World is going electric, but needs to go twice as fast for net zero target

The world’s car makers have just 15 years to phase out production of petrol and diesel vehicles altogether and replace them with full electric vehicles for there to be a realistic chance of hitting net zero by 2050, a new report by Bloomberg NEF finds.

Such a transformation will not happen through market forces alone, and the report warns policymakers must act immediately to step up the pace of change.

By 2030 – just nine years away – 60 per cent of cars being sold around the world must be zero emissions, up from just 4 per cent today. On the current trajectory, by 2030 only 35 per cent of new cars will be electric.

Five years on from that, in 2035, every single new car must be electric or zero emissions, and even then many existing petrol or diesel vehicles will have to be either converted to electric or taken off the road early to completely decarbonise transport by 2050.

Notwithstanding the enormity of the challenge, the report was relatively positive about current trends. It found there were already 12 million passenger EVs on the road globally, 1 million commercial vehicles, and 260 million electric mopeds, scooters, motorcycles and three-wheelers, and predicted this would rise steadily whatever happens. Climate breakdown or not, the world is going electric.

Europe, China and the US will drive most of the growth in the next few years, with the rest of the world picking up in the 2030s. Australia, which has some of the worst EV policies in the industrialised world, will be a notable laggard.

But the existing trajectory will not get us anywhere near where it needs to be to meet net zero by 2050, the report argues, meaning governments must intervene with aggressive pro-EV policy immediately. Failure to do so will all but guarantee the world blows its carbon budget by a wide margin, locking in extremely dangerous levels of global warming.

BNEF calls the business-as-usual scenario the “Economic Transition Scenario” and the more aggressive, policy led scenario the “Net-Zero Scenario”.

The charts below show that while motorcycles and buses will get close to 100 per cent zero emissions by 2050 on their own, cars and commercial vehicles won’t get anywhere close without aggressive policy intervention.

The net zero scenario would require major efforts to improve charging infrastructure outside the home – vital for getting the last 20 per cent of drivers with no access to home charging to ditch their petrol guzzlers in favour of EVs.

Policy to electrify heavy-duty commercial vehicles is particularly urgent, as without action only around 30 per cent of freight transport will be zero emission by 2050.

On the positive side, the report showed that if left to the market, by 2050 more than 60 per cent of cars on the road are already on track to be zero emissions, the vast majority of them battery EVs. It found plug-in hybrids, while enjoying a short-term boost, would quickly drop off as people opted for full battery EVs – a good thing, it said, given data is increasingly showing people aren’t charging their plug-ins up all that often.

The report predicted hydrogen fuel cell passenger vehicles would grow modestly, but would remain a niche technology, making up just 1 per cent of passenger vehicles, 16 per cent of buses and 10 per cent of medium and heavy commercial trucks.

In lieu of aggressive policy, though, nearly 40 per cent of cars will still be running on petrol or diesel in 2050. For heavy and medium commercial vehicles, that figure will be 70 per cent. Clearly that is not anywhere close to being compatible with carbon neutrality by 2050. By then pretty much every car on the road must be electric or hydrogen-powered – no one is pretending there is any possibility of capturing and storing the CO2 emissions from moving vehicles.

Colin McKerracher, head of the advanced transport team at BNEF, said: “The growth of electric transport is an amazing success story to date, and the future of the EV market is bright.

“But there are still over 1.2 billion combustion cars on the road and the fleet turns over slowly. Reaching net zero by mid-century will require all hands on deck, particularly for trucks and other heavy commercial vehicles where the transition has barely started.

“2030 is only two model-refresh cycles away for automakers, so policy certainty will be needed very soon to make investments for a higher rate of penetration possible.”

And, in a comment that could be directed at Australia: “This is particularly true for countries that do not already have tightening vehicle CO2 emissions or fuel economy standards. Early adoption is vital for building infrastructure and broader consumer interest.”

Carbon budget running out

What does this mean for the global carbon budget? In 2018 global transport emitted around 8 billion tonnes of CO2 into the atmosphere, accounting for about 22 per cent of global CO2 emissions and 12 per cent of total greenhouse gas emissions.

In the same year, the Intergovernmental Panel on Climate Change estimated only 420 billion tonnes of net CO2 could be released into the atmosphere to give a two thirds chance of limiting warming to 1.5 degrees – the threshold beyond which global warming becomes unacceptably dangerous.

Since then we have eaten through about a quarter of that budget, leaving around 300 billion tonnes of CO2 left to emit to have good chance of staying within the 1.5 degrees limit – which at current rates will take around 6.5 years. It’s that figure that is shown on the “climate clocks” put up in cities around the world.

At current rates, the transport sector alone would use up the remaining budget in less than 40 years. If transport emissions reduced at a stable rate for the next 30 years, falling by the same amount each year and reaching zero by 2050, the accumulative emissions over that period would use up about 40 per cent of the total carbon budget for 1.5 degrees. And that’s from a sector that contributes around 20 per cent of total global CO2 emissions.

While a completely steady downward trend may not be realisitic – it may start slow, and speed up – this gives a general idea of where things are heading. Even radical policy that results in total decarbonisaton of transport by 2050 probably won’t be anywhere near enough to keep temperatures below 1.5 degrees.