 period (Gazzetta Ufficiale, 2019). The bonus (subsidy) can be up to EUR 6 000 (USD 7 100) for cars emitting less than 20 g CO2/km up to a malus (tax) of EUR 2 500 (USD 2 800) for cars emitting more than 250 g CO2/km (values measured according to the NEDC test procedure). The bonus level is similar to France and Sweden, whereas the malus is only one-quarter of the maximum used in France (Transport Agency Sweden, 2019; Government of France, 2019; Gazzetta Ufficiale, 2019) and comparable to Sweden. Bulgaria implemented a purchase subsidy of up to EUR 10 000 (USD 11 800) per BEV (EAFO, 2018). Outside the European Union, Ukraine extended the derogation of the value-added tax for EVs from the end of 2018 through 2022 (Government of Ukraine, 2018). Besides incentives for electric cars, Germany initiated support for electric bus purchases in 2018, providing up to EUR 70 million (USD 83 million) through 2021 (IEA, 2018a).

Charging infrastructure policies

The EU Alternative Fuels Infrastructure Directive requires countries in the European Union to set deployment targets for publicly accessible chargers in 2020 (mandatory), 2025 and 2030 as part of their national policy frameworks (EC, 2014). The same directive includes the definition of indicative targets for the deployment of chargers along the Trans-European Network for Transport (TEN-T) core network. The analysis developed in the Global EV Outlook 2018 (IEA, 2018a) indicated that the publicly accessible charging points indicated by the submissions for 2020 fall short of the publicly accessible charging points required across the European Union (as indicated in the Action Plan on Alternative Fuels Infrastructure) (EC, 2017). However, as several countries are expected to exceed the deployment targets, the ratio of one publicly accessible charger per ten cars is likely to be achieved in 2020 (IEA, 2018a). Individual EU member states have set targets for chargers in order to electrify their government fleets. For example, in 2019, the Netherlands committed to install 2 000 charging points to support electrification of its government fleet by 20% in 2020 and 100% by 2028 (Rijksoverheid Government of the Netherlands, 2019).

The Energy Performance Buildings Directive (EPBD) was approved in the European Union in May 2018. It requires member states to specify minimum requirements for charging infrastructure in new and renovated buildings by March 2021 (EC, 2018a). For new or renovated non-residential buildings, the EPBD mandates at least one-fifth of the parking places to be equipped with conduits allowing the installation of chargers. Moreover, at least one charging point needs to be installed if more than ten parking places are available. For new or renovated residential buildings with more than ten parking places, all parking places need to be prepared with conduits for future chargers.

The EPBD has to be implemented within national building codes in order to take effect. Spain, France and Portugal already had charging infrastructure mandates within their national building codes before the EPBD update (Government of France, 2016; Government of Spain, 2017; IEA HEV TCP, 2016). Denmark is the only EU country that has published an updated building code since the EPBD update (Government of Denmark, 2018b), though it was too close to its approval to include a rule on charging infrastructure.

Various European countries provide incentives at a city level as well. For example, by mid-2019 in the Netherlands, 192 municipalities (55% of the total), including nearly all big cities, had adopted the approach to allow on-demand deployment of street public charging for EV users without private parking, initiated by the municipality of Amsterdam and highlighted as a good

PAGE | 73

IEA. All rights reserved.